Instructor Solution Manual For Organizational Behaviour Improving Performance And Commitment In The by StudyGuide

Instructor Solution Manual For Organizational Behaviour Improving Performance And Commitment In The Workplace 5ce Jason A. Colquitt, Jeffery A. LePine, Michael J. Wesson, Ian Gellatly Chapter 1-15

Chapter 1: What Is Organizational Behaviour?

NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW Organizational behaviour is a field of study devoted to understanding and explaining the attitudes and behaviours of individuals and groups in organizations. The two primary outcomes of organizational behaviour are job performance and organizational commitment. This chapter explores the factors that affect these outcomes, and shows how scientific studies provide evidence that good organizational behaviour policies are linked to employee productivity, firm profitability, and even firm survival. This chapter also shows how we ―know what we know‖ about organizational behaviour by describing the scientific research process. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 1.1 1.2 1.3 1.4 1.5 1.6

What is the definition of ―organizational behaviour‖ (OB)? What are the two primary outcomes in studies of organizational behaviour? What factors affect the two primary OB outcomes? Why might firms that are good at OB tend to be more profitable? What is the role of theory in the scientific method? How are correlations interpreted?

CHAPTER OUTLINE 1.

WHAT IS ORGANIZATIONAL BEHAVIOUR? Try This!: Open the very first class by asking them to picture their worst coworker ever and to list the things that person did to earn ―worst coworker‖ status. Then have them do the same with the best coworker ever, listing the things that person did to earn ―best coworker‖ status. Both of these lists should be written on the board, a process that will result in a table similar to Table 1-1. Then get them to understand the importance of explaining why the two people act so differently. That process of explanation is what OB is all about.

Organizational Behaviour Defined

Organizational behaviour is a field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviours of individuals and groups in organizations B.

Role of Management Theory Organizational behaviour is a field of study that has an important historical context, and has evolved from several historical movements and landmark studies – including Scientific Management and the Human Relations movement

An Integrative Model of OB 1.

Provides a roadmap for the field of organizational behaviour, and shows how different chapters in the text are related

Individual Outcomes – These are the two primary goals of organizational behaviour a. b.

Individual Characteristics and Mechanisms - These directly affect job performance and organizational commitment a.

b. c. d. e. f.

Job performance (Chapter 2) – how well employees do on the job Organizational commitment (Chapter 3) – how likely employees are to remain with an organization. Employee retention is a huge issue for many Canadian firms.

Personality, Cultural Values, and Ability (Chapter 4) – describe various individual traits and characteristics that say what we are like and what we can do Job Satisfaction (Chapter 5) – what employees feel about their work Stress (Chapter 6) – psychological responses to job demands that tax or exceed an employee‘s capabilities Motivation (Chapter 7) – energetic forces that drive an employee‘s work Trust, justice, and ethics (Chapter 8) – degree to which employees feel that their company does business with fairness, honesty, and integrity Learning and decision making (Chapter 9) – how employees gain job knowledge and use that knowledge to make decisions

Relational Mechanisms – These affect and provide a context for the individual mechanisms mentioned above a.

Communication (Chapter 10) – describe the communication process as well as the different mediums information is exchanged within organizations; formal and informal communication networks Team characteristics and processes (Chapter 11) – the qualities that teams possess, including norms, roles, and the way team members

c. d.

Organizational Mechanisms – Also affect individual mechanisms, because they influence the environment in which work is done a.

depend on and relate to each other. Also how teams behave with regard to task work, teamwork, cooperation, and managing conflict. Power, influence, and negotiation (Chapter 12) – the process by which individuals gain authority over other individuals Leader styles and behaviours (Chapter 13) – describes the specific actions leaders take to influence others at work

Organizational structure (Chapter 14) – shows how various units within an organization communicate; how an organization coordinates human activity. Organization culture and change (Chapter 15) – describes the shared rules, norms, and values that shape behaviour for organizational employees, and how to change or manage cultures.

DOES ORGANIZATIONAL BEHAVIOUR MATTER? OB Internationally. This feature is a valuable tool to help students understand how the relationships among OB concepts, and their applications, varies across cultures. A good way to begin discussing international issues in Chapter 1 is to ask students to describe their international experiences. How many students are international students? How many were born or raised in another country prior to moving to Canada? How many have lived or worked abroad? How many have gone abroad on study trips or vacations? Once you‘ve gotten a feel for the experience levels of the class, ask students if they believe that the importance of the concepts in the integrative model of OB will vary across cultures, or whether their importance will be universal. If they believe the importance varies, should multinational corporations design their OB policies to function differently at different branches? What are the pluses and minuses of such a strategy?

Building a Conceptual Argument 1. 2.

Resource-based view of organizations – looks at what makes resources capable of creating long-term profits for a firm Resources are considered to be more valuable when they are: a. Rare – ―good people are hard to find‖ b. Inimitable – people are difficult to imitate for three reasons: i. History – people have a collective pool of experience, wisdom, and knowledge that benefits the organization ii. Numerous Small Decisions – big decisions are easy to copy – it is the small decisions that people make day-in and day-out that are significant for an organization

Try This! Ask students to think of all the times when one company copied a big decision made by another. For example, consider the recent move by Microsoft to open retail stores in Canada that mimic the look and feel of Apple Stores. What are some examples of times where that copying has proven successful? What are some examples of times when that copying seem to be successful? What explains those differences in copying success? iii. Socially Complex Resources – resources like culture, teamwork, trust and reputation come from the social dynamics of a given firm in a given time B.

Research Evidence 1.

Study 1 a. Survey of executives from 968 publicly held firms with 100 or more employees b. High performance work practices were related to decreased turnover, increased sales, increased market value, and increased profitability

Study 2 a. The prospectuses of 136 companies undergoing IPOs in 1988 were examined for evidence that the company valued OB issues b. Firms which valued OB had a 19% higher survival rate than those that did not

Study 3 a. ―Best Companies to Work For‖ lists (e.g., Top 100 employers). Many of these companies demonstrate exceptional OB practices, and are very profitable – even in difficult economic times. Try This! If the students have on-line access, have them work in small groups and look up some of the Canadian companies that have made the ―Best Companies‖ or ―Top Employers‖ lists (going beyond the companies listed in Table 1-3). Ask them to consider how these lists could be used to scientifically test whether being good at OB improves profitability. Usually students can guess many of the details of the study described in the book.

So What‘s So Hard? 1.

Many organizations do a bad job of managing OB issues because they don‘t view OB issues in a comprehensive fashion a. No single OB practice can increase profitability by itself b. Rule of One-Eighth

i. Half the organizations don‘t believe there is a connection between people and profits ii. Half of those who see the connection try to make a single change, rather than attempting to make comprehensive changes iii. Half of the firms that make comprehensive changes persist long enough for those changes to make a difference iv. ½ x ½ x ½ = ? 3.

HOW DO WE “KNOW” WHAT WE KNOW ABOUT ORGANIZATIONAL BEHVAIOUR?

According to philosophers, there are four ways of knowing things: 1. Method of experience – believing something because it is consistent with your experience 2. Method of intuition – believing something because it seems obvious or self-evident 3. Method of authority – believing something because a respected source has said it is so 4. Method of science – believing something because scientific studies have replicated that result using a series of samples, settings, and methods Try This! Ask students how they know the factors that improve health. What kinds of dietary philosophies do they know to be healthy? What kinds of exercise practices do they know to be healthy? Once the ―knowledge in the room‖ has been summarized, explore where that knowledge came from. How much of it was just experience or intuition? How much of it comes from authorities (e.g., doctors, trainers, books). How much of it comes from science, either directly (news reports, magazine reports) or indirectly (through relevant authorities). Does any of the ―knowledge in the room‖ conflict with each other (for example, some students think a low fat diet is more critical; others think a low carbohydrate diet is more critical)? Which method of knowing would be most valuable for reconciling such conflict?

Scientific Method 1. Theory – collection of assertions that specify how and why variables are related 2. Hypotheses – written predictions that specify relationships among variables 3. Data – collection and observation of behaviours and outcomes related to the hypotheses 4. Verification – use of statistical methods to determine whether or not a hypothesis can be disconfirmed a. Example of verification process is correlation Try This! Ask ten students to volunteer their height in inches and their weight in pounds. Ask them to write the numbers down on a sheet of scrap paper. Then input them into an Excel spreadsheet, placing them in columns A and B. Ask

students to eyeball the two columns of numbers and guess the correlation. Then calculate it using this formula: =correl(a1:a10,b1:b10). Did the resulting correlation differ from the population value (.44, as given in Table 1-4). Ask the students why the class number might differ from the population value, using that to explain why multiple studies (and high sample sizes) are needed when performing OB research. Then ask the students whether the correlation between job satisfaction and job performance should be higher or lower than the correlation between height and weight. Use that frame of reference to get them to understand that correlations of .30 are actually moderate in size, and correlations of .50 are actually strong in size. b. Correlations are not enough to prove causation. Making causal inferences requires ruling out alternative explanations. Experimental methods are often used for that purpose, as they are able to control external factors that could create misleading correlations. c. A meta-analysis takes all of the correlations found in a set of studies and calculates a weighted average of those correlations to help understand the overall relationships between variables. Meta-analyses can also be a helpful guide for evidence-based management, where management education and practice relies on scientific findings (as in medicine). OB on Screen: Moneyball. The clip referenced in the book begins around the 46:11 mark of the film, continuing until about the 49:45 mark. The scene depicts an argument between Billy Beane, the General Manager of the Oakland A‘s, and Grady Fuson, his head scout. Beane has embraced advanced analytics—statistics-based decision making as espoused by Pete Brand. Fuson prefers decision making based on experience and intuition, not science, referring to Brand as ―Google Boy.‖ Ask the students who is right? Beane or Fuson? The reality is that both are a little right and both are a little wrong. The method of science need not come at the expense of experience or intuition—all can be used to complement one another. Although Beane clearly denigrates the need for scouting in the clip, the reality is that most sports teams now have analytics experts and science experts. Beane‘s focus on science has stood the test of time, as the A‘s have remained successful. Unfortunately for them, other teams copied the use of analytics, given that the practice was not inimitable. Try This! Use the Moneyball clip for a different chapter. The clip provides a good example for discussing the rational decision-making model, types of decisions, and the value of experience and intuition from Chapter 9. Ask the students whose decisions are likely to be more faulty and why: a scout‘s or a statistical analyst‘s? Why? BONUS OB on Screen: The Social Network. The clip begins around the 21:32 mark of the film, continuing until about the 24:20 mark. The clip depicts Tyler and Cameron Winklevoss approaching Mark Zuckerberg to work on their site, the Harvard Connection. The scene encapsulates the inimitable

advantage that Facebook had in the beginning (and that Harvard Connection would have had): Unlike Myspace or Friendster, you needed a harvard.edu email address to access it. Ask the students to describe why that represented such an inimitable advantage in the beginning. Then guide discussion toward the inimitable advantages that Facebook has garnered since the site was opened up to everyone. BONUS OB on Screen: Office Space. This clip (beginning at 18:20 and ending at 25:44 for a total running time of 7 minutes, 24 seconds) depicts Peter Gibbons, a computer programmer at Initech, as he struggles to get through his work day. Eventually he seeks the advice of a therapist, which inadvertently causes him to embrace the role of an ―office slacker.‖ The scenes provide a case study of an employee with low job performance and low organizational commitment. Ask the students why Peter seems to be struggling. What concepts from Figure 1-1 seem most relevant? Students who have seen the entire movie will be able to point to a number of different concepts that explain Peter‘s current ineffectiveness. 4.

SUMMARY: MOVING FORWARD IN THIS BOOK

OB Assessments: Introspection. This brief survey can be used to give students a feel for the types of data that are often collected in organizational behaviour studies. Introspection, specifically, is relevant in an OB course because introspective students can use the content in the chapters to better understand their current and past work experiences, and their strengths and talents as employees. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. Challenge students who score low on the assessment to actively try to apply course content to their own experiences and characteristics. DISCUSSION QUESTIONS 1.1

Assuming you possessed the right technical skills, would a job at IKEA be appealing to you? What would be the most important positives associated with the position, in your view? What would be the most important negatives? The answers will vary from person to person, but one of the more oft-mentioned positives would be working for a company that stood for something—that had a ―social mission.‖ One negative might be working for a company whose product seems routine and common, as there are a number of companies that the lay consumer might view as substitutable.

1.2

Think again about the worst coworker you‘ve ever had—the one who did some of the things listed in Table 1-1. Think about what that coworker‘s boss did (or didn‘t do) to try to improve his or her behaviour. What did the boss do well or poorly? What would you have done differently, and which organizational behaviour topics would have been most relevant?

One boss, when faced with a ―bad‖ employee, got more and more authoritarian – finding fault with everything the employee did and penalizing the employee for every fault. As a result, the employee was more and more demotivated. An alternative approach would be to discuss the employee‘s strengths and weaknesses with him, determining the cause of the poor performance, and seeking more helpful solutions for dealing with it. For example, discussing the employee‘s individual characteristics might yield knowledge about how to place that person for maximum effectiveness and job satisfaction. An analysis of group mechanisms could help to determine whether or not the employee had the proper support to do his work. And an analysis of organizational mechanisms might provide information on changes that need to be made to the environment for the employee to improve. 1.3

Which of the Individual Characteristics and Mechanisms in Figure 1-1 seem to drive your performance and commitment the most? Do you think you‘re unique in that regard or do you think most people would answer that way? Answers to this question will vary, but the important point to make when discussing the question is that everyone is different, and that when trying to motivate employees, those differences must be taken into account.

1.4

Think of something that you ―know‖ to be true based on the Method of Experience, the Method of Intuition, or the Method of Authority. Could you test your knowledge using the Method of Science? How would you do it? It is often fun to work with adages (i.e., short but memorable sayings which are considered true by many people). Examples might be ―too many cooks spoil the soup‖, ―when it rains, it pours,‖ ―don‘t judge a book by its cover‖, or ―two heads are better than one.‖ Students will come up with others. Have students think of ways these could be test, scientifically. Answers will vary.

CASE: IKEA Questions: 1.

To what extent does a company‘s culture wind up reflecting the personality of its founder? To what extent does it reflect the values of the country it was founded in? Which seems to be a stronger force in the case of IKEA?

Certainly there will be elements of both, and both the founder and the country seem to have impacted the culture at IKEA. It‘s also important to note that—because founders grow up in a particular country—their traits are themselves shaped by the prevailing culture. 2.

IKEA operates in a number of countries around the world. The governments and people in those countries may have different attitudes about working hours, diversity efforts, pay levels, and political and environmental activism. Should

companies alter their policies and activities in a way that is sensitive to such differences? Most multinational companies do allow for variation in HR policies across countries— when those policies are peripheral to the core mission and philosophy of the firm. Policies that are core aspects of the firm‘s identity, however, wind up being maintained across countries. In IKEA‘s case, some of those policies and activities are core to their culture. Variation on them is likely restricted as a result. 3.

Assume you were an employee at an organization like IKEA, and Fortune surveyed you for its 100 Best Companies to Work For list. To what extent would your attitudes be shaped not just by internal work policies, but also by how the company engages with society?

This will vary by person, but how a company engages with society is becoming a bigger and bigger part of what it means to work there. Social media amplifies how a company conducts itself, and business reporting has become more sensitive to such issues over time. Thus, the external facing aspects of a company are likely to be even bigger drivers of employee attitudes. BONUS CASE: LEADING THE WAY1 What do an airline and a bank have in common? You would be correct if you guessed that both WestJet and the Royal Bank of Canada (RBC) were named along with a small handful of other companies as Canada‘s most admired companies. Why were these companies chosen? In spite of being in different industries, all had developed their respective corporate cultures in such a way as to unleash the talents of their people to achieve important organizational goals. According to Gregg Saretsky, President and CEO of WestJet, ―our culture of care not only delivers a world-class guest experience, but our culture is fundamentally important to sustaining and growing our business in the longer term.‖ Commenting further on importance of culture, WestJet‘s Ferio Pugliese, Executive Vice- President, People and Culture, emphasized that ―many organizations talk about the importance of values and culture. At WestJet we do more than talk—we LIVE IT! Our culture drives a superior guest experience that is brought to our guests consistently every day. That‘s because we have the right people on our team.‖ But it‘s more than having a service-oriented, caring culture. ―If you walk around our airports or our airplanes, and you come in contact with WestJetters, you‘ll see they act like they own the place. And we‘re really okay with that because that‘s what we‘re trying to create here at this company,‖ says Ferio Pugliese.

Sources: www.waterstonehc.com/cmac/canadas-10 (retrieved August 5, 2014); www.westjet.com/guest/en/media-investors/gregg-saretsky.shtml (retrieved May 3, 2011); www.westjet.com/guest/en/media-investors/ferio-pugliese.shtml (retrieved May 3, 2011); www.rbc.com/diversity/ceo-message.html (retrieved May 3, 2011). RBC website, www.rbc.com, accessed August 2014; Royal Bank of Canada, 2010 annual report; RBC, 2010 Diversity Progress Report; RBC, 2009 RBC Employment Equity Report; Statistics Canada website, www80.statcan.gc.ca/wes-esw/page1-eng.htm, accessed May 2011.

For RBC, a winning corporate culture has meant openly valuing teamwork and ongoing learning and development, and embracing and harnessing the diversity of its employees. ―Our strength comes from the combination of what we have in common, like our shared values, vision, and purpose, as well as what makes us different, like experiences and perspectives,‖ says Gordon Nixon, president and CEO of RBC. ―We recognize the value and power of tapping into the full spectrum of ideas and abilities that people possess. Doing just that has been a strong part of RBC‘s past success and is crucial for seizing the opportunities ahead. We are competing in a global marketplace, and we know that our growth will depend on an increasingly diverse and global workforce.‖ Without a doubt, ―it is our people that bring our brand to life every day with our clients,‖ says Zabeen Hirji, Chief Human Resources Officer. Both WestJet and the RBC are people-driven companies that have been able to find employees who are conscientious and intelligent, motivated and satisfied with their jobs, and committed to their organizations for a longer-than-normal period of time, and who perform their job duties reliably and enthusiastically. Simply put, both are leading Canadian companies that seem to be doing an excellent job managing organizational behaviour! As alluded to earlier, RBC is Canada‘s largest bank as measured by assets and market capitalization, and among the largest banks in the world in terms of market capitalization. It is a leading financial services company providing personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing. In total, RBC employs approximately 79,000 full- and part-time employees who serve close to 16 million personal, business, publicsector, and institutional clients through offices in Canada, the United States, and 42 other countries. The employees at RBC are very different on the surface. For instance, within Canada, the workforce demographics break down as follows: approximately 69 percent are women, 1.6 percent are Aboriginal, 3.7 percent are persons with disabilities, and 27.3 percent are visible minorities. According to Zabeen Hirji, Chief Human Resources Officer, differences in people and their talents are seen as valuable and as potential assets, and also a source of sustainable competitive advantage. It is not surprising to learn, therefore, that diversity for growth and innovation is one of RBC‘s core values and an integral part of their business strategy. What does this mean? Well, for RBC, this means understanding and drawing on the strength of diversity to meet the needs of clients around the world, building strong relationships in the many communities they serve, and fully engaging the talents of their people. Hirji goes on to say that ―only by fully leveraging the talents and potential of a diverse workforce, can companies ensure economic prosperity in the face of changing conditions and challenging economic times.‖ But how does RBC implement its diversity strategy? Several key activities include hiring people who have the technical, behavioural, and diversity requirements for the position being filled, investing heavily in training throughout the company, and promoting internal mentoring relationships. One example is its Diversity Dialogues program, a reciprocal mentoring program in which mid-level women or visible minority employees are matched with senior leaders and executives. Says Cheryl Tjok-A-Tam, ―it was one of the best experiences of my career. It gave me a remarkable insight not just into ways to promote diversity and inclusion but also into what

it takes to advance to senior positions within the bank.‖ According to Naim Kazmi, it was through the reciprocal mentoring program that ―I got to tell my story to someone who was listening and wanted to help me bring my unique experiences and perspectives to the organization.‖ Questions: 1.

Most of you would agree that it is easy to get along and work with people who are similar to us. Yet diversity programs like the one described at RBC are intentionally designed to bring together people who are different in some way. Isn‘t this a recipe for conflict? What do you think might have to happen for these programs to be really successful? Explain.

The case illustrates what a leading Canadian organization is doing to promote a diverse workforce. This question was designed to help students discover a potential dilemma with this strategy. On the one hand diversity (i.e., having group members who are different with respect to ethnicity, expertise, personality, abilities, interests and values) provides for a larger pool of resources and perspectives from which the group, team or organization can draw upon to carry out its work. On the other hand, and as implied in the question, people who are fundamentally different may encounter more trouble communicating and coordinating their respective activities – possibly leading to conflict. So, does diversity help or harm a group, team or organization? To make sense of this, students should recognize that diversity occurs on different levels (see Chapter 11): surface-level diversity (observable differences, such as physical characteristics, style of dress, or language).versus deep-level diversity (differences in values, interests and attitudes that are inferred from behaviour). Yes, it is possible to be different on the surface, yet similar in attitudes and core values which, in turn, should enhance communication within the team. Diversity becomes a problem when surface-level differences extend to deep-level attributes that are important for job performance. 2.

In the case we heard reactions from two participants in RBC‘s reciprocal mentoring program. Why do you think that they call is reciprocal? What effects, if any, do you think participation has on the mentors? Explain.

The notion of reciprocal mentoring is when people who are being mentored agree to mentor others. It‘s a very powerful way to establish supportive internal social networks, and facilitates the communication and exchange of tacit knowledge (see Chapter 9) so critical for one‘s career advancement. In the case, establishing internal mentoring relations is one of the initiatives that RBC uses to promote diversity conversations and dialogue – and understanding! The effect of this program is twofold. Mentors benefit because they have a chance to hear, first hand, what some of the challenges and issues are when it comes to diversity. These concerns can then inform subsequent strategy and implementation decisions. Of course, mentees benefit because they feel their concerns are being heard and that the organization cares about and supports them. As we will see in Chapter 3, these feelings are important for fostering both affective and normative commitment, which pay-off in terms of staying and higher performance.

According to a recent census by Statistics Canada, 51% of Canadians were women, 3.8% were aboriginal peoples, and 16.2% were visible minorities. There were no statistics for people with disabilities. According to Statistics Canada, we also know that more and more people will be leaving the labour force as members of the baby-boom generation approach retirement age. What are the implications of these external realities for RBC and its approach to diversity management? Explain.

This question has been designed to evoke controversy and spirited discussion. The information in the case states that RBC workforce demographics are as follows: 69% are women, 1.6% aboriginal peoples, 3.7% are persons with disabilities, and 27.3% are visible minorities. Students should see that when compared with national statistics, females and visible minorities might be over-represented whereas the proportion of aboriginal peoples is slightly underrepresented. Is this a problem? Student opinions will vary as they should – this is a tricky issue. One of the major implications of mass baby-boom retirement is that many experienced and skilled individuals will be leaving organizations across the country. On the one hand, this should create promotion opportunities for all incumbents who desire a chance to develop their careers. On the other hand, the risk is that demand for skilled workers will increase in an everincreasing competitive labour market. One way to address the anticipated labour shortage is to make the bank more attractive to under-represented groups – in this case, male applicants. Another way to address this issue would be to make the bank more attractive to older workers, who may have retired from their formal duties but are willing to come back part-time or on a contract basis. It is noteworthy that some of the fastest growing segments in our population are the aboriginal communities. Finding ways to tap into this labour pool would be positive. The fact the bank has established (and successful) diversity programs in place would make this organization attractive for aboriginal workers. BONUS CASE: GOOGLE2 Google is a company built on data. Its search engine uses data on how often sites are visited to rank-order the results of search queries. Its ads use data on client bids and landing page relevance to decide where to place ads on a page. More targeted ads also use data on previous browsing sessions to prioritize ads relevant to one‘s interests, hobbies, and habits. All of these data uses are key to Google‘s business and explain, in part, how it has grown into an organization with 60,000 employees working in 40 countries. But Google is a company built on data in another, more literal, sense. Google‘s People Operations group bases its human resource decisions on data, rather than opinion. Hiring decisions are based on structured measures of ability, personality, and cultural fit rather than the gut instincts of specific managers. The process of evaluating and rewarding people has evolved based on careful study of what works, and what doesn‘t. Change initiatives are based on results 2

Sources: L. Bock, Work Rules! Insights from Inside Google that Will Transform How You Live and Lead. New York: Twelve, 2015; J. Colvin, ―Personal Bests,‖ Fortune, March 3, 2015; D.A. Garvin, ―How Google Sold Its Engineers on Management,‖ Harvard Business Review, December, 2013; D.A. Garvin, ―Google‘s Project Oxygen: Do Managers Matter?‖ Harvard Business School Case 9-313-110, October 15, 2013. M. Moskowitz and R. Levering, ―The 100 Best Companies,‖ Fortune, March 15, 2015.

from Googlegeist, the company‘s annual attitude surveys. And those initiatives are tested using carefully designed experiments before they‘re rolled out more broadly. Google‘s People Analytics team even has an internal think tank—the People and Innovation Lab (PiLab)— staffed in part by PhDs in organizational behavior, industrial/organizational psychology, sociology, and economics. Laszlo Bock, Google‘s senior vice president of People Operations, summarizes the company‘s philosophy: ―Relying on data—indeed, expecting every conversation to be rooted in data— upends the traditional role of managers. It transforms them from being providers of intuition to facilitators in a search for truth…One of the core principles of Google has always been ‗Don‘t politick. Use data.‘‖ Bock notes that this embracing of the technical side of human resources has allowed a company built by engineers to trust in the importance of management. It seems that many of those data-based conversations have worked out, as Google has maintained its standing as one of Fortune‘s 100 Best Companies to Work For, earning the top spot in the most recent rankings. Google‘s employees point to the corporate culture and the exceptional perks, of course. But they also point to the people. As one veteran of the company explained, ―The best perk of working at Google is working at Google…We are surrounded by smart, driven people who provide the best environment for learning I‘ve ever experienced.‖ Assume you were working in People Operations for a company that didn‘t always see the value in managerial roles—to the point where it once experimented with getting rid of them! Let‘s further assume that this company did see the value in data—in numbers that could be used to test arguments. What would you do? At Google, they launched a study to prove that management mattered. It was called Project Oxygen, so-named because good managers could be ―breaths of fresh air‖ that are crucial to a company‘s survival. It was launched by the PiLab within Google‘s People Analytics team. As the study began, one of the lab‘s members noted, ―We knew the team had to be careful. Google has high standards of proof, even for what, at other places, might be considered obvious truths. Simple correlations weren‘t going to be enough.‖ How did Project Oxygen go about the task of proving that managers mattered? One approach they took was separating managers into high and low-scoring groups. They used two tools to do so: the performance evaluation ratings of the managers by their bosses and data from the Googlegeist employee attitude survey. Once the high and low-scoring groups were created, the team compared them on several important variables of interest. The results showed that employees working for high-scoring managers had more job satisfaction, lower turnover rates, and better job performance than employees working for low-scoring managers. Indeed, those differences remained apparent even when statistically controlling for the seniority, rank, and performance of the employees. One lab member summarized, ―It turned out that the smallest incremental increases in manager quality were quite powerful. Good managers do matter.‖ Prasad Setty, Google‘s vice president of People Analytics, argues that the use of analytics must move from description to analysis and insight to prediction. So, with the knowledge in hand that managers mattered at Google, what was the next step for Project Oxygen and the PiLab team? Using that awareness to nurture better managers at Google. The team conducted ―doubleblind‖ interviews with the high and low-scoring managers, meaning that the interviewers were

not aware of which group the managers were in and the managers were not aware of the focus of the study. The carefully constructed interview scripts were meant to uncover a set of behaviors that united the best managers in the company. The study resulted in the so-called ―Oxygen 8‖ behaviors of great managers: empowering, coaching, expressing a vision, showing concern for well-being, being results-oriented, focusing on career development, being an effective communicator, and possessing key technical skills. Soon the tools used to evaluate leaders were reorganized around the Oxygen 8, with training seminars devised to help improve performance on them. The team also organized panel discussions with high-scoring managers from all functional groups. As one member explained, ―We realized that engineers don‘t necessarily want to hear about management from people in HR. But they are willing to listen to engineering managers whom they respect.‖ Questions: 1.

If you set out to prove that ―managers matter‖ in a company, how would you do it? What data would you want to gather, and what would you look for in those data?

There are a variety of ways to approach this issue. One way would be to assess leaders on many of the behaviors described in Chapter 13: Leadership Styles and Behaviors. At the same time, data could be gathered on employee job performance and employee organizational commitment. If the leadership assessments were correlated at a moderate to strong level with job performance and organizational commitment, then that would show that ―managers matter.‖ 2.

What do you think of the Oxygen 8 behaviors? Does it surprise you that those eight were the most vital in an organization like Google? Which would you view as most important and why?

Answers to which are viewed as most important will vary. It is worth noting that the behaviors have much in common with transformational leadership (Chapter 13 on Leadership Styles and Behaviours), psychological empowerment (Chapter 7 on Motivation), and trustworthiness (Chapter 8 on Trust, Justice, and Ethics). Thus, Google has identified concepts that organizational behaviour research has revealed to be important. 3.

Consider the skepticism that some engineers seem to feel about management at Google. How common do you think that attitude is in today‘s organizations? What can be done to combat such attitudes?

It can be a somewhat common attitude, as described in the Rule of One-Eighth. The best way to combat the attitude is to gather data on organizational behavior phenomena, whether through formal or informal surveys and small-scale experiments. The method of science is often the best way to combat skepticism that flows from the method of intuition or the method of experience.

BONUS CASE: STARBUCKS3 Wherever you are as you read this book, chances are good that a Starbucks isn‘t too far away. By the start of 2006 there were about 10,000 Starbucks locations worldwide, including a mall, campus, airport, or exit near you. Although some people may worry about the fate of their local, independent coffee shops or the high price of Starbucks coffee, consider the answers to these questions. When was the last time your Starbucks was messy? When was the last time you were treated rudely by the person across the counter? When was the last time your order of choice tasted wrong (or even just a bit different)? One reason for Starbucks‘s success is that such occurrences are quite rare, especially in reference to other service, retail, or dining venues. Who receives much of the credit for the consistency in Starbucks service? The rank and file employees who run the stores and interact directly with the customer. Somehow Starbucks has been able to find employees who are conscientious and intelligent, who seem motivated and satisfied with their jobs, who remain committed to their stores for a longer-than-normal period of time, and who perform their job duties reliably and enthusiastically. Put simply, Starbucks seems to be doing a good job managing organizational behaviour. Some support for that claim comes from Fortune magazine‘s list of the 100 Best Companies to Work For in 2007, where Starbucks placed 16th. Generous benefits and health care coverage— even for part-time workers or for spouses and partners—seem to have instilled a sense of commitment, as Starbucks‘s voluntary turnover rate is 120% lower than the average quick service restaurant business. Guiding principles like ―provide a great work environment‖ and ―treat each other with respect and dignity‖ seem to have fostered a sense of satisfaction with the culture of the organization. Indeed, a recent survey showed that 82% of employees were either ―satisfied‖ or ―very satisfied‖ with the company. In addition, the social activism of the company—Starbucks contributed $15 million to local nonprofits in 2004—seems to have built a sense of trust and ethics among the rank and file. Taken together, such policies and practices are increasing the likelihood that your next Starbucks visit will be a pleasant one. Questions: 1.

Do you believe that Starbucks‘ corporate culture has given the organization a competitive advantage in the industry? Explain.

Starbucks has gained a competitive advantage in the industry simply by creating a culture which encourages employees to stay with the company. Since turnover rates at fast food restaurants are 120% higher than Starbuck‘s turnover rates, Starbucks has an advantage not only because they have to find fewer employees than other companies in their industry, but also because of decreased training costs and improved customer service.

Sources: Gold, E. Commentary: With roughly 9000 stores, Starbucks serves it up by design. St. Louis Daily Record, May 13, 2005. Levering, R., & Moskowitz, M. In good company. Fortune, January 22, 2007. Weber, G. Preserving the counter culture. Workforce Management, February 1, 2005.

What makes Starbucks more desirable to work for than other coffee shops? Would you prefer to work at Starbucks? Why or why not?

Working for Starbucks has a number of benefits, not the least of which is their benefits package. In addition, the Starbucks practices of ―providing a great work environment‖ and ―treating employees with respect and dignity‖ give people reason to choose Starbucks as an employer. When discussing this question, you may want to find out if any of your students currently work at Starbucks, and if so, whether their experiences match the ones described in this case.

EXERCISE: IS OB COMMON SENSE? Instructions: Many students complain that OB is ―just common sense.‖ They typically say this after hearing some intuitive research finding such as ―perceptions of task variety are positively related to job satisfaction.‖ However, virtually anything seems intuitive once you‘ve heard it—the trick is to come up with the important concepts yourself before being told about them. This exercise shows how difficult it can be to do that, thereby demonstrating that OB isn‘t just common sense. This exercise should take around 15 minutes. Begin by going over the sample theory diagram (for movie box office receipts) so that they understand what a theory diagram is. Then put them into groups and have them pick from among the four potential topics (job satisfaction, strain, motivation, trust in supervisor). Have them create a diagram of their own using their chosen topic as a dependent variable. Try This! A slightly different approach would be to begin with a set of counterproductive behaviours (e.g., stealing, cyber slacking, bullying, absenteeism) selected by the instructor. Organize the class into small groups and assign a ―problem behavior‖ to each one. Have each group create a theory diagram that explains the behaviour in question. Specifically ask that groups identify person and situational factors in their theories. When called upon, groups present their theory to the class. Relate the concepts and ideas back to material that will be discussed in the chapters. Sample Theories: Here‘s an example of what students might come up with for Job Satisfaction. Their models will typically have some things that have been supported by academic research, though usually they won‘t use academic terms. For example, the ―fun tasks‖ box reflects a concept similar to ―satisfaction with the work itself.‖ However, the models will often include things that have not been as supported, such as the relationship between having good job skills and viewing job tasks as fun. Most often, however, the models will omit importance concepts. Have slides ready of Figure 5-7 on job satisfaction, Figure 6-3 on strain, Figure 7-7 on motivation, and Figure 8-7 on trust in supervisor. Then compare the students‘ diagrams to those diagrams. For example, if the figure below is compared to Figure 5-7, a number of omissions are evident. Questions:

If OB was just common sense, students wouldn‘t include variables in their model that don‘t actually impact the outcome in question. Nor would they omit variables from the model that do impact the outcome in question. Either kind of mistake shows that students don‘t automatically know what OB concepts are relevant to key OB outcomes.

Chapter 2: Job Performance

CHAPTER OVERVIEW Job performance is the set of employee behaviours that contribute to organizational goal accomplishment. It has three components: 1) task performance, or the transformation of resources into goods and services; 2) citizenship behaviours, or voluntary employee actions that contribute to the organization; and 3) counterproductive behaviours, or employee actions that hinder organizational accomplishments. This chapter discusses trends that affect job performance in today‘s organizations, as well as practices that organizations can use to manage job performance.

LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 2.1 2.2 2.3 2.4 2.5 2.6

What is job performance? What is task performance? How do organizations identify the behaviors that underlie task performance? What is citizenship behaviour? What is counterproductive behaviour? How can organizations use job performance information to manage employee performance?

CHAPTER OUTLINE 5.

JOB PERFORMANCE Defined as the value of the set of employee behaviours that contribute either positively or negatively to organizational goal accomplishment i. Behaviours are within the control of employees, but results (performance outcomes) may not be. ii. Behaviours must be relevant to job performance.

WHAT DOES IT MEAN TO BE A “GOOD PERFORMER”? Task Performance i. Task performance involves employee behaviours that are directly involved in the transformation of organizational resources into the goods or services that the organization produces. 1. Routine task performance involves well-known responses to predictable demands. 2. Adaptive task performance involves responses to novel or unusual task demands. 3. Creative task performance involves developing ideas or physical products that are both novel and useful. ii. Job analysis can be used to define task performance for different jobs. 1. List the activities done on the job. 2. Use ―subject matter experts‖ to rate each activity on importance and frequency. 3. Select the activities that are rated highly on importance and frequency and use them to describe the job. 4. Job analysis results can be used to create the tools managers need to evaluate job performance. 5. NOC (National Occupational Classification) and O*NET (the Occupational Information Network) are online databases that provide generic information for most jobs. A very good place to start. Information from these on-line sources needs to be supplemented in order to capture organizational culture (e.g., corporate values) and business strategies. iii. Task performance behaviours are not simply ―performed‖ or ―not performed‖—the best employees exceed performance expectations by going the extra mile on the job.

Try This! To demonstrate the value of job information in a way that really engages students, ask for an example of a job from a student in class, and then brainstorm to identify critical tasks. After you have a reasonable list, enter the job in NOC (http://www5.hrsdc.gc.ca/NOC/English/NOC/2011/Welcome.aspx) or in O*NET (https://www.onetonline.org) and then compare the resulting tasks with the list from the brainstorm. At that point, you can discuss reasons why the lists may have differed. Although the brainstorm list may be shorter and less detailed, it typically includes extra tasks that reflect student assumptions regarding organizational values and strategy. Try This! Break students into small groups and have them complete the exercise at the end of the chapter – defining the performance domain of servers. I have found that an application like this is an excellent way for students to see how available job information can be used to map the performance domain and answer the question: What does it mean to be a good server? Instructions for this exercise come later in the manual. Citizenship Behaviour 1. Citizenship behaviour is defined as voluntary employee activities that may or may not be rewarded, but contribute to the organization by improving the overall quality of the setting in which the work takes place a. Interpersonal citizenship behaviour involves assisting and supporting coworkers in a way that goes beyond normal job expectations. Helping, courtesy, and sportsmanship are all interpersonal citizenship behaviours OB Assessments: Helping. This survey helps students to assess how helpful they are under normal circumstances. Since helping behaviours are socially desirable, this may be a good time to point out the value of honest self-assessment to students. If students are unsure of whether or not they can evaluate themselves objectively in this regard, they may want to ask co-workers or class teammates to fill out the form about them. It is also worthwhile to discuss the importance of helping behaviours relative to task performance in the context of teams. Which type of performance is more important? What reactions do team members have when confronted with a team member who is not helpful? Is this the same reaction when a team is confronted with a member who is not effective with respect to task performance? b. Organizational citizenship behaviour involves supporting and defending the organization through voice (offering supportive ideas for change), civic virtue (participating in company activities at a deeper-than-normal level), and boosterism (representing the company in a positive way in public.) Try This! Ask students to name examples of organizational citizenship behaviours in jobs that they‘ve held. For example, students who have worked as servers might have suggested better menu items (voice), might have paid

attention to how other restaurants did things (civic virtue), and might have said good things about the restaurant to their friends, rather than sharing kitchen horror stories (boosterism). c. Citizenship behaviours are relevant for all jobs, and provide clear benefits to the effectiveness of work groups and organizations d. Citizenship behaviours become more vital during organizational crises OB Internationally. A good question to ask students in class is whether they think that citizenship behaviours are likely to be valued differently in different cultures. The findings from the study described in the insert box suggest that the value for citizenship behaviour may be universal, and this may surprise some students. The discussion can focus on why the value of these behaviours may be similar across cultures that may seem to be quite differ from one another. Counterproductive Behaviour 1. Counterproductive behaviours intentionally hinder organizational goal accomplishments a. Property deviance harms an organizations assets and possessions and can include sabotage and theft b. Production deviance reduces the efficiency of work output, and includes wasting resources and substance abuse c. Political deviance refers to behaviours that harm individuals within the organization, and can include gossiping and incivility d. Personal aggression involves hostile verbal and physical actions taken towards other employees. Examples are harassment and abuse. Summary: What Does it Mean to be a Good Performer? OB on Screen: Molly’s Game. To illustrate prosocial counterproductive behaviour, view the film from around the 1:44:08 mark to about the 1:48:42. The clip depicts a meeting between two FBI agents, Molly Bloom, and her lawyer. The FBI is pressuring Molly to become a witness against some of the players in her underground poker game, but Molly refuses because she‘s concerned that testifying will ruin the players‘ lives. Her decision could result in the forfeiture of millions of dollars and imprisonment. Molly‘s lawyer is trying to convince the FBI agents that Molly is not a bad person, and that although some of her acts were illegal, they were also well-intended. After watching the clip, you can give some background on the film, which is based on the memoir of real-life Molly Bloom. She was a promising Olympic skier, but suffered a career ending injury during an event. She accepted a job offer as an office manager for a real estate developer, but ended up

helping this person run an underground poker game. She did really well in this job, going way above and beyond what was required. She was super organized, did research on her own, and attracted many new players with innovations that made the game classier. Eventually, she had a falling out with the real estate developer, and ended up starting her own game. Molly also did really well with her own game, but she also cared about the welfare of the players, some of whom were really troubled. When players couldn‘t pay, she covered for their bets with her own money instead of hiring muscle to collect, as was the norm in the underground poker industry. But as the game became more successful, Molly couldn‘t afford to cover the growing pots of cash, so she did something that made her game illegal: She took a ―rake‖, which refers to taking a percentage of the cash from the pots as insurance. Bloom also started taking drugs to help regulate her sleep and deal with the stress. Eventually she was arrested. After this overview, you can ask students to identify examples of the different types of job performance. Because her game was successful and made so much money, students may point out that she was effective in task performance. This is a reasonable assumption. Students may also note that, because she went above her job description as an office manager, and showed compassion towards the players, she engaged in citizenship behaviour. You can explain that the target of citizenship behaviour is generally others in the organization (examples are helping and being courteous) or the organization itself (for example, making suggestions for improvements and representing the organization in a positive way), not clients or customers. However, Molly did behave in a way that promoted a safe and positive social and psychological environment during the games, which is what citizenship behaviour is all about. Students might also dive straight into the more interesting discussion surrounding her decisions to take a percentage from the pots and do drugs. On the one hand, these are certainly counterproductive behaviours. They are intentional, illegal, and contributed negatively to her business. On the other hand, the former was well-intended (not self-serving, but intended to benefit her clients and her business), and the latter was how she was able to cope. Students who read the book should realize that the former behavior is an example of prosocial counterproductive behaviour. During the discussion, students may point out that prosocial counterproductive behaviour may seem justified, and perhaps even moral. Other students may disagree, but if not, you can wrap-up the discussion by noting that prosocial counterproductive behaviours could put the organizational and its stakeholders in legal jeopardy. Please email me at ian.gellatly@ualberta.ca if you have any questions about using OB on Screen in your teaching. BONUS OB on Screen: Sully. To illustrate extraordinary job performance, view the film from around the 1:18:23 mark to about the 1:24:40. After watching the clip, you can give some background on the incident. The scene depicts what occurred in the cockpit of US Airways Flight 1549 on January 15, 2009. The aircraft struck birds shortly after takeoff and lost both engines. Sully discussed the problem with his first officer and an air traffic controller, considered options, and ultimately chose to ditch the aircraft in the Hudson River. Sully executed a perfect landing on the water, something that hasn‘t happened much in the history of commercial aviation, and saved the lives of all 155 souls on board. People considered him a hero, and the incident became known as the ―Miracle on the Hudson.‖ You can

begin the discussion by asking why this is a good example of extraordinary job performance. Students are likely to focus on the fact that he conducted a perfect water landing and that he saved the lives of everyone on board. You can then ask if this is really job performance as defined in the chapter? Students will realize that they‘re focusing on the results of performance and that the correct answer lies in behaviours. Some students may object to this distinction and say that you know extraordinary performance when you see it. You can respond by saying that this may be true, but what if there was a big gust of wind as the plane was touching down, and a wing clipped the water and the jet flipped over as it touched down on the water, and the majority of the passengers died. He might have engaged in all the right behaviours, but the outcome was different simply because of some random event. You would still want your pilots to execute those behaviours even though the outcome was not the one that was desired. You can point out that the film actually centers on the NTSB‘s investigation to see if Sully and his copilot‘s behaviours were a contributing factor in the incident. To wrap it up, you can then ask the students to identify some extraordinary job performance behaviours. The clip clearly depicts task performance behaviours that are specific to piloting a commercial aircraft. Some students might note that the clip depicts highly effective adaptive task performance as well. The pilots train for emergencies, but each one is different, and losing both engines at such low altitude in the middle of one of the busiest cities in the world is something without precedent. Some students might also note examples of citizenship behaviour. Sully was remarkably courteous and calm during the entire incident. BONUS OB on Screen: Flight. The clip referenced begins around the 1:33:20 mark of the film, continuing until about the 1:36:20 mark. The clip depicts a meeting where South Jet Air attorney Hugh Lang tells pilot Whip Whitaker that, although there are a few loose ends to take care of, he won‘t be held responsible for the crash of an airliner despite being very intoxicated at the time. Hugh suggests that empty bottles of alcohol found on the plane (the alcohol was consumed by Whip during the flight) should be blamed on a flight attendant with whom Whip had a relationship. Whip is upset with the idea, and responds sarcastically. Hugh responds by saying that although he thinks Whip is a ―drunk arrogant skumbag‖ he‘s also in awe of what he did as a pilot. The scene provides an excellent example of the independence of various job performance activities. On the one hand, Whip engages in behaviour at work that‘s clearly counterproductive. On the other hand, Whip engages in behaviour that reflects excellent task performance—he adapts to an equipment malfunction, flies the airplane inverted, and ultimately saves the lives of most of the passengers. One topic for class discussion is whether Whip is an effective performer. Students will likely disagree, with some focusing on flying the plan and others focusing on substance abuse and putting passengers and the crew at risk. You can keep track of what they say and help them realize that they are providing examples of task performance and counterproductive behaviour. You can stay focused on the broader dimensions of task performance and counterproductive behaviour or the narrower examples (adaptive task performance and production deviance). Some students may suggest that Whip‘s counterproductive behaviour isn‘t important because it‘s his task performance that saves the lives of his passengers. This may be a valid point in the

context of this particular movie. In reality, however, being drunk while flying an airplane could result in a mistake that kills everyone on board. To convey this point, you can ask students if they would board a plane if they know the pilot was high on cocaine and had a blood alcohol content of .24 (three times the level that most states use to classify someone as driving while drunk). You can also discuss why counterproductive behaviour like this could go on for an extended period. You can suggest that co-workers might have had clues that Whip had problems with substance abuse, but they looked the other way because he‘s such a great pilot. You can ask students to provide other examples of this type of situation. Typically, a student will volunteer an example of someone who is great at task performance but horrible at citizenship behaviour or counterproductive behaviour. Students will often say they were disappointed and shocked at the contradiction after it was discovered. You can ask them how these types of situations should be managed. This should lead to the conclusion that it‘s best to pay attention to the different aspects of performance and provide feedback—highlighting both the positives and the negatives. " BONUS OB on Screen: Hancock. The clip (beginning 27:35 to 29:15, for a total running time of 1 minute, 22 seconds) depicts a superhero named Hancock being counseled by a public relations spokesperson. The scene provides an interesting case of someone who is a good performer from a task performance perspective (he puts out a fire, removes a whale from the beach) but a bad performer from a counterproductive behaviour perspective (he steals an ice cream cone, and flings a whale into the ocean and wrecks a sailboat). One topic for class discussion is how Hancock stacks-up in terms of his performance. The students should quickly come to the conclusion about task performance and counterproductive behaviour. Some students may suggest that Hancock is low in citizenship behaviour because he doesn‘t appear to be particularly courteous or a good sport. Other students may suggest that Hancock is high in citizenship behaviour because his behaviours are voluntary and his behaviour ultimately helps promote a safer city. You can point out that there isn‘t much in the scene to indicate the specific types of interpersonal citizenship or organizational citizenship. You can also explain that in trying to score Hancock‘s citizenship behaviour they are making inferences about this aspect of performance based on other aspects of performance, and this is something to avoid in real world ratings context where the intent to is to gather valid information about specific aspects of performance. Another topic for class discussion is why an organization would put up with someone like Hancock. Their conclusion is that we do this for exceptional performers—people with unique and rare capabilities with respect to task performance—but even then, there are limits because (a) eventually it affects everyone around them, and (b) there are legal ramifications.

TRENDS THAT AFFECT PERFORMANCE

1. Knowledge Work a. Jobs that involve cognitive activity are becoming more prevalent than jobs that involve physical activity.

b. As a result, employees are being asked to work more quickly, learn continuously, and apply more theoretical and analytical knowledge on the job. 2. Service Work a. Service workers have direct verbal or physical interaction with customers, and provide a service rather than a good or a product. b. Trailing only professional services in terms of growth, service jobs make up 20 percent of all new jobs. c. The costs of bad performance are more immediate and obvious in service work, and service work contexts place a greater premium on high levels of citizenship behavior and low levels of counterproductive behavior Try This! Ask students to share the details of their worst customer service experience ever, whether in a retail store, a restaurant, a customer service call, or some other context. Discuss the impact of that event on the students‘ future relationship with that organization. Then ask students who have served in customer service roles to detail their own experiences, and to describe the factors that trigger negative customer experiences.

APPLICATION: PERFORMANCE MANAGEMENT

A. Management by Objectives (MBO) 1. MBO is a performance evaluation system that evaluates people on whether or not they have met pre-established goals. It is best suited for employees with jobs that have quantifiable measures of job performance. a. An employee meets with a manager to develop mutually agreed-upon objectives. b. The employee and manager agree on a time period for meeting those objectives. c. The manager evaluates the employee based on whether or not objectives have been met at the end of the time period. B. Behaviourally Anchored Rating Scales (BARS) 1. BARS look at job behaviors directly. a. Critical incidents are used to develop evaluation tools that contain behavioural descriptions of good and poor performances. b. Supervisors typically rate several dimensions and average across them to get an overall rating. c. BARS can complement MBO by providing information about why an objective has been missed. C. 360-Degree Feedback

1. A 360-degree performance evaluation includes performance information from anyone who has firsthand experience with an employee, including subordinates, peers, and customers. a. With the exception of the supervisor‘s ratings, all ratings are combined so raters stay anonymous to the employee. b. 360-degree ratings are best suited for use as a developmental, rather than evaluative, tool because of difficulties related to combining information from different sources and the possibility of bias in the ratings D. Forced Ranking 1. Forced ranking systems make managers ―grade on a curve‖ when evaluating performance, allocating some percentage of employees into categories such as below average, average, or above average. a. These systems were popularized by Jack Welch at General Electric, whose ―vitality curve‖ grouped employees into the ―top 20,‖ ―vital 70,‖ and ―bottom 10‖ categories. b. Although these systems force managers to differentiate between employees, they may be inconsistent with team-based work, which requires more collaboration than competition. Try This! Ask students to debate whether their OB course should be graded on a curve, with a predetermined percentage of students earning an A, B+, B, B-, and so forth. Assign one portion of the class to be the ―yes‖ side and the other portion of the class to be the ―no‖ side. Then, once the two sides have shared their best arguments, allow the class to vote (in a non-binding fashion, of course). E. Social Networking Systems 1. Technologies like those used in Facebook and Twitter are beginning to be used to provide feedback, monitor performance, update goals, and discuss performance management issues. DISCUSSION QUESTIONS 2.1

Describe your ―job‖ as a student in terms of the job performance dimensions discussed in this chapter. What would be the benefit of approaching student performance from a behaviour perspective rather than from an outcome (grades) perspective? What would the downsides of this approach be? How would grading policies in your classes have to change to accommodate a behaviour approach to student performance? By focusing on behaviours students should come up with a list of important daily activities, that is, the kind of things that students have to do to be successful each day (e.g., preparing for class; attending classes; planning and organizing; meeting with team members; studying readings and class material; using the library resources, etc.). There might be a tendency to focus on ―task performance‖ but try to get students to

identify activities that might define citizenship (e.g., helping a class mate who is struggling; attending school function; participating in class) and counter-productive performance (e.g., not talking in class). Behaviours provide a very clear picture how the job is to be performed, and can be used as a basis for learning (how to learn), selfmanagement and helpful if students are experiencing difficulty and need to know what they can do differently. The downside of only assessing students on day-to-day behaviours is that it can be harder to assess mastery of the subject material and achievement in an absolute sense and in relation to other students. To accommodate a behaviourally-based approach to performance management within the classroom, a potential drawback would be the increased time an effort needed to effectively measure and provide on-going behavioural feedback. Ultimately, however, the focus should be on learning. And learning is best assessed with an outcomes approach. 2.2

Describe the job you currently hold or hope to hold after graduation. Now look that job up in the National Occupational Classification (NOC) database (www5.hrsdc.gc.ca/NOC); also try looking up the job on O*NET (www.onetonline.org). Does the profile of the job fit your expectations? Are any task behaviours missing from the online descriptions? Student answers to this question will vary. The on-line profile, either based on NOC or O*NET will provide a generic picture of the job in question. A positive of this approach is that you will acquire a broad or general sense of the kinds of tasks, behaviours, and skills that might be required. This might be helpful if you desire a high-level view of the job in questions. What the generic approach misses, however, is the emphasis on certain task duties or behaviours that reflects a particular company‘s culture, values, and strategy.

2.3

Describe a job in which citizenship behaviours would be especially critical to an organization‘s functioning and one in which citizenship behaviours would be less critical. What is it about a job that makes citizenship more important? Almost any sales position requires citizenship behaviours to help the company function effectively. When sales personnel speak well of their company (boosterism), when they participate in voluntary company activities (civic virtue) and when they suggest helpful changes to the product or sales process (voice), the company will thrive. Students are likely to suggest solitary jobs as not needing citizenship behaviours, but they may be surprised by how much citizenship affects those jobs, as well. For example, an author seems to work alone, but in reality, he or she must function effectively with editors, publishers, layout and copy design personnel, marketing professionals, agents, publicists, etc., in order to be successful. Citizenship behaviours will help the group come together and function effectively as a team.

2.4

Figure 2-3 classifies productive deviance and political deviance as more minor in nature than property deviance and personal aggression. When might those ―minor‖ types of counterproductive behavior prove especially costly?

Production deviance and property deviance can be especially costly in jobs that place a high premium on safety. For example, a marketing manager who comes to work drunk may not hurt anyone, but a bus driver who comes to work drunk could kill an entire busload of schoolchildren. Political deviance can be especially costly in contexts where the people who perform the jobs are highly mobile (i.e., have knowledge, skills, and experiences that are in high demand). Gossiping and incivility, on the surface, may appear relatively innocuous. However, these behaviours can create toxic working environments, which, in turn, will do more to drive people away. Losing good people, or hard-to-find people, will increase recruiting costs and adversely affect staff morale. Production deviance, even minor things like stealing office supplies, can be costly when aggregated across the organization - inadvertently creating a deviance culture (e.g., one that encourages stealing, waste, non-compliance). 2.5

Consider how you would react to 360-degree feedback. If you were the one receiving the feedback, whose views would you value most: your manager‘s or your peer‘s? If you were asked to assess a peer, would you want your opinion to affect that peer‘s raises or promotions? Individual answers to this question will vary, but students who are accustomed to receiving traditional performance appraisals may be more likely to value a manager‘s assessment over a peer evaluation. If students do not have work experience, ask them if they want their evaluation of a classmate‘s performance to affect that classmate‘s grade (most do not.) Follow up this question by asking students to think about their own performance in the classroom. Are there times when a classmate‘s evaluation will be more accurate than the professor‘s? Are there behaviours that are more important to professors than they are to classmates, and vice versa? These questions will help students to understand how different evaluators can ―round out‖ a performance picture.

CASE: Accenture Questions: 2.1

Describe the major strengths and weaknesses of Accenture‘s new system of providing employees feedback about their job performance. The system can provide timely feedback to employees. Employees can make immediate changes to their behavior to improve their effectiveness. The system also requires less time and is more acceptable to millennials who comprise much of the company‘s workforce. A disadvantage of the system is that there may not be consistency across employees in the type of feedback they receive. Some may receive far less feedback than others. It‘s also easy to envision how the type of feedback provided may be a function of the quality of interpersonal relationships rather than job relevant behaviors. Finally, people are far less civil on social media, so there‘s a chance that employees say

inappropriate things to each other. For all of these reasons, it may be difficult to use the information as a basis for administrative decisions (promotions, pay raises, etc.). 2.2

Identify types of job performance that Accenture‘s new system of providing performance feedback would best account for? Which types of job performance might be overlooked? Explain. It would seem that the system is conducive to capturing aspects of performance that are visible and noteworthy to observers. Task performance that is exceptionally creative, interpersonal citizenship behavior reflecting extraordinary helpfulness, organizational citizenship in the form of innovative ideas are great examples. Important, but more runof-the-mill job performance behaviors might be ignored (routine task performance, courtesy, and civic virtue). Employees may also refrain from providing feedback on counterproductive behaviors for fear of creating friction or engendering conflict.

2.3

Describe jobs or job contexts where a performance management system like the one Accenture replaced might be more appropriate? Explain. The old system might work well in jobs where individuals work independently, on tasks that are fairly routine from day to day, and where there are clearly defined set of outcomes to which employee goals are connected. Sales jobs may be a good example. In these contexts, the information needed to improve performance may be readily available. There is less of a need for on-going feedback on a wide range of job-relevant behaviors, and fewer individuals to provide it.

BONUS CASE: GENERAL ELECTRIC (from the 4th Canadian Edition)4 When you think of General Electric, or GE for short, company founder, Thomas Edison, might come to mind. You might also think of light bulbs or appliances. Depending on your background, you might also think of medical equipment, jet engines, or even locomotives. In fact, GE is a massive global conglomerate with a diverse array of businesses, which include aviation, digital, energy, oil and gas, power, renewable energy, health care, appliances, lighting, and transportation. With operations in all these different industries, it‘s easy to appreciate the vast range of jobs that are held by GE‘s workforce, which numbers well over 300,000 full- and part-time employees. You might also appreciate the management challenge faced by GE. That is, how does GE ensure that employees in all these different jobs produce results and perform in ways that are consistent with the company‘s values and objectives?

Sources: M. LaMagna, ―Why Major Companies Are Getting Rid of Traditional Performance Reviews,‖ Marketwatch, July 12, 2016, http://www.marketwatch.com/story/why-major-companies-are-getting-rid-of-traditional-performance-reviews-2016-06-06; M. Nisen, ―How Millennials Forced GE to Scrap Performance Reviews,‖ The Atlantic (from the archive of partner QUARTZ), August 18, 2015, https://www.theatlantic.com/politics/archive/2015/08/how-millennials-forced-ge-to-scrapperformance-reviews/432585/; R. Silverman, ―GE ReEngineers Performance Reviews, Pay Practices,‖ The Wall Street Journal, June 8, 2016, https://www.wsj.com/articles/ge-re-engineersperformance-reviews-pay-practices-1465358463; and R. Silverman, ―GE Does Away with Employee Ratings,‖ The Wall Street Journal, July 26, 2016, https://www.wsj.com/article_email/ge-does-away-with-employee-ratings-1469541602-lMyQjAxMTA2ODI2NzEyODcyWj.

In the mid-1950s, GE established a management-training centre in Crotonville, New York. High potential managers are sent to Crotonville to learn about practices that GE believes will promote high performance across the entire organization. For example, in the 1970s and 80s, GE was facing competitive pressure from Asian manufacturers, and the company responded by training managers in practices, such as Six Sigma, that focused on reducing costs and increasing efficiency and quality in operations. With the adoption of these types of practices, GE employees were no longer just responsible for carrying out tasks involved in the design and manufacturing of products, but they were also accountable for measuring and eliminating defects and reducing waste through continuous improvements in manufacturing processes. During this period, GE managers also learned how to push their employees hard to achieve results with regard to these ends. The training centre in Crotonville continues to serve as a means of instilling GE‘s values in managers. GE continues to believe this effort is vital to ensuring that employees across the globe function as one. However, the training that managers receive at Crotonville has changed its focus to the type of performance needed for the company to thrive in a constantly evolving, fast-paced global competitive environment. So, for example, to help enhance creativity and other behaviours necessary for innovation and rapid product development, GE managers receive training on things like mindfulness, emotional self-regulation, and the importance of constant feedback. GE has played an influential role in managerial practice, in part, because of a highly charismatic CEO named Jack Welch, who ran the company from 1981 to 2001. In light of intense competitive pressures and the commoditization of many of GE products, Welch focused on goals related to costs, efficiency, and operational excellence, and he instituted practices that reinforced employee behaviours to ensure that his goals could be met. As an example, Welch advocated an annual job performance review process that drew sharp distinctions between effective and ineffective employees. He felt that the best way to do this was to have managers rank employees relative to their peers and to fire the bottom 10 percent. Welch‘s hard-nosed approach to managing the performance of his employees led GE to great success during his tenure. Welch‘s successor at GE, Jeff Immelt, recognized that a new set of employee behaviours was necessary to compete in a changing competitive environment where technology and innovation are making product life cycles shorter. Rather than focusing on doing things in the most costeffective and efficient way, and without error, employees need to take risks and test new ideas, and incorporate learning from errors into deliverables. With this shift in thinking, Immelt moved GE away from many of the rigid practices that Welch had implemented, including the ―rank and yank‖ annual performance review system. Immelt and others at the company came to believe that the system promoted competitiveness rather than cooperation, and that it had become a time-consuming ritual that hindered the type of risk taking necessary for the company to succeed in the 21st century. In fact, GE has moved away from formalized annual reviews of employee job performance altogether. Rather than rating employees each year on a scale that results in labels such as ―role model,‖ ―strong contributor,‖ or ―unsatisfactory,‖ the company has adopted a smartphone app

called PD@GE, which facilitates ongoing performance feedback throughout the year. Managers are expected to have frequent discussions, or ―touchpoints,‖ with employees on short-term priorities so that discrepancies can be fixed quickly. Employees can also use the app to request feedback from others in the organization so that they have a better understanding of whether they should continue to do something or to change what they are doing. Although there are still open questions regarding how the system can be used to support compensation decisions, the company is convinced that it will provide feedback to employees that is more relevant and timely. Questions: 2.1

How well do you think that Jack Welch‘s performance review system evaluated employee job performance (as we have defined it in this chapter)? Which specific dimensions of job performance do you think his system emphasized? Jack Welch‘s system seems to emphasize results more so than behaviour. Employees were driven by productivity and quality-related goals, and were evaluated annually on their ability to meet these goals and placed into different categories. Given the nature of the system and its emphasis, it‘s probably safe to say that it primarily captures task performance. Interestingly, because the approach encourages competition among employees (no one wants to be in the lowest category) it may decrease citizenship behaviour (e.g., helping) and increase counterproductive behaviour (e.g., gossiping or sabotage other‘s work).

2.2

Describe advantages of the PD@GE app as a means of evaluating employee job performance. PD@GE allows for feedback that is much timelier and more relevant than annual feedback sessions. Moreover, it seems tailored to capture any dimensions of job performance behaviour. Additionally, because employees can ask for feedback, it gives them more control of their own development. Employees who are unsure of how they are doing can simply ask the appropriate parties.

2.3

Describe disadvantages of the PD@GE app. Explain why managers with longer tenure at GM may have doubts about the effectiveness of the PD@GE app. What could be done to alleviate potential concerns? One disadvantage mentioned in the case is that it is more difficult to use the information to make administrative decisions (e.g., promotions, raises, etc.). The information captured by the system may vary a great deal from one employee to the next. It also seems possible that employees might try to game the system by seeking feedback from sources they believe would be most positive. Employees with more tenure at the company, especially those who lived with ―rank and yank,‖ might dismiss the system as being ―soft,‖ and may be bothered that the feedback is not as useful for making decisions about pay and promotions. To address potential concerns, GE could incorporate requirements with respect to specific critical behaviours, amount of

feedback, number of touchpoints, and so forth. GE could also provide training and other incentives to ensure that the system is used appropriately and uniformly. BONUS CASE: GM CANADA (from the 3rd Canadian Edition)5 General Motors Company is the largest automaker in North America, and a close second to Toyota in global sales of cars and trucks. Its GM Canada division, headquartered in Oshawa, Ontario, operates assembly plants in Oshawa, Ingersoll, and St. Catharines. Although GM Canada has had a long and rich history, the company, along with its parent, slid into financial trouble during the last recession. To assist GM Canada, in June 2009 the federal and Ontario governments provided a loan of $10.8 billion. The company‘s management and other stakeholders knew that if GM Canada was to have a chance of becoming viable and paying back its debt to taxpayers, significant changes were in order. The first steps were to cut costs and streamline operations. Among the most publicized actions was a significant reduction in the size of the company‘s salaried and hourly workforce. As you might imagine, this had significant implications for the 23,000 employees who remained in Canadian operations. Most obviously, with fewer employees left to do all the production, administrative, and managerial tasks required to design, manufacture, and sell cars and trucks, the number and scope of the activities employees needed to perform in their jobs increased. In short, what it took for GM‘s employees to be considered effective or ineffective in their jobs evolved as a consequence of the downsizing. A second step involved a renewed vision of designing, building, and selling the world‘s best vehicles, and this also had implications to employee job performance. Consider the five core principles that were instituted to accomplish this new vision: (1) put safety and quality first, (2) create lifelong customers, (3) innovate, (4) deliver long-term investment value to shareholders, and (5) make a positive difference in the workplace and world. These principles mean that job performance at GM Canada involves activities such as promoting safety in facilities and products, listening to customers and striving to meet their needs, thinking of new ideas and implementing them to improve production processes and to delight customers, investing with the highest level of integrity, being a good team player, and volunteering in the community. Although some of these might seem indirectly related to the core task of building and selling cars and trucks, GM Canada believes these employee contributions are key to its chance of thriving in this millennium. 5

Sources: Krisher, T. ―Toyota Still World‘s No. 1 in Global Vehicle Sales for First Quarter, Outpacing GM, Volkswagen.‖ Washington Post, April 24, 2013, http://articles.washingtonpost.com/2013-04-24/business/38772691_1_toyota-motor-corp-gm-and-volkswagen-volkswagen-ag.; GM Canada Corporate Website. http://www.gm.ca/gm/english/corporate/about/ourcompany/overview (accessed November 19th 2014); ―Canada‘s auto bailout: Still waiting for payback‖ by Mark Milke, Financial Post, May 31, 2013. http://opinion.financialpost.com/2013/05/31/canadas-auto-bailout-still-waiting-for-payback/ (accessed November 19th 2014); .Langlois, S., and C. Hinton. ―General Motors to Cut 12% of U.S. Workforce.‖ MarketWatch, February 10, 2009, http://articles.marketwatch.com/2009-0210/news/30714976_1_salaried-workforce-morgan-analyst-himanshu-patel-white-collar0workforce; GM Canada Corporate Website. http://www.gm.ca/gm/english/corporate/about/ourcompany/overview (accessed November 19th 2014); General Motors Corporate Website, (2013), http://www.gm.com/company/aboutGM/our_company.html (accessed April 28, 2013); General Motors Corporate Website, 2013, http://www.gm.com/company/aboutGM/our_company.html (accessed April 28, 2013); Lichterman, J. ―General Motors‘ CEO Dan Akerson Urges Employees to ‗Behave with Integrity.‘‖ Workforce, August 10, 2012, http://www.workforce.com/apps/pbcs.dll/article?AID=/20120810/NEWS01/120819996&template= printarticle; Higgins, T. ―Racing Helps GM Spur Urgency in Engineering.‖ Arizona Republic, March 24, 2013, p. CL2.

To enable General Motors and its divisions, such as GM Canada, to compete effectively on a global basis with the likes of Toyota and Volkswagen, there has been a necessary shift in the nature of what constitutes effective job performance within the company. Hints of this change can be seen on the company‘s website, where its new guiding principles are highly visible and clearly stated. These principles let employees know that their job performance involves not only carrying out the core tasks they were hired to do—designing, assembling, and selling vehicles—but also carrying them out in ways that promote safety, customer satisfaction, innovation, shareholder value, and social responsibility. Of course, true change in an organization takes more than just revising a website. What else might indicate GM‘s commitment to the company‘s turnaround? One sign that the company is serious about change is CEO Dan Akerson‘s regularly held ―town hall meetings‖ with his employees. Not only has he been pressing them to embrace change, focus on customers, and behave with integrity—he has also been warning them that, if they can‘t play by these rules, they should look for work elsewhere. Akerson has also indicated a sharp break from GM‘s long-standing tradition of strong centralized corporate control and micromanagement. How has he done this? He now praises plant employees who demonstrate proactivity in their job performance in order to make changes and fix problems. He has promised to cut red tape and streamline management to encourage this type of proactive performance, and he has urged employees to fix problems when they see something wrong and not to worry about asking for permission first. Other signs that the revitalization at General Motors is genuine involve changes to the company‘s management practices. For example, consider the steps the company has taken to develop creativity and urgency of engineers who need to introduce fresh new vehicles into the marketplace at an improved pace. Traditionally, engineers worked long-term product development cycles involving high levels of structure, control, and routine. Engineers are now rotated through GM‘s racing teams for a season so that they can learn how to perform in a context where problem solving is quicker and more fluid. In racing, there‘s less information and time available, and as a consequence, engineers learn to become more comfortable making decisions based on their gut feelings and experience, rather than on an exhaustive analysis of data and consideration of benefits and costs from every conceivable vantage point, so that the best compromise can be reached. General Motors is willing to accept that some decisions will be wrong, however; decisions will be made quicker, and perhaps more importantly, knowledge gained from bad decisions can be used to inform better future decisions. How well will this practice work? Although it is difficult to predict, the 20 new vehicles that General Motors introduced in 2012 compare favourably to the 19 that its chief rival Toyota introduced in 2011. Questions: 2.1

Which dimensions of job performance do you think General Motors emphasized prior to their revitalization effort? What are the advantages and disadvantages of this emphasis? How did this emphasis likely contribute to the company‘s problems?

General motors likely emphasized routine task performance. In a large bureaucratic company like GM, routines are used to promote efficiency and reliability in the production of vehicles. This same emphasis tends to be used in other functional areas as well (vehicle development, marketing, etc.). Unfortunately, however, this approach led to stagnation in the company‘s product lines. It also made it difficult for GM to respond quickly to nimble competitors that offer new and innovative vehicles on a regular basis. 2.2

Which dimensions of job performance do you think General Motors is emphasizing now? How might the change in emphasis improve the likelihood that General Motors can compete effectively? From the case it appears that GM is emphasizing a broader array of task performance activities, many of which do not directly involve manufacturing and marketing of vehicles (e.g., safety, customer satisfaction, social responsibility). GM is also emphasizing adaptive and creative task performance. These are aspects of performance that are needed to enhance innovativeness. The company needs innovativeness to compete on a global basis.

2.3

Describe the potential advantages and disadvantages associated with rotating engineers through the racing teams. Explain how the experience on the racing teams could be used to develop GM employees who have other types of jobs? The racing teams give engineers experience working in a context where they can learn to make decisions much more quickly. Because the feedback from decisions made in a racing context occur more quickly than in other contexts (e.g., it may take a year or two to get consumer feedback about a design or product feature) learning can occur more quickly. GM can also leverage the existing racing teams. They do not have to create or outsource for new training. Of course, it‘s unknown whether the lessons learned in the racing context can be applied to other contexts. Although decisions need to be made quickly based on gut instinct in racing, the same might not be true when considering a major capital purchase, for example.

BONUS CASE: BEST BUY (from the 2nd Canadian Edition)6 The next time you need to buy something electronic—perhaps a television, computer, cell phone, or GPS, or maybe a Blu-Ray disk or game for your Wii—chances are you‘ll consider shopping at Best Buy. The store with the blue and yellow logo, with its corporate headquarters 6

Sources: Best Buy Canada, Corporate Web Site, http://www.bestbuy.ca/en-CA (May 7, 2011); Future Shop Canada, Corporate Web Site, http://www.futureshop.ca/en-CA (May 8, 2011); Best Buy, Corporate Web Site, http://www.bestbuy.com/site/index.jsp (May 8, 2011); Kiger, P. ―Throwing Out the Rules of Work.‖ Workforce Management, September 26, 2006, http://www.workforce.com (May 8, 2011); Ressler, C., and J. Thompson. Why Work Sucks and How to Fix It. New York: Portfolio, 2008; Conlin, M. ―Smashing the Clock: No Schedules. No Mandatory Meetings. Inside Best Buy‘s -Radical Reshaping of the Workplace.‖ BusinessWeek, December 11, 2006. http://www.businessweek.com/print/magazine/content/06_50/b4013001.htm (May 8, 2011); Barbaro, M. ―Service in a Store Stocked with Stress.‖ Washington Post.com, December 24, 2004. http://www.washingtonpost.com/wp-dyn/articles/A23383-2004Dec23.html (May 8, 2011); Brandon, J. ―Rethinking the Time Clock: Best Buy is Getting Rid of its Time Clocks—and Wants to Persuade You to Get Rid of Yours Too.‖ CNNMoney.com, April 4, 2007. http://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401022/index.htm (May 8, 2011).

Richfield Minnesota, is the world‘s largest consumer electronics retailer. In Canada, Best Buy is our fastest-growing specialty retailer and e-tailer of consumer electronics, with more than 60 stores in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Nova Scotia. In addition to its stores with the familiar blue and yellow logo, Best Buy Canada also operates more than 130 stores under the Future Shop banner. Best Buy continues to grow, in Canada and around the world, in both number of stores and market share, and has performed at better than expected levels, even during the economic downturn. How has Best Buy become so successful, and why does it continue to grow in a rough competitive environment? One potential reason is that Best Buy recognizes that its employees are a key driver of corporate performance. The company has instituted several innovative management practices, the most unique of which focuses on the 4,000 employees at its corporate headquarters. This management practice, called the ―Results Only Work Environment,‖ or ROWE, places responsibility for managing the performance of work on the employee who‘s assigned to do that work. Rather than having to spend regular hours at work in an office, employees can come and go as they please without permission. Their job performance is evaluated on the basis of whether the necessary results are achieved, not whether they‘ve put in ―face-time‖ at the office. Best Buy believes that giving employees control over how they manage their work will allow them to work when and where they‘re most productive. So far, the employees working under ROWE appear to be more productive and more committed to the firm. Indeed, ROWE has worked so well at corporate headquarters that the company is making plans to expand it to its network of retail stores. But will ROWE apply to an environment where being a good performer means more than meeting corporate goals (i.e., sales), such as being responsive to customer needs at a given moment or exhibiting teamwork within the store? The concern, really, is implementing a management system based on a narrow view of job performance. For example, let‘s say you were a manager of two Best Buy employees who achieved the same level of ―bottom-line‖ results. One of those employees regularly helps coworkers with important tasks, makes suggestions that improve working conditions, and refrains from wasting company resources. The other employee ignores coworkers who need help, never volunteers ideas or shares important information, and regularly abuses and wastes the company‘s property and resources. Clearly you would value the former employee more than the latter, but they would wind up looking similar under the ROWE system. Thus, although there appear to be benefits from ROWE at Best Buy‘s headquarters, only time will tell if the system works over the long term in a wider variety of work settings. ROWE gives Best Buy employees at corporate headquarters the freedom to determine where and when they do their work, and evaluates their job performance on the basis of whether they achieve work-related productivity goals. Although ROWE has been associated with increases in productivity of up to 35 percent, some people have begun to express concerns about the system‘s potential drawbacks. Consider the case of Jane Kirshbaum, an employee in the legal department, which has not transitioned to ROWE. Kirshbaum recently had her second child and changed her work schedule to four days a week. Although she still struggles with balancing the demands of work and family, she questions whether the transition to ROWE would work well in her department. She realizes that important things sometimes pop up at work that need immediate attention, and she believes that people who are at the office or are easiest to contact

will get this work ―dumped on‖ them. She also feels that the effectiveness of the legal department depends on how well it serves other departments, and therefore, it‘s important that people be willing and able to be present so issues can be dealt with in a timely manner. Kirshbaum‘s concerns highlight a problem with evaluating employee performance on the basis of results linked to the achievement of goals. Although such an approach to appraising employees may seem very rational and objective, it may overvalue or undervalue contributions to the organization made by certain employees. For example, one employee might choose to work exclusively away from the office to avoid having to work on issues that arise in the course of a normal day. This employee might realize that at performance evaluation time, what really matters is whether productivity goals are achieved, and the best way to achieve these goals is to focus exclusively on assigned work tasks. Another employee, in the same department, with the same amount of assigned work and productivity goals, might realize that the department‘s overall effectiveness and reputation depend on someone being around to deal with the ―extra work‖ that crops up. So this employee might choose to work exclusively at the office, even though the interruptions interfere with the ability to accomplish assigned work efficiently. This second employee would be seeing the ―big picture‖ of what allows the legal department to carry out its mission effectively. Unfortunately, under the ROWE system, this employee could be very disappointed at performance evaluation time. Questions: 2.1

Consider Best Buy‘s Results Only Work Environment. What are its major strengths and weaknesses? ROWE gives employees flexibility to accomplish non-work related tasks, and this reduces stress and increases employee satisfaction and commitment. The practice is very simple, and it focuses on results that matter most to Best Buy. The weaknesses include lack of performance information for development purposes, potential problems with accomplishing work that comes-up in the course of day-to-day operations, and being available to serve customers and coordinate with co-workers.

2.2

Describe the types of performance that ROWE overlooks. What are the likely consequences of overlooking these aspects of performance in performance evaluations, both to the employee and to the organization? How might these consequences offset some of the strengths of the system? ROWE focuses on results, so it overlooks the behaviours involved in task performance, citizenship behaviour, and counterproductive behaviour. For the organizations, this may be problematic because it isn‘t very helpful in diagnosing and fixing performance related problems. This also is problematic to employees who could use feedback on which specific behaviours need to be improved.

2.3

Describe the types of jobs for which results based performance evaluations would work poorly. What are the features of these jobs that make the results-based system

inappropriate? Identify modifications that could be made to a system such as ROWE to make it work better in these contexts. Customer service jobs in retail stores might not be very conducive to a system like ROWE. These jobs require the employee to be responsive to customer needs. If a department is undermanned and a customer doesn‘t get help quickly enough, the customer could shop elsewhere. A system like ROWE might be able to work, but the employees and managers would need to establish procedures and plans to ensure the floor is covered. Such a system could give employees flexibility, but there would most likely need to be advanced planning involved and some set schedules. A less obvious factor is that in this type of context, results can only occur in the store. It is difficult to imagine how the work of a salesperson at Best Buy could be accomplished at home.

EXERCISE: PERFORMANCE OF A SERVER Instructions: Put students in groups and have them sketch out the major job dimensions for a server‘s performance, drawing those dimensions on a circle. Students are free to use on-line job inventories (e.g., NOC, O*Net), and to interview one another (assuming that all are subject matter expects). Also ask them to list two specific behaviours within each of those dimensions. Emphasize that the behaviors should be verbs, not adjectives. In other words, they should be explaining what servers actually do, not what qualities servers should possess. A server is useful as a job analysis example because students are so familiar with server duties (as indicated above, many students have worked as servers and all students have observed servers while dining in a restaurant). This exercise should take around 15-20 minutes. Sample Job Dimensions and Behaviors: Here‘s an example of the kinds of job dimensions and tasks students might come up with for a restaurant server. The job dimensions are numbered with the more specific behaviours bulleted underneath. Taking Meal Orders • Describing the menu • Making recommendations Delivering Food • Remembering who had what • Balancing food on tray Checking on Customers • Keeping water and drinks filled • Asking about dessert of the check Being Friendly to Customers • Smiling

•

Being conversational

Questions: Unless they‘ve peeked ahead to subsequent steps, most lists will omit citizenship behaviours like helping, sportsmanship, voice, and boosterism. Most lists will also omit counterproductive behaviours like theft, wasting resources, substance abuse, or incivility. Once you‘ve gotten the students to understand this omission, the former servers in the class will be able to attest to the importance of these non-customer-directed behaviours. If the list of behaviours generated by the students were to be supplemented by citizenship and counterproductive behaviours, a performance evaluation form like the one shown in Table 2-2 could be created. This sort of approach could be valuable because it would broaden the way restaurant managers view the performance of servers. After all, it‘s not enough to have a server who brings in big tips if that person has a negative effect on the climate and morale of the restaurant. OMITTED TOPICS The field of organizational behaviour is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this chapter, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Diagnosing Performance Problems - Theories that have been used as a basis for diagnosing performance problems (e.g., expectancy theory) are covered in Chapter 7. * Withdrawal - Lateness, absenteeism and turnover are sometimes discussed along with job performance. These concepts are covered in Chapter 3. * Performance in Teams - A lot of the work that takes place in organizations occurs in teams. Chapter 11 discusses this issue in the context of various types of task work and teamwork activities. * Application of Job Performance Evaluations - For a more comprehensive treatment of the uses of job performance information see: Murphy, K. R.., & J. N. Cleveland. Understanding Performance Appraisal: Social, Organizational, and Goal-Based Perspectives. Thousand Oaks, CA: Sage, 1995. Smither, J. W. Performance Appraisals: State of the Art in Practice. San Francisco, CA: Jossey-Bass, 1998. * Workplace Trends - Technological change, contingent employees, and the need for continuous learning and adaptability are trends that have impacted the nature of employee job performance. For more on these issues see:

Ilgen, D. R., & E. D. Pulakos. The Changing Nature of Performance: Implications for Staffing, Motivation, and Development. San Francisco, CA: Jossey-Bass, 1999.

Chapter 3: Organizational Commitment

NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW The chapter opens with a discussion of three different forms of organizational commitment – affective, continuance, and normative. Responses to negative events are also examined, including exit, voice, loyalty and neglect, with exit and neglect also described as physical and psychological withdrawal. Finally the chapter covers workplace trends such as diversity and employee-employer relationships, which can influence organizational commitment, and gives suggestions for fostering a sense of commitment among employees. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 3.1 3.2 3.3 3.4 3.5 3.6

What is organizational commitment? What is withdrawal behaviour? How are the two connected? What are the three forms of organizational commitment, and how do they differ? What are the four primary responses to negative events at work? What are some examples of psychological withdrawal? Of physical withdrawal? How do the different forms of withdrawal relate to each other? What workplace trends are affecting organizational commitment in today‘s organizations? How can organizations foster a sense of commitment among employees?

CHAPTER OUTLINE 6.

ORGANIZATIONAL COMMITMENT A. Organizational commitment is defined as the desire on the part of an employee to remain a member of the organization B. Employees who are not committed to their organizations engage in withdrawal behaviour – actions that help the employee to avoid the work situation

WHAT DOES IT MEAN TO BE A “COMMITTED” EMPLOYEE? Try This! Open the class by asking students to picture a scenario where they‘ve worked for their first employer for a number of years and have been approached by a competitor. Ask them what factors would cause them to stay and list those factors on the board, subtly grouping them into affective, continuance, and normative factors (without using those terms). Allow the students to guess what the groupings reflect. This process will result in a table similar to Table 3-1.

Forms of Commitment 1. Affective Commitment – a desire to remain a member of an organization due to an emotional attachment to, and involvement with, that organization a. Research shows that people with affective commitment engage in more interpersonal and organizational citizenship behaviours, such as helping, sportsmanship, and boosterism b. Affective behaviour is influenced by the bonds between employees i. Erosion model says that employees with fewer bonds will be more likely to quit the organization ii. Social influence model says that employees who have direct linkages with ―leavers‖ will themselves be more likely to leave OB Assessments: Affective Commitment. This brief survey can be used to give students a feel for their affective commitment levels, if they are currently working (or have recently worked). Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. Ask students with particularly high scores what explains their levels, and do the same for students with particularly low scores. Do the part-time employees in the class feel less committed than the full-time employees? Why might that be? Please email me at ian.gellatly@ualberta.ca if you have any questions about using these assessments in your teaching

2. Continuance Commitment – a desire to remain a member of an organization because of awareness of the costs associated with leaving it a. Continuance commitment is increased by the investment an employee has in an organization, as well as lack of employment alternatives b. Embeddedness summarizes an individual‘s links to the organization and community, and what he or she would have to sacrifice for a job change. The more embedded a person is, the more likely he or she will stay in his or her current position. 3. Normative Commitment – a desire to remain a member of an organization due to a feeling of obligation a. Two ways to build a sense of obligation-based commitment among employees: i. create a feeling that the employee is in the organization‘s debt ii. become a charitable organization Withdrawal Behaviour 1. Withdrawal behaviour (a set of actions performed to avoid the work situation) is particularly important in times of organizational crisis 2. Employees respond to negative work events in one of four ways: a. Exit – an active, destructive response where the employee removes him/herself from the situation b. Voice – an active, constructive response, where the employee tries to change the status quo c. Loyalty – a passive, constructive response, where the employee maintains public support for the company, but privately hopes for an improvement d. Neglect – a passive, destructive response, leading to a decline in interest and effort on the job OB on Screen: Baby Driver The clip begins around the 39:07 mark of the film, continuing until about the 43:40 mark. The clip depicts Baby, shortly after he‘s quit his job as a getaway driver in a bank robbing ring. Baby has met a woman named Debra and winds up putting his driving skills to work in a new job. Ask the students what emotions they would feel if they quit a job where their employer was doing illegal and unethical things. Ask whether those sentiments would still exist even if their actual pay level went significantly down. Bonus OB on Screen: Chef The clip begins around the 31:22 mark of the film, continuing until about the 37:40 mark. The clip depicts Chef Carl Casper quitting his job after an argument with his boss, Riva. Ask the students who they think was ―right,‖ in the argument? What kind of organizational commitment did Carl seem to possess? Other topics of discussion could include which of the four types of

employees Carl would be (star, citizen, lone wolf, apathetic) and which tends to be more powerful in a situation like Carl‘s: organizational commitment or occupational commitment. Try This! Use the Chef clip for a different chapter. The clip provides good discussion fodder for Chapter 6 on Motivation. What drives Carl to do this job? What are the extrinsic factors he‘s searching for (praise, respect) and what are the intrinsic factors that he‘s searching for (creativity, self-expression). What motivational drivers does Riva‘s behavior constrain for Carl, in terms of psychological empowerment? BONUS OB on Screen: Up in the Air The clip begins around the 5:50 mark of the film, continuing until about the 9:42 mark. The clip depicts Ryan Bingham as he supplements his busy travel schedule for work with a speaking engagement at a Hampton Inn in Columbus. Ask the students whether they agree with the ―moving is living‖ sentiment, that a life of attachments winds up weighing a person is down. Ask them how an individual might come to feel that way, and what the plusses and minuses to his/her employee might be. Try This! Use the Up in the Air clip for a different chapter. In terms of Chapter 4 on Personality and Cultural values, what traits does Ryan Bingham seem to possess? Do those make him a good or bad fit for a travel heavy job? The clip also provides good discussion fodder for Chapter 5 on Job Satisfaction. Do students view travel as a positive, in terms of work values? What moods and emotions does travel tend to arouse? Does travel instill variety in a job characteristics sense, or does it instead instill monotony? BONUS OB on Screen: The Incredibles The clip (beginning at 26:53 and ending at 30:41 for a total running time of 3 minutes, 48 seconds) depicts Bob Parr (once a superhero named Mr. Incredible) as he tries to adjust to life at Insuracare--the insurance company in which he‘s been placed as part of the Superhero Relocation Program. Ask the students why Bob remains committed to Insuracare--what form of commitment does he feel and why does he feel it? Does Insuracare benefit from Bob‘s commitment? Why or why not? Note that this discussion could take a broad view on the consequences of commitment--including not only voluntary turnover but also behaviours that are counterproductive to the firm. Try This! Use the Incredibles clip for a different chapter. The clip provides a good demonstration of low job satisfaction in Chapter 5--in terms of both a poor supply of relevant values (such as altruism) in value-percept theory and low levels of significance in job characteristics theory. The clip also illustrates low levels of psychological empowerment in Chapter 7 on Motivation. Bob‘s ―bending‖ of the rules can also be discussed from the perspective of the moral principles in Chapter 8 on Trust, Justice, and Ethics. Finally, the boss‘s behaviour is indicative of a number of ineffective leadership styles in Chapter 13 on Leader Styles and Behaviours, including passive management-byexception.

BONUS OB on Screen: The Firm The clip (beginning at 2:34 and ending at 13:25 for a total running time of 10 minutes, 51 seconds) depicts Mitch McDeere, a Harvard law student, as he interviews with Bandini, Lambert, and Locke, a small law firm in Memphis. The scenes reveal a firm that encourages marriage and children to its employees, because children bring stability. The firm seems charming, if old fashioned, until the end of the second chapter, when a somewhat sinisterlooking man meets with the senior partners to detail the phone calls Mitch‘s wife made from their hotel. That scene hints at the true nature of the firm, which has the mob as its primary client. One topic for class discussion is whether the firm is really taking the right approach in building commitment among its lawyers—is it smart for them to focus on building continuance commitment and embeddedness? Is there anything else they could do to build commitment instead, considering the illegal nature of their activities? 3. Types of Withdrawal a. Psychological (Neglect) i. actions that provide a mental escape from work environment, including: a.) daydreaming b.) socializing c.) looking busy d.) moonlighting e.) cyberloafing Try This!: Have an in-class debate about whether managers should actively monitor internet usage, and punish employees who seem to be engaging in too much cyberloafing. Assign one side of the class to be the ―yes‖ side and the other to be the ―no‖ side, writing the arguments on the board. Then allow students to switch sides to make additional arguments. Then take a vote to see if the class as a whole is in favor of monitoring internet usage. b. Physical (Exit) i. actions that provide a physical escape from the environment a.) tardiness b.) long breaks c.) missing meetings d.) absenteeism e.) quitting 4. Models of Withdrawal Try This! After going through all of the psychological and physical forms of withdrawal, ask students whether they think they are positively, negatively, or uncorrelated with respect to their frequency. Try to direct discussion in such a way that students provide logic for all three positions, because all are somewhat intuitive in their own way. a. Independent forms model

i. Argues that various withdrawal behaviours are uncorrelated with one another, occur for different reasons, and fulfill different needs on the part of employees b. Compensatory forms model i. Argues that various withdrawal behaviours negatively correlate with one another – doing one means you are less likely to do another c. Progression model i. Argues that various withdrawal behaviours are positively correlated with each other – exhibiting one behaviour increases the tendency of exhibiting other behaviours ii. This is the model that has received the most research support C. Summary: What Does It Mean to Be a ―Committed‖ Employee? 8.

WORKPLACE TRENDS THAT AFFECT COMMITMENT

Diversity of the Workforce 1. Canadian workforce is becoming increasingly diverse in terms of ethnicity, age, and nationality 2. As workgroups become more diverse, there is a danger that minority employees will find themselves on the fringe of work networks, which can reduce affective commitment. Foreign born nationals are less likely to have continuance commitment, since they are less embedded in the communities in which they work. OB Internationally. This text box discusses the difficulty multinational organizations may have in keeping employees committed to the organization, especially when they are given expatriate assignments. When teaching classes with a significant foreign-born population, you may ask students to think about whether they are more committed to their home country or to the country in which they are currently residing. Their answers will give them a feeling for the kind of ambivalence often felt by expatriate employees. The Changing Employee-Employer Relationship 1. Downsizing, or involuntary turnover, and the associated practices of outsourcing and using temporary workers, are fundamentally altering the way employees view their relationships with their employers today Try This! Ask students, by show of hands, how many have had a family member who was downsized. Allow any students who are willing to share their anecdotes. Then ask, again by show of hands, how many students feel they will work for 1 employer their whole career. Two employers? Three? Four? More than four? Ask them whether their answers to the question are somehow influenced by growing up amid decades of downsizing. Has downsizing impacted their expectations of their own commitment levels?

2. But downsizing typically doesn‘t make companies more profitable – one study shows that it takes companies two years to return to their former levels of profitability post downsizing 3. Employees who remain with an organization after a downsizing tend to have ―survivor syndrome‖, and they have feelings of anger, depression, fear, distrust, and guilt 4. These trends have changed the psychological contracts that employees have with their employers. Those contracts are now more likely to be transactional in nature (reflecting a narrow set of specific monetary promises and obligations) and less likely to be relational in nature (reflecting a broader set of open-ended and subjective promises and obligations). 9.

APPLICATION: COMMTIMENT INITIATIVES

In general, organizations can foster commitment by being high in perceived organizational support, which can be viewed as an employer‘s commitment to its employees. Organizations can show support by: 1. Providing bonding activities and mentoring activities designed to increase affective commitment 2. Providing a salary and benefits package, and advancement and promotion opportunities, to increase continuance commitment 3. Providing training and development opportunities to increase normative commitment 4. Identify the root source of even minor withdrawal as soon as possible, to try and stop its progression

DISCUSSION QUESTIONS 3.1

Which type of organizational commitment (affective, continuance, or normative) do you think is most important to the majority of employees? Which do you think is most important to you?

Responses to this question will vary from student to student, but most will point to affective as being the most ideal form. In your discussion of their responses, it may be useful to consider whether we really know what keeps us on the job. Normative commitment effects are subtle, and may not be recognized by the people they affect. In addition, continuance commitment factors may trump affective factors at times, with employees staying with a company that makes them unhappy due to a sense of practical or financial need. It is often interesting to consider profiles of the three components, and how these different profiles may lead to different experiences and outcomes. Propose a few different profiles and ask students how each would feel (e.g., high AC, low CC, high NC versus low AC; high CC; high NC). 3.2

Describe other ways that organizations can improve affective, continuance, and normative commitment, other than the strategies suggested in this chapter. How expensive are those strategies?

Organizations might improve affective commitment by encouraging supportive management practices and policies. For instance, having managers act in ways that convey to employees the organization values their contributions and cares about their well-being. In addition to management practices, organizations can do a number of things to be supportive, including providing adequate rewards, protecting job security, improving work conditions, and minimizing the impact of politics. Continuance commitment might be increased through bonuses or other rewards, but also through the acquisition of competing companies in the area, thus removing employee options for work. Both of these approaches can be expensive, although obviously the latter is more expensive than the former. Normative commitment can be fostered by fostering a sense of trustworthiness in top management. Being open and honest about key events can build a sense of integrity regarding top management, which can create a sense of obligation among employees. 3.3

Consider times when you‘ve reacted to a negative event with exit, voice, loyalty, or neglect. What was it about the situation that caused you to respond the way you did? Do you usually respond to negative events in the same way, or does your response vary across the four options?

Each student will have an individual response, but this question offers a good opportunity to reinforce the concepts that differing levels of performance and commitment lead to different responses to negative events in the organization. It may also be helpful to point out to students that performance and commitment are interrelated and that both are influenced by environmental factors within the organization. 3.4

Can organizations use a combination of monitoring and punishment procedures to reduce psychological and physical withdrawal? How might such programs work from a practical perspective? Do you think they would be effective?

Monitoring and punishment programs may decrease physical withdrawal, but they are likely to increase psychological withdrawal, since most employees respond to coercive management efforts with resistance, rather than compliance or commitment. 3.5

Can you think of reasons the increased diversity of the workforce might actually increase organizational commitment? Why? Which of the three types of commitment might explain that sort of result?

Increased diversity brings with it an opportunity to learn and experience new things, which can make work more meaningful and enjoyable and increase affective commitment. If the increased diversity winds up improving organizational performance, then affective commitment could be further increased as employees identify more with ―a winner.‖ In addition, employees who view increased diversity as ―the right thing to do‖ could respond to such initiatives with increased normative commitment.

3.6

Studies suggest that decades of downsizing have lowered organizational commitment levels. Can you think of a way that an organization can conduct layoffs without harming the commitment of the survivors? How?

One way is to handle the layoffs in an exceptionally fair manner--by providing notice of the layoffs in an honest and sincere way, by carefully explaining the business reasons for the layoffs, and by providing extensive severance and placement assistance (for more on this, see Chapter 8 on Trust, Justice, and Ethics). Survivor commitment will also be more protected if the remaining employees get the sense that the layoffs are truly helping the long term financial performance of the firm.

CASE: LYFT Questions: 3.1

Consider the way that Lyft managers its drivers, compared to Uber. Should the things that Lyft does engender affective commitment, continuance commitment, or normative commitment?

The fact that Lyft has a better corporate reputation should boost affective commitment, at least compared to Uber. If Lyft remains more lucrative now that Uber has also incorporated tipping, then that would maintain a continuance commitment advantage as well. If Uber‘s ethical issues remain, then staying at Lyft rather than moving to Uber could have some normative qualities as well. 3.2

Lyft‘s drivers are technically independent contractors, rather than employees. Are there reasons to expect them to feel less commitment to the company because of that designation? Why?

Definitely. Being a true employee brings more psychological involvement in a company, which fosters commitment. The independent contractor classification is the organization keeping drivers at arm‘s length in some sense, for various business reasons. But that length restricts commitment. That issue is exacerbated by the nature of being a driver, as one rarely comes into contact with any other members of the company. 3.3

Consider that ride-sharing companies like Lyft manage their drivers through online apps. Not only do these apps assign work by connecting drivers to passengers, but they evaluate and reward drivers based on passenger feedback. On this basis, the algorithm decides whether drivers may continue to use the app or whether they are deactivated by the company. While the hyper-surveillance of ride-share apps has its virtues (e.g., passengers feel safe), might this kind of external control have implications for drivers‘ organizational commitment and withdrawal? Explain.

This question will surely generate differences of opinions and has broader implications for how technology is used in organizations. The issue boils down to control and how people feel about

being externally regulated. On the one hand, control via technology or by work rules and procedures can offer comfort because it reduces uncertainty and anxiety. On the other hand, people who feel overly controlled will lose their sense of autonomy and their relationship with the organization might suffer. From a commitment perspective, excessive control conveys that the company doesn‘t trust you leading to eroded emotional bonds (leading to lower levels of affective commitment). Ask students how they think it will affect continuance or normative commitment, and what forms of withdrawal are likely when work activities are monitored. Finally, instructors might want to consider using this scenario in few other chapters in the textbook, such as the chapters on Motivation, Communication, and Organizational Structure. BONUS CASE: PWC7 What‘s your sense of the typical career path at a Big Four accounting firm? If you‘re like most people, you might imagine something very traditional, where many different kinds of accountants perform their duties within a large formal bureaucracy. At PricewaterhouseCoopers (PwC) you might experience something a little less traditional. A multinational professional services network with 223,000 employees in 157 countries, PwC is now among the largest firms of its kind in the world (along with Deloitte, EY, and KPMG). In Canada, PwC has more than 6,700 partners and staff in locations from St. John‘s, Newfoundland to Victoria, British Columbia. In recent years, PwC has been actively trying to make its traditional career paths, well…..a little less typical. In fact, the firm, which was recently named one of Fortune‘s 100 Best Companies to Work For, is taking a number of steps to build a sense of loyalty among the rank and file. Some of those steps are focused on making PwC a fun place to work. For example, interns who receive offers of full-time employment get to compete in games and challenges held in locations such as Disney World. PwC also uses sporting events and leagues to promote camaraderie. Nearly 400 employees—including interns and partners—participate in its annual softball tournament. Other steps are focused on making PwC a convenient place to work. For example, the company offers a number of desirable perks, including telecommuting, job sharing, compressed work weeks, paid parental leave, and paid time off for volunteering. Indeed, PwC recently announced that it would begin contributing $1,200 a year to employees‘ student loans. The founder of a startup helping PwC administer this new perk views it as a ―tremendous differentiator‖ when PwC recruits on college and university campuses. Helping new hires pay off their student loans should be particularly valued by millennials, who typically carry a significant amount of debt from their postsecondary education. PwC hopes that‘s the case, as it‘s struggled to build loyalty on the part of millennials in recent years. Whereas new hires typically stayed for multiple years to take advantage of training and 7

Sources: C. Groden, ―Five Things You Can Do to Attract Millennial Talent,‖ Fortune, March 15, 2016; R. Levering, ―The 100 Best Companies to Work For,‖ Fortune, March 15, 2016; M. Moskowitz, and R. Levering, ―The 100 Best Companies to Work For,‖ Fortune, March 15, 2015; P. Thallner, ―Where Hours Aren‘t Everything,‖ Great Place to Work, March 29, 2016, https://www.greatplacetowork.com/blog/130-where-hours-aren-t-everything?highlight=WyJwd2MiLCJwd2MncyJd; J.M. Twenge, S.M. Campbell, B.J. Hoffman, and C.E. Lance, ―Generational Differences in Work Values: Leisure and Extrinsic Values Increasing, Social and Intrinsic Values Decreasing,‖ Journal of Management 36, pp. 1117–42; and C. Zillman, ―Hot New Perk: Paying Down Student Loans,‖ Fortune, March 15, 2016.

development opportunities, more and more millennials have been quitting after a year or two. ―Our first reaction was to question ourselves,‖ says Anne Donovan, a manager in PwC‘s human capital group. ―We thought we must be hiring the wrong people.‖ That sense changed when PwC commissioned a large-scale study of millennial attitudes to find out what drove loyalty for that age group. What did that study show? Summarizes Donovan, ―Millennials are driven by how well their team works together, how supported and appreciated they feel, and how much possibility they have. They‘re all about how it feels.‖ PwC is certainly not the first group to attempt a large-scale study of millennial attitudes. Such studies face an inherent challenge, however. Researchers have to be able to separate the effects of generation membership—millennial, Generation X, or baby boomer—from the effect of stage of life—being twenty-something, thirty-something, or forty/fifty-something. Suppose a given study showed that 25-year-olds were especially attracted to firms that offered paid time off for volunteering. Is the explanation for that finding that millennials value volunteering more than previous generations, or that twenty-somethings value it more than older employees? That‘s a critical distinction because millennials will remain members of their generation for their lifespan, whereas twenty-somethings will eventually turn into thirty-somethings. One study, published in Journal of Management, did an especially good job of teasing apart generation membership and stage of life. The study drew from an annual survey of 15,000 high school seniors—thereby holding stage of life constant. Respondents were classified as baby boomers if they were born between 1946 and 1964, as Generation X if they were born between 1965 and 1981, and as millennials if they were born between 1982 and 1999. What did the study uncover? One finding was that millennials valued leisure time more than either Generation X or baby boomers, being more likely to value ―A job that leaves a lot of time for other things in your life.‖ Somewhat surprisingly given existing stereotypes, there were few differences across generations in valuing intrinsic rewards (―A job that is interesting to do‖), altruistic rewards (―A job that gives you an opportunity to be directly helpful to others‖), or social rewards (―A job that gives you a chance to make friends‖). Millennials were less focused on extrinsic rewards (―A job that provides you with a chance to earn a good deal of money‖) than Generation X, but more focused on such things than baby boomers. The finding that millennials value leisure time dovetails nicely with PwC‘s own results. Their study showed that 95 percent of millennials believed that work–life balance was important to them. Moreover, 25 percent of millennials were disappointed in the work–life balance that PwC was affording them. From a loyalty perspective, those 25 percent can be viewed as ―retention risks‖—employees who may decide to turn over because they no longer want to stay with PwC. In response, PwC organized a top-down initiative where managers were encouraged to work with their employees to chart out a work schedule that suited them. The good news is that PwC now understands what drives loyalty among millennials. The bad news is that future interns will soon be members of the next generation! Questions:

3.1

Compare the findings described above for Millennials to your own views on Millennial characteristics. What surprises you about the findings? What doesn‘t surprise you?

The answer may depend to some extent on whether students are themselves Millennials. Most will not be surprised by Millennials‘ increased focus on leisure and work-life balance. That tends to be consistent with prevailing stereotypes. That they are not necessarily more focused on social and prosocial dynamics will be surprising, most likely. 3.2

If you think about the three types of commitment—affective, continuance, and normative—which do you think is most changed among Millennials (or twentysomethings)? In what way?

The notion of normative commitment is likely to be foreign to young employees. Their parents came of age in the time of downsizings, when the notion of ―lifelong loyalty for lifelong security‖ had already ebbed. Millennials expect to work for several different employers in their careers, and they understand that their employers may often view them as replaceable assets. 3.3

Consider all the initiatives and programs PwC uses to inspire employee loyalty. Do most of those seek to ―move the needle‖ on affective commitment, continuance commitment, or normative commitment?

Many of the social and sports-related activities are attempting to increase affective commitment, as they focus on deepening bonds between employees. The perks focus on continuance commitment, as they simply make it easier to stay with PwC than with employers who lack such perks. The more unusual perks—like helping to repay student loans may create a sense that PwC is going ―above and beyond‖ for its employees. That could increase normative commitment to some extent. BONUS CASE: COSTCO8 Picture this scenario. You‘re the CEO of one of the largest retailers in Canada, trying to guide your company through the economic downturn. What would you do to cope with financial uncertainty? Maybe you‘d cut wages or staff, as Walmart, Best Buy, Home Depot, and Office Depot have done. After all, that‘s a straightforward way to reduce costs. Jim Sinegal, cofounder and recently retired CEO of Costco, did the opposite—giving all hourly employees a wage increase. The business model used at Costco is different from that of most of its competitors. It prices all of its groceries, home electronics, and office supplies at just 15 percent above cost, making it the price leader on virtually everything it sells. Costco‘s profits come from its $55 annual membership fee. 8

Sources: Stone, B. ―Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World.‖ Bloomberg Businessweek, June 6, 2013, http://www.businessweek.com/articles/2013-06-06/costco-ceo-craig-jelinek-leads-the-cheapesthappiest-company-in-the-world#p1; and Dudley, R. ―Walmart Faces the Cost of Cost-Cutting: Empty Shelves.‖ Bloomberg Businessweek, March 28, 2013, http://www.businessweek.com/articles/2013-03-28/walmart-faces-the-cost-of-costcuttingempty-shelves.

So why the wage increase? Because Costco understands that its profitability relies on customers renewing those memberships year after year. And that it needs customers to actually buy stuff when they visit, rather than simply ―showrooming‖ products (i.e., visiting a retailer to view and research a product, then purchasing it for less online). And—when the downturn comes to an end—Costco needs those customers to keep it as part of their routine rather than viewing it as someplace they‘re embarrassed to visit. All of that requires committed and loyal employees who are knowledgeable and invested enough to make the Costco shopping experience fun and convenient. Joe Carcello is one of those employees. The 59-year-old has worked for Costco for 26 years, noting, ―I‘m just grateful to come here to work every day.‖ Indeed, Costco pays its hourly workers an average of $20.89 an hour, three times the $7.25 minimum wage. Explains new CEO Jim Jelinek, ―We know it‘s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment, and loyalty.… If you treat consumers with respect and treat employees with respect, good things are going to happen to you.‖ Good things do indeed seem to be happening at Costco, as its industry leading turnover rate (5 percent) is matched only by its stock price (which has doubled since 2009). As it tries to build on its success, Costco faces competition from two different flanks. The first, of course, is from Walmart—the only major retailer bigger than Costco. Although they compete for many of the same customers, Costco and Walmart are very different in a number of respects. Costco‘s employees make $20.89 per hour; Walmart‘s make $12.67. ―I just think people need to make a living wage,‖ explains CEO Craig Jelinek. ―It also puts more money back into the economy and creates a healthier country. It‘s really that simple.‖ In contrast, Walmart has drawn criticism for cutting staff within its stores over the past five years. Those cuts have resulted in longer lines, less help for customers, disorganized aisles, and unstocked shelves. Costco‘s second competitor—Amazon—has no shelves to stock. Indeed, Amazon‘s business model relies, in part, on in-store shopping being so annoying that ordering online becomes the more relaxing alternative. Although the rise of Amazon has signalled a decline for a number of retailers, Costco has been able to hold its own, for three reasons. First, the bulk discounts it receives from suppliers allow Costco to have lower prices than Amazon. Second, much of Costco‘s business revolves around groceries—a market Amazon has yet to crack. Third, Costco does have at least some online presence, its own website being the 17th most popular retail site in the United States. Will these advantages hold with online retail growing at roughly three times the rate of retail overall? Costco chair Jeff Brotman summarizes the sobering nature of such trends: ―I used to get up every morning worried about Walmart.… Now I worry about them, and I worry whether we are up to the challenge of the shift in retail buying habits.‖ The different threats represented by Walmart and Amazon pose something of an organizational commitment dilemma for Costco. On the one hand, Costco‘s 5 percent turnover rate gives it a cost and stability advantage that helps it beat traditional competitors. On the other hand, that retention limits the fresh ideas that outsiders can bring to a company. Indeed, Costco‘s executive turnover rate is only 1 percent, and it refuses to hire business school graduates (instead opting to send rank-and-file employees to school to earn degrees). Indeed, even

recently retired CEO Jim Sinegal, who is 77, has maintained an advising role. That potential for stagnation does not seem to be lost on Costco, however. John Matthews, vice-president of human resources, acknowledges that the company has become ―awfully inbred.‖ And Rotman admits, succinctly: ―We‘re all old.‖ Questions: 3.1

How exactly does Costco‘s low turnover rate help it in its battle against Walmart? Will any of those factors also help against Amazon?

The most obvious way that it helps is cost savings, as a low turnover rate has a direct and quantifiable impact on the bottom line. That allows Costco to compete on price with Walmart, which is critical. The experience that Costco builds because of that stability also helps, given that there are many similarities in business models for Walmart and Costco. That stability is less helpful when competing with Amazon, because Costco likely needs ―fresh blood‖ to deal with a different kind of competitor. 3.2

What would a ―perfect turnover rate‖ be for a company like Costco? Describe the consequences of a turnover rate that‘s too low.

It‘s hard to argue with an overall turnover rate of 5-percent. That seems about perfect. But the 1-percent level among executives could indeed be too low. The consequences of that would be an inability to spot and react to new and emergent threats—threats that don‘t resemble issues that Costco faced five or ten years ago. 3.3

If you were in charge of human resources at Costco, would you retain the philosophy of sending rank-and-file employees to school rather than hiring business school graduates? Why or why not?

There is a lot of wisdom in this approach. The prospect of future promotions is a motivator that also breeds continuance commitment, even as receiving promotions builds affective and normative commitment. It is key to receive a business school education to be exposed to new and cutting edge ideas. But if you can get that positive with your own employees—as opposed to outsiders—it can be a win-win. All that is lacking here are recruits and hires that have not already drunk the ―Costco Kool-Aid,‖ which could be valuable from an innovation perspective.

BONUS CASE: ACCENTURE9 It‘s 5 a.m., time to rustle out of bed to catch your flight from Toronto to Edmonton. You‘ll be in the ―City of Champions‖ for the next four days, helping a major client at an oil refinery implement a new information technology system. Then you‘ll fly back to Toronto on Thursday, working from home on Friday. You‘ll need to do it all again next week, and the week after that, and the week after that. That‘s the schedule for Margaret Bretzke, a consultant at Accenture Canada. 1 Accenture is a global management consulting company that collaborates with clients in nearly every major industry and government agency to help them become high-performance organizations. Margaret is one of 4,500 employees who work out of Accenture‘s regional offices from coast to coast, and part of a global family that includes more than 211,000 people in 120 countries. 2 Although Margaret is currently based in Canada, she works virtually with team members all over the world. This sort of arrangement is typical, with the firm‘s employees needing to be able to work from anywhere, depending upon the needs of their clients. On average, consulting firms lose 15 to 20 percent of their workforce every year. The career path for consultants is often summarized as ―up or out,‖ with employees either being promoted after putting in some time or voluntarily turning over to pursue a job with less travel and more stable hours. The most recent estimates put Accenture‘s own attrition rate at 15 percent, down from 18 percent two years prior. The challenge for firms like Accenture is keeping employees committed to an organization that they rarely see. After all, consultants like Margaret are scattered around the world, rarely coming face to face with their manager, and often lacking a true headquarters. Accenture has pursued several strategies to create a sense of loyalty and attachment among its consultants. It organizes quarterly ―community events‖ in which groups of employees come together for charity drives, cultural fare, or sports activities. These events are designed to give the consultants some sense of connection, despite the far-flung nature of their work. The company also instituted a sabbatical program, in which consultants can arrange to have a portion of their paycheques set aside for a three-month vacation after three years of service. Accenture also invests a great deal in their employees, with consultants spending an average of 75 hours a year in training sessions. For example, consultants can take a training course on leading teams whose members are geographically separated. In addition to all this, the company is committed to attracting and developing women. The hope is that these sorts of investments will instill a sense of value in further years of service, keeping consultants for a longer time period. As a global company, Accenture understands the value of a diverse workforce, united by a common culture and commitment to help its clients achieve high performance. In particular, Accenture is committed to attracting, retaining, and advancing women. Currently, more than 70,000 women work at Accenture, roughly a third of the company‘s global workforce. According to William D. Green, Chairman and CEO of Accenture, ―having an inclusive 9

Sources. Marquez, J. ―Accentuating the Positive.‖ Workforce, September 22, 2008, pp. 18–-25. Levering, R.; and M. Moskowitz. ―And the Winners Are…‖ Fortune, February 2, 2009, pp. 67–-78. Berfield, S. ―Mentoring Can Be Messy.‖ BusinessWeek, January 29, 2007, pp. 80–-81.

workforce is part of what makes Accenture a special place, and the commitment to advancing the careers of women at Accenture is one of our top priorities.‖ Several corporate initiatives have been implemented to support women in their career development and progression, such as flexible work arrangements (encouraging a balance between work and personal priorities), an active women‘s mentoring program (female executives are paired with senior executive mentors), and the Accenture Women‘s Network (a global internal website that connects women across the company; an online forum where women can share experiences, advice, and insight). The company also provides courses directed toward developing woman leaders. In the Developing High-Performing Women course, for example, female role models help managers evaluate requirements to reach the next stage in their careers. To date, more than 550 women from 23 countries have participated in the program. At the local level, the company helps women build strong networks, both within Accenture and with the broader community. There are local women‘s networking groups in Austria/Switzerland/Germany, Canada, Denmark, Finland, France, India, Italy, Ireland, Japan, Latin America, Norway, the United Kingdom, and the United States. Finally, for eight consecutive years, Working Mothers magazine has included Accenture in the ―100 Best Companies for Working Mothers.‖ In short, this should be an easy place for women, like Margaret Bretzke, to work and be successful. You might think that Accenture‘s primary concern is losing its people to other top consulting firms. In fact, the company actually loses most of its consultants to its very own clients. A consultant at another firm explains the appeal of client firms this way: ―The coolest thing about being a consultant is that I know exactly where I would go work if I left, because I already have assessed the workplace of the company.‖ As Accenture consultants work with more and more clients, they develop a broader network of contacts that become potential employers. Those moves typically bring more stability and the sense of moving into a ―smaller pond.‖ Margaret feels she is at a crossroads. Although she enjoys interacting with clients and her Accenture colleagues all over the world, at 32 she is not sure if this frenzied work pace is sustainable in the longer term. Questions: 3.1

Assess the companies approach to attracting, developing, and retaining women. Do you have any concerns? Explain.

Accenture creates a work context that is particularly attractive to women. The nature of the work is hectic and high-pressure, but employees appear to have some degree of flexibility with regard to when, how, and where work in accomplished. An immediate benefit of flexible work arrangements is that it can be easier to achieve work-life balance/work-family balance. Other attractive features would the opportunity to work with many different clients in different industries on different problems. It would appear that many of the projects are collaborative in nature, offering the chance to work with interesting and informative colleagues. For people who like lots of change, growth opportunities, and challenge of excelling and the rewards that flow from high performance, Accenture would be an attractive destination. From a

development perspective, the company appears to invest heavily in training, not just on the technical side but in the softer skills, such as leadership. In terms of retention, one way the company builds commitment is to do things to strengthen emotional ties and bonds (e.g., faceto-face social events; active mentoring; organization support through its on-line forums). Possible concerns might be that high-pressure, high-pace work may increase the likelihood of emotional exhaustion and burnout (see Chapter 5 on Stress). Consulting work is also a lifestyle and may not be for everyone, or it might work for a time in your life. Another concern is that if strong emotional connections and social ties are not developed, there is a real risk that talented consultants may leave the company to work with a client firm. 3.2

What could Accenture do to reduce the number of consultants who leave to work for client firms? Would those strategies have any unintended drawbacks?

One obvious approach is to create some sort of contractual agreement that states that consultants cannot join a client firm for some specified period of time. That strategy would have two unintended drawbacks. First, it might lower the performance of Accenture consultants to some degree, as some consultants might go ―above and beyond‖ when performing their tasks partly because they see a client firm as a good long-term destination. Second, consultants might wind up feeling trapped to some extent, creating resentment toward Accenture. The best approach is to be supportive enough of consultants‘ needs that a sense of affective and normative commitment develops. 3.3

What form(s) of organizational commitment do you think Accenture is trying to instill in its employees, and why? What forms(s) of commitment do you think are actually being experienced, and why? Ideally, what advice would you give the company?

By creating opportunities to grow and achieve, Accenture is trying to foster affective commitment. This is also fortified by its initiatives to strengthen emotional and social bonding (e.g., mentoring; social activities; work teams). By providing a context that allows employees to meet their personal and social needs, and by providing generous job-specific training opportunities, the company may also be strengthening continuance commitment and normative commitment. Ideally, all three forms of commitment will be strong. In terms of the overall level of commitment experienced, or the strength of the three commitment forms, it would depend on each consultant. The best advice for the company would be to ensure that affective commitment is strong. Research has showed that continuance commitment, and to a lesser extent normative commitment, feels differently depending if affective commitment is high than when it is low. When desire or emotional attachment is absent, people who are committed because they ―have no other choice‖ or ―feel obligated‖ can feel stuck or trapped in the relationship! People may stay but they are not happy about it, and it shows in terms of their on-the-job behaviours. However, when desire is strong ―being committed‖ can feel very positive, even if continuance and normative commitment is strong. The payoff for high affective commitment is not just retention, but in higher levels of citizenship behaviours and lower counterproductive behaviours (See Chapter 2).

3.4

Can you think of any ―silver linings‖ for Accenture when consultants do leave to work for clients? Can such situations benefit the firm in some way?

Such exits wind up broadening and deepening Accenture‘s professional network. Assuming the exiting consultants feel good about Accenture and their time there, they might deepen their new firm‘s professional relationship with Accenture. They may also be in a position where they can recommend Accenture to supplier firms or partner firms. 3.5

What do you think Margaret with do – will she stay or leave?

Student answers will vary. Try to get them to explain the reasons behind Margaret‘s decision, and what this says about the kind of commitment she experiences (or not). BONUS CASE: MICROSOFT10 When was the last time you used a Microsoft product? Chances are, it was within the past few hours, whether you were surfing the Web using Internet Explorer, answering e-mail using Outlook Express, writing a paper or memo using Word, using a computer running Windows, or playing a videogame on an Xbox. How did Microsoft become successful enough to attain this presence in our day-to-day lives? If you were to ask the chairman of the company, Bill Gates, or the CEO of the company, Steve Ballmer, they‘d likely explain that Microsoft hires the best computer science students from the best universities, year in and year out. After all, if a company wants to have the best products in a given market, it helps to have the best people. Microsoft has been able to hire the best people in part by being known as a great place to work. For example, Microsoft placed 50 on Fortune‘s list of the ―100 Best Companies to Work For‖ in 2007. However, for the first time in its history, Microsoft is having trouble holding on to its best and brightest. Microsoft‘s annual rate of voluntary turnover, which captures the percentage of the workforce that decides to quit in a given year, is just 9 percent—still below the industry average. But many of Microsoft‘s most respected software developers, engineers, managers, and marketers have recently left to go work for competing firms in the high-tech industry. For example, Kai-Fu Lee, one of Microsoft‘s foremost experts on speech recognition, left for Google, as did Mark Lucovsky, Joe Beda, and Gary Burd, three of the company‘s most distinguished engineers. The employees who have quit their jobs at Microsoft voice a wide range of complaints about the company, including a swelling bureaucracy, sagging morale among the rank-and-file employees, a lack of innovative spark, cuts in compensation and benefits, and an unfair performance evaluation system. Many of these complaints are echoed on Web sites and blogs run by current Microsoft employees, which reinforce a culture of criticism within the company.

Sources: S. Harvey, ―Getting the Stars Aligned at Microsoft,‖ Strategic HR Review, March 2002; M. Goldsmith, ―Engaging Employees,‖ BusinessWeek, July 3, 2007; ―Microsoft Struggles to Improve Worker Morale,‖ eweek, June 5, 2006; M. Moeller and V. Murphy, ―Outta Here at Microsoft,‖ BusinessWeek, November 29, 1999; J. Persaud, ―Keep the Faithful,‖ People Management, June 12, 2003.

The challenge for Microsoft is to find a way to reverse these trends so that it can retain the most talented employees. After all, what could be more damaging than losing one of your best and brightest to a major competitor? Not only do you no longer have access to that employee‘s knowledge and experience, but now your competitor can draw on his or her wisdom to find a way to beat you. Microsoft is already taking steps to combat some of the complaints raised by former employees, including a reorganization of its business units designed to make the company more nimble and innovative. Of course, there isn‘t likely to be a ―magic bullet‖ that will single-handedly prevent further exit of more and more talented and valuable employees. Microsoft has one of the lowest employee turnover rates in the IT industry; however, there is room for improvement. Top talent is currently leaving Microsoft to pursue Internet start-ups or jumping ship to Google. The loss of these key employees represents a serious threat to the success of the company in the future. Recognizing this problem, Microsoft is actively identifying its top talent and developing ways to make jobs more attractive. Employee engagement appears to be the buzz today. Studies show that employees who are engaged are more productive, profitable, and customer focused and less likely to leave the organization. According to Dr. Beverly Kaye, an expert on career issues in the workplace, what employees want is a relationship with their managers, so managers have to act more like coaches, not bosses. Some of the factors that always rank at the top with regard to what gets employees engaged and what they value in a job include career opportunities and development, great people to work with, and a great boss. Microsoft is meeting the challenge of improving worker morale head on to retain its employees. My Microsoft is a program introduced by the company to provide some of the attractive amenities that other IT companies offer employees. This program will include a wide range of incentives focused on improving the working conditions and culture of the company, such as a set of lifestyle perks and a management development program. Microsoft‘s new program is an initial step to improve the morale of employees, but only time will tell if this program is attractive enough to retain employees. Questions: 3.1

What are the factors causing the brain drain at Microsoft? Explain.

Employees at Microsoft are leaving because of organizational factors that have decreased their affective, continuance and normative commitment. For example, a swelling bureaucracy and sagging morale are both indicators of low affective commitment, while cuts in compensation and benefits are likely to affect continuance commitment. An unfair performance evaluation system is likely to cause problems both in terms of affective and normative commitment, as employees who believe they are treated unfairly are likely to withdraw. The complaints on blog sites also reduce normative commitment because they reduce faith in the company. 3.2

Is Microsoft‘s organizational structure having an impact on creating organizational commitment? Explain.

Microsoft‘s organizational structure does have an impact on creating organizational commitment. As companies get larger, they tend to become both more autocratic and more bureaucratic – and this is what is happening at Microsoft, leading to a decrease in affective commitment. It is only when large organizations are structured to run as smaller groups that employees have the autonomy they need to be fully engaged.

EXERCISE: REACTING TO NEGATIVE EVENTS Instructions: Ask students to read the three vignettes and write down two specific behaviours that they would engage in as a result of the work situation. Emphasize that they should write down what they actually would do, as opposed to what they wish they would do. This is meant to encourage them to write ―nothing‖ if they would indeed to nothing in response to one of the situations. This is important because responses like loyalty and neglect in the Exit-Voice-Loyalty-Neglect framework are very passive responses to negative events that largely involve doing nothing. Then put the students in groups, have them come to a consensus on the most likely behaviours for each scenario, and have them share those behaviours with the class. Sample Behaviours: Here‘s an example of the kinds of behaviours students might come up with for each of the three scenarios: Annoying Boss - Just ―grin and bear it‖ - Vent by talking bad about boss to others Boring Job - Start looking for another job - Ask for new job assignments Pay and Seniority - Start ―slacking off‖ at work - Demand a raise

(Loyalty) (Unclear) (Exit) (Voice) (Neglect) (Voice)

Questions: Personal factors that might cause one to adopt voice or loyalty over exit or neglect include how patient an employee is, how much he/she likes colleagues and coworkers, as well as marketability. Situational factors that might drive the same sort of choice include the prestige of the company and the general labor market conditions. There are responses that do not fit into the Exit-Voice-Loyalty-Neglect framework. For example, it‘s not clear where the ―venting‖ response above would fit. In general, actions that fall under the ―counterproductive behaviour heading (discussed in Chapter 2) do not really fall into any of the Exit-Voice-Loyalty-Neglect categories.

OMITTED TOPICS The field of organizational behaviour is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. * Attitudes – Organizational commitment is part of a larger family of work-related attitudes. Attitudes have an associated attitude object, which may be the organization, the job, a coworker, or the leader. They also have an evaluative component (what is felt toward the object), a cognitive component (what is thought about the object), and a behavioural component (a predisposition to act a particular way towards the object). For more on this, see: McGuire, W. J. ―Attitudes and Attitude Change.‖ In Handbook of Social Psychology, Vol. 2, eds. G. Lindzey and E. Aronson. New York: Random House, 1985, pp. 233-346. * Job Satisfaction – Along with organizational commitment, job satisfaction is the most commonly discussed job attitude. It reflects a pleasurable emotional state resulting from an appraisal of one‘s job and is covered in Chapter 5. * Unfolding Model of Turnover – Describes the process by which employees decide to leave the organization, including the roles of ―shocks to the system‖ (a critical event) and ―decision frames‖ (lenses based on past experience that color perceptions). For more on this, see: Lee, T. W.; and T. R. Mitchell. ―An Alternative Approach: The Unfolding Model of Employee Turnover.‖ Academy of Management Review 19 (1994), pp. 51-89

Chapter 4: Personality, Cultural Values, and Ability

NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW This chapter introduces students to the concept of the ―Big Five‖ dimensions of personality – conscientiousness, agreeableness, neuroticism, openness to experience, and extraversion. The evidence linking these traits to performance and commitment is explored. The chapter also describes cultural values, such as individualism-collectivism, power distance, and uncertainty avoidance, which combine to give nations a sort of cultural personality. Finally, this chapter discusses the nature of cognitive, emotional, and physical abilities. The chapter also highlights how these abilities are measured and how information on these abilities is used in organizations. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 4.1 4.2 4.3 4.4 4.5 4.6 4.7

What is personality? What are cultural values? What is ability? What are the ―Big Five‖ factors of personality? What taxonomies can be used to describe cultural values? What are the various types of cognitive ability? What are the various types of emotional ability? What are the various types of physical ability? How do individual differences affect job performance and organizational commitment?

CHAPTER OUTLINE 10.

PERSONALITY, CULTURAL VALUES, AND ABILITY Try This! Open the class by asking students to describe someone (for example, their first college roommate). Ask them to give you adjectives that describe the person while you write the adjectives on the board. As adjectives are listed, try to put them into five separate columns representing the conscientiousness-agreeableness-neuroticism-extraversionopenness (CANOE) dimensions of the Big Five. If a trait represents a low levels of a given dimension (e.g., ―lazy‖ for conscientiousness) put it in parentheses. Decline to include any adjectives that actually get at ability rather than personality (e.g., ―smart‖). You may need to prod students a bit to come up with openness adjectives. This process should eventually result in a table like Figure 4-1. Once the discussion slows down, see if students recognize the categories you‘ve created on the board, thereby illustrating how good of a job the Big Five does at describing what people are like.

Personality 1. The structures and propensities inside a person that explain his or her characteristic patterns of thought, emotion, and behaviour. 2. Captures what people are like, as opposed to ability, which captures what people can do. Cultural Values 1. Shared beliefs about desirable end states or modes of conduct in a given culture 2. Influence the expression of personality traits Ability 1. Ability refers to the relatively stable capabilities people have to perform a particular range of different but related activities. 2. Abilities are a function of both genetics and the environment, including family environment, quantity of schooling, choice of occupations, and biological hazards in the environment, such as malnutrition 11.

HOW CAN WE DESCRIBE WHAT EMPLOYEES ARE LIKE?

Personality (Big Five Taxonomy) 1. All traits can be classified into five broad factors that summarize personality. These factors include: a. Conscientiousness

b. Agreeableness c. Neuroticism d. Openness to Experience e. Extraversion OB Assessments: Big Five. This brief survey provides students with an idea of where they stand on each of the ―Big Five‖ measures of personality. As you get to each of the Big Five during lecture, use a show of hands to see how many students fell above or below the average level (note, you may want to skip this step for neuroticism). You will typically find that most students are high on conscientiousness. This makes sense given that the students (a) made it into their current program of study, (b) successfully passed multiple semesters in their program of study, and (c) showed up for class on this particular day. Students may find it interesting to compare their results on this test with their results on the complete version of the same test (300 item), which can be accessed without charge at http://www.personal.psu.edu/j5j/IPIP/ipipneo300.htm. The longer version gives students feedback on specific facets of each of the Big Five, facets that are not discussed within the chapter. For example, the longer version gives students feedback on six facets of Extraversion: friendliness, gregariousness, assertiveness, activity level, excitement seeking, cheerfulness. Please email me at ian.gellatly@ualberta.ca if you have any questions about using these assessments in your teaching 2. Conscientiousness a. Conscientious individuals are dependable, organized, reliable, ambitious, hardworking, and persevering b. Conscientiousness has the biggest influence on job performance of any of the Big Five c. Conscientious individuals prioritize accomplishment striving, which reflects a strong desire to accomplish task-related goals as a means of expressing one‘s personality a.) One study shows that conscientious salespeople set higher sales goals for themselves. b.) Another study shows salespeople‘s organizational skills were valuable during their first year of employment, with their ambitious nature becoming more critical as they gained tenure and experience. c.) Third research study shows that childhood conscientiousness ratings are correlated with career success five decades later. d.) Conscientiousness also shown to be negatively related to mortality, including death from injuries, death from cardiovascular disease, and death from cancer, probably because conscientiousness was negatively related to alcohol consumption and smoking during adulthood.

3. Agreeableness a. Agreeable individuals are warm, kind, cooperative, sympathetic, helpful, and courteous b. Agreeable individuals prioritize communion striving, which reflects a strong desire to obtain acceptance in personal relationships as a means of expressing one‘s personality c. Communion striving is beneficial for some jobs, but detrimental to others i. Agreeable individuals tend to have strong customer service skills, because they tend to react to conflict by walking away, adopting a ―wait and see‖ attitude, or giving in to the other person d. A ―lived day‖ study shows that agreeable individuals tend to spend more time in public places, are less likely to use swear words and more likely to use words that convey personal rapport during conversations 4. Extraversion a. Extraverted individuals are talkative, sociable, passionate, assertive, bold, and dominant (in contrast to introverts, who are quiet, shy, and reserved) b. Of the Big Five, extraversion is the easiest to judge in zero acquaintance situations—situations in which two people have only just met c. Extraverted people prioritize status striving, which reflects a strong desire to obtain power and influence within a social structure as a means of expressing one‘s personality d. Extraverts are more likely to emerge as leaders in social and task-related groups e. Extraverts are rated as more effective in leadership roles by their followers f. Extraverts are more satisfied with their jobs – they tend to by high in positive affectivity—a dispositional tendency to experience pleasant, engaging moods such as enthusiasm, excitement, and elation g. Extraversion is also associated with positive life events such as getting a raise at work and getting married or engaged. However, extraverts have less frequent interactions with their families. 5. Neuroticism

a. Neurotic individuals are nervous, moody, emotional, insecure, and jealous b. Neuroticism is negatively related to job performance for most jobs c. Neuroticism is synonymous with negative affectivity—a dispositional tendency to experience unpleasant moods such as hostility, nervousness, and annoyance Negative affectivity explains why neurotic individuals have lower job satisfaction than less neurotic people Neuroticism is also responsible for the Type A Behaviour Pattern (see Chapter 6). It is associated with differential exposure to stressors (where individuals perceive more stressors in daily life) and with a differential reactivity to stressors (where individuals are less able to successfully cope with stressors) Neuroticism is also strongly related to locus of control, where individuals attribute the causes of events to the external environment, rather than themselves. 6. Openness to Experience a. Open individuals are curious, imaginative, creative, complex, refined, and sophisticated b. Openness is not significantly related to job performance across jobs, but becomes more important in jobs that are fluid and dynamic, or that require high levels of creative performance i. Together with cognitive ability, openness helps individuals excel at creative though, which has a significant influence on creative performance Cultural Values 1. Culture is the shared values, beliefs, motives, identities, and interpretations that result from common experiences of members of a society and are transmitted across generations. Most cross-cultural research focuses on shared cultural values, which come to reflect the way things should be done in a given society. 2. Hofstede‘s taxonomy of cultural values a. Individualism-Collectivism b. Power Distance c. Uncertainty Avoidance d. Masculinity-Femininity e. Short-Term vs. Long-Term Orientation

i. Canadians tend to be high on individualism, low on power distance, low on uncertainty avoidance, high on masculinity, and high on short-term orientation 3. Project GLOBE‘s taxonomy of cultural values a. Includes many of the same dimensions as Hofstede‘s work, including power distance, uncertainty avoidance, and collectivism. Also includes the following dimensions: b. Gender egalitarianism c. Assertiveness d. Future Orientation e. Performance Orientation f. Humane Orientation i. Canadians are described as Anglo in the GLOBE formulation, and should tend to score near the middle on most of the dimensions 4. The bulk of the cross-cultural research in OB has focused on collectivism, showing that highly collective individuals tend to exhibit better task performance and more citizenship behaviour when working in team settings, relative to individualists. They also tend to feel higher levels of affective and normative commitment than individualists. 5. Differences in cultural values create differences in reaction to change, conflict management styles, negotiation approaches, and reward preferences a. Differences in cultural values can be problematic if employees are high in ethnocentricism (viewing one‘s culture as right and other cultures as wrong) OB Internationally. This box explains a multicultural personality tool that can be used to determine how likely people are to be successful in expatriate assignments. Ask students to raise their hands if they believe they would score highly on the five dimensions described in the box. Are those students drawn to international study or assignments, or have they spent a significant amount of time traveling internationally? Then ask students to volunteer if they believe they are low on most of the dimensions described in the box. If those students have been abroad, did they find the experience to be stressful or uncomfortable? You might also explore whether the students presumed standing on the five dimensions is predicted by their openness score for the OB Assessments box. Summary: How Can We Describe What Employees Are Like? (Figure 4-4) OB on Screen: Black Panther The clip referenced in the book begins around the 33:10 mark of the film, continuing until about the 37:05 mark. The clip depicts conversations that King T‘Challa has with his exgirlfriend Nakia and his friend W‘Kabi. Those two members of his inner circle are at opposite poles in a debate about isolationism. Nakia wants Wakanda to reveal its technology and

resources to the world, in order to reach out and help other countries. W‘Kabi wants to remain hidden, as outside connections bring outside problems. Ask the students which of Hofstede‘s and Project GLOBE‘s dimensions can be situated within this isolationism debate? Given that Nakia and W‘Kabi are both from Wakanda—from within the same culture—why might they have different views on the subject? One key lays in the nature of their jobs, as Nakia is tasked with observing the outside world, with W‘Kabi tasked with protecting Wakanda‘s border. BONUS OB on Screen: The Break-Up Beginning at 6:17 and ending at 12:36 for a total running time of 6 minutes, 20 seconds, the clip introduces the audience to Gary and Brooke at work in their respective jobs. Once Gary joins Brooke at home to prepare for a dinner party, the contrasts in their personalities become more obvious. Brooke is very conscientious whereas Gary is not. Gary failed to do what Brooke asked when he was on his way home, and now chooses to lounge around instead of help Brooke get ready for the party. Class discussion could focus on whether conscientiousness is more important in a significant other or in a coworker. What can be done when two people have to work or live together but have different conscientiousness levels? Discussion could also focus on positive aspects of Gary‘s personality. For example, Gary seems particularly extraverted, which helps in jobs with direct customer contact. You might also ask students if they have had any experience with online dating, or if they know of friends who have. Most of the matching algorithms used in online dating sites include assessments of the Big Five personality dimensions. Try This! Use the Break-Up clip for a different chapter. When Gary is trying to rev up the crowd on the bus, he may be using emotional labor to act more enthusiastic than he currently feels, and he‘s trying to use emotional contagion to transmit that affect to the crowd (see Chapter 5 on Job Satisfaction). Gary‘s argument that Brooke should finish getting ready herself is also a reference to identity from job characteristics theory. The clip also demonstrates a number of concepts from Chapter 6 on Stress, including work-family conflict and the Type A Behaviour Pattern (Brooke is Type A, Gary is Type B. Gary‘s job likely demands a high level of emotional intelligence, especially use of emotions, yet he seems quite low in other awareness during his conversation with Brooke. Finally, Gary and Brooke‘s disagreement is evidence of either noise or poor communication competence from Chapter 10. 12.

WHAT DOES IT MEAN FOR AN EMPLOYEE TO BE ABLE?

Cognitive Ability 1. Capabilities related to the acquisition and application of knowledge in problem solving. Facets of cognitive ability include: (Table 4-3) a. Verbal ability i. oral comprehension, written comprehension, oral expression, and written expression

b. Quantitative ability i. number facility, mathematical reasoning c. Reasoning i. problem sensitivity, deductive reasoning, inductive reasoning, originality d. Spatial ability i. spatial organization, visualization e. Perceptual ability i. speed and flexibility of closure, perceptual speed General Mental Ability (also called the g factor or g) A measure of global cognitive ability – the generalized level of mental ability that determines all other levels of mental ability BONUS OB on Screen: Hidden Figures The clip referenced begins around the 1:22:19 mark of the film, continuing until about the 1:26:19 mark. Before watching the clip, you can describe it to the students: The clip shows a high-level meeting of NASA employees who are trying to solve problems related to the launch and recovery of Friendship 7, a spacecraft John Glenn would use to orbit the earth. Glenn is at the meeting. Al Harrison, head of NASA‘s Space Task Group, walks into the meeting with Katherine Harrison, one of NASA‘s human ―computers.‖ You can begin the discussion by asking students about the types of cognitive abilities that are illustrated during the meeting. Most likely students will respond with the obvious by saying that Katherine has high levels of quantitative ability. Probe for more specifics. Students should be able to identify and describe the specific quantitative abilities that are apparent. Katherine is asked to solve a problem and uses mathematical reasoning ability and number facility. Without hesitation, she selects the appropriate formulas and quickly and correctly carries out the math operations to produce the latitude and longitude where the spacecraft would most likely touch down. You can then ask what other abilities are illustrated in the clip. Students may note that Katherine appears to possess excellent oral and written expression abilities, for she speaks and writes (in mathematical terms) about complex ideas in a way that is clear and easy for those in the audience to understand. She also demonstrates problem sensitivity. Harrison asks an assistant about the speed of the aircraft, but the assistant has difficulty locating the answer in a pile of papers. Harrison realized that everyone is becoming uncomfortable and volunteers the information (from memory) before the problem gets out of hand. BONUS OB on Screen: Admission The clip referenced begins around the 1:09:30 mark of the film, continuing until about the 1:19:37 mark. The clip depicts a meeting where the Princeton admissions committee is

reviewing applications. The clip provides an example of the information that college admissions committee members consider in their decision making process. The qualifications of most of the applicants are all very good in terms of SAT scores (NOTE: The SAT is a standardized test of cognitive ability used for college admission in the United States – we don‘t use SAT scores in Canada, but cognitive ability tests are commonly used for admission to graduate programs, such as law, medicine and business), GPA, and experiences. However, most applicants are denied admission. The clip shows that each committee member seems to ―spin‖ the accomplishments of their favorite applicants to obtain favorable votes in the meeting. Portia tries to do so with Jeremiah‘s case, but is unsuccessful. Despite his drive and intellect, the committee feels that he‘s too risky and not ―Princeton material‖. The discussion could begin by asking students about their impression of the meeting. Some students will likely object to the fact that the decisions are not purely objective, and that committee member preferences carry so much weight. The discussion could then turn to the question of the information the committee members should consider. Ask the students what the information indicates about the applicant that is important for student success, and whether the information is truly objective. You can then ask students about the advantages and disadvantages of using SAT scores in this regard. Students should come to the conclusion that these scores, while not perfect (because smart people sometimes don‘t do well on these types of tests), are the only pieces of information that are directly comparable from one student to the next. Even GPA is going to be a function of experiences and opportunities that might have nothing to do with intellect or potential. Try This! Use the Admission clip for a different chapter. The committee‘s deliberations provide a good example of a number of issues in Chapter 10 on Communication and Chapter 11 on Team Processes. The deliberations include the presence of conflict and communication issues. That Jeremiah did not get admitted also points to the absence of groupthink. BONUS OB on Screen: Sherlock Holmes The focal clip begins around the 11:34 mark of the film, continuing until about the 15:43 mark. The clip illustrates the cognitive and emotional abilities of Detective Sherlock Holmes as he interacts with Dr. Watson and his date for the evening, Mary Morstan. Ms. Morstan asks Holmes, whom she is meeting for the first time, to use his reasoning abilities to tell her something about herself. Holmes starts off well enough, deducing several things about Mary. But he goes too far. He begins to reveal things about Mary of a more personal nature, and despite the discomfort that‘s clear in Mary and Watson‘s expressions, Holmes continues until Mary tosses a drink in his face and leaves the restaurant. One topic for class discussion is how Holmes stacks-up in terms of his abilities. The students should be able to quickly come to the conclusion that Holmes has strong cognitive ability—in particular, reasoning ability—but is weak in emotional ability—in particular, other awareness. Another topic for class discussion is how amenable these two types of abilities are to improvement as a function of training. Students will likely come to the conclusion that emotional abilities are easier to train. To help students understand why this might be true, ask them to describe training that might be used for both cognitive and emotional ability. After they think about it a bit, they‘ll realize that emotional abilities are narrower in scope, and accordingly, it‘s easier to develop training that can be transferred more directly to the ―real world‖.

BONUS OB on Screen: 21 Beginning 18:50 to 28:35, for a total running time of 9 minutes, 45 seconds, the clip depicts how Ben Campbell, and MIT student, gets involved with a team of blackjack players who win by counting cards. The scene shows that Ben possesses a number of abilities that would help the black team become more effective, and the team‘s coach (an MIT professor) tries to recruit him. At first Ben is hesitant about joining the team, but eventually he caves in. One topic for class discussion would be to identify the abilities that Ben possesses that would make him an excellent card counter. Students will most likely focus on his quantitative abilities, however, the scene also hints at his emotional and verbal abilities as well. Another related topic for class discussion is what problems a card player might have if he or she lacked one of these abilities. Note: Use the 21 clip for a different chapter. As the group tries to convince Ben to join, they really on expectancy theory arguments from Chapter 7 on Motivation, reinforcing the intrinsic and extrinsic outcomes that Ben could receive if he joined them. The clip also demonstrates the development of explicit knowledge and expertise from Chapter 9 on Learning and Decision Making. Ben‘s personality profile seems to be high on conscientiousness and high on agreeableness, which makes him initially reluctant to do something dishonest. Finally, the group uses several of the influence tactics from Chapter 12 on Power, Influence, and Negotiation as they try to lure Ben in, including ingratiation, personal appeals, exchange tactics, and apprising (with just a hint of pressure thrown in). Emotional Ability 1. The human ability that affects social functioning, emotional intelligence consists of four different, but related, abilities: a. Self Awareness – the ability to understand the types of emotions one is experiencing, the willingness to acknowledge them, and the capability to express them naturally. b. Other Awareness – the ability to recognize and understand the emotions that other people are feeling c. Emotion Regulation – the ability to recover quickly from emotional experiences d. Use of Emotions – the degree to which people can harness emotions and employ them to improve their chances of being successful in whatever they are seeking to do Try This! Ask students to share stories about coworkers, friends, or family members with exceptionally poor (or good) skills in each of the four areas (without naming names, of course). Do most of the stories cluster in one or two facets, or do students have salient anecdotes across all four areas? Then ask the students what could be done to improve the person‘s skills in that particular facet. What kinds of activities or initiatives might be helpful?

Physical Abilities (Table 4-4) 1. Physical abilities involve the body, more specifically: a. Strength – the degree to which the body is capable of exerting force. Strength includes: i. Static strength ii. Explosive strength iii. Dynamic strength b. Stamina – the ability of a person‘s lungs and circulatory system to work efficiently while he or she is engaging in prolonged physical activity c. Flexibility and Coordination – the ability to bend, stretch, twist, or reach, and to synchronize movement. Includes: i. Extent flexibility ii. Dynamic flexibility iii. Gross body coordination iv. Gross body equilibrium d. Psychomotor Abilities – the capacity to manipulate and control objects. Includes: i. Fine manipulative abilities ii. Control movement abilities iii. Response orientation iv. Response time e. Sensory Abilities – the capabilities associated with vision and hearing. Includes: i. Near and far vision ii. Night vision iii. Visual color discrimination iv. Depth perception v. Hearing sensitivity vi. Auditory attention vii. Speech recognition Try This! If you have any athletes in your class (either current or past), ask them to describe the sport they engage in. Then ask the class to describe the specific physical abilities that are demanded in that sport. Do some physical abilities seem to be relevant in virtually every sport? If so, which ones? And which physical abilities seem to be more sport-specific?

Summary: What Does It Mean For An Employee To Be Able? (Figure 4-6) 13.

HOW IMPORTANT ARE THESE INDIVIDUAL DIFFERENCES?

A. Conscientiousness closely linked to performance across wide spectrum of jobs 1. Conscientiousness drives ―typical performance‖ or day to day performance, while ability drives ―maximum performance‖ or the person‘s best efforts 2. Conscientious employees are more likely to engage in citizenship behaviours 3. Conscientious employees are less likely to engage in counterproductive behaviours 4. Conscientious employees are more committed to the organization B. The concept of situational strength says that personality variables tend to be more significant drivers of behaviour in weak situations than in strong situations C. The concept of trait activation says that situations can provide clues that trigger the expression of a given trait D. General cognitive ability has a strong, positive effect on task performance 1. People who have higher general cognitive ability tend to be better at learning and decision making E. General cognitive ability has no effect on affective commitment, continuance commitment, or normative commitment F. Caveats 1. Cognitive ability is not related to citizenship or counterproductive behaviour 2. The correlation between cognitive ability and job performance is higher for jobs that are more complex than average and lower for jobs that are less complex than average 3. People often do poorly on cognitive ability tests for reasons other than a lack of cognitive ability 14.

APPLICATION: PERSONALITY AND COGNITIVE ABILITY TESTS A. Many organizations today are using paper and pencil personality tests to determine whether or not to hire employees B. A good example of a valid and useful measure of cognitive ability is the Personnel Assessment Form (PAF) See Sigma Assessment Systems, based in London, Ontario

The PAF has been carefully designed to help managers and human resource professionals quickly assess cognitive ability in adults and adolescents (age 16 and older). In 15 minutes, this online assessment provides scores on two subtests measuring verbal and quantitative ability. The verbal subtest of the PAF measures general verbal aptitude (e.g., knowledge of words and verbal concepts), and the quantitative subtest measures math ability, reasoning ability, and problem solving skills. The verbal and quantitative subtests can be scored on their own or combined to derive an overall measure of general cognitive ability.

DISCUSSION QUESTIONS 4.1

Assume that you applied for a job and were asked to take a personality test. How would you react? Would you view the organization to which you were applying in a more or less favourable light? Why? Answers to this question will vary. Some will view the organization positively, viewing any form of data collection as in the organization‘s best interests. Others will maintain that there is no way personality tests could work, despite what the chapter says. Still others will agree they may work, but be uncomfortable with the practice on some level, perhaps on privacy grounds

4.2

Consider the profile of Canada on Hofstede‘s cultural values, as shown in Table 4-2. Do you personally feel you fit the Canadian profile, or do your values differ in some respects? If you served as an expatriate, meaning you were working in another country, which cultural value differences would be most difficult for you to deal with? This answer will differ from student to student. If students have been working in a team during the school year, it may be interesting to ask them to see if they can predict their teammates‘ responses to the first part of this question. Discussing each individual‘s answer to this question can build team cohesion and help team members to understand each other better.

4.3

What roles do learning, education, and other experiences play in determining a person‘s abilities? For which type of ability—cognitive, emotional, or physical—do these factors play the largest role? Learning and education play a large role in determining a person‘s cognitive ability. They provide the environmental backdrop that interacts with a person‘s genetic factors to create overall intelligence or g. It is important to note, however, that learning and education can also improve a person‘s emotional and physical abilities, as long as the education is based on acquiring the specific behaviours needed to improve the relevant skill.

4.4

Think of experiences you‘ve had with people who demonstrated unusually high or low levels of emotional intelligence. Then consider how you would rate them in terms of

their cognitive abilities. Do you think that emotional intelligence ―bleeds over‖ to affect people‘s perceptions of cognitive ability? Not necessarily. Some people, who have very high levels of cognitive intelligence, have much lower levels of emotional intelligence. It may be that a person who has a low level of emotional intelligence is seen as someone who is not cognitively intelligence, but the two are not necessarily related. 4.5

What combination of personality and abilities is appropriate for the job of your dreams? Do you possess those characteristics? If you fall short on any of these attributes, what could you do to improve? Every student will have a different answer to this question, but encourage them to think about personality traits and the range of abilities (cognitive, emotional, physical) needed to do the job of their dreams.

CASE: MARRIOTT Questions: 1.

Can you think of other jobs in Marriott where Big Five dimensions other than agreeableness and conscientiousness would be vital?

There are research and development positions in virtually any large company. At Marriott, there are people tasked with envisioning what the future of a hotel should look like, and what new services hotels should offer.Those jobs would require high levels of openness. In addition, visible managerial positions would benefit from extraversion, given the assertiveness and leader-like qualities that extraverts often possess. 2.

If you applied for a job that involved a personality assessment, would you be honest in your responses or would you exaggerate your answers to appear more desirable? Why?

Responses to this question will vary, and the textbook discusses research on the subject. In general, though, most applicants approach hiring contexts by wanting to put their best foot forward. Wanting to portray their ―best self.‖ That might involve being a bit better dressed than normal for an interview. And it might involve answering assessment questions with the most optimistic view of oneself. 3.

What other approaches might companies use to assess personality during hiring, other than an interview or assessment? What strengths and weaknesses might those other approaches have?

Interviews are the other practical way of assessing personality. Some traits, like extraversion, can be validly assessed in an interview—especially in later stages of the application process when the interviews become more lengthy. Other traits, however—like conscientiousness—are

harder to gauge as an interviewer. Interviews are an expected part of the process from an applicant‘s perspective, however, and afford an opportunity to gauge more company-specific aspects of personality-culture fit. BONUS CASE: CHICAGO CUBS11 One thousand seven hundred and twenty-eight players. Fifty-two managers. That‘s how many people represented the Chicago Cubs between 1908—their prior World Series title—and 2016, when their long drought ended. That 1908 team had played in the era of Mark Twain, Florence Nightingale, and the Ottoman Empire. How did the franchise break through after all that time? Much of the credit can be given to a new owner, a new president of baseball operations, and a focus on personality. The new owner is Tom Ricketts, the director of TD Ameritrade Holding Corporation. The new president of baseball operations is Theo Epstein, previously the general manager of the Boston Red Sox, and assembler of a two-time World Series champion in that city. Ricketts had been impressed with Epstein‘s personality as they discussed a position with the Cubs. ―He was the kind of person who treats people with respect,‖ Ricketts noted. ―He was honest and candid about his successes and failures.‖ Epstein is also enormously curious, a trait fueled by a family rule where every minute watching baseball had to be matched by time reading books. ―A double header was a lot of reading,‖ recalled Epstein. The Cubs manager, Joe Maddon, offered his own take on Epstein‘s personality: ―He‘s brilliant, he‘s sabermetrically inclined, he‘s old school, he understands old-school scouting techniques, he understands the game, but of all the guys I‘ve met, he‘s more empathetic than all of them. He understands people. And he feels what they feel.‖ Much like how books fueled his curiosity, Epstein attributes that empathy to his family and his upbringing. ―Maybe it‘s part of being a twin. I‘m a twin. My mom‘s a twin. My grandfather‘s a twin.‖ Regardless of where his traits came from, Epstein went about retooling the Cubs with his own emphasis on personality. He wanted players with the right ―makeup‖—who would create the proper ―ethos‖ in the clubhouse. Some of that emphasis came from the failures of his most recent Red Sox clubs, but it was also a simple evolution of his own views on managing people. The word that he most often uses is ―character‖—a sense that players will work hard, do the right thing, fit into the team concept, and overcome adversity. ―We are not going to compromise character for talent,‖ Epstein vowed. ―We‘re the Cubs. We‘re going to have both. Talent and character.‖ How exactly has Epstein prioritized personality in shaping the Cubs? One way is by instructing his scouts to get to know prospects as people. Scouts are instructed to list three examples of times when players have overcome adversity on the field, and three examples of times they‘ve done so off the field. Scouts are also instructed to ask anyone they can about the prospect‘s traits and qualities, from guidance counsellors to girlfriends to family members. How does the prospect treat others when no one is looking? Is the prospect motivated by money and fame or 11

Source: T. Verducci, The Cubs Way: The Zen of Building the Best Team in Baseball and Breaking the Curse. New York: Crown Archetype, 2017.

competition and winning? Short scouting reports with boxes to be checked were quickly replaced by detailed summaries several pages long. Speaking of Kyle Schwarber, one of the team‘s better hitters, Epstein recalled, ―Scouts loved the bat. We all loved the bat. Our statistical model loved the bat. And makeup was huge. Stan Zielinski, the area scout, did a great job getting to know Kyle inside and out … he‘s the perfect player to have as a franchise player because he can be one of your best players who everybody else wants to follow because of his character.‖ Another way is by prioritizing everyday positional players over pitchers who only start once every five games. Noted Epstein, ―And there were a lot of good arms available so the debate in the draft room really crystallized. It was like, ‗We can choose a pitcher who is going to move quickly and can help us win every fifth day, but pitchers have a really hard time leading. They can lead the starting rotation after they get established a little bit, but it‘s hard for them to lead the team. … We are going to define our identity … we want players who are invested in their teammates … we want players we trust can respond to adversity. We want players other players like being around.‖ By focusing on players who are on the field every day, Epstein wound up creating a culture—not just a collection of personality traits. Epstein feels vindication for his personality focus by comparing the 2016 team to some of the other Cubs teams that had made the playoffs a decade earlier. ―What was the personality of those Cubs teams?‖ he asked. ―They had been to the playoffs in ‘07, ‘08, but what was the personality? Who were the leaders?‖ The 2016 team had those leaders, and that was by design. Questions: 1.

When Epstein talks about ―character,‖ ―makeup,‖ and ―ethos,‖ what personality traits does he seem to be prioritizing?

Most of those traits seem to be aspects of conscientiousness. Epstein wants players who have persevered in the face of adversity, and who pride themselves on going about their work ―the right way.‖ Those traits are expressions of conscientiousness. 2.

Do you think professional baseball scouts can get an accurate read of a prospect‘s personality from observing him and talking to those who know him? Would it be wise for the Cubs to use personality tests for that purpose?

Scouts often observe players for extended periods of time. They review extensive amounts of tape, have many conversations, and do a great deal of in-person observation. Once told to focus on something specific like conscientiousness, it is likely that they can get a reasonably valid read. In that way, they have an advantage over hiring managers in typical organizations, who often only get a matter of hours to observe recruits. Of course, traditional personality tests would still be a useful complement to the other gauges used by scouts. 3.

Do the personality traits needed to be a successful baseball player differ from the traits needed to be a successful president of baseball operations? In what way?

becomes more important for a president of baseball operations, however. In the competitive world of professional sports, it‘s often helpful to ―zig when everyone else zags.‖ Openness could foster that sort of tendency. BONUS CASE: NEXEN12 Nexen, a wholly owned subsidiary of CNOOC Limited, is a Calgary-based energy company responsibly developing energy resources in the U.K. North Sea, offshore West Africa, the United States, and western Canada. It has three principal businesses: conventional oil and gas, oil sands, and shale gas/oil. One of the challenges facing a truly global company is managing the diverse range of issues, interests, and backgrounds of employees and contractors in a way that promotes a strong, unified workplace culture. Closer to home, another challenge is maintaining a North American workforce at a time when chronic skill shortages exist in many key technical areas, which include legions of retiring baby boomers. These challenges have changed the playing field for many North American oil and gas companies. Winning the ―war for talent‖ requires attracting the attention of a shrinking pool of qualified job seekers who have many options. Why are people attracted to Nexen? For starters, the company has earned a reputation within the industry of finding the best and brightest talent. It aggressively seeks out individuals with the technical skills, knowledge, and abilities needed to be successful in their work roles. To be hired, individuals have to show they have personal qualities that fit a workplace culture that puts high value on safety, collaboration, innovation, and striving to exceed expectations. One of Nexen‘s signature human resources initiatives is its New Graduate Rotation Program, a development opportunity offered to new and recent graduates across a range of disciplines, including engineering, geology, geophysics, human resources, finance, and accounting. These young professionals spend their first three years learning on the job by rotating through different areas of the business and working on high-profile projects. A mentor is assigned each graduate to provide coaching and feedback. The program is just one part of Nexen‘s commitment to providing every employee with a rewarding career. The company also offers internships and summer student positions for young talent. Once hired, employees take an active role in mapping out a plan for their own career growth and development, supported by top-quality tools and resources. In addition, Nexen provides generous tuition subsidies for employment-related courses and subsidies for professional accreditations. For managers at every level, opportunities are targeted at enhancing leadership capabilities through intensive training programs.

Sources: Nexen Inc., corporate website, http://www.nexencnoocltd.com/en/AboutUs.aspx (retrieved December 27th 2014); http://www.nexencnoocltd.com/en/Careers/HiringProcess/InterviewTips.aspx (retrieved December 27th, 2014); Nexen awarded prestigious Progressive Aboriginal Relations Award; http://www.nexencnoocltd.com/en/AboutUs/MediaCentre/FeatureArticles/2012/CCABAward.aspx (retrieved December 27th 2014).

As important as the traditional recruiting sources are for the company (e.g., colleges and universities), Nexen has been able to meet its staffing goals by attracting job seekers from locations around the world and from non-traditional sources. A growing and underutilized source of talent is the Aboriginal communities in which Nexen operates. Several strategic initiatives are under way to attract qualified Aboriginal applicants. Information sessions are offered at Aboriginal career centres, and in career and recruitment fairs at postsecondary institutions. What have initiatives like these accomplished? In addition to being an employer of choice, Nexen is now recognized as one of the best employers in the country! Nexen Energy realizes that a diverse workforce, in terms of demographic (e.g., age, gender, ethnic origin) and individual characteristics (e.g., personality, cultural values, abilities), offers great opportunity for creativity, innovation, higher-quality problem solving, and relationship building within a global community. Harnessing the talents of a diverse workforce is much harder than it sounds. Consider the following. If it is easy to get along with people who are similar to you, imagine what it would be like to work closely with people who view the world differently from you? Everyday activities, such as communicating, coordinating with team members, and resolving conflicts, can all become more challenging within diverse workforces. Earlier we learned that Nexen is a very successful company, in part because it has been able to harness the talents of many different kinds of people. We learned that the company puts particular emphasis on the notion of fit to the work role and with the organization‘s culture. We learned that the company works hard to ensure that new hires from different backgrounds experience welcoming and engaging work environments. An example of this is the culturalawareness training that the company puts on to foster tolerance and appreciation of its Aboriginal employees. Questions: 1.

Let‘s consider what ―fitting in‖ means when you are different from others in the organization. Does it matter if those differences are demographic in nature (e.g., age, gender, ethnic origin) or if the differences are based on the individual characteristics discussed in this chapter (personality, cultural values, abilities)? Explain

Due to their salience, demographic differences might initially present a challenge for the new hire. The reason would be the natural tendency to form social ties with, and gravitate toward, ―similar‖ others on the basis of superficial characteristics (e.g., an older new hire may demonstrate an affinity for coworkers of similar age; or females may naturally bond with other females). In Chapter 11, demographic differences such as these are associated with ―surfacelevel diversity.‖ As the new hire gets to know the other employees (and they get to know him or her), new information regarding non-superficial qualities, such as personality, attitudes, values, interests, knowledge, and ability will emerge. Differences like these have been associated with ―deep-level diversity‖ (see Chapter 11). If there are significant differences on these non-superficial qualities, fitting in will become a serious problem, regardless of the surface-level similarity or differences. To the extent that new hires have been selected because they possess the personality, values, and abilities necessary for the job and culture (i.e., deep Copyright © 2022 McGraw Hill Limited

level similarity), it is very likely that employees, who might be different on the outside, will ―fit in‖ very well. For Nexen, recruiting from traditional and non-traditional applicant populations increases the likelihood of a diverse-looking workforce. ―Fitting in‖ has been optimized by selecting people in such a way that deep-level similarity is achieved – and this is why Nexen is so focused on selecting people who have the ―right stuff.‖ 2.

In addition to having the ability to perform their specific technical duties at Nexen, what personality characteristics and cultural values do you think a person would need to have to function effectively within a culturally diverse, team-based work environment?

Student responses will vary. Conscientiousness, agreeableness, and emotional stability (reflected neuroticism) would complement high levels of job-related ability. As for cultural values, moderate to slightly above-average levels of collectivism would be beneficial in this context. 3.

Of the individual qualities covered in the chapter, which ones are more amenable to change through training and development experiences? Which ones tend to be ―hard wired‖ and stable fixtures of a person‘s character?

Generally speaking, the individual characteristics covered in this chapter are relatively stable qualities, and not amenable to change. That said, people can learn to behave differently through the processes described in Chapter 9 (e.g., modeling). Training often targets knowledge and skills; characteristics that are amenable to change. The only caveat would be that often ability or personality represents natural limits that may constrain performance. For instance, you can teach anyone to throw a curveball, but whether or not the training will be successful (performance) depends on one‘s innate level of perceptual and psychomotor abilities. 4.

If you had to design an optimal five-member student group, what mix of personality, cultural values, and abilities would you want members of the group to possess? Would you want members to be similar or dissimilar on these characteristics? Why? If your group consisted of members who were dissimilar, how would you handle any communication and coordination issues that may arise? Are there any risks associated with being too similar?

This will be a good question for students. Have them reflect on their team experiences, and whether they liked working in teams that were similar or dissimilar. As mentioned in question 4.2, conscientiousness, agreeableness, and emotional stability would be important. Depending on the nature of the task, openness to experience might be helpful. Ask students whether they would want everyone to be high on this quality? Extraversion, again, depends on the nature of the task. If the group has to present their work publically then having a few extraverts might be an asset. However, too many members that are high on extraversion may detract from the group‘s performance. Generally, high ability should be valued. Student groups are probably more similar than you might see in the general workforce (e.g., students taking a class together will likely have similar career goals; majors; interests, and demographic qualities - age), thus

communication and coordination issues may not be as important as you might see in a groups that are formed within a diverse company such as Nexen. BONUS CASE: GOOGLE13 How long has it been since you last used Google to do a search on the Internet or navigate the Web? If you‘ve worked on your computer today, chances are it hasn‘t been more than a few hours. In fact, Google has more than 300 million users across the globe and is by far and away the most popular Internet search engine. With all this popularity has come staggering financial success. Google‘s revenues increased from $86.4 million in 2001 to $6.14 billion in 2006, when the company had a market value of over $115 billion. To put this in perspective, $115 billion is almost 50 percent higher than the combined market value of the ―big three‖ automakers in North America. So how did Google become so wildly successful? Well, for one thing, cofounders Larry Page and Sergey Brin developed and patented an algorithm that made Internet searches much more efficient and user friendly than what was previously available. However, another key factor that has allowed Google to achieve continued success is its strategy of hiring employees who are extremely intelligent. How does Google go about hiring the best and the brightest? The company has used a number of innovative techniques to attract and recruit a huge pool of really smart people. For example, Google placed billboards in Silicon Valley and Harvard Square with the brainteaser, ―first 10-digit prime found in consecutive digits of e.com.‖ People who solved the brainteaser were taken to a Web site with a more difficult brainteaser. Solving that one resulted in Google asking for the person‘s resume. As another example, Google developed something called the Google Labs Aptitude Test (GLAT for short) and published it in magazines that smart techies might read. The GLAT includes questions such as, ―How many different ways can you color an icosahedron with one of three colors on each face?‖ and ―On an infinite, two-dimensional, rectangular lattice of 1ohm resistors, what is the resistance between two nodes that are a knight‘s move away?‖ The GLAT also includes questions for which there are no correct answers per se, but instead require originality. For example, one question asks, ―Write a haiku describing methods for predicting search traffic seasonality.‖ Another notes, ―This space is intentionally left blank. Please fill it with something that improves upon emptiness.‖ 13

Sources: Ferguson, C.H. ―What‘s Next for Google?‖ Technology Review 108, no. 1 (January 2005), pp. 38– 46; Elgin, B. ―Google‘s Leap May Slow Rival‘s Growth.‖ BusinessWeek 3943, no. 45 (July 18, 2005). ProQuest database (May 14, 2007); ―Brain Teasers Help Google Recruit Workers.‖ CNN.com Technology. November 4, 2004, www.topcoder.com/pressroom/cnn_110404.pdf (June 2, 2006); Eustace, A. ―Pencils Down, People.‖ Google Blog. September 30, 2004, http://googleblog.blogspot.com/soo4/09/pencils-down-people.html (May 12, 2006); Kopytoff, V. ―How Google Woos the Best and Brightest.‖ San Francisco Chronicle, December 18, 2005, A1. Lexis Nexis Academic database (May 12, 2006); ―Google Faces Brain Drain as Anniversaries Hit,‖ April 11, 2007, http://www.redorbit.com/news/technology/898498/google_faces_brain_drain_as_anniversaries_hit/index.html# (June 20, 2007); K. Hafner, ―New Incentive for Google Employees: Awards Worth Millions,‖ The New York Times, February 1, 2005; ―Revenge of the Nerds–Again,‖ BusinessWeek, August 8, 2005; ―The Best Places to Launch a Career,‖ BusinessWeek, September 18, 2006.

Google used the GLAT as a public relations tool to attract people who are smart and who are interested in the types of problems in the test. As noted on the Official Google Blog, where the test is available, ―We enjoyed writing it, and if you‘re our kind of uber-geek, you‘ll enjoy taking it, and maybe you‘d enjoy life as a Googler.‖4 How effective are practices like these in generating a large pool of potential Googlers? On average, Google hires about 9 people a day from the 150,000 resumes received each month—a very selective ratio. The people who are brought in for an interview typically face 10-person interview panels who ask very difficult questions. For example, someone who applies for a technical job might be asked to solve math algorithms and answer technical questions about software and computer networking. Clearly Google understands the need to hire smart people. It also understands that if Google is not successful in beating out rivals like Yahoo and Microsoft for the best and brightest, odds are the company will go the way of AltaVista and Inktomi, two of the previous leaders in the internet search business. Google‘s strong magnetism has turned the technology company into the Mecca for talented intellects across the world. Talented individuals from academia and respected technology companies are jumping to Google to join its unique culture and flex their intellectual power. The culture at Google encourages top talent to pursue innovative entrepreneurial projects. For example, engineers may work on their own projects for the company one day a week. For this reason, Google has attracted tech gurus such as Rob Pike, one of the creators of the Unix operating system. In 2006, BusinessWeek named Google the thirteenth best place to launch a career. It offers many appeals for smart employees who choose to pursue a career path with the search engine behemoth. Some are attracted to the opportunity to solve enormous, unsolved technical challenges, which could benefit millions of people daily. Others are drawn to the company to get the chance to work with tech gurus who have already revolutionized the industry. Whatever the reason, Google is accumulating the most intelligent human capital in the world. Questions 1. Does Google‘s success rely on its ability to attract and retain the most talented employees? Explain. Absolutely! The high-tech industry is fiercely competitive, and in order to stay on top against Microsoft, and others, Google has to get the very best employees. The work involved in developing new software and services requires high cognitive ability. If Google can be more successful than their competitors in hiring people who are extremely intelligent, they believe they can be more successful than their competitors in developing profitable software and services. 2. Which of the Big Five personality dimensions would fit best with the culture at Google? Explain.

Conscientiousness, especially achievement striving, would be critical. . Openness to Experience (intellectually curious) would be another trait configuration that would prepare an individual for this context. To complement high levels of technical knowledge, skills and abilities, people who can collaborate and communicate effectively with others will likely fit in better – thus agreeableness and emotional stability would be important dimensions. 3. Can a company have too much intellectual human capital? Explain. If a company has intellectual human capital to the exclusion of all other kinds of human capital, it will be difficult to maintain the organization – companies require doers, as well as thinkers. But in well-managed companies, it is almost impossible to have too much intellectual capital, because the more intellectual capital, the greater the competitive edge.

EXERCISE: GUESSING PERSONALITY PROFILES Instructions: Have the students write their Big Five scores on a piece of paper in the format described. Impress upon students to use very plain paper so that the type of paper is not a giveaway (you may even want to bring plain copy paper). Also impress upon them to disguise their handwriting, making it as gender neutral as possible. Questions: Most groups should be able to correctly identify two to three group members, though early bad guesses will impact that batting average significantly. Accuracy should be higher for groups that are more familiar, or when the exercise is completed later in the term rather than earlier. Extraversion is the natural trait to rely on first, as its most visible in typical interactions. Given the school setting, students may use conscientiousness next, especially if they‘ve had enough time to observe study habits, classroom habits, and grades on class assignments or exams. Other traits, such as openness, neuroticism, or agreeableness, may only be diagnostic with extremely high or low scores.

Rosenberg, M., C. Schooler, C. Schoenback, F. Rosenberg. ―Global self-esteem and specific self-esteem: Different concepts, different outcomes.‖ American Sociological Review 60 (1995), pp. 141-156. Self-Monitoring – A personality trait reflecting the tendency to change one‘s behaviour to suit the needs of a given situation. High self-monitors are more likely to engage in impression management than low self-monitors. For more on this, see: Snyder, M. Public appearance/private realities: The psychology of self-monitoring. San Francisco, CA: Freeman, 1987. Machiavellianism – A personality trait reflecting the tendency to manipulate others in order to fulfill one‘s own self-interests. Individuals high on this trait act in accordance with the philosopher Niccolo Machiavelli, who laid out a strategy for seizing power in his book The Prince. For more on this, see: Christie, R.; F.L. Gies. Studies in Machiavellianism. New York: Academic Press, 1970. Type A Behaviour Pattern – Individuals who are ―Type A‖ tend to have competitive, harddriving, and irritable personalities, as opposed to individuals who are ―Type B.‖ The Type A Behaviour Pattern primarily represents a combination of high conscientiousness and high neuroticism and is discussed in the context of coping with stress in Chapter 6. IQ – The intelligence quotient, or IQ, is likely to be familiar to anyone reading this book. However, many people do not realize that IQ testing is rooted in research that was intended to diagnose learning disabilities. For more information see: Binet, A. ―New Methods for the Diagnosis of the Intellectual Level of Subnormals,‖ first published in L'Année Psychologique, 12(1905), pp. 191-244. English translation by Kite, E. S. ―The development of intelligence in children.‖ Vineland, NJ: Publications of the Training School at Vineland (1916). Practical Intelligence – Scholars have is argued that intelligence should also include the ability to adapt to one‘s environment and select a new one in order to achieve personal goals. For more information on this ―common sense‖ type of intelligence, which is most commonly called ―practical intelligence‖, see: Sternberg, R. J., R. K. Wagner, W. M. Williams, and J. A. Horvath. ―Testing Common Sense.‖ American Psychologist, 50(1995), pp. 912-927. Sternberg, R. J.,G. B. Forsythe, J. Hedlund, J. A. Horvath, R. K. Wagner, W. M. Williams, S. Snook, and E. L Grigorenko, Practical Intelligence in Everyday Life. New York: Cambridge University Press. (2000).

Group Differences – One of the most debated issues in cognitive ability relates to the meaning of group differences in test scores. Popular interest in the issue increased in 1994 after Herrnstein and Murray published their book, The Bell Curve. For more information regarding different perspectives on the issue, see: Herrnstein, R. J and C. Murray. The Bell Curve, New York: Free Press. (1994) Rushton, J. P., and A. R. Jensen. ―Thirty years of research on race differences in cognitive ability.‖ Psychology, Public Policy, and Law 11(2005). pp. 235-294. Dickens, William T. (2005) ―Genetic Differences and School Readiness,‖ The Future of Children, 15 (1, 2005). pp.55-69. Turkheimer, Eric, Andreana Haley, Mary Waldron, Brian D‘Onofrio, and Irving I. Gottesman, ―Socioeconomic Status Modifies Heritability of IQ in Young Children,‖ Psychological Science, 14 (November 6, 2003). pp. 623-628. Influence of the Environment – Scholars have been interested in the degree to which cognitive abilities change over time as a function of experience and education. For more information see: Asbury, K., T. D. Wachs and R. Plomin. ―Environmental Moderators of Genetic Influence on Verbal and Nonverbal Abilities in Early Childhood,‖ Intelligence, 33 (November-December, 6, 2005) pp. 643-661. Cecci, S. J. ―How Much Does Schooling Influence General Intelligence and its Cognitive Components? A Reassessment of the Evidence,‖ Developmental Psychology, 27 (1991), pp. 703-722. Dickens, W. T and J. R. Flynn. ―Heritability Estimates Versus Large Environmental Effects: The IQ Paradox Resolved,‖ Psychological Review, 108 (2, 2001) pp. 346-369. Flynn, J. R. ―Massive Gains in 14 Nations: What IQ Tests Really Measure,‖ Psychological Bulletin, 101(1987). pp. 171-191. Fairness and Bias –For a discussion regarding issues of bias and fairness in applications of cognitive ability tests in employment contexts see: Hartigan, J. A., and A. K. Wigdor. Fairness in Employment Testing: Validity Generalization, Minority Issues, and the General Aptitude Test Battery. Washington D.C: National Academy Press (1989). Principles for the Validation and Use of Personnel Selection Procedures, 4th Edition. Bowling Green: OH. Society of Industrial and Organizational Psychology (2003). Individual Differences in Personality – Emotional abilities may, to some extent, involve enduring dispositions that reflect certain personality characteristics.

Chapter 5: Job Satisfaction

NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW This chapter gives an overview of job satisfaction, or the feelings employees have about their jobs. Precursors to job satisfaction are examined, including the value-percept theory, job satisfaction facets, job characteristics, and mood fluctuations. The impact of job satisfaction on job performance, organizational commitment, and life satisfaction is considered, along with techniques that organizations can use to improve job satisfaction. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8

What is job satisfaction? What are values, and how do they affect job satisfaction? What specific facets do employees consider when evaluating their job satisfaction? Which job characteristics can create a sense of satisfaction with the work itself? How is job satisfaction affected by day-to-day events? What are mood and emotions, and what specific forms do they take? How does job satisfaction affect job performance and organizational commitment? How does it affect life satisfaction? What steps can organizations take to assess and manage job satisfaction?

CHAPTER OUTLINE 15.

JOB SATISFACTION

Job satisfaction is defined as a pleasurable emotional state resulting from the appraisal of one‘s job or job experiences

16.

WHY ARE SOME EMPLOYEES MORE SATISFIED THAN OTHERS?

Employees are satisfied when their job provides the things they value, or things they consciously or subconsciously want to seek or attain Try This! Open the class by asking students what they want their ideal job to supply for them—what values do they want that job to fulfill? List the values they describe on the board, grouping similar values into columns. This process will result in a table similar to Table 5-1.

Value Fulfillment: Value-Percept Theory 1. Job satisfaction depends on whether you perceive that your job supplies the things that you value a. Dissatisfaction = (Vwant – Vhave) x (Vimportance) 2. People evaluate job satisfaction according to specific facets of the job a. Pay satisfaction b. Promotion satisfaction c. Supervision satisfaction d. Coworker satisfaction e. Satisfaction with the work itself Try This! Before you discuss which of the specific facets is the strongest driver of overall job satisfaction, ask students to guess which one is the strongest driver. Students who have not yet read the book will likely guess pay satisfaction, but some other students will correctly guess satisfaction with the work itself. Encourage the two students to debate each other‘s position before revealing the results. 3. Research results show that satisfaction with the work itself is the strongest driver of overall job satisfaction, followed by satisfaction with coworkers and supervision. Satisfaction with promotions and pay have weaker relations to overall job satisfaction.

Satisfaction with the Work Itself: The Job Characteristics Model 1. Work is more satisfying when it provides three ―critical psychological states‖

a. Meaningfulness of work b. Responsibility for outcomes c. Knowledge of results 2. Five core job characteristics are linked to these psychological states a. Variety – the extent to which the job requires different activities requiring different skills and talents b. Identity – the degree to which the job allows an employee to complete a whole, identifiable piece of work c. Significance – the degree to which the job has an impact on the lives of other people d. Autonomy – the degree to which the job provides freedom, independence and discretion to the individual performing the work e. Feedback – the degree to which the job itself provides clear information about how well the individual is performing the work OB on Screen: Ocean’s 8 The clip referenced in the book begins around the 1:21:44 mark, continuing until about the 1:27:00 mark. The clip depicts John Frazier, an insurance investigator, as he tries to find out how a diamond necklace was stolen. Ask the students what they like about mysteries— whether in movie form or book form. Then ask the students how jobs (and job tasks) could create those same kinds of feelings. BONUS OB on Screen: Paterson The clip referenced begins around the 3:01 mark, continuing until about the 10:46 mark. The clip depicts Paterson as he starts and finishes his work day. Focus the discussion on how most students would view the job of an urban bus driver from a satisfaction perspective. How, though, does Paterson seem to view it? What is unique in what he seems to want out of life and—as a result—what he wants out of his job? Try This! Use the Paterson clip for a different chapter. The clip would provide a good forum for discussing personality issues for Chapter 9 on Personality and Cultural Values. What is the Big Five profile of Paterson? He seems to be high on conscientiousness but—especially—high on openness. It is that latter dimension that likely pulls him toward poetry and makes him more attentive to what‘s happening in the world around him. BONUS OB on Screen: Burn The clip referenced begins around the 5:41 mark of the film, continuing until about the 13:10 mark. The clip includes interviews with a number of Detroit firefighters as they talk about what they do (and why they do it). They reference a number of values that their work supplies for them, including altruism, status, coworkers, and the work itself. They get to help others, make a different, do their work their own way, bond with one another, and be something special. Ask the students why they believe that firefighters are drawn to the

work, often across generations. What do students find appealing, even when compared to the occupations the students are pursuing. Then ask them what values the job of a firefighter would not supply to them. Often those answers are a safe and comfortable environment and high and secure salaries. Try This! Use the Burn clip for a different chapter. The clip provides a good demonstration of challenge and hindrance stressors in Chapter 6 on Stress, and could also tie into a discussion of stress management. The clip would also be relevant to discussions of intrinsic motivation and psychological empowerment in Chapter 7 on Motivation. BONUS OB on Screen: Michael Clayton The clip referenced begins around the 8:29 mark of the film, continuing until about the 15:51 mark. The clip depicts Michael Clayton dealing with a client of his law firm—a client who has fled the scene of a hit and run at a rural road. Ask the students why Michael seems so dissatisfied with his job—what is he missing? From the perspective of the value-percept theory, what values are not being fulfilled? From the perspective of job characteristics theory, what core job characteristics are missing? In addition, ask the students what emotions are being triggered by the conversation with the client, both in the kitchen and on the drive back home. OB Assessments: Core Job Characteristics. The assessment at the end of the chapter measures the extent to which a student‘s job contains core job characteristics. If you have students who are not working, tell them to think of being a student as their job, and to answer the questionnaire accordingly. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. Ask students with particularly high scores what explains their levels, and do the same for students with particularly low scores. 3. There is a relation between core job characteristics and job satisfaction a. Each of the five core job characteristics is related to job satisfaction – either moderately or strongly b. The relationship between core job characteristics and job satisfaction is moderated by knowledge and skill and growth need strength – the relationship is stronger when these variables are present Try This! Run the Exercise on Job Satisfaction across Jobs here, at this point in the lecture. You will have just gone over the core job characteristics and the OB Assessment, so both will be fresh in students‘ minds. D.

Mood and Emotions 1. Job satisfaction levels fluctuate over time, with the fluctuations caused primarily by mood and emotions

a. Moods – states of feeling that are mild in intensity, last for an extended period of time, and are not explicitly directed at or caused by anything i. Moods are categorized in two ways a. pleasantness – is the mood good or bad? b. engagement – to what extent does the mood cause you to feel activated and aroused? ii. Some organizations offer perks that are designed to improve an employee‘s mood – things such as an onsite gym or even strolling musicians iii. When individuals are highly skilled and work in challenging jobs, a positive mood state called ―flow‖ results. Flow creates a total immersion in the task at hand, with individuals sometimes losing track of time that‘s passed. b. Emotions – states of feeling that are often intense, last for only a few minutes, and are clearly directed at (and caused by) someone or some circumstance i. Emotions are often triggered by specific events, as described by ―affective events theory.‖ ii. Positive emotions include things like joy, pride, relief, etc. iii. Negative emotions include things like anger, anxiety, fear, etc. iv. Some jobs require ―emotional labor‖ in which employees must manage their emotions to complete their job duties successfully a. ―Emotional contagion‖ can occur when one person ―catches‖ the emotions of another person – this phenomenon can explain why customers are less likely to purchase from a dissatisfied salesperson, for example Try This! Ask students in the class if any of them work in retail or other customer service types of settings. Ask those students to explain the kinds of emotions they often feel during the work day, and the kinds of emotions they need to project to customers. Do they struggle with issues of emotional labor or emotional contagion? If some students are more easily able to cope with such work contexts, why might that be? You could draw a bridge to Chapter 4 where emotional intelligence is discussed. E.

Summary: Why Are Some Employees More Satisfied than Others?

17.

HOW IMPORTANT IS JOB SATISFACTION?

Research Results 1. Job satisfaction has a moderate positive effect on job performance. People who experience higher levels of job satisfaction tend to have higher levels of task performance and citizenship behaviour, and lower levels of counterproductive behaviour.

2. Job satisfaction has a strong positive effect on organizational commitment. People who experience higher levels of job satisfaction tend to feel higher levels of affective and normative commitment, but not necessarily of continuance commitment. B.

Life Satisfaction 1. Job satisfaction is strongly related to life satisfaction, or the degree to which employees feel a sense of happiness with their lives 2. Increases in job satisfaction have a stronger impact on life satisfaction than do increases in salary or income OB Internationally. This feature shows that money is not necessarily related to happiness, even on a national level. Although countries above the poverty line are generally happier than countries below the poverty line, for countries with an average income of $20,000 or more, additional income is not related to additional satisfaction. Ask students to hypothesize about why this might be so.

18.

APPLICATION: TRACKING SATISFACTION

Attitude surveys tend to be the most accurate and effective way for organizations to track satisfaction levels.

Although many organizations design their own surveys, there are also benefits to using an existing survey such as the Job Descriptive Index (JDI), which measures satisfaction in five facets: 1. 2. 3. 4. 5.

Pay satisfaction Promotion satisfaction Supervisor satisfaction Coworker satisfaction Satisfaction with the work itself

Recommendations for JDI Administration 1. Survey as much of the company as possible 2. Keep the survey responses anonymous – be careful about collecting demographic information 3. Use JDI results for comparisons – with ―neutral levels‖, with national norms, and within the organization itself 4. Feedback the results to employees, so that they can be involved in an improvement process

DISCUSSION QUESTIONS 5.1

Which of the values in Table 5-1 do you think are the most important to employees in general? Are there times when the values in the last three categories (altruism, status, and environment) become more important than the values in the first five categories (pay, promotions, supervision, coworkers, the work itself)? In general, employees value the work itself over all of the other values in Table 5.1. However, altruism, status, and environment may become more important depending on individual needs and characteristics. For example, an insecure employee may value a comfortable and safe working environment above all of the other categories on the table.

5.2

What steps can organizations take to improve promotion satisfaction, supervision satisfaction, and coworker satisfaction? Organizations can offer fair and well-publicized promotion policies, provide supervisors with training to be sure that they are dealing with employees effectively, and offer opportunities for coworkers to socialize to improve promotion satisfaction, supervision satisfaction, and coworker satisfaction.

5.3

Consider the five core job characteristics (variety, identity, significance, autonomy, and feedback). Do you think that any one of those characteristics is more important than the other four? Is it possible to have too much of some job characteristics? Autonomy and significance are probably the two most important job characteristics. It is possible to have too much of a job characteristic – consider variety, for example. There are times when employees would like to be able to get into a routine and become experts at their job duties, and excessive variety could prevent that.

5.4

We sometimes describe colleagues or friends as ―moody.‖ What do you think it means to be ―moody‖ from the perspective of Figure 5-6? The ―moody‖ term really probably suggests two things in terms of Figure 5-6. First it probably suggests frequent displays of intense negative emotions (hostile, nervous, annoyed). However, it also suggests an inconsistency in mood, with the person swinging between those negative emotions and more pleasant sorts of feelings (enthusiastic, happy, serene).

5.5

Consider the list of positive and negative emotions in Table 5-2. Which of these emotions are most frequently experienced at work? What causes them? The positive emotions most likely to be experienced at work are pride, relief, and hope – these are generally connected to work outcomes or organizational issues. The negative emotions are anger or envy (typically against a boss or coworker), anxiety or guilt

(typically linked to not doing work that was assigned), and shame or sadness (typically linked to relations with others in the organization.)

CASE: ACTIVISION BLIZZARD Questions: 1. If you think about the components of value-percept theory and job characteristics theory, where does ―the product‖ fit in? How can the high satisfaction of Activision Blizzard employees be explained by those theories? For value-percept theory, the product probably fits into satisfaction with the work itself, along with the more infrequently studied facet of status. For the former, a successful product likely instills a sense of achievement and creative expression. For the latter, a successful product brings a sense of prestige. For job characteristics theory, a product that impacts the lives of many consumers likely instills a sense of significance. 2. Does it make sense to think of satisfaction as an aspect of industries, rather than jobs? Activision Blizzard employees a number of different employees in a number of different roles. Is there a reason to suspect, say, a quality assurance person at Activision Blizzard to be more satisfied than a quality assurance person in a typical manufacturing job? Most of job satisfaction should indeed be a function of ―jobs.‖ But, as noted above, the product does impact job satisfaction to some degree. If the product can indeed shape perceptions like achievement, prestige, or significance, then satisfaction is about more than jobs. Likewise, associations with desirable or high status industries should have their own effects. 3. What role do hours worked play in job satisfaction? Do gaming companies have an obligation to help employees manage their hours, even when they are ―in the zone‖ in their coding or even when product launch deadlines are looming? One of the more infrequently studied facets of job satisfaction is the work environment, which includes comfort and safety. Hours certainly falls under such headings. Of course, hours also impacts a number of the concepts in Chapter 6 on Stress. BONUS CASE: ZAPPOS (AMAZON)14 14

Sources: David Burkus, ―Why Amazon Bought Into Zappos‗s ‘Pay to Quit' Policy,‖ Inc., June 15, 2016, https://www.inc.com/david-burkus/why-amazon-bought-into-zappos-pay-to-quit-policy.html; Martha C. White, ―Amazon Will Pay You $5,000 to Quit Your Job,‖ Time, April 11, 2014, www.time.com/58305/amazon-will-payyou-5000-to-quit-your-job, retrieved December 30, 2014; Jeff Bezos, annual letter to shareholders, April 11, 2014, Exhibit 99.1, https://www.sec.gov/Archives/edgar/data/1018724/000119312514137753/d702518dex991.htm; K. McFarland, ―Why Zappos Offers New Hires $2000 to Quit,‖ BusinessWeek, September 16, 2008, www.businessweek.com/smallbiz/content/sep2008/sb20080916_288698.htm, retrieved May 19, 2011; J.M. O‘Brien, ―Zappos Knows How to Kick It,‖ Fortune, February 2, 2009, pp. 55–60; B. Taylor, ―Why Zappos Pays New Employees to Quit—and You Should Too,‖ Harvard Business Review, May 19, 2008.

―Create fun and a little weirdness.‖ That‘s one of the ten core values of Zappos.com, a highly successful member of the Amazon.com family of online retailers. It is fitting to feature the Zappos story in a chapter on job satisfaction, given that management practices at this company are just so strange, if not a little controversial and counterintuitive. What‘s weird at Zappos? For starters, senior managers there are referred to as ―monkeys‖ because they all like bananas and work in a jungle. The top monkey, Tony Hsieh, CEO, hosts company pyjama parties and obsessively blogs about a variety of subjects, from how Twitter can make you a happier person to whether eggnog tastes good on mashed potatoes. The company also employs a full-time life coach. Employees can talk about personal issues, chat off the record about their work group, or get advice on advancing at the company. The one requirement is that they sit on a red velvet throne during their session. Even the hiring process is a little weird, including some non-traditional interview questions such as ―What‘s your theme song?,‖ ―If you could be a superhero, which one would you be?,‖ and ―How weird are you?‖ Those who get through that process don‘t just read about fireable offences in some employment manual; instead, they watch human resources employees act out the ―no-nos‖ in Saturday Night Live–style skits. Zappos currently showcases millions of products from over 1,000 clothing and shoe brands. So, in one sense, the employees at Zappos perform the kind of dreary work that you might see in a typical call centre, such as taking orders and communicating with customers over the phone and Internet. But there is nothing typical about Zappos. The company lives up to the ―fun‖ part of its core values by taking steps to keep employees satisfied with their jobs. Employees understand that their job is to delight customers, and they‘re encouraged to use their imaginations—rather than some predetermined script—during calls. They might encourage customers to order two sizes of shoes, because Zappos offers free shipping for both purchases and returns, or they will recommend a competitor for items that are out of stock. Zappos employees have even been known to send handwritten notes or flowers in cases in which customers complained about a tough workday. Such gestures can have a significant impact, because three-quarters of the company‘s purchases are made by repeat customers. In addition to being able to use their discretion, employees at Zappos get free lunches and access to a nap room and concierge service. Zappos also covers 100 percent of employees‘ health insurance premiums. Employees can even give another employee a $50 bonus for a job well done. Zappos also creates family feeling by encouraging managers to spend 10 to 20 percent of their time with employees outside the office. These sorts of practices help explain why Zappos.com has been consistently recognized over the past decade as one of Fortune‘s 100 Best Companies to Work For. Zappos takes great pride in the weird culture it‘s cultivated, and currently offers a 3-Day Culture Camp for other companies who are interested in transforming their own cultures into something a little more fun and weird. When a company actively promotes ―a little weirdness,‖ it becomes important to hire people who will be satisfied in that sort of environment. Zappos does so by carefully assessing fit during its hiring process. But what happens if new hires realize that they‘re not satisfied with their job, their co-workers, or the organization? After all, the craziness at Zappos is not for

everyone! That‘s where ―The Offer‖ comes in: New hires begin their Zappos employment with a four-week training period that acquaints them with the company‘s strategy and its approach to customer service, receiving their full salary along the way. One week in, the new hires are offered a bonus … to quit. That‘s right—new hires can walk away with one week‘s salary and an extra $2,000 in their pocket. Zappos uses ―The Offer‖ to give employees who may not enjoy working at Zappos an easy out. The idea of ―paying people to quit‖ has been picked up by Jeff Bezos, founder and CEO of Amazon.com (Zappos‘s parent company). Amazon recently shocked the corporate world by announcing a new policy: ―If an employee isn‘t happy working at the online retail giant, they can earn up to $5,000 just for quitting.‖ Bezos describes the program as being fairly simple: ―Once a year we offer to pay our associates to quit. The first year the offer is made for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000 . . . The goal is to encourage folks to take a moment and think about what they really want,‖ Bezos explains. In addition to its ―Pay to Quit‖ program, Amazon has adopted a couple of other employee empowerment initiatives. Career Choice is a program in which Amazon prepays 95 percent of tuition for its employees to take courses for in-demand fields, such as nursing or mechanics, even if the skills have nothing to do with a career at Amazon. Bezos explains, ―The goal is to enable choice. We know that for some of our fulfillment center employees, Amazon will be a career. For others, Amazon might be a stepping stone on the way to a job somewhere else—a job that may require new skills. If the right training can make the difference, we want to help.‖ A third initiative is called the Virtual Contact Center. Under this program, Amazon employees are able to provide customer service support while working at home. ―This flexibility is ideal for many employees who, perhaps because they have young children or for another reason, either cannot or prefer not to work outside the home,‖ explains Bezos. Questions: 1.

What do you think of Amazon‘s approach to employee empowerment? Explain how this strategy might work at a strategy for maximizing job satisfaction within the organization?

Students should find the overall approach has its merits. All of these initiatives provide employees with real choices that, in turn, allow them to satisfy personal needs (see Chapter 7) and to align their work experiences with core values. For instance, the ‗paying people to quit‖ program is clever in that it provides employees with a legitimate ―exit‖ opportunity and enough money to manage the transition to another organization and job. Employees who feel dissatisfied but feel they have no other options (high continuance commitment – Chapter 3) now have a way to leave. This is a win for both the company and the individuals, as the employee can move on to a more satisfying job situation and the organization can replace a dissatisfied employee with one who fits a little better. Over time, the level of satisfaction with the company should increase as disgruntled and unhappy people leave and satisfied employees stay. Career choice is another example of an employee empowerment program that allows people to take courses in other areas not necessarily related to their work. The logic is similar to the ―paying people to quit‘ in that the company is providing a legitimate pathway out of the

organization for those who want to take it. The benefit to the company is that, over time, dissatisfied employees remove themselves from the organization whereas those who really want to stay with the company do not. Allowing people to work from home is another way the company provides choices to employees so that they can tailor the work environment around their values and needs. And, in doing so, allows them to create conditions that lead to satisfaction rather than dissatisfaction. 2.

Should the ―pay to quit‖ programs used at Zappos and Amazon be used at other organizations? Are you concerned that programs like this might undermine the company‘s attempt to strengthen organizational commitment? Explain

Students will probably think of situations where a program like this would not be in the organization‘s best interest – perhaps in highly-skilled positions where job shortages exist, or where recruiting costs are very high. In these cases, a better strategy might be to assess fit earlier in the selection process before the individual has had all the orientation and training. For other organizations and job situations, it should work well. Ask students to consider some of the conditions when ―pay to quit‖ will work well and when it probably won‘t. While it is important to offer a small incentive to those who wanted to leave anyway, organizations should be careful about making the incentives too high – or else employees who might have been satisfied might feel pressure to exit –just to get the incentive. This is especially true when jobs are plentiful. Programs such as ―pay to quit‖ will work against the goals of a continuancecommitment strategy. For instance, if the goal of a continuance-commitment strategy is to lock employees into jobs through generous pay and benefits, then ―pay to quit‖ effectively offers a way out. However, as we discussed in Chapter 3 fostering continuance commitment is not the most desirable way of retaining employees because people who feel trapped are not necessarily productive (beyond minimally-acceptable levels). To complement ―pay to quit‖ (which reduces feelings of continuance commitment), organizations might also focus on job re-design and job enrichment to strengthen emotional ties and affective commitment. In this way, ―pay to quit‖ need to undermine a company‘s retention strategies. 3.

When you consider your personal values (Table 5-1) and what you perceive Zappos offers, would you experience job satisfaction or dissatisfaction? Would you fit in at Zappos or organizations like this? Why or why not?

Answers will vary widely across students. If students are working in small discussion groups ask them if their individual reactions were influenced by the views of others? The main thing here would be to encourage students to explain the reasons behind their answer. Ultimately, whether someone fits at Zappos (Amazon) may well depend on their personal values and individual characteristics, such as personality (see Chapter 4).

BONUS CASE: PEFORMANCE PLANTS15 What if you could do something that would help prevent the suffering of millions of starving people in the third world? Imagine not having to water your front lawn or flowers, even during the hottest summer months, and still have the grass retain its fresh spring-like look. What if farmers no longer had to irrigate their fields to harvest a bumper crop? Imagine if all mankind‘s energy needs could be met from growing grass? Does all of this sound like science fiction? Well, to the 45 dedicated men and women who work at Performance Plants, solving some of the world‘s most challenging food supply, energy, and environmental problems is all in a day‘s work! Performance Plants Inc., founded by David Dennis in 1995, is Canada‘s largest agriculture biotechnology company with office and research facilities in Kingston, Saskatoon, and Waterloo, New York.1 Their mission is to develop science-based technologies for the purpose of enhancing the production of food, feed and bio-fuel crops. In laymen‘s terms, the basic idea is to make small targeted changes to plant genetics that lead to big effects, such as dramatically increasing a plant‘s performance (i.e., yield) and/or increasing a plant‘s natural ability to withstand periods of short-term drought and extreme heat. ―Performance Plants has already demonstrated in field trials the ability of its patented technologies to produce higher yields of canola – even under drought conditions,‖ says Heather Collins, Investment Director with Investment Saskatchewan. ―This technology is currently being tested in other crops such as corn, soybeans, rice, turf grass and ornamental plants.‖2 Recently, Performance Plants signed an agreement with the Africa Harvest Biotechnology Foundation International, an international non-profit foundation with a focus to fight poverty, hunger and malnutrition, to use the company's technology in a multi-year project to develop and field test drought tolerant white maize, a staple crop in Africa. This is the first time that a Canadian company's agricultural biotech intellectual property is being transferred to Africa for non-commercial purposes.3 Some of the most technically-demanding work is performed at the company‘s research facility, located in the heart of Innovation Place at the University of Saskatchewan.4 Here a team of scientists perform a variety of highly specialized and interdependent activities. The role of laboratory workers is to make the targeted changes to the plant DNA and then to ensure that the resulting plant tissues can re-generate with the new genetic instructions. Walking through the laboratory one is reminded of the popular CSI television show, with characters such as Nick Stokes or Warrick Brown performing DNA analyses on hair samples found at a crime scene.5 And just like the characters on the CSI television series, it is critical for the technical experts to communicate and coordinate their activities with respect to several different projects. People not assigned to the laboratory, work as greenhouse technicians in the plant nursery or outside the facility managing any number of field trials. Day-to-day supervision is shared within the team, in consultation with a respected team leader. Everyone is expected to perform a variety of 15

Sources: Performance Plants Inc. Homepage, http://www.performanceplants.com/media.html (accessed June 20, 2008); News release (Kingston, June 19, 2006). Performance Plants receives largest private investment in Canadian Ag-Biotech. Company to increase capacity, advance drought resistance technology to market; News release (Calgary, September 24th, 2007) Leading Canadian Biotechnology Company, Performance Plants Inc. (PPI) and Africa Harvest Biotech Foundation International (AHBFI) agree to use drought tolerance biotechnology developed in Canada to help ensure sustainable food production in Africa. Innovation Place. http://www.innovationplace.com/; http://en.wikipedia.org/wiki/CSI:_Crime_Scene_Investigation

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different tasks in their area of expertise, which in turn, affords them an opportunity to develop and master a wide range of skills and use the ―latest-and-greatest‖ technology and tools. Although team members perform their specialized work, frequent team meetings helps everyone to see and track the fruits of their labour (e.g., finding out that three of your transgenic plants provided a yield boost in the field trial). Often faced with unique challenges, team members often use their discretion to come up with innovative solutions. Historically, turnover rate within the Saskatoon facility has been low. In the past year or two, the economy in Saskatchewan has been strengthening which, in turn, has increased the demand for a relatively small pool of talented people. A particular concern for Performance Plants is the growing presence of several large multinational corporations (e.g., Dow AgroSciences; Bayer CropScience), and the effect of these companies on the overall satisfaction felt by members of the team. Although Performance Plants pays its employees competitive salaries for the region, the multinational corporations have a more competitive total compensation package (salary, benefits, bonus system, company vehicle, etc..,). Moreover, the opportunity for promotion and career advancement in one‘s technical specialty tends to be higher in the larger, more complex multinational organizations. A challenge now facing the company is holding on to its best and brightest. People who have the talent and creativity needed to help the company realize its mission, unfortunately, are in short supply. Although Performance Plants has a core of dedicated employees across its three locations, the size of this organization pales in comparison to the big multinational corporations that can do, essentially, the same or similar work. With employees able to change jobs any time they want (i.e., suitable alternatives do exist), and, in many cases, do so without having to change their address or their morning commute, overall satisfaction and commitment play a critical role in decisions to stay or leave. At this time, satisfaction is high and turnover has been, historically, low. But it is a very fragile situation. The majority of employees who work at the Saskatoon facility are females in their early to mid-30s. There is growing pressure to satisfy their need for career advancement and development. Questions: 1.

Put yourself in the shoes of a typical scientist at the Saskatoon facility. What might you be thinking or feeling with respect to job satisfaction, and the consequences of these thoughts and feelings. Explain.

Although the employees at the Saskatoon facility are likely satisfied, we can learn more by considering facet satisfaction. We know that employees at the Saskatoon facility have ample opportunity to acquire and use a variety of different skills in their day-to-day activities. Moreover, in a tightly integrated unit with a high level of co-ordination, individual employees have an opportunity to follow and track their efforts – increasing their sense of task identity. The work is cutting-edge that promises to have a significant effect on the lives of others. Together, high skill variety, high task identity, and high task significance should lead strong feelings of meaningfulness. When meaningful, high-discretion roles are performed in a context where feedback is constantly provided, work satisfaction should be high (assuming that growth needs are strong). In addition to high work satisfaction, we can infer from case that

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satisfaction with coworkers and supervision is likely high too. However, promotion opportunities at Performance Plants are limited. Satisfaction with pay and benefits might be lower when comparisons are made with their peers who work ―next door‖ in the multinational corporations (see Chapter 7 for a more in-depth discussion of equity theory and how perceptions of referent others affect attitudes and motivation). When we consider the facets of pay and promotion opportunities along with the other facets mentioned above, the level of overall job satisfaction is likely to be moderate. A consequence of moderate overall satisfaction is that employees will likely keep their eyes open for suitable alternatives. It is unlikely that motivation will suffer because the work itself is interesting and challenging, however, turnover is definitely possible. Whether or not an individual leaves the facility would like depend on the nature of the opportunity, and one‘s sensitivity to economic concerns. What exacerbates the risk here is the fact that employees can change jobs without disrupting their non-work lives. 2. If you did decide to move, what job satisfaction issues might you have to deal with in a larger, multinational corporation? To appreciate job satisfaction issues in a larger, multinational corporation, a good place to start is with organizational structure (see Chapter 14), and how this reality shapes the perceptions that we know are linked to work satisfaction. In order to co-ordinate the activities of individuals and teams within a larger organization, it is typical to see a higher degree of job specialization, formalization, and centralization. Job specialization allows highly trained employees to focus and develop their technical expertise in a few rather than many areas. Formalization refers to the degree of policies, rules and procedures that govern a wide range of organizational behaviours. Formalization might also filter into the work itself, where employees are expected to follow standardized processes and outcomes. Centralization refers to the degree that decision-making authority is centred at higher rather than lower levels of the organization. In this context, it might be more difficult for employees to experience the level of skill variety, task identity, task significance, autonomy and feedback than they would have in a small organization, like Performance Plants. Thus satisfaction with the work itself will likely be an issue for employees in the multinational corporation, especially if growth needs are strong.

EXERCISE: JOB SATISFACTION ACROSS JOBS Instructions: Put students into groups and make sure they each have a copy of the OB Assessment for this chapter. Instruct them to come to consensus on each of the questions on the OB Assessment in reference to the four jobs (lobster fisherman, stand-up comedian, computer programmer, and leader of a political party in Canada). Typical Scores: The Satisfaction Potential Scores for a stand-up comedian and a lobster fisherman will typically be highest, possibly even in the upper 100‘s or even the lower 200‘s. This is because those jobs have high levels of autonomy and feedback, will receive more weight in the formula used in the OB Assessment (because they get multiplied). The political leader‘s score will usually come next, in the 50-100 range. That score is lower because the ―checks and balances‖ created by the Copyright © 2022 McGraw Hill Limited

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parliament and the party itself. In addition, feedback may be lacking because it‘s often not known for a period of several years whether a given decision was ―right.‖ The computer programmer will usually be lowest, struggling on all five job characteristics. Have a representative of each group share their scores with the class. Questions: The Satisfaction Potential Score is indeed meant to capture the job that is most enjoyable day-in and day-out. That does mean that being a lobster fisherman or a stand-up comic may usually be more enjoyable than being the political leader (a job that brings with it a great deal of responsibility and frustration). However, students would probably not pick being a lobster fisherman or stand-up comic if they could snap their fingers and magically attain one of the jobs covered in the exercise. That‘s because there‘s more involved in picking a job than what‘s enjoyable. Being a political leader would allow students to fulfill many other values, beyond just having satisfactory work tasks, making value-percept theory relevant to this issue. From Table 5-1, those values might include good pay, a sense of status, and the ability to engage in altruistic work.

OMITTED TOPICS The field of organizational behaviour is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Attitudes – Job satisfaction is part of a larger family of work-related attitudes. Attitudes have an associated attitude object, which may be the organization, the job, a coworker, or the leader. They also have an evaluative component (what is felt toward the object), a cognitive component (what is thought about the object), and a behavioural component (a predisposition to act a particular way towards the object). For more on this, see: McGuire, W. J. ―Attitudes and Attitude Change.‖ In Handbook of Social Psychology, Vol. 2, eds. G. Lindzey and E. Aronson. New York: Random House, 1985, pp. 233-346. Job Involvement – Represents another commonly discussed job attitude, reflecting the degree to which one is cognitively engaged in and concerned about one‘s present job. Job involvement can be viewed as a blend of job satisfaction and motivation (motivation concepts are covered in Chapter 7). For more on this, see: Lodahl, T. M.; and M. Kejner. ―The Definition and Measurement of Job Involvement.‖ Journal of Applied Psychology 49 (1965), pp. 24-33. Dispositional Influences – Studies of identical twins raised apart have revealed that job satisfaction has a significant genetic component. Specifically, personality and dispositional

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variables like neuroticism and negative affectivity make some individuals dissatisfied by nature. Such effects are covered in our discussion of personality in Chapter 4. Herzberg‘s Two-Factor Theory – This widely known (but scientifically unsupported) theory describes satisfaction and dissatisfaction as two separate concepts. Satisfaction is said to be driven by ―motivators‖ such as promotion opportunities, recognition, and growth opportunities. Dissatisfaction is said to be driven by ―hygiene factors‖ such as pay and the quality of supervision. The hygiene factor classification significantly underestimates the importance of pay and supervision, which are important factors in job satisfaction and motivation. For more on this, see: Herzberg, F. Work and the Nature of Man. Cleveland, OH: World, 1966. Emotional Intelligence – Includes a set of competencies that allow some individuals to accurately identify and express emotions. Individuals who are high on emotional intelligence may be more able to succeed in jobs that are high in emotional labor requirements. The competencies that underlie emotional intelligence are covered in our discussion of ability in Chapter 4.

Chapter 6: Stress

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW Stress is a psychological response to demands that tax or exceed an individual‘s capacity or resources. This chapter describes the difference between challenge and hindrance stressors, and provides suggestions on how to cope with these stressors. In addition, individual differences with regard to stress are discussed, along with the experience of strain. Finally, organizational efforts to manage stress are overviewed. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 6.1 6.2 6.3 6.4 6.5 6.6

What is stress, and how is it different than stressors and strains? What are the four main types of work stressors? How do individual people cope with stress? How does the Type A Behaviour Pattern influence the stress process? How does stress affect job performance and organizational commitment? What steps can organizations take to manage employee stress?

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CHAPTER OUTLINE 19.

STRESS

A. Definitions 1.

Stress is defined as a psychological response to demands for which there is something at stake and coping with those demands taxes or exceeds a person‘s capacity or resources

Stressors are the particular demands that cause people to experience stress

Strains are negative consequences that occur when demands tax or exceed one‘s capacity or resources

Try This! For students who have not yet read the chapter and have not yet seen Table 6-1, ask them to guess what some of the least stressful jobs are, and what some of the most stressful jobs are. Write them in two different columns on the board. Then, as you go through the list of challenge and hindrance stressors later in the lecture, keep coming back to your list on the board. Do the least stressful jobs really have lower levels of challenge and hindrance stressors? Which stressors are lowest? Do the most stressful jobs really have higher levels of challenge and hindrance stressors? Which stressors are most salient? 20.

WHY ARE SOME EMPLOYEES MORE “STRESSED” THAN OTHERS?

Perception and Appraisal of Stress 1.

The transactional theory of stress describes how stressors are appraised. When people first encounter stressors, primary appraisal, or the evaluation of the significance and meaning of those stressors, is triggered a.

Job demands that are not considered stressful are called benign job demands

Types of Stressors 1.

Work Hindrance Stressors – work-related stressors that people perceive as hindering their progress toward goals a.

Role conflict – conflicting expectations that other people have of us

Try This! Ask students to think about their current job, or the job they will pursue as their career after graduation. Have them describe the role conflict inherent in that job. At a minimum, most jobs will have a built-in conflict between quality and quantity that the students can identify. However, sometimes there will be more unique examples, such as

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strictly adhering to rule following versus providing customers with a uniquely pleasing customer service experience. b. c. d.

Work Challenge Stressors – work-related stressors that can lead toward development and growth a. b. c.

Time pressure – the sense that you don‘t have enough time to do what needs to be done Work complexity – the degree to which the requirements of the work tax or exceed the capabilities of the person doing the work Work responsibility – the nature of the obligations a person has to others

Non-Work Hindrance Stressors – non-work-related stressors that hinder progress toward goals a. b. c.

Role ambiguity – lack of information regarding what needs to be done in a role Role overload – when the number of roles a person holds is so high that some of the roles are performed less effectively, or not at all Daily hassles – relatively minor day-to-day demands that get in the way of accomplishing what we want to do

Work-family conflict – when the demands of the family role hinder the demands of the work role and vice-versa Negative life events – specific life events, such as the death of a spouse, that are perceived as stressful Financial uncertainty – a general uncertainty about loss of livelihood, savings, or the ability to pay expenses

Non-Work Challenge Stressors – non-work-related stressors that are opportunities for growth and development a. b. c.

Family time demands – the time a person commits to participate in an array of family activities and responsibilities Personal development – participation in activities associated with personal development, such as music lessons or sports activities Positive life events – specific life events such as pregnancy or the birth of a child, which, although positive, can still be perceived as stressful

Try This! Together with your students, create a ―university life event scale‖ for your university, along the lines of Table 6-2. List events on the board, guessing at a stress score for each one. For example, a negative event might be getting a bad grade on an exam, or breaking up with a significant other. A positive event might be winning an important sporting event or planning for graduation. The specific numbers will be guesses of course, but the interesting part will be to make sure the numbers make comparative, relative sense (e.g., that the number associated with the exam make sense relative to the number

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associated with the breakup. You may also want to use Table 6-2 as a guide for the numbers, meaning that most events listed will be in the thirties or below. C.

How Do People Cope With Stressors? 1.

Coping refers to behaviours and thoughts that help people manage stressful situations a. b. c. d.

Behavioural coping – the set of physical activities that are used to deal with a stressful situation Cognitive coping – the thoughts that are involved in trying to deal with a stressful situation Problem-focused coping – refers to behaviours and cognitions intended to manage the stressful situation itself Emotion-focused coping – refers to the various ways in which people manage their own emotional reactions to stressful demands

OB Internationally. This text box discusses the impact of stress on people with expatriate assignments. The main point of the insert box is that many expatriates fail in their assignments because they fail to effectively cope with the associated stress. One additional point to make is that it is not only the expatriate who faces the stress of being overseas, but also his or her family, and this may have a spiraling effect. Focus discussion on this scenario: imagine that you are the trailing spouse of an expatriate manager. What stresses might you encounter when your spouse is moved to another country? How might this stress, in turn, impact your spouse? OB on Screen: First Man. The clip begins around the 13:37 mark of the film, continuing until about the 15:41 mark. You can begin by providing a bit of background. In 1961 Neil Armstrong was a test pilot. There was an incident (depicted in the opening scene of the movie) where Armstrong‘s X15 rocket plane is nearly lost in a disaster. He was at the edge of the atmosphere, and rather than descending back to earth, the X-15 started to ascend into outer space. The situation was dire and deteriorated fast, but he remained calm despite the stress. He figured out what was happening, improvised, and ultimately landed safely in the Mohave Desert. Soon thereafter, his young Daughter Karen, who had brain cancer, passed away. The clip depicts how Armstrong copes with this tragedy. The day after his daughter‘s funeral, Armstrong tells his wife he‘s going to work. His co-workers are obviously surprised that he‘s at the office instead of home with his wife and two boys. Armstrong‘s boss senses that his reaction to his daughter‘s passing isn‘t normal, and tells him he cannot fly. The scene ends with Armstrong noticing a NASA advertisement for Project Gemini astronauts (the next scene in the movie shows Armstrong interviewing for the job). You can begin the discussion by asking why Armstrong‘s co-workers were surprised that he showed up for work and why his boss grounded him. Students will likely respond by noting that the death of a child is perhaps the most stressful life event there is. It‘s only natural to experience intense strain that would make it difficult to function in one‘s job, especially in a job where full mental and physical capacity is needed, and where failure to perform effectively could lead to disaster. You can

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then ask about what form of coping Armstrong is using and how effective it is. Students should note Armstrong is coping with the stress by regulating his emotions using both cognitive (distancing himself from his family and reminders of his daughter) and behavioral methods (going to work and interviewing for a job as a NASA astronaut). Students may note that this type of coping may not be effective, but they may have trouble explaining why beyond noting that deep feelings of sadness many never get resolved unless the person experiencing the stress talks about it. Other students might also note that because nothing can be done about the source of the stress, there is not much else to do other than regulating one‘s emotions. You can then move on to ask students how being able to regulate emotions experienced from stressors may have served Armstrong quite well as a test pilot and astronaut. Students should realize that being able compartmentalize fear and anxiety and frustration may be critical in situations where one has to deal with an emergency situation calmly and rationally. In fact, this approach to regulating his emotions is foreshadowed in the previous scene in the movie. Obviously distraught over his daughter‘s death, he closes notebooks containing research on his daughter‘s cancer and puts them away along with her bracelet. Please email me at ian.gellatly@ualberta.ca if you have any questions about using OB on Screen in your teaching. BONUS OB on Screen: Deepwater Horizon. The clip begins around the 28:10 mark of the film, continuing until about the 33:53 mark. You can begin by providing a bit of background. Deepwater Horizon was an oil rig located off the coast of Louisiana in the Gulf of Mexico. A Deepwater Horizon crew had just sealed off an exploratory well with a concrete cap so that the well could be exploited later by BP, who was leasing the rig and crew from another company called Transocean. There was a routine crew changeover, and the new crew expressed concerns regarding the previous crew‘s failure to complete some tests on the integrity of the concrete cap. The scene depicts a meeting between BP executives, led by Donald Vidrine, and Deepwater Horizon personnel, led by Jimmy Harrell. You can begin by asking students if they think Harrell‘s overall job is a stressful one, and if so, why. Students will likely point out that he‘s responsible for the lives of the crew members, there‘s pressure to meet performance goals, running an oil rig is very complex, the rig has a bunch of problems, and they‘re isolated and have to solve problems on their own. You can then ask students what specific stressors are evident in the meeting with Vidrine. Students will note that the meeting depicts conflict and politics. Students who read the chapter might point out that Harrell is likely experiencing role conflict. On the one hand, he‘s responsible for the safety of the crew and the rig, and wants to err on the side of safety. On the other hand, Vidrine reminds him that BP is paying the bills, that the project is behind schedule, and he needs to do what he can to get the well ready for exploitation. You can then ask students about their own experiences with role conflict and why it‘s stressful and typically appraised as a hindrance rather than a challenge. Students will provide examples and say that these situations create uncertainty about what to do and puts them in a ―no-win‖ scenario. In most instances, there isn‘t a best solution and satisfying one party will upset the other, and this creates conflict. If no one mentions it, you can say that it can result in some poor decisions too. This is precisely what happened aboard the Deepwater Horizon. Vidrine appeared to really push his agenda on Deepwater Horizon crew, and as a result, they didn‘t scrutinize test results the way they should have, and the end result was a

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catastrophe. The cap gave way, which not only destroyed the rig and killed crew members, but also created one of the largest marine oil spills ever. Bonus OB on Screen: Gravity. The clip begins around the 8:40 mark of the film, continuing until about the 16:26 mark. The scene focuses on two astronauts who are on a spacewalk outside the Explorer shuttle. Commander Matt Kowalski, a veteran astronaut, is floating around in space and appears to be enjoying himself. Dr. Stone, a biomedical engineer on her first space mission, is obviously much less comfortable. She feels very queasy and is trying her best to hold it together while trying to repair and reinitiate a circuit board she designed for the Hubble telescope. The two get word from mission control that a Russian missile has struck a satellite, which created some space debris in the area. Dr. Stone appears to be nervous about the news, but Kowalski tells her to relax and to let mission control worry about it. Soon thereafter, mission control tells the crew to abort their mission. The missile caused a chain reaction and a large field of space debris is speeding towards them. The debris arrives and destroys the shuttle and Hubble telescope. Kowalski is hurled out into space. If you stop at the 16:26 mark, students will see him floating away. The scene provides a very powerful example of extreme stress and various aspects of the stress process discussed in the chapter. One topic for class discussion relates to differences in the apparent stress of the two astronauts prior to the disaster. You can ask the class to explain why there may have been differences. To Kowalski, an experienced astronaut, the spacewalk is much more routine—a benign job demand that did not seem to tax him whatsoever. Dr. Stone, however, is a rookie. She has to focus intensely on her work. She feels ill and disoriented and has difficulty holding onto her tools and parts from the circuit assembly. You can conclude this part of the discussion by noting that although stress originates from the demands in jobs, the degree to which stress occurs depends a great deal on employee attributes. You can then turn students‘ attention to the astronauts‘ stress during and after the disaster. You could begin by asking them to explain why the situation becomes more stressful. It seems like an obvious question, and students are likely to respond quickly by saying that the lives of the astronauts are in great danger. Deeper responses will center on the situation; it‘s complex, uncertain, chaotic and dynamic. You can then tie these responses back to the material in the book by noting that there is a lot at stake for the astronauts, and that dealing with the situation will very much tax their resources. This is the definition of stress from the chapter. The conversation can then turn to how the demands of the situation are likely to be appraised. Some students might argue that the demands created by the disaster are appraised as hindrance stressors because they have thwarted progress on the crew‘s the mission. Other students will likely note that the disaster ended the mission and created a new one; staying alive. They may also note that because the new situation is filled with time pressure, complexity, and responsibility, and because accomplishing this new mission will be more satisfying than the alternative, the demands are more likely to be appraised as challenge stressors. BONUS OB on Screen: Argo. The clip begins around the 50:00 mark of the film, continuing until about the 1:00:00 mark. The clip depicts many of the stressful demands that confront Tony Mendez as he tries to rescue the American hostages in Iran. The scene opens with Tony getting a visa to enter Iran. Then he makes his way through Iranian airport security. He has to seek approval from an Iranian official to make the movie ―Argo‖ (his

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cover). He then meets the Canadian ambassador and explains the plan to rescue the hostages. The clip depicts many types of stressors. It‘s evident that the plan is risky—it hasn‘t been tried before. There are a lot of moving parts that have to come together. There‘s great time pressure. It‘s also clear that Tony is almost totally responsible for the plan and for the lives of the hostages. One topic for class discussion could center on the stressors Tony faces. You can list these and help students realize that they are a mix of hindrances and challenges. Another topic for class discussion could center on why someone would want to do a job like this. Here students will likely point out that the level of challenge stressors is high. Some students will likely say that they would never want to do it. You could use this type of comment to segue to a discussion of individual differences that might influence how stressors are interpreted and appraised. Note that some of these issues are covered later in the chapter. Try This! Use the Argo clip for a different chapter. The clip provides a good opportunity for discussing emotional intelligence and cognitive ability dimensions in Chapter 4. Everyone involved in Tony‘s plan will need high levels of verbal ability to recall cover story details and reasoning ability to react to questioning. Emotion regulation and emotion use will also be needed to ―play the role‖ required by the plan. D.

The Experience of Strain 1.

Negative Consequences of Stress a.

b. c.

Physiological strains – stress can have an impact on immune system, cardiovascular system, musculoskeletal system, and gastrointestinal systems Psychological strains – stress can cause psychological symptoms such as depression and anxiety, which can lead to burnout Behavioural strains – alcohol and drug use, teeth grinding, compulsive behaviours, overeating)

Accounting for Individuals in the Stress Process 1.

Reaction to stress depends on whether or not a person exhibits the ―Type A Behaviour Pattern.‖ Note that the Type B Behaviour Pattern is essentially the exact opposite of Type A Behaviour Pattern (thus knowing about Type A tells you about Type B, only reflected)

OB Assessments: Type A. This assessment measures the extent to which students exhibit the ―Type A‖ behaviour pattern. When discussing the results with students, it is important to point out that while people who exhibit Type A behaviours tend to be more ―stressed‖ than other people, other factors also come into play – the type of stressors people encounter, the amount of social support they have, etc. It might also be worth pointing out that this was originally developed as a tool by medical doctors to diagnose the predisposition for coronary problems.

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a. b. c.

Type A people tend to encounter more stressors than other people, due to the fact that they are hard-driving and competitive Type A people are more likely to see demands as being stressful rather than benign Type A people are more likely to have coronary artery disease and exhibit other physical and psychological symptoms of strain

Social support can help to mitigate reactions to stress, by providing a buffer between stresses and strains a. b.

Instrumental support – help people receive that can be used to address the stressful demand directly Emotional support – the help people receive in addressing the emotional distress that accompanies stressful demands

21.

HOW IMPORTANT IS STRESS?

Hindrance stressors have a weak negative effect on job performance, because they reduce the energy and attention people can devote to a job. Challenge stressors, in contrast, have a weak positive effect on job performance, because they trigger positive emotions that can improve the work experience.

Hindrance stressors have a strong negative effect on organizational commitment, because they make organizational life more dissatisfying. Challenge stressors, in contrast, have a moderate positive effect on job performance, again because they trigger positive emotions within the employee.

22.

APPLICATION: STRESS MANAGEMENT

Benefits of Managing Stress 1.

Levels of stress are directly linked with health care costs and worker‘s compensation claims – managing stress keeps these costs down

Steps in Stress Management 1.

Assessment – Determine whether or not stress is a problem in the organization a. Stress audit – asks questions about the nature of jobs to determine if stress is an issue in the organization

Reducing Stressors a. Eliminate or significantly reduce stressful demands through programs such as job sharing b. This approach is most beneficial for hindrance stressors

Providing Resources

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Help employees cope with stressful demands by i. providing resources such as training interventions ii. providing supportive practices such as flextime or compressed work weeks to help balance work and non-work role demands

Reducing Strains a. Decrease the strains associated with stress through practices such as relaxation techniques and meditation b. Use cognitive-behavioural techniques to help people appraise and cope with stress in a more rational manner c. Improve resistance to stress through health and wellness programs

DISCUSSION QUESTIONS 6.1

Prior to reading this chapter, how did you define stress? Did your definition of stress reflect stressors, the stress process, strains, or some combination? Most students think of stressors when they think of stress – things like not having enough time, unreasonable demands from a parent, significant other, boss or professor, and not having the resources they need (money, books, etc.) As a follow-up to this question, ask students to identify the strains associated with the stressors they mention. What negative outcomes do they associate with their stressors?

6.2

Describe your dream job and then provide a list of the types of stressors that you would expect to be present. How much of your salary, if any at all, would you give up to eliminate the most important hindrance stressors? Why? Answers to this question will vary by student, but consider the student whose ―dream job‖ is to be CEO of his or her own organization. Examples of hindrance stressors might include difficulties in dealing with politics in the organization, difficult customers, and hassles with employees.

6.3

If you had several job offers after graduating, to what degree would the level of challenge stressors in the different jobs influence your choice of which job to take? Why? Challenge stressors help people to develop, and this is something that most individuals desire. It also makes sense to have jobs with high challenge stressors early on because this is how you grow and develop competence.

6.4

How would you assess your ability to handle stress? Given the information provided in this chapter, what could you do to improve your effectiveness in this area?

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Again, student answers will vary, but common responses will include gaining skills in time management, modifying job and/or school requirements, getting more exercise, participating in calming techniques such as meditation, etc. 6.5

If you managed people in an organization in which there were lots of hindrance stressors, what actions would you take to help ensure that your employees coped with the stressors using a problem-focused (as opposed to emotion-focused) strategy? The most obvious answer involves getting rid of hindrance stressors whenever possible.

CASE: CGI Questions: 1.

It would seem that so much of our felt stress comes from events or circumstances that are imposed upon us (i.e., not of our choosing). That said, a lot of our stress comes from within in the sense that we put pressure on ourselves. Which of these sources is easier to deal with and why? The transactional theory of stress tells us that how we perceive and appraise (interpret) events and circumstances are the key to whether we feel stressed out or not. So, our reaction to many of life‘s daily stressors will, to a large extent, depend on us (i.e., person factors) and the pressure we put upon ourselves. That said, there are some events or circumstances that do not require subjective interpretation, such as accidently running across a grizzly bear when mountain biking on a remote trail. While cognitive appraisal of the situation is still needed, there are some real dangers that are imposed upon us that need to be resolved. Which is easier to deal with? Avoiding the stressful events and circumstances may or may not be easy or possible. However, for the vast majority of daily stressors, people can learn to re-frame their events/circumstances, and to manage the stress response using the techniques outlined in the chapter.

CGI Oxygen events such as ―Walk Around the World‖ presume that people can gather and support one another as they collectively strive for health and wellness. However, in the wake of the global health pandemic, can health and wellness programs such as Oxygen be adapted to benefit those who are socially isolated and have to interact with others virtually via digital channels? Explain. More and more companies these days are demonstrating an awareness of physical and psychological well-being. This need was particularly salient during early days of the global health pandemic. In the chapter we see that social support can help to mitigate reactions to stress, by providing a buffer between stresses and strains. Collective initiatives and events, like ―Walk Around the World,‖ help to increase one‘s sense of being part of a bigger community all focused on health and wellness. We also learn later in the chapter that opportunities to collaborate and socialize are tangible

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resources that the company can provide employees to help them respond to a stressful work situation. 3.

Why do programs like Oxygen work when it comes to managing stress? In your discussions and answers refer to the stress process described in Figure 6-3. When might the demands of participation in Oxygen events inadvertently increase rather than lower stress? Oxygen is an initiative aimed at promoting health and wellness. From that perspective, it will help build employees‘ capabilities to work under pressure. In their answers, students will apply the concepts described in Figure 6-3 to the wellness initiative. A concern might be that the various events and activities associated within the Oxygen program could be viewed by some as challenge stressors. In turn, stress might inadvertently increase rather than decrease.

BONUS CASE: HONEYWELL16 When asked to think of a Honeywell product, the company‘s ―round‖ thermostat might come to mind. In continuous production since 1953, the T-86 thermostat is used in more homes and commercial buildings than any other, and is part of the Smithsonian Design Museum‘s collection of iconic everyday items. If asked what other products Honeywell manufactures, you might have a vague sense that they manufacture equipment for the military and space industries, but perhaps you would have difficulty naming anything specific. In fact, Honeywell manufactures tens of thousands of products, though most are used in the production of other products and services. Examples of businesses in which Honeywell operates include commercial and defence aviation, satellite communications, home comfort and security, remote health monitoring, industrial automation, petroleum and petrochemical equipment, and products and materials used in electronics, fertilizers, films, and adhesives. Over the last century, Honeywell has evolved into a $40 billion company through a constant stream of acquisitions and divestitures. To Honeywell‘s employees, this evolution has been a double-edged sword. On the one hand, continual change in the company‘s mix of businesses creates opportunities for employees to develop their knowledge and skills. For example, company managers may be tasked with the challenge of integrating an acquisition into the larger company and identifying potential synergies with existing businesses. On the other hand, constant change creates a great deal of uncertainty and stress among the company‘s employees. For instance, an acquisition of a related business can create redundancies in functional roles, and so employees may feel threatened about losing their jobs or being forced to relocate. 16

Sources D. DePass, ―Honeywell Ends Telecommuting Option,‖ Star Tribune, October 21, 2016, http://www.startribune.com/honeywell-ends-telecommuting-option/397929641/; Honeywell, ―HealthResource,‖ http://www51.honeywell.com/hrsites/healthresource/health_about.html (accessed March 10, 2017); Honeywell, ―Our History,‖ https://www.honeywell.com/whoweare/our-history (accessed March 10, 2017); R. Randazzo. ―Honeywell Employees Told to Take Furloughs,‖ The Arizona Republic, May 25, 2016, http://www.azcentral.com/story/money/business/economy/2016/05/25/honeywell-employees-askedtake-furloughs/84927666/; and R. Randazzo, ―Honeywell Announces More Layoffs,‖ The Arizona Republic, October 20, 2016, http://www.azcentral.com/story/money/business/jobs/2016/10/20/honeywell-announces-more-layoffs/92490690/.

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Honeywell recognizes that there are costs associated with employee stress and has taken steps to mitigate its effects. For example, the company offers a multifaceted health benefits package that includes things like medical and preventative care, mental health services, and substance abuse counselling. Although most large companies offer similar types of benefits, Honeywell‘s HealthResource program is more innovative. It consists of a set of tools that help employees connect with health care resources any time they might need them. For example, registered nurses are available to answer health care questions and direct employees to other resources. The program also provides employees with access to information from the Mayo Clinic regarding issues such as weight management, diet, and stress reduction. Honeywell believes that when employees are given information to make informed decisions about health and wellbeing, the employees, their families, and the company all benefit. Honeywell has a history of evolving through acquisitions into high-growth sectors of related business, and there is no indication that this trend is slowing. In fact, the company has placed increased emphasis on software and other businesses that address challenges related to energy, security, safety, productivity, and urbanization. However, while Honeywell continues to grow and evolve, the company also faces mounting pressure in some of its businesses and has reacted with initiatives intended to control costs and increase company performance. As an example, Honeywell‘s Aerospace Division responded to an extended slowdown in the aerospace industry by laying off employees in 2015 and 2016. The division also implemented week-long furloughs (unpaid time off) for employees not involved in manufacturing and sales. Honeywell also believes that improvements in company performance require teamwork, idea sharing, and faster decision making, and that this is best accomplished through face-to-face interaction among employees. To facilitate this, the company decided to end its telecommuting option for employees not involved in sales or field service. Honeywell had permitted employees to work remotely, at home if they wished, for several reasons. First, Honeywell employees are based in more than a thousand sites in over 70 countries, and they often work on important projects with other employees who may be located halfway across the world. The projects may be engaging, but trying to coordinate across time zones can be quite difficult during normal working hours. Second, telecommuting allows employees to work when and where they feel they are most productive. Employees who work remotely can choose to avoid the daily commute, office politics and distractions, and the hassle of accomplishing nonwork demands. Finally, telecommuting is very popular with millennial engineers and scientists who are comfortable using technology to collaborate and who have other employment options. The change in Honeywell‘s long-standing policy will be especially difficult for employees who have built their lives around the flexibility of working remotely. As an example, decisions made regarding where to live may haunt employees who now face the prospect of commuting back and forth to distant Honeywell offices each day. To some Honeywell employees, however, there may be a bright side to the change in policy. After putting in their weekly 40 hours in the office and commuting each day, employees may not feel as compelled to deal with work-related issues that come up in the evenings or on weekends.

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Questions: 1.

Describe how the change in Honeywell‘s telecommuting policy likely influenced the types of work stressors experienced by the company‘s employees. How has the change in policy likely influenced nonwork stressors? It‘s possible that work-related challenge stressors will increase if face-to-face collaboration on projects results in feelings of greater work complexity and responsibility; however, it seems more likely that the change in Honeywell‘s telecommuting policy will result in an increase in work-related hindrance stressors. For example, uncertainty regarding how to coordinate with teammates in other countries during normal working hours may engender role ambiguity. As another example, if employees cannot be productive working at the office, employees may experience role overload. Finally, employees may experience hassles in the form of office politics and wother distractions. The change in the telecommunting policy will also increase nonwork-related hindrance stressors. Because employees will have more difficulty accomplishing nonwork demands while at office, and given the additional time required for commuting, work-family conflict will certainly increase. It‘s difficult to see how the change in telecommuting policy would affect nonwork-related challenge stressors.

Given the change in stressors resulting from the change in the telecommuting policy, what can you predict about the commitment and job performance of Honeywell‘s employees? Explain. Given that the change is most likely to increase work-related hindrance stressors, commitment and job performance should decrease. Hindrance stressors result in strains and negative emotions. These strains and negative emotions, in turn, reduce the level of energies that employees invest in their roles. This translates in reduced job performance. Strains and negative emotions that result from hindrance stressors should also reduce job satisfaction, and in turn, employee commitment.

Identify steps that Honeywell could take to mitigate the potential for negative consequences resulting from the change in the company‘s telecommuting policy. Honeywell could assess their employees to pinpoint the most important stressors. They could then focus their efforts on trying to either reduce or eliminate the important stressors or provide resources to deal with them. For example, if work family conflict was found to be the most important stressor, the company could offer other types of supportive practices, such as a compressed workweek, increased support for child care or concierge services. As another example, if distractions were found to be an important stressor, then the company could make changes to the work environment or offer training to help employees learn how to focus their attention more effectively.

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BONUS CASE: CREW/DO NURSES “EAT THEIR YOUNG?”17 According to Statistics Canada, nearly one in three employed Canadians report being either ―quite‖ or ―extremely‖ stressed. More alarming is the fact those entrusted to provide health care (e.g., nurses, physicians), are themselves some of the most stressed-out people in the country! To put this in some context, only 31 percent of Canadians who do not work in health care report the same degree of stress. And this may be only the tip of the iceberg. It seems that these stressed-out healthcare providers report lower levels of life satisfaction and general health than those who do not experience work stress on a daily basis. All this invites the question: Why? What is it about working as a healthcare provider that is so stressful? Of course, many factors are in play. More and more, studies are showing the importance of having healthy and positive relationships at work—not least, simply being civil to one another. Civility involves behaving in a respectful and courteous manner. It involves simple things like remembering to say ―please‖ when asking a colleague for a favour or refraining from making sarcastic comments. What‘s surprising is how something so seemingly trivial as being rude and disrespectful can have big effects. We know, for instance, that employees who experience incivility tend to be more stressed, spend less time at work, and have lower satisfaction and productivity levels than those treated with respect and courtesy. If incivility is alive and well within healthcare facilities, what can these organizations do? According to such experts as Dr. Michael Leiter at Acadia University in Nova Scotia, one of the first things they can do is simply to pay attention to the problem. Instead of labelling it as relatively minor and innocuous, involving ―personal issues that will sort themselves out,‖ it is important to acknowledge that incivility is a problem that affects people, groups, and the overall organization. The second thing they can do is address the problem head on. This is where CREW, a training program developed for Canadian healthcare facilities, comes in. CREW stands for Civility, Respect, and Engagement at Work. CREW Canada staff train on-site facilitators to lead groups within their organization and to provide ongoing support for them during the six-month process. The results of this training are determined by means of staff surveys and anecdotal information gathered within healthcare groups (e.g., nursing units). The upshot is: CREW works! The overall level of civility within units that received the training improved, and particularly the level of civility expressed by supervisors. Nurses experienced less stress and burnout, were more committed to their organization, and missed work less often. Thus, not only does the CREW program reduce stress by fostering healthy work relationships, but it seems to contribute positively to organizational outcomes.

Sources: Wilkins, K. ―Work Stress Among Health Care Providers.‖ Health Reports (Statistics Canada, Catalogue 82-003) 18(4) (2007), pp. 33–36.; 2.―Health-Care Providers Report High Stress Levels: Report.‖ CBC News, November 14th 2007; www.cbc.ca/news/health/story/2007/11/13/stress-statscan.html (retrieved May 19, 2011); Day, A., M.P. Leiter, H.K.S. Laschinger, and D.G. Oore. Developing Healthy Workplaces: What‘s Civility Got to Do with It? Good Company e-Newsletter, 4 (2) (2010). www.phwa.org/resources/article/158 5/19/2011 (retrieved May 19, 2011); CREW, Centre for Organizational Research and Development, Acadia University, Nova Scotia. cord.acadiau.ca/crew-interventions.html (retrieved May 22, 2011).

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In short, CREW is an innovative program aimed at restoring healthy and positive relationships within healthcare organizations. If you think the issue of nurse-to-nurse incivility is puzzling, consider that most of this hostility tends to be directed at new nurses! In fact, a recent study has estimated that one-third of new nurses are bullied and verbally abused by seasoned nurses, and that new nurses experience a disproportionate degree of stress, burnout (emotional exhaustion), cynicism, and lower self-confidence than nurses in general. So is it true? Do seasoned nurses actually ―eat their young?‖ For Kathleen Bartholomew, the issue is a complex one. Further insights are attained if we consider that this issue of nurse-to-nurse or ―horizontal‖ hostility can be understood from different perspectives. We might view it from the perspective of new graduates or student nurses. For them, the level of incivility and hostility directed toward them is very real. It is not uncommon for young nurses to say that it‘s a struggle to survive, every day, and that the workplace often feels more like a ―battlefield‖ than a nursing unit! Young nurses often report incidents of overt bullying, belittlement, and humiliation by seasoned nurses. It is common to hear stories in which young nurses are made to feel unappreciated and that what they learned in school is not relevant. Most frustrating is the fact that all this hostility seems to occur at precisely the time when these beginners are looking to their experienced peers for support and approval. For a sampling of comments from young nurses with respect to nurse-to-nurse hostility, go to www.realityrn.com/more-articles/nurserelationships/why-nurses-eat-their-young%E2%80%A6/542. Through the eyes and experiences of the seasoned or experienced nurse, things look quite different. Nursing is a tough job that comes with a lot of responsibility. The problem for many is that the student nurses or new graduates come on to the units thinking they know a lot more than they really do. These ―young nurses‖ have no experience with the difficult, often daunting day-to-day challenges that more experienced nurses face every day—and worse still, they don‘t respect the fact that much of nursing can‘t be learned from a textbook or in a lecture. More seasoned nurses believe that experience matters; that a day in the trenches is worth a year in the classroom. As one experienced nurse said, ―behavior that might seem hostile to them is just us passionately protecting the safety of our patients.‖ For a sampling of how seasoned nurses view nurse-to-nurse hostility, go to www.realityrn.com/more-articles/nurse-relationships/whynurses-eat-their-young%E2%80%A6/542. Questions: 1.

Adopt the perspective of a new nurse. What stressors (and types of stressors) are you most likely to encounter? What role issues might you have to deal with (e.g., conflict, ambiguity, and overload)? New nurses are likely exposed to a number of work-related stressors. Although nurses will have acquired explicit technical knowledge and skills from their college/university training, they may be lacking the tacit knowledge that can only be gleaned from actual job experience (see Chapter 9 for more discussion on these different types of knowledge). Thus, the first year or so will potentially be a time of high role ambiguity and role overload. And it is entirely possible that they might also experience role conflict if mixed messages are coming from senior nurses or clinical instructors (e.g. trainers). In addition to these work-related hindrance stressors, new nurses may a

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number of work-related hindrance stressors, including excessive time pressure, highly complex work, and feelings of enormous responsibility. If their non-work stressors, either hindrance (e.g., work-family conflict, financial uncertainty) or challenge (e.g., family demands), are elevated it will only compound the problem and increase stress levels. 2.

Adopt the perspective of a seasoned nurse. What stressors (and types of stressors) might you have to deal with? What kind of stressor(s) do the new nurses represent, and why? Unlike new nurses, seasoned nurses should have a well-developed understanding of their role and will have acquired the necessary knowledge, skills, and ability to perform in a safe and efficient manner. Thus, they are unlikely to experience role conflict or role ambiguity. If they do experience challenge stressors, such as time pressure or work complexity, in all likelihood they should be able to cope using behavioural or cognitive problem-focused methods. The effect will be to reduce the press of this category of stressor. Working with new nurses potentially presents a source of stress for seasoned nurses, in terms of increasing their workload, responsibility, and complexity. As was the case with new nurses, if the seasoned nurses experience elevated stressors in their non-work lives (hindrance or challenge), then the overall level of stress might produce strain responses.

What coping strategy (or strategies) would you recommend to new nurses? Seasoned nurses? For both of these cohorts, a blend of problem-focused and emotion-focused strategies would be recommended. New nurses must learn and adjust to the realities of working in a health-care environment, and therefore, an active behavioural response would be best way to reduce the level of hindrance and challenge stressors. In addition, dealing constructively with the various emotions will be beneficial, either behaviourally or cognitively (e.g., reappraising). Seasoned nurses, like the new nurses, should use active and cognitive strategies for reducing the potency of the work and non-work stressors.

What does the model in Figure 6-3 tell us about what is likely to happen in this situation? What are the likely effects for new and seasoned nurses? Do you think CREW training would work? Explain how this type of intervention might reduce stress on the nursing units. New or seasoned nurses who exhibit the Type A behaviour pattern will be more sensitive to the various stressors, and will be more likely than their Type B counterparts to experience physiological, psychological and/or behavioural strains. Figure 6-3 also points out the importance of strong social support as a way of ameliorating the negative effects of work and non-work stressors. We know, for instance, that when people have strong social and emotional support they are less likely to experience harmful stress reactions than those who do not have these supports. Programs such as CREW attempt to build positive and healthy relationships within nursing units (based on civility and

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respect), which, in turn, can be leveraged to make a stressful occupation/situation a little more tolerable. 5.

Do you think that the concept of nurses ―eating their young‖ applies to other occupations? Explain with some examples. Yes. Student answers will vary, but discussion should reveal a few example where this occurs (e.g., trades; professional accountants). The dynamic between experience and new workers can be explored – to some extent this might reflect generational differences (e.g., Gen X versus Gen Y). Another issue concerns respect, and when should respect happen? Should it occur after an individual has earned it, or should this be offered early in the relationship?

EXERCISE: MANAGING STRESS Instructions: Put students into groups and instruct them to share the 2-3 most important hindrance stressors that they are currently experiencing and to seek feedback from their group members on strategies for managing those stressors. Note that some students may instead list challenge stressors, such as workload or time pressure. That‘s OK too. The exercise focuses specifically on hindrance stressors because those have a greater impact on strain, but that restriction need not be enforced. For the life balance portion in Step 2, you may find it helpful to draw your own circles as a demonstration to the class, with one being your current division of your waking hours and the other being your ideal division. You may wish to add categories to the division to fit the characteristics of your particular class. Finally, have students share and critique their current standing on the hardiness factors (relaxation, exercise, and diet). Questions: It is true that many stress management strategies take time, particularly strategies centered around building better life balance or finding more time to relax or exercise. That time requirement makes ―stressed‖ individuals resistant to them, on the logic that ―if I had time to do that, I wouldn‘t be so stressed out!‖ However, most stress and health experts would say that stress management strategies save time in the long run. For example, becoming more hardy will allow employees to focus better and think better on the job, getting more done in less time. It will also prevent them from getting sick in response to strain, sparing them from the productivity consequences of illness. Such strategies are particularly important for Type A individuals whose disposition makes them particularly sensitive to the stressors in their lives.

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where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Eustress-Distress. Hans Seyle coined the terms eustress and distress to refer to positive and negative stress respectively. These terms are fairly well-known, and they may appear to be similar to the concepts of challenge stressors and hindrance stressors. Seyle, however, was a medical doctor and his research focused primarily on the physiological effects of stress, rather than work related effects. For more on this see: Seyle, H. The Stress of Life. New York: McGraw Hill, 1956. Optimal stress levels. It is widely believed that the relationship between the level of stress and outcomes is an inverted U. This perspective suggests that stress is energizing, and therefore is good up to a certain point. However, after that optimal point, stress becomes excessive and is bad. This relationship is most often attributed to the early work of Yerkes and Dodson. For more information see: Yerkes, R. M., & J. D. Dodson. ―The relation of strength of stimulus to rapidity of habitformation. Journal of Comparative Neurology and Psychology, 18(1908). pp. 459-482. Teigen, K. H. ―Yerkes-Dodson: A Law for all seasons.‖ Theory and Psychology, 4(1994), pp. 525-547. Institute for Survey Research (ISR) Model of Stress. Widely cited general model of stress that considers objective properties of the environment, enduring properties of the person, and interpersonal relationships as factors that impact the psychological interpretation of the environment, and in turn, more distal outcomes (physiological, behavioural, and affective responses). For more on this see: French, J. R. P., and R. L. Kahn. ―A programmatic approach to studying the industrial environment and mental health‖ Journal of Social Issues, 18(1962), pp. 1-47. Person-Environment Fit. To some degree an extension of the ISR model, but with more explicit attention paid to the idea that stress (strain) is a consequence of the mismatch between person and environment. For more information see: Edwards, J. R. & R. V. Harrison. ―Job demands and worker health: Three-dimensional reexamination of the relationship between person-environment fit and strain‖. Journal of Applied Psychology, 78(1993). pp. 626-648. French, J. R. P., & R. D. Caplan, and R. V. Harrison. The mechanisms of job stress and strain. Chinchester, England: Wiley. 1982. Job Demand-Job Control Model. Proposes that high decision latitude (decision authority or job control) attenuates the effects that workload has on strains. The combination of high workload demands and low decision latitude cause the most strains. For more information see:

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Karasek, R. A. Jr. ―Job Demands, Job Decision Latitude, and Mental Strain: Implications for job Redesign‖. Administrative Science Quarterly, 24(1979). Pp. 285-308.

Chapter 7: Motivation

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LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 7.1 7.2 7.3 7.4 7.5 7.6 7.7

What is motivation? What three beliefs help determine work effort, according to expectancy theory? What two qualities make goals strong predictors of task performance, according to goal setting theory? What does it mean to be equitably treated according to equity theory, and how do employees respond to inequity? What is psychological empowerment, and what four beliefs determine empowerment levels? How does motivation affect job performance and organizational commitment? How do organizations use compensation practices to increase employee motivation?

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CHAPTER OUTLINE 23.

MOTIVATION

A set of energetic forces that originates both within and outside an employee, initiates work-related effort, and determines its direction, intensity, and persistence

A current corporate buzzword for motivation is engagement, with ―engaged‖ employees being those who invest themselves in their job and bring a lot of energy to their work.

24.

WHY ARE SOME EMPLOYEES MORE MOTIVATED THAN OTHERS?

Expectancy Theory 1.

A cognitive process that employees go through to make choices among different voluntary responses

Process suggests that choices about behaviour depend on three beliefs a.

Expectancy i.

The belief that exerting a high level of effort will result in the successful performance of some task

ii.

Expectancy is shaped by self-efficacy – the belief that a person has the capabilities needed to execute the behaviours required for task success. Self-efficacy depends on an analysis of the task and one‘s own resources, and can be enhanced through: a) Past accomplishments – the degree to which the person has succeeded on similar tasks in the past b) Vicarious experience – observing others performing the same kinds of tasks c) Verbal persuasion – supportive comments from friends, coworkers, etc. which indicate that an employee can ―get the job done‖ d) Emotional cues – feelings of fear or anxiety can decrease expectancy, while feelings of pride or enthusiasm can boost it

Try This! Ask the students if there are any current or former athletes in the room. Then ask them to think about the things their coaches would say during practices, before games, or during games. Did those things reflect the sources of self-efficacy, such as past accomplishments, verbal persuasion, or emotional cues? Can any students provide some good example quotes? b.

Instrumentality

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The belief that successful performance will result in certain outcomes.

ii.

Many employees do not see the link between job performance and the rewards they receive

Valence i.

The anticipated value of the outcomes associated with performance

ii.

Valences are influenced by the specific needs of the employee. Needs studied in OB include existence, relatedness, control, esteem, and meaning needs. Traditional need theories, such as Maslow‘s Hierarchy of Human Needs and Alderfer‘s revision of this theory, have largely been replaced by Deci and Ryan‘s SelfDetermination Theory (i.e., need for competence, autonomy, and relatedness).

iii.

Outcomes such as pay, bonuses, promotions, etc., are linked to extrinsic motivation, while outcomes such as enjoyment, interestingness, and accomplishment are linked to intrinsic motivation.

iv.

The attractiveness of outcomes varies across cultures – different outcomes are more attractive to different people

Employees underestimate how powerful a motivator pay is to them. Financial incentives almost always have a stronger impact on motivation than other sorts of outcomes. a) Money is relevant to multiple needs b) Money also conveys a sense of esteem – money can have a symbolic meaning, not just an economic one

OB Assessments: Meaning of Money. This questionnaire gives students a sense of the meaning they attach to money. Prior to asking students to take this assessment, ask them if they have ever left a job because they wanted to make more money. If they have, why did they need the money at the time? What did it give them? If they haven‘t, what factors kept them on the job? Were other jobs that paid more not available, or were they getting something from the job that was more important than money? 3. B.

Motivational Force = Expectancy x Instrumentality x Valence

Goal Setting Theory

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Goal setting theory views goals as the primary drivers of the intensity and persistence of effort a.

Specific and difficult goals result in higher performance than no goals, easy goals, or ―do your best‖ goals i. ii.

Shape self-set goals – the internalized goals people use to monitor their performance Trigger the creation of task strategies to achieve goals

Goals should be S.M.A.R.T. – specific, measurable, achievable, resultsbased, and time sensitive

Teaching Tip: Students may require clarification between assigned versus self-set goals. The core motivational concept in this theory is one‘s ―goal‖ or intention. Experience and research studies have shown that people do what they intend to do, that they devote attention and effort to activities they intend to perform, that they pursue their personal or self-set goals. Thus, to motivate someone you need to alter or change their intentions of self-set goals. Of course, one way of influencing internal goals is to assign an external one. Goal-setting theory has developed around this basic idea, and the practice of ―assigning goals‖ has become a well-documented motivational technique. The point, however, is that assigned goals will only work if they are internalized as internal goals. Having said that, there are other ways to change personal or self-set goals, such as increasing the valence of high performance (by providing performance-contingent rewards) and social pressure (we discuss the role of workgroup norms in Chapters 11 and 15). 2. Moderator variables in goal setting a.

Feedback – Goals are more effective when people are provided with information about their progress in meeting the goals

Task Complexity – The effects of specific and difficult goals are twice as strong for simple tasks as they are for complex tasks

Goal Commitment – Performance is influenced by the extent to which a person accepts the goal and is determined to try to reach it

OB Internationally. This box identifies several of the factors that influence the effectiveness of goals in different cultures. If you have a diverse class, ask students from different countries to describe how the organizations in which they have worked handle goal setting, particularly in the performance review process. The box notes that culture influences the types of goals that are set, rewards, and how they are associated with goals, participation in the goal setting process, and the feedback given about goal progress. C.

Equity Theory

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Equity theory suggests that employees create a ―mental ledger‖ that tallies their contributions to the job with the rewards they get from the job

Try This! Before going over the specifics of equity theory, focus the class on professional athletes who are particularly highly paid, yet disparities exist. Have the class identify players (e.g., NHL hockey) who have recently signed exceptionally lucrative contracts. Ask the students whether they believe this player feels guilty that his contract pays him more than his teammates? They‘ll likely answer ―no,‖ but the key question is ―why?‖ Guide the discussion toward the issue of the value of the player‘s inputs (being among the best in the world at what he does) and the likely ―comparison other‖ that this individual focuses on (other professional athletes). a.

The ratio in this ledger (outcomes/inputs) is compared to a similar ratio for a comparison other – someone who provides a frame of reference for judging equity i. ii. iii.

An alternative means of restoring balance in an inequitable situation is to change the comparison other i. ii. iii.

If positions are equitable, no actions are needed If underreward inequity exists, people try to increase outcomes or shrink inputs If overreward inequity exists, people try to shrink outcomes or grow inputs

internal comparisons occur within the same company external comparisons occur outside the company Table 7-6 provides examples of how comparison others are determined using survey items

Some companies try to deal with pay equity issues by enforcing pay secrecy policies

OB on Screen: Battle of the Sexes. The clip referenced in the book begins around the 2:32 mark of the film, continuing until the 6:43 film. The clip depicts Billie Jean King and Glady Heldman as they challenge Jack Kramer and Bob Sanders about the prize money being offered at the new Pacific Southwest Championships. Focus discussion on how someone in Jack‘s position should go about making these decisions today. Should equal prize money be assumed? Moving beyond tennis, how should such decisions be made in general, in basketball, soccer, golf, and the like? Ticket sales should be part of the equity calculus, but what else should be? BONUS OB on Screen: La La Land. The clip referenced begins around the 18:40 mark of the film, continuing until about the 26:33 mark. The clip depicts Sebastian before and during his piano gig at a local restaurant. In a psychological empowerment sense, Sebastian

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sees little purpose playing Bill‘s music. Forcing Sebastian to work from a playlist imposes an external constraint that undermines his feelings of meaningfulness, autonomy, and selfdetermination. More importantly, Bill‘s demand prevents Sebastian from expressing himself and growing musically as an artist. In the end, Sebastian chooses to be true to himself and ―follow his heart.‖ BONUS OB on Screen: Dark Knight Rises. The clip referenced begins around the 26:23 mark of the film, continuing until about the 31:29 mark. The clip depicts a frail and disengaged Bruce Wayne, long retired from his role as the Batman, coming to grips with a new evil in Gotham City. As he hears about the shooting of Commissioner Gordan and the arrival of a mercenary named Bane, Bruce has to consider whether to re-don the cape and cowl. Ask the students why Bruce might—and might not—be motivated to resume his costumed identity. On the one hand, they may point to the renewed need for a hero, as Gotham seems to be on the verge of trouble after years of relative quiet. On the other hand, Bruce‘s body is broken and his confidence is shaken. That tension between impact and efficacy is what Bruce must wrestle with during and after the clip. Try This! Use the Dark Knight Rises clip for another chapter. Bruce‘s condition provides a good discussion of physical abilities in Chapter 4 on Ability. Although his cognitive abilities seem ―up to the job,‖ the condition of his body does not seem strong enough to don the cape and cowl. One open question is whether Bruce is emotionally intelligent enough to make a valid decision about whether to stay on the sidelines or reengage his superhero identity. BONUS OB on Screen: Wall Street: Money Never Sleeps. The clip begins around the 49:20 mark of the film, continuing until about the 54:18 mark. The clip depicts Jake Moore meeting with Bretton James, sometime after Moore started a rumor that hurt James‘s company. Focus the discussion on what money seems to mean to James, and of the meaning of his one word answer to Moore‘s ―what‘s your number question‖? In what ways might James‘s greed aid him in his working life? In what ways might it hurt him? Are there ways in which ―greed is good?‖, in terms of the original Wall Street? What are the limits on that goodness? D.

Psychological Empowerment 1.

Psychological empowerment is energy rooted in the belief that work contributes to some larger purpose

Work is psychologically empowering when it contains: a. b. c.

Meaningfulness, or an importance relevant to one‘s ideals and passions Self-determination, or a choice about the imitation and continuation of work Competence, or a belief that the person is able to perform the work successfully

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Impact, or the sense that a person‘s actions made a difference in fulfilling a larger purpose

Summary: Why Are Some Employees More Motivated Than Others?

25.

HOW IMPORTANT IS MOTIVATION?

Motivation and Job Performance

The motivating force with the strongest performance effect is selfefficacy/competence, because people who feel a sense of internal self-confidence tend to outperform those who doubt their capabilities

Difficult goals are the second most powerful motivating force – people who receive such goals outperform those who do not

Valences, instrumentalities and expectancies are the next most important variables with regard to motivation

Equity perceptions are the next most important issue

Motivation and Citizenship Behaviours 1.

Equity theory research shows the clearest link between motivation and citizenship behaviours – employees who feel a sense of equity are more emotionally attached to their firms and feel a stronger sense of obligation to remain

26.

APPLICATION: COMPENSATION SYSTEMS

Table 7-7 shows elements that are commonly used in compensation plans. These include: 1.

Individual-Focused a. b. c. d.

Unit-Focused a.

Piece-rate – pay linked to work produced Merit pay – pay linked to performance evaluation ratings Lump-sum bonuses – one-time bonus given for meeting goals Recognition awards – one-time award given to recognize achievement

Gainsharing – bonus given to entire group when unit goals are met

Organization-Focused

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Profit Sharing – bonus given to entire organization, based on overall profitability of company

Try This! Ask students who are currently working or have worked recently to describe the compensation elements that they‘ve experienced. How many have experienced piece-rate, merit pay, lump-sum bonuses or recognition awards? How many have experienced gainsharing or profit sharing? Which elements do the students find most effective and motivational? B.

Compensation Issues 1.

Does plan include specific and difficult goals to channel work effort?

Is there a link between individual performance levels and individual monetary outcomes in the plan?

Are the performance evaluations which drive the system accurate?

In what context do performance evaluations occur?

DISCUSSION QUESTIONS 7.1

Which of the outcomes in Table 7-2 are most appealing to you? Are you more attracted to extrinsic outcomes or intrinsic outcomes? Do you think that your preferences will change as you get older? Different students will have different answers to this question, but they may find that extrinsic rewards become less important as they grow older, and intrinsic rewards become more important.

7.2

Assume that you were working on a group project and that one of your teammates was nervous about speaking in front of the class during the presentation. Drawing on Figure 7-3, what exactly could you do to make your classmate feel more confident? You could remind your teammate of his or her past accomplishments in the area of speaking (maybe your friend had persuaded an entire group of people to take part in a team activity, for example). You could show your teammate videotapes of effective speakers to give a vicarious experience that would support self-efficacy. You could encourage your teammate, by offering supportive words to show you believe in his or her ability. Finally, you could talk only about the positive aspects of giving the speech; to be sure your friend had the right emotional cues for the job.

7.3

Consider the five strategies for fostering goal commitment (rewards, publicity, support, participation, and resources). Which of those strategies do you think is most effective? Can you picture any of them having potential drawbacks?

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The most important strategy for fostering goal commitment is probably participation in the goal setting process, followed by rewards. A person who sets his or her own goals is more likely to be committed to those goals, and a person who is never rewarded for goal attainment is likely to stop setting and/or achieving goals. Publicity may have a potential drawback because it can put undue pressure on an employee to reach a goal, and if the goal is not attained, cognitive dissonance may make the person less committed to achieving the goal in the future. Rewards may also have a drawback, in that if a person is always rewarded for achieving a goal, he or she may come to expect the reward, and be less committed when it is not present. 7.4

How do you tend to respond when you experience overreward and underreward inequity? Why do you respond that way rather than with some other combination in Figure 7-6? Responses to overreward and underreward inequity may be determined by personality, as well as the situation. Some students, for example, may simply withdraw from the situation when underreward inequity is present. Research suggests that overrewarded employees tend to engage in more team oriented behaviours, rather than simply shrinking inputs.

7.5

Think about a job that you‘ve held in which you felt very low levels of psychological empowerment. What could the organization have done to increase empowerment levels? Organizations can increase psychological empowerment by providing their employees with the resources they need to do their jobs (including training), setting goals with employees and then giving employees the autonomy to chose the ways in which they will meet those goals, providing feedback on the employee‘s progress toward meeting goals, and giving employees work that they find meaningful.

CASE: SOBEYS Questions: 1.

Analyze this situation through the lens of the motivation theories in this chapter, and consider the implications for both the company and its employees. From the perspective of Expectancy Theory we can see how the reversal of hero‘s pay undermined the both instrumentality (i.e., weakening the link between performance and rewards) and the valence. To the extent that intrinsic and extrinsic outcomes associated with working through the pandemic are eroded due to this change, the negatives (e.g., personal health risk; long hours; dealing with impatient customers) of the job will become more salience – and thus, lowering the overall valence of high performance. From a goal-setting perspective, the change in hero pay should weaken the link between assigned and personal goals. Students should appreciate that changing the hero pay

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program – even a modest change – will impact equity perceptions. The biggest impact will be to move from feeling appreciated and valued to a state of feeling reward inequity – even though their wages in absolute sense didn‘t change from pre-pandemic levels. Employees who experience reward inequities are likely to feel lower commitment and act in ways that are consistent with lower motivation. The emotional impact of having their hero pay removed likely will erode feelings of psychological empowerment. Ask students to consider if the company knew it would be withdrawing this reward, would it have been better off to not done this in the first place. 2.

How might employees who lost their hero pay respond in the future? Will this decision affect their future motivation and commitment to the company? Explain Expect lower affective and normative commitment in particular. Violations like this potentially damage emotional bonds with the organization, and likely feelings of obligation toward the corporation. Expect lower levels of discretionary citizenship behavior, especially those directed toward the organization. You might also see an increase in counterproductive behavior (e.g.., slacking off; taking time off; longer breaks), but minor rather than major given that getting fired is not desirable. On that note, likely no change in task performance – or at least performing at minimallyacceptable levels. Continuance commitment may increase if employees start thinking more about the economic reasons for staying and if employment alternatives are less available.

What other options could the company have considered? Student answers will vary. Better answers are those where the motivational processes the govern job performance are enhanced rather than diminished. The company made significant profits during the health pandemic, so looking at how these might have been shared with employees is a compelling option.

BONUS CASE: GOOGLE18 What image pops into your head when you picture a Google employee? Maybe someone stopping for a snack and drink from a food kiosk between rounds of Foosball? Or maybe someone huddled over a computer, headphones on, late in the evening, writing code? Judging from the sheer breadth of Google‘s products, services, and initiatives, it seems clear that the second image is more prevalent. So, what is it that motivates ―Googlers‖ to put forth so much effort on the job? Certainly the work they do is an important factor. Employees are given the freedom to spend part of their week on projects that interest them. Moreover, the company‘s mission—to organize the world‘s information and make it accessible to all—provides a sense of purpose for the rank-and-file.

Sources: L. Bock, Work Rules! Insights from Inside Google that Will Transform How You Live and Lead. New York: Twelve, 2015; E. O‘Boyle Jr. and H. Aguinis, ―The Best and the Rest: Revisiting the Norm of Normality of Individual Performance.‖ Personnel Psychology, 65, 79–119.

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That said, Google‘s People Operations group does a number of things to keep employees motivated. Employees are given specific, measurable, and ambitious goals each quarter— termed ―OKRs‖ (for Objectives and Key Results). Those OKRs are shown on the company‘s internal website, right next to an employee‘s phone and office number. Successfully meeting OKRs then feeds into Google‘s performance evaluation process, which occurs twice a year. Employees are rated by their managers on a five-point scale where 1 = needs improvement, 2 = consistently meets expectations, 3 = exceeds expectations, 4 = strongly exceeds expectations, and 5 = superb. To ensure that higher ratings really do go to higher performers, managers engage in a process called ―calibration.‖ In groups of five to ten, managers project their employees on a wall and have a group discussion to ensure that no ―grade inflation‖ (or ―grade deflation‖) occurs. The ratings then feed into two separate conversations: one about skill development and one about changes to compensation. Motivational strategies go beyond evaluation and compensation, however. Google‘s awards program stresses experiential rewards, like sending teams to Hawaii, providing trips to health resorts, or splurging for lavish dinners. Studies within the company have shown that the memory of such rewards lingers longer than cash, making them more satisfying. And employees can even give each other rewards themselves. The gThanks (―gee-thanks‖) software system allows employees to send public thank yous to reward good work. The system even allows employees to give peers a $175 cash award—with no managerial approval needed. One motivational issue that Google pays particular attention to concerns its star performers. Most organizations treat performance evaluation ratings—and accompanying compensation differences—much like grades in a university course. Just as a distribution of grades might have a few A‘s, more A–‘s, B+‘s, B‘s, and B–‘s, and a few C‘s, so too do performance evaluations wind up with a few 5‘s, more 4‘s, 3‘s, and 2‘s, and a few 1‘s. Thus, scores and rewards have a ―bell curve‖ distribution, with fewer people in the tails and more in the middle. Moreover, just as an A is only a bit more rewarding than an A–, so too does a 5 get just a bit more than a 4. Although there‘s a logic to that view of evaluation and compensation, it misses an important insight from scientific work on performance. That work suggests that the top 1 percent of performers contribute 10 percent of the firm‘s productivity all by themselves. Similarly, the top 5 percent of performers contribute 25 percent of the productivity all by themselves. Put differently, stars aren‘t just a little bit better than typical employees—they‘re worlds better. This is especially true in white collar jobs where there are no equipment or process constraints on what employees can do. As Bill Gates once argued, ―A great lathe operator commands several times the wage of an average lathe operator, but a great writer of software code is worth 10,000 times the price of an average software writer.‖ Laszlo Bock, the former head of Google‘s People Operations group, followed such advice when rewarding star performers. He argues, ―Internal pay systems don‘t move quickly enough or offer enough pay flexibility to pay the best people what they are actually worth. The rational thing for you to do, as an exceptional performer, is to quit.‖ Thus, Google practices what he calls ―paying unfairly‖—where ―unfairly‖ means a rejection of the notion that 5‘s should only get a little more than 4‘s or 3‘s. ―If the best performer is generating ten times as much impact as an average performer, they shouldn‘t necessarily get ten times the reward,‖ Bock notes, ―but I‘d

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wager they should get at least five times the reward.‖ He continues, ―The only way to stay within budget is to give smaller rewards to the poorer performers, or even the average ones. That won‘t feel good initially, but take comfort in knowing that you‘ve now given your best people a reason to stay with you, and everyone else a reason to aim higher.‖ Questions: 1.

Do you agree with Bock that star performers should get a lot more—not just a little more—than average performers? If someone earning a 3 on Google‘s evaluation system gets a 2 percent raise, what should employees earning 4‘s and 5‘s get? Opinions on this will vary philosophically, depending on whether students seek to prioritize achievement versus group harmony. Bock himself argued that the best performers should get five times the reward of average performers. That would mean that 5‘s should get a 10 percent raise, with 4‘s falling somewhere in between 10 percent and the 2 percent given to average performers. Most students will likely see those numbers as face valid.

Given the budget issues created by giving star performers more, should someone earning a 3 get a 2 percent raise—or should they get less? What are the arguments for and against a 2 percent raise level for average performers? If employees do not get a cost-of-living allowance, meaning a raise that keeps up with the inflation rate, they will likely withdraw and eventually quit. The answer to this question then depends on how damaging that is to the employer. What‘s the labor market like? Are these roles where losing an average employee means a chance to replace them with better? Or is it likely that the next person hired will be similar in their performance?

Consider all the things Google‘s People Operations group does to motivate its employees. Which motivation theories do they seem to be leveraging, and how? Google‘s focus on freedom and mission fosters elements of psychological empowerment—especially self-determination and meaning. The focus on Objectives and Key Results has elements of goal-setting theory. From there, the focus on matching performance review ratings with raise levels fosters aspects of both expectancy theory and equity theory.

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BONUS CASE: ENTERPRISE CANADA19 What do you think of when you hear ―Enterprise Rent-A-Car‖? Do you think of ―We‘ll pick you up‖—the catchphrase that reflects the company‘s willingness to come to your door when your car‘s in the shop or you‘re ready to take a trip? What you may not realize is that Enterprise is one of the leading companies when it comes to hiring new university and college graduates— and has been for some time! Using this strategy, Enterprise Canada has grown to be the second-largest car rental company in the country with over 2,800 employees in 260 branch offices. One recruiter sums up what Enterprise looks for in its new hires this way: ―The students that fit are highly motivated, positive, energetic, and enthusiastic.‖ Motivation is key, because the hours are long and the work isn‘t always glamorous. The company describes the standard work week as no more than 49.5 hours, but some employees report a norm that‘s closer to 60 hours. And much of that time is spent behind a counter, picking up customers, or washing cars—all while wearing professional business attire. Estimates suggest that about half of the new hires don‘t last a year at the company. Those who stick it out do so because the company has a clear career ladder. New graduates begin their careers as management trainees. The job performance of all management trainees is tracked monthly and ranked within their respective regions. For instance, a trainee who works in an office in London would be compared with other trainees within the southwestern Ontario region. To be eligible for a promotion, a trainee‘s performance ranking must be in the top half of the comparison group, three times within a six-month period. This initial training period can last 6 to 12 months, exposing management trainees to every aspect of the business. Most promotions occur after a year on the job. If everything works out, management trainees are promoted to the role of assistant managers. After reaching the assistant manager level, the very best become branch managers, in charge of hiring and firing, the rental car fleet, and finances. As Enterprise‘s vice-president for corporate communications points out, ―100% of our operations personnel started as management trainees.‖ Another reason why management trainees stick it out is because they have the potential to earn an impressive array of incentives. The branch generates profits in a variety of ways. In addition to the rental charges, customers are offered a variety of extra options for additional charges, such as supplemental liability protection, prepaid fuel (i.e., you can bring back the car empty), and roadside assistance. It is the extra, add-on options that provide the company with the highest profit margins, and are the primary bases for the bonuses. Management trainees earn 19

Sources: Cline, S. ―The companies hiring the most new college grads‖ Forbes, June 21, 2010. http://www.forbes.com/2010/06/21/companies-hiring-college-graduates-leadership-careers-jobs.html (Retrieved, June 5, 2011); Enterprise Canada corporate website http://aboutus.enterpriserentacar.ca/ (Retrieved, June 5, 2011); Enterprise Canada (http://www.erac.com/our-company/international-locations.aspx) (Retrieved, June 5, 2011); Loomis, C.J. ―The Big Surprise Is Enterprise.‖ Fortune, July 14, 2006, http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/24/8381691/index.htm (Retrieved, June 5, 2011); Frankel, A. Punching In. New York: HarperCollins, 2007; Gerdes, L. ―The Best Places to Launch a Career.‖ BusinessWeek, September 18, 2006, http://www.businessweek.com/magazine/content/06_38/b4001601.htm (June 24, 2009); Gerdes, L. ―The Best Places to Launch a Career.‖ BusinessWeek, September 24, 2007, pp. 48–60; Gerdes, L. ―The Best Places to Launch a Career.‖ BusinessWeek, September 15, 2008, pp. 36–44; ―Enterprise Rent-A-Car Ranks Highest on J.D. Power Survey.‖ St. Louis Business Journal, November 15, 2005, http://stlouis.bizjournals.com/stlouis/stories/2005/11/14/daily34.html (Retrieved June 5, 2011).

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minimum wage; however, once they are promoted to role of assistant manager (and, in turn, branch manager), a profit-sharing system kicks in with rewards linked to branch performance. The incentives really ramp up beyond the role of branch manager. Regional managers, for instance, benefit from the profitability of all of their branches. Clearly, in this company, the higher you go the more rewards you earn. For Enterprise, this seems to be a winning motivational strategy, as the company usually occupies the top stop in rental car customer satisfaction published by J.D. Power and Associates. At Enterprise, the opportunities for promotion (and the rewards that flow from promotion) are the primary motivators. Stephen Cullen, an assistant manager, notes, ―Everyone here looks at you as future management potential. Your goal is to get everyone under you promoted.‖ That promotability, however, depends on both individual and branch-level factors. On an individual basis, employees are evaluated on their ability to sell customers a variety of optional packages, such as roadside assistance, prepaid fuel, or supplemental liability protection. Management trainees are taught how to sell these options to customers using roleplays, and are encouraged to experiment with different methods of persuasion. Those efforts continue until a customer says no three times. The results of individual employees are tracked monthly in a matrix (employees by several performance indicators), and trainees are ranked within their respective region. Ultimately, to be eligible for promotion to the role of assistant manager, a trainee‘s performance must be in the top half of the matrix, three times in a sixmonth period. On a branch-wide basis, promotions depend on scores on the Enterprise Service Quality Index, or ESQi. The ESQi is calculated by an independent survey group each month, based on follow-up phone calls to one out of every 15 Enterprise customers. The customers are asked how satisfied they were with their rental experience, on a scale ranging from ―completely satisfied‖ to ―completely dissatisfied.‖ If 50 percent of the respondents for a given branch answer ―completely satisfied,‖ that branch earns an ESQi score of 50. The ESQi average across Enterprise branches typically hovers around 80, signalling that most customers are indeed quite satisfied. If a branch falls below that average, however, its employees are no longer eligible for promotions or transfers. Thus, in addition to their individual statistics, to be promotable a management trainee must be in a top-performing branch. Employees therefore understand that their careers depend on making their branches above average—and keeping them there. One of the major challenges for management trainees, who are under pressure to meet their selling and branch (ESQi) goals, is the competing demands of the job. An average busy branch, for instance, might write 30 to 40 contracts per day with some management trainees responsible for 10 of those contracts. Although that doesn‘t sound like much, consider that management trainees are responsible for many duties that are not formally tracked (e.g., driving to pick up/drop off customers, washing cars, refuelling vehicles, cleaning and preparing returned vehicles, taking the vehicles for scheduled service, moving cars between branches, finding products for customers in the system, various computer-related and administrative tasks within the branch, making coffee). As one management trainee put it, ―Everyone does everything.‖ However, only assistant managers and branch managers get commissions on sales. For management trainees, it‘s basically a ―carrot game‖ with the rewards coming with promotion.

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Questions: 1.

Is it a good idea to make promotions contingent on your branch‘s ESQi score? Why or why not? Again, responses here may vary. On the plus side, the ESQi score seems less controversial as an incentive tool than selling customers coverage that they may not need. On the negative side, one employee may not be able to have much of an impact on an entire branch‘s ESQi score. So an employee could work hard but not receive a promotion. Moreover, some employees can contribute very little but be lucky enough to work in a great branch with great ESQi scores.

Consider the motivational practices used at Enterprise (clear career paths; performancebased incentives) in the context of the theories reviewed in this chapter (expectancy theory, goal setting theory, equity theory, psychological empowerment). Which theories would support the effectiveness of these strategies and which theories might raise doubts about their effectiveness? The motivational scheme at Enterprise is essentially a ―carrot game‖. For management trainees, the ―carrot‖ is promotion to assistant manager. We know that substantial rewards only come when the individual is promoted to the level of assistant manager, with the rewards increasing as the assistant manager is promoted, in turn, to branch manager. The rub here is getting promoted! To get promoted, trainees have to not only work hard themselves, but they have to ensure their store is a top performer in relation to other stores. The effectiveness of this ―carrot game‖ would be supported by expectancy theory, so long as the valence of the promotion to assistant manager outweighed the limited intrinsic rewards (enjoyment, lack of frustration). If, at any point, valence begins to wane, motivation will decline due to lower expectancy and instrumentality (i.e., beliefs regarding the link between one‘s effort and desired outcomes). Equity theory offers another perspective. On the surface, reward allocations are not fair – the harder trainees work, the more money assistant managers and branch managers make. The ―carrot game‖ has produced with trainees a state of under-reward inequity, but has managing their response to this inequity by laying out the link between working hard and promotion (and reward). Once promoted, an assistant manager might temporarily experience an over-reward inequity in relation to trainees, but will likely justify the reward differential, believing that is was earned from superior inputs. Only when they shift their focus to branch managers will feelings of under-reward inequity emerge. Goal setting theory is probably consistent with the motivational practices used at Enterprise. The company sets difficult goals for its employees and then attaches substantial rewards if goals are achieved. As long as promotion is associated with valued rewards, employees may bring their internal goals in line with company goals.

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Enterprise is obviously a very successful company. What recommendations, if any, would you provide to strengthen the ties between employee motivation and either job performance or organizational commitment? In its present form the system is geared towards people, at the lower levels, chasing promotions, which, in turn, make the company successful. Given the uncertainties regarding the promotion process, the risk is higher-than-expected turnover among management trainees. At some point, they may just give up and leave the company – even if they are high performers. Strengthening the expectancy and instrumentality of promotion would help. It would also help to have trainees share in some of the commissions on sales. This would help to sustain their motivation to pursue promotion, and compensate them for their hard work and frustration – restoring some balance to the input-output equation.

BONUS CASE: BECAUSE OWNERS CARE20 When WestJet first took to the sky 12 years ago, it was destined to play an important role in the Canadian airline industry. Founded in 1996 by a team of Calgary entrepreneurs headed by Clive Beddoe, WestJet began operations as a western Canadian regional carrier, with 200 employees and three aircraft servicing five cities.1 Today, WestJet is Canada‗s leading high-value low-fare airline, offering scheduled service to 47 destinations in Canada, the United States, Mexico, and the Caribbean.2 Discussions are currently underway with U.S.-based Southwest Airlines (an airline built on the same business model) to start a code-share partnership that will greatly enhance each airline‘s capability to transport passengers anywhere in North America.3 In 2007, the company reported revenues in excess of $2.1 billion, with net earnings coming in at a record $192.8 million.4 In a year when many of its industry competitors faced difficulties, WestJet continued to perform well. Since 2001, WestJet has spent over $2 billion upgrading its fleet to the more fuel-efficient Boeing next-generation 737-series aircraft. It now has 74 of these new aircraft in operation, giving WestJet one of the youngest and most fuel-efficient fleets in North America. Emissions from these aircraft are 30 percent lower on a per-person basis than the fleet of 200-series aircraft that the company replaced.5 Other cost-saving innovations include the required navigation performance (RNP) approach technology to land aircraft. RNP utilizes global positioning system satellites to allow aircraft to fly more direct, precision approaches to airports. This in turn shortens flight time and miles flown, reducing fuel burn and emissions.6 Why do cost savings matter so much? The answer is simple—because owners care! Who are these owners? On September 26, 2005, WestJet launched the Owners campaign.7 You may have heard this slogan on television: ―Why do WestJetters care so much? Because we‘re also Westjet owners.‖ 20

Sources: http://c3dsp.westjet.com/guest/media/investorMedia.jsp?id=Facts; Southwest plans Canada pact with WestJet, Reuters, July 8, 2008 (Bill Rigby and Derek Caney); WestJet Annual Report 2007; http://c3dsp.westjet.com/guest/media/investorMedia.jsp?id=Facts#; http://c3dsp.westjet.com/guest/media/investorMedia.jsp?id=Facts.

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Today, approximately 80 percent of WestJet‘s 6,700 employees allocate 12 percent of their base salary toward the purchase of company shares. Since the program began, ―owners‖ have been rewarded with over $142 million in profit-sharing dollars. Not only has the reward system produced tangible results for employees, but it has also impacted how employees feel about their company. As one WestJetter put it, ―The best sentiment we can convey to our guests is the pride we feel for our company. Our dedication is evident in the way we perform our jobs and the way we extend our renowned hospitality towards our guests.‖8 WestJetters love being WestJetters, and their caring commitment to their guests and to each other has earned the company, as was featured in Chapter 1, a coveted Most Admired Culture award in 2005, 2006, and 2007. WestJet has not only challenged the conventional wisdom in the way an airline should be run but also has demonstrated an understanding that people are an important source of sustainable competitive advantage. To support a culture that motivates and empowers its members, the company has developed a compensation plan that rewards employees for their collective efforts and results. As ―owners,‖ employees seem to personally identify, and emotionally connect, with the goals and challenges faced by the organization. The airline industry is currently going through very turbulent times. In spite of the heavy investments in a state-of-the-art fleet, the rising cost of jet fuel is a huge consideration given the recent price of crude oil on world markets. A weaker North American economy will no doubt have an effect on discretionary air travel. With the potential of lower revenues combined with higher costs, the risk for ―owners‖ is that the company may not be as profitable as it has been in the past. To the extent this scenario is accurate, incentive systems built on profit-based payments will be adversely affected—employees and investors may not benefit from these reward systems as they have in the past. Moreover, as revenues level off or diminish there will be pressure on the organization to reduce all forms of costs (including labour), and increase its level of high-value service to attract and retain a shrinking pool of customers. Questions: 1.

Analyze this case from the perspective of expectancy and equity theories. Do you think the motivation of individual employees will increase or decrease? Explain. This is an interesting case because common sense would say that when profit-sharing payments decline, due to the worldwide economic downturn, so should employee motivation. However, when we analyze the case from the perspective of expectancy and equity theories a different story emerges. Let‘s start with equity theory. Clearly, inputs will remain high and perhaps increase to preserve a shrinking customer base. What will definitely change are the financial outcomes received (i.e., profit sharing incentives flowing from the Owners program). But we also know, after reading this chapter, that individuals evaluate the fairness of their input-outcome ratios in relation to others. For the employees at WestJet, the most likely referent group would be their counterparts in other domestic airlines. To the extent that WestJet is better positioned to weather this economic storm than her rival airlines, and all else equal (e.g., inputs), it seems reasonable to expect that the outcomes received by WestJeters will be more favourable that those received by comparable employees in other airlines. Thus, during these

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challenging times, an over-reward inequity should be perceived – and motivation should increase rather than decrease. Turning now to expectancy theory, all three components should hold. Expectancy and the attractiveness of profit-sharing payments should remain unchanged. As long as the profit-sharing formula is not altered, the perceived link between one‘s effort/performance and valued outcomes should remain unchanged – even though the actual dollar value of the payments will be lower to reflect lower company profits. In fact, during these uncertain periods outcomes other than profit-sharing rewards may take on more importance (e.g., holding on to one‘s job). According to both theories, the prediction would be that employee motivation should either be enhanced or remain relatively constant in this economy. 2.

In the context of lower profit-sharing rewards, what would you do to keep motivation high? Draw attention to how employees in other airlines are doing, especially those employees working for rival companies who do the same work but are not as wellequipped to handle the economic downturn. This should help to reinforce favourable equity comparisons. Draw attention to a wide-range of outcomes, not just the profitsharing program. This would be especially true for rewards that are attainable through hard work (e.g., praise from the team leader when extraordinary effort is demonstrated). Build confidence by explaining to employees how the airline will weather the storm and come out of this ahead – leading to more profits and payouts down the road.

EXERCISE: EXPLAINING PAY DIFFERENCES Instructions: Put students into groups and instruct them to read the scenario and think about why Chris and Pat may be earning different salaries. Remind them that they can focus on legal reasons, illegal reasons, wise reasons, or unwise reasons. Have them focus on the reasons first. They should only consider the relevant theories once they‘ve completed their list of reasons. Sample Reasons: Here is a sample of the kind of list the groups might generate, with the relevant theories identified in the parentheses. Pat‘s more skilled (EQ, PE) Pat works harder (EX, EQ) Chris‘s boss doesn‘t like Chris for some reason (EQ) Pat is male and Chris is female (EQ) Pat‘s work has more impact on the firm (EQ, PE) Pat makes more important decisions than Chris (EQ, PE) Pat‘s got more tenure (EQ)

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Chris is less politically astute (EQ) Pat hits his targets more than Chris (EX, GS, EQ) Pat negotiated more aggressively when he got the job (EQ) Questions: Equity theory is most relevant to this scenario, which is not surprising given the nature of the scenario. Many of the reasons generated will reflect differences in inputs that are both legal to consider and wise to consider (such as skills or effort). Others will reflect differences in input that are legal to consider but not always as wise (such as tenure). Other reasons will reflect differences that may be illegal to consider (such as gender). Other reasons will reflect differences that are probably not valid inputs, making it unwise to have decisions be affected by them (such as likability or political skill). Still other reasons will reflect differences that are more difficult to label in terms of their wisdom (such as negotiating ability). The relevance of the other theories will depend on what‘s listed. Factors that have to do with expectancy differences, instrumentality differences, valence differences, or effort differences are relevant to expectancy theory. Factors that have to do with goal differences are relevant to goal setting theory. Factors that have to do with meaningfulness, self-determination, competence, or impact differences have to do with psychological empowerment. It will be difficult to identify a reason that cannot be slotted into any of the four theoretical perspectives, though sometimes that slotting is more of a ―stretch‖. For example, the last reason above--Pat negotiated more aggressively--may not truly be relevant to equity theory, as it‘s difficult to classify negotiation skill as a relevant input (after all, it doesn‘t benefit the firm directly, and the person isn‘t even a member of the firm yet). Most of the reasons generated will be legal, just because legal reasons come to mind more quickly. Of the reasons listed above, only gender differences could potentially be illegal, depending on whether the differences reflect a true bias. However, the reasons will typically cluster into both wise and unwise categories. Of the reasons listed above, at least five are wise (skill, effort, impact, important decisions, targets) while others may be unwise (likability, gender, tenure, political ability, negotiating ability. Class discussion could center on when potentially unwise reasons could in fact be wise. For example, there are many scenarios where likability may not reflect bias, but rather a true input.

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Herzberg‘s Two-Factor Theory – This widely known (but scientifically unsupported) theory describes satisfaction and dissatisfaction as two separate concepts. Satisfaction is said to be driven by ―motivators‖ such as promotion opportunities, recognition, and growth opportunities. Dissatisfaction is said to be driven by ―hygiene factors‖ such as pay and the quality of supervision. The hygiene factor classification significantly underestimates the importance of pay and supervision, which are important factors in job satisfaction and motivation. For more on this, see: Herzberg, F. Work and the Nature of Man. Cleveland, OH: World, 1966. McLelland‘s Theory of Needs – Argues that work motivation is influenced by three needs: the need for achievement, the need for power, and the need for affiliation. These needs have much in common with three dimensions of personality discussed in Chapter 4: conscientiousness, extraversion, and agreeableness, respectively. For more in this, see: McLelland, D. C. The Achieving Society. New York: Van Nostrand Reinhold, 1961. Job Characteristics Model – This model, by Hackman and Oldham, describes how five core job characteristics (variety, identity, significance, autonomy, and feedback) combine to create work that is intrinsically satisfying and motivating. This model is covered in our discussion of job satisfaction in Chapter 5. Organizational Justice – Equity theory deals with distributive justice, but there are three other facets of justice in organizations: procedural justice, interpersonal justice, and inspirational justice. These justice forms are covered in our discussion of trust and justice in Chapter 8.

Chapter 8: Trust, Justice, and Ethics

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW This chapter covers the topics of trust, justice, and ethics. Trust, or the willingness to be vulnerable to an authority based on positive expectations about the authority‘s actions and intentions, is discussed from the perspective of personality, cognition, and affect. Four different types of justice, or the perceived fairness of actions, are discussed – distributive justice, procedural justice, interpersonal justice, and informational justice. Finally, ethical decision making is explained in terms of moral awareness, moral judgment, and moral intent. The chapter concludes by showing how ethical organizations emphasize corporate social responsibility to help their employees meet the economic, legal, ethical, and citizenship expectations of society.

LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 8.1 8.2 8.3 8.4 8.5 8.6 8.7

What is trust, and how does it relate to justice and ethics? In what three sources can trust be rooted? What dimensions can be used to describe the trustworthiness of an authority? What dimensions can be used to describe the fairness of an authority‘s decision making? What is the four-component model of ethical decision making? How does trust affect job performance and organizational commitment? What steps can organizations take to become more trustworthy?

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CHAPTER OUTLINE 27.

TRUST, JUSTICE, AND ETHICS

Reputation - the prominence of a brand in the minds of the public and the perceived quality of its goods and services. It depends largely on trust.

Trust – the willingness to be vulnerable to an authority based on positive expectations about the authority‘s actions and intentions 1.

Authorities can be either person-based or organization based

Trust is often dependent on two related concepts: a.

Justice – the perceived fairness of an authority‘s decision making

Ethics – the degree to which the behaviours of an authority are in accordance with generally accepted moral norms

28.

WHY ARE SOME AUTHORITIES MORE TRUSTED THAN OTHERS?

Trust 1.

Three types of trust a.

Disposition-Based i.

Some people have personality traits that include a general propensity to trust others

OB Assessments: Trust Propensity. This brief assessment helps students to determine their inherent levels of trust. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. When discussing the results of the assessment, ask students to vote on which is more damaging: being too trusting or being too suspicious. Ask students to describe the consequences of being too trusting (most will note that you can be taken advantage of or you could delegate to ineffective people). Also ask students to describe the consequences of being too suspicious (many will note the strain that would be brought on by monitoring, checking up, and not delegating, or the harm to interpersonal relationships when someone fails to trust). ii.

Trust propensity is a product of both genetics and early childhood experiences

iii.

Trust propensity is also influenced by experiences in later life and national culture

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Try This! Ask students if they have any experiences in countries from Figure 8-2 that are especially high or low on trust propensity. Do they have experiences that are consistent with the rankings in the figure? Do they have experiences that are inconsistent with those rankings? How would those trust propensity levels manifest themselves in national norms, routines, practices, and laws? b.

Cognition-based Trust i.

Cognition-based trust is based on what we know about an authority – our understanding of that authority‘s ―track record‖

ii.

Track records are gauged on three dimensions: a) Ability – the skills and abilities that enable an authority to be successful in a given area b) Benevolence – the belief that the authority wants to do good for the trustor, apart from any selfish or profit-centered motives c) Integrity – the perception that the authority adheres to a set of values and principles that the trustor finds acceptable

Affect-based Trust i.

Affect-based trust is emotional – it is based on the feelings we have for people, not rational evaluations of their trustworthiness

OB on Screen: A Star is Born. The clip referenced in the book begins around the 21:35 mark of the film, continuing until about the 42:08 mark. For a shorter version, begin at the 32:51 mark. The clip depicts Ally as she gets to know Jackson Maine—a country music star. Eventually Jackson invites Ally on stage to sing his arrangement of a song she wrote. Poll the class on whether they would have taken the leap to walk on stage. For those who would have, why would they do it? Listen to the reasons and try to slot them into the factors that influence trust levels. BONUS OB on Screen: The Founder. The clip referenced begins around the 1:16:04 mark of the film, continuing until about the 1:25:05 mark. The clip depicts Ray Kroc as he figures out a way to wrest control of McDonald‘s from the company‘s two founders, Dick and Mac McDonald. Focus discussion on who seems to be more ethical: Ray or Dick and Mac. In what ways? In what ways are Ray‘s actions unethical, and in what ways are they ethical? From the perspective of the four-component model, how do the men differ? Try This! Use The Founder clip for another chapter. The clip allows for some interesting discussions of personality. How does Ray‘s personality differ from the traits that Dick and Mac seem to possess? In some ways, he has more of the

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classic entrepreneur‘s traits than they do: he‘s conscientious and open, but also disagreeable in a way that ultimately helps him accomplish his goals. He also has an internal locus of control, which gives him the mindset to effect change even within the constraints of his contract. BONUS OB on Screen: Whiplash. The clip referenced begins around the 22:48 mark of the film, continuing until about the 27:52 mark. The clip depicts Professor Terence Fletcher being abusive with Andrew Neiman as he begins his tenure as the drummer for the top jazz band at the Shaffer Conservatory. Focus discussion on how the students would react in Andrew‘s situation. Many would want to immediately quit the band. Of those who would not, why would they not? Why might some ―silently bear it‖ and why might some take action with the Shaffer administration? From a trustworthiness perspective, what is it that Fletcher most clearly lacks? From an ethical perspective, what is Fletcher missing that allows him to act the way he does? BONUS OB on Screen: Man of Steel. The clip referenced begins around the 1:08:55 mark of the film, continuing until about the 1:14:00 mark. The clip depicts Clark Kent as he struggles with the decision to turn himself into the U.S. government. They, in turn, will give him to General Zod, a Kryptonian criminal who has arrived on Earth. Clark has lived a life of secrecy for the past 33 years, concerned about what mankind would do to him (and his adopted parents) if they knew an alien was living in their midst. The clip depicts that concern, but also reveals the other side of the trust equation. Mankind, for their part, is worried about the benevolence of a super-powered being who cannot be handcuffed or controlled. Ask the students how much of the mutual distrust is cognition-based and how much of it is affect based. Then ask them what would have to happen, on both sides, for that distrust to change to trust. Obviously we know from other Superman stories and movies that he is eventually trusted by the people of the world. Why? What has changed? BONUS OB on Screen: Slumdog Millionaire. The clip referenced begins around the 1:27:29 mark of the film, continuing until about the 1:35:16 mark. The clip depicts Jamal Malik‘s dilemma as the host of the game show apparently sneaks him the answer to the next question. The clip provides a dramatic demonstration of the definition as trust, as Jamal must decide whether to accept vulnerability to the host by saying that answer, with a chance at a million dollars on the line. Poll the class to see how many would have gone with the answer that the host provided. Then ask them which trustworthiness dimension would have been most relevant to their trust levels. They will probably draw most on integrity, given that the host himself has broken the rules of the show by sharing an answer. However, they may also realize that the host lacks benevolence, as he doesn‘t want Jamal‘s fame to surpass his own. B.

Justice

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Distributive Justice – perceptions of fairness related to whether or not outcomes have been allocated in accordance with accepted norms a.

Most common norm in business settings is equity – more outcomes should be given to people who contribute more inputs

Procedural Justice – perceptions of fairness related to whether or not the rules of fair process have been followed a.

Rules of Fair Process i. ii. iii. iv. v. vi.

Voice – do employees have a chance to express their opinions? Correctability – can employees request an appeal when a procedure seems to have worked ineffectively? Consistency – are procedures consistent across people and time? Bias suppression – are procedures neutral and unbiased? Representativeness – do procedures consider the needs of all groups? Accuracy – are procedures based on accurate information?

Try This! Take some decision making procedure that a number of students will be familiar with. It could be the procedure used by Canadians to elect their Members of Parliament, the procedure used to select the order in which NHL teams select in the draft, the procedure used to decide which students are eligible for scholarships and bursaries within your school, or how students in the class are assigned to project teams. In short, any decision-making process that most students would be familiar with will work. Then ask the students to analyze the fairness of the procedure using the procedural justice rules in Table 8-1. How is the process fair, or how is the process unfair? b.

Research shows that procedural justice is a stronger driver of reactions to authorities than distributive justice

Interpersonal Justice - perceptions of fairness related to whether or not authorities treat people with fairness when implementing rules a.

Rules for Fair Treatment i. ii.

Respect rule – are people treated in a dignified and sincere manner? Propriety rule – do authorities refrain from making improper or offensive remarks?

Abusive Supervision - behaviours that are extremely unfair from an interpersonal justice perspective, with sustained displays of hostile verbal and nonverbal behaviour (excluding physical contact)

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Informational Justice - perceptions of fairness related to whether or not the communications provided to employees during organizational decision making are fair a.

Rules for Fair Communication i.

ii.

Informational justice can have a large impact on an organization‘s bottom line. In one research study, a company offered two different explanations for a pay cut at two different plants. In the plant with a short, impersonal explanation for the pay cut, employee theft was five percent higher than it was at the plant where employees were given a longer, more sincere explanation for the pay cut.

Summary a.

Justification rule – have authorities explained the decisionmaking procedures and outcomes in a comprehensive and reasonable manner? Truthfulness rule – have authorities been honest and candid in their communications?

When authorities adhere to the justice rules in Table 8-1, they are more likely to be seen as trustworthy

Ethics 1.

Research on ethics seeks to explain why people behave in a manner consistent with generally accepted norms of morality, and why they sometimes violate those norms

76% of employees have observed illegal or unethical conduct on the job within the past 12 months, and that figure may be higher in some countries.

OB Internationally. This table shows that different countries have very different baseline levels of unethical actions. If you have international students, try to start a conversation with the class about specific behaviours that might be considered ethical in one country and unethical in another. What is it that makes a behaviour ethical or unethical? Do students believe that having a code of conduct, such as the one discussed in the box, will be enough to significantly alter employee behaviours in other countries/cultures? Why or why not? 3.

Four Component Model of Ethical Decision Making

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Moral Awareness – Occurs when an authority recognizes that a moral issue exists in a situation or that an ethical standard or principle is relevant to the circumstance i.

Moral awareness depends on: a.) Moral intensity, or the degree to which the issue has moral urgency i.) Moral intensity is driven by two general factors (see Table 8-3) a. Potential for harm b. Social pressure b.) Moral attentiveness, or the degree to which people chronically perceive and consider issues of morality

Moral Judgment – Occurs when an authority accurately identifies the morally ―right‖ course of action i.

Moral judgment depends on: a.)

Stage of cognitive moral development i.) ii.) iii.)

preconventional - right and wrong is based on consequences of actions for the individual conventional - right and wrong is based on the expectations of family and society principled/postconventional - right and wrong is referenced to a set of defined, established moral principles (see Table 8-5). Some principles are consequentialist, meaning the morality of the acts depends on their goals, aims, or outcomes. Other principles are non-consequentalist, emphasizing instead formal codes or standards.

Moral Intent – reflects the authority‘s degree of commitment to a moral action i.

Driven by moral identity – the degree to which people see themselves as a ―moral person‖

Try This! Describe a scenario for your students that could be used as an example for the parts of the four-component model. For example: assume a student ―heard through the grapevine‖ that other students had obtained an advanced copy of the final exam in the

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class. Should the student report this to the professor? Based on Table 8-3, how morally intense is this issue, and why? Based on Table 8-5, which course of action is most morally right, and why? D. Summary: Why Are Some Authorities More Trusted Than Others? (Review Figure 8-7) 29.

HOW IMPORTANT IS TRUST?

Trust has a moderate positive effect on performance, because it influences an employee‘s ability to focus and because it fosters the development of a social (rather than merely economic) exchange relationship.

Trust has a strong positive effect on commitment, because trust increases the likelihood that an emotional bond will develop between employer and employee

30.

APPLICATON: CORPORATE SOCIAL RESPONSIBILITY

The idea of corporate social responsibility acknowledges that organizations must take the economic, legal, ethical, and citizenship expectations of society into account when conducting their business

DISCUSSION QUESTIONS 8.1

Which would be more damaging in organizational life--being too trusting or not being trusting enough? Why do you feel that way? This discussion could parallel the discussion of the OB Assessment on trust propensity. When one is too trusting, one risks being taken advantage of, or entrusting important tasks to people who are not competent enough to do them. That tendency could be damaging at times, certainly. However, not being trusting enough could create more daily wear-and-tear on an employee. Being suspicious requires monitoring and the creation of backup plans, both of which distract from task effort. Moreover, trusting others is an empowering experience that can build bonds between coworkers. Being suspicious too often could harm such relationships.

8.2

Consider the three dimensions of trustworthiness (ability, benevolence, and integrity). Which of those dimensions would be most important when deciding whether to trust your boss? What about when deciding whether to trust a friend? If your two answers differ, why do they? Benevolence may be most important when deciding to trust a friend, whereas ability and integrity may be most important when deciding whether or not to trust a boss. Friendships develop over time and are more emotion-based, whereas a professional relationship with a boss depends on respect for the boss‘s skills, and the hope that the boss will keep his promises.

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8.3

Putting yourself in the shoes of a manager, which of the four justice dimensions (distributive, procedural, interpersonal, informational) would you find it most difficult to maximize? Which would be the easiest to maximize? Distributive justice is often the most difficult to maximize, just because managers may not have the discretion to allocate rewards according to a strict equity principle. Procedural justice can also be difficult to maximize as making decisions in a consistent, accurate, and unbiased work requires conscientious effort on the part of managers. In contrast, interpersonal and informational justice only require a commitment to engage in respectful and candid communication.

8.4

Which component of ethical decision making do you believe best explains student cheating: moral awareness, moral judgment, or moral intent? Why do you feel that way? Reactions to this question could vary. Most will probably view it as an issue of moral intent, as students might understand that cheating is wrong but still do it due to GPA pressures or a pressure to keep up with one‘s classmates. However, some practices, such as secretly collaborating on papers and sharing take-home assignments could be becoming murkier in a moral judgment sense (given the rise of collaborative, opensource resources such as Wikipedia).

8.5

Assume you were applying for a job at a company known for its corporate social responsibility. How important would that be to you when deciding whether to accept a job offer? Student answer to this question will vary depending on their moral attentiveness or their moral identity.

CASE: CAPITAL POWER Questions: 1.

Why do you think the board of directors at Capital Power insists on setting clear and high ethical goals for its senior leadership team, and then holding these leaders accountable through a system of incentives and punishments? As we learned in the previous chapter, goal setting is a powerful way that leaders can influence what subordinates attend to and where they allocate their efforts. In case of Capital Power, measuring and managing ethical decision making and outcomes of senior leaders is a way the board can communicate what‘s important (e.g., valued) and align day-to-day behaviors with strategic goals. Getting the tone right at the very top should bode well for middle and lower-level managers who take their cues from the senior management team. From the perspective of the Four Component Model of Ethical Decision Making, a potent system of incentives and punishments will no doubt

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raise awareness, intentions (personal goals) and actual behavior. Note only will this kind of reward system ensure compliance, but over time the internalization of ethical practices throughout the organization. 2.

When it comes to ethical and unethical behaviour in work settings, why do you think employees are influenced so much by the actions of others? This will be a challenging question for students and gives them a chance to bring in concepts and ideas touched on in previous chapters. By definition, to topic of ethics is all about being able to do the ―right thing‖ when it isn‘t clear what doing the right thing means – it‘s not as if there are clear policies and procedures for resolving ethical dilemmas! Thus, when it comes to ethics, leaders and employees often find themselves in an uncharted waters. When faced with uncertainty, it‘s natural to attend to and monitor social cues provided by others. It would seem then that talking to others, paying attention to how others resolve these dilemmas provides guidance. As we will see in the next chapter, the science tells us that if relevant others are seen acting in an (modelling) ethical manner, it will shape our own behavior. Thus, in a very real way, ethical behavior is under social and cultural control, and no doubt explains why the board felt it so necessary to force senior management to visibly demonstrate ethical decision making and behavior.

If you‘re an honest and trustworthy person by nature, does it really matter how your leader or co-workers behave? Explain, making reference to the four-component model of ethical decision making. What the model tells us is that ethical behavior represents an interaction of people (apples) and situational (barrels) factors. Thus, the risk for an honest and trustworthy person is that, over time and repeated exposure to unethical acts, will alter one‘s awareness, judgement, and intention to act in an ethical way.

BONUS CASE: SEA WORLD21 What image comes to mind when you picture SeaWorld? Dolphins? Penguins? Chances are it‘s a powerful majestic killer whale—or orca—jumping out of the water or splashing the audience with its tail. The company owns 89,000 animals in total, but it‘s the 29 orcas that have always gotten the lion‘s share of attention. After years of controversy, however, theatrical orca shows are being phased out at SeaWorld‘s parks. The controversy over SeaWorld‘s orcas began in 2010 when a whale named Tilly killed a trainer. That incident led to an investigation by the Occupational Safety and Health Administration and—more famously—a scathing documentary called Blackfish. That film debuted at the Sundance Film Festival in 2013 and tied Tilly to two additional deaths, making the case that the whale became violent due to captivity. As Blackfish played widely on CNN 21

Source: E. Fry, ―Swimming Upstream: Can a Bible-Studying, Love-Peddling Showman Save SeaWorld . . . from Itself?‖ Fortune, September 15, 2016.

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and Netflix, more and more people expressed criticism of SeaWorld on social media. People for the Ethical Treatment of Animals (PETA) staged protests of SeaWorld, both at its parks and at the homes of its executives. The criticisms triggered by Blackfish cut to the core of SeaWorld as a company. Its mission was to care for and train animals in captivity, with the film making the case that captivity itself was unethical. Initially, the company responded in ways that only exacerbated the ethical issue. Aside from launching a combative public relations campaign, it also sent staff members ―undercover‖ as animal rights activists to spy on PETA. Joel Manby—SeaWorld‘s new CEO—has helped to steady the ship. It was Manby who made the decision to phase out the theatrical orca shows. He commissioned a nine-month study that showed a majority of people thought that keeping large creatures in small spaces was unethical. It was also Manby who devoted SeaWorld to a more education- and conservation-focused mission. Such activities have always been in SeaWorld‘s DNA, as was evident when it helped rescue hundreds of animals stranded on the California Coast in 2015. ―I really felt the company was getting a bad rap,‖ notes Manby. ―I wanted to help them get through this.‖ Manby‘s new vision for the park is ―experiences that matter.‖ Visitors will increasingly be taken ―behind the scenes‖ to see all the things that SeaWorld does to care for the planet and its creatures. As is often the case with large companies, SeaWorld‘s responses to its ethical crises have been shaped, in part, by negotiations with government representatives. Before Manby was brought in, the company had been investigating a concept called BlueWorld: 50-feet-deep orca tanks with simulated currents that would allow whales to swim against moving water. The California Coastal Commission had approved the BlueWorld plan, but under the following stipulation: SeaWorld could no longer breed orcas. Once its 11 California orcas were no more, BlueWorld would have no occupants for its tanks. As the company moved on from BlueWorld, a former congressman (and former co-chair of the animal welfare caucus) helped connect Manby with Wayne Pacelle—the CEO of the Humane Society. Once the two men got past the initial awkwardness of their exchanges, they began communicating regularly. Eventually, Manby brought Pacelle to SeaWorld—his first ever trip to the park. There Pacelle was impressed by the rescue work that SeaWorld did. ―People who work there love animals; appreciation of animals is a big part of their enterprise,‖ he noted. ―If you sit down, look at the other person, and see the complexity; you find you have more common ground than you might have imagined when lobbing cannonballs.‖ Indeed, Manby and Pacelle announced an initiative to fight shark finning—a practice that kills 75 million sharks a year. Other negotiations involved John Reilly—the former president of SeaWorld San Diego and now the company‘s COO—and Richard Bloom—a California assemblyman. Bloom was in the process of authoring a bill that would have outlawed captivity, which would have dealt a fatal blow to SeaWorld. Reilly, Manby, and Bloom worked out a compromise, resulting in the Orca Protection Act. Not only would orca breeding be banned, but all theatrical shows using orcas would be phased out. They would be replaced by so-called ―encounters‖ with orcas in more natural-looking environments. Of course, no one knows what the future may bring, in terms of either activist or government pressure. After all, SeaWorld will continue to do theatrical dolphin and sea lion shows and continues to keep animals in captivity. When a company

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―moves the line‖ in an area of its business that is ethically murky, it can be difficult to decide where that line should be repositioned. Questions: 1.

In terms of the four-component model, what effect did Blackfish seem to have on the public, as it altered its views of SeaWorld‘s theatrical orca shows? Blackfish increased the moral awareness associated with having orcas in captivity. It was previously something that the public didn‘t seem to really think about. Once that moral awareness was triggered, the moral judgment associated with the orca shows seemed clear to many in the public.

If you consider the various moral principles described in Table 8-5, is there support for ending theatrical orca shows but not ending theatrical dolphin or sea lion shows? The nonconsequentialist principles would not seem to argue for a distinction. If theatrical orca shows are ―wrong‖ from the perspective of liberty, consent, mercy, and so forth, then the other kinds of theatrical shows are also. The difference instead seems to be one of moral intensity, as there is simply less social consensus about theatrical dolphin or sea lion shows.

Activist groups like PETA exist, in part, to force companies to become more ethical in their practices. Looking back across decades, has that seemed to happen? What role does (or should) government play in such evolutions? Responses to this will vary, but it does seem that many causes have had their moral awareness (or their social pressure) increased over time. Often the role of government is to be somewhat of a follower to such trends, formalizing them and codifying them once they reach a critical mass socially.

BONUS CASE: UBER22 Picture this. You walk out of a restaurant, capping off a long day in the city you‘re visiting on business. The restaurant‘s on the edge of downtown, far from any hotels, including yours. You could have asked the maitre d‘ to call a cab, or you could call one yourself after some searching on your smartphone. You don‘t need to do either, however, because you‘ve already launched Uber and set your pickup location. Your driver‘s car appears on a map, six minutes away, and you get his name and picture. Once he picks you up in his black Cadillac he‘ll drop you at your hotel and—here‘s the best part—you‘ll just get out. No rummaging for cash, no change, no tip, and no receipt request. Uber simply charges your credit card through the app and emails you a 22

Sources: J. Heimans and H. Timms, ―Understanding ‗New Power‘,‖ Harvard Business Review, December, 2014; J. Hempel, ―Hey, Taxi Company, You Talkin‘ to Me?‖ Fortune, October 7, 2013; A. Lashinsky, ―Uber Banks on World Domination,‖ Fortune, October 6, 2012; E. Porteus, ―Invasion of the Taxi Snatchers,‖ Bloomberg Businessweek, February 24–March 2, 2015; B. Smith, ―Uber Executives Suggest Digging Up Dirt on Journalists,‖ BuzzFeed, November 17, 2014.

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receipt. Uber grew out of a conversation between Travis Kalanick and Garrett Camp, with the idea being to create a time-share service for fancy cars. Camp worked on an iPhone app while Kalanick developed relationships with cabbies in San Francisco. As business took off, Kalanick became CEO, bringing his own unique style to managing the company. What is that style? Well, to understand that question, it helps to know that Kalanick likens himself to Winston Wolfe, the ―fixer‖ from Pulp Fiction who just ―solves problems.‖ Under Kalanick‘s playbook, Uber enters a new market experimentally, waiting to see how the bodies that regulate taxi and limousine services respond. If relevant rules are not enforced within 30 days, something Kalanick calls ―regulatory ambiguity,‖ Uber comes in more aggressively. Besides, Kalanick contends that Uber is essentially just a software company—not subject to the laws and regulations that city mayors want it to follow. If Kalanick practices business by walking right up to ethical lines, Uber and its employees have occasionally crossed them. The company‘s been criticized for its ―surge pricing,‖ where prices get higher at peak times. Although Uber prices tend to be similar to cabs in general, surge pricing resulted in Jessica Seinfeld—the wife of Jerry—spending $415 to take her children to a nighttime event. The company was also criticized for insufficient background checks after a driver was charged with vehicular manslaughter 10 years after earning a citation for reckless driving. And what about Uber‘s employees? They‘ve been criticized for contacting cars from competing services before canceling just before pickup—literally slowing down the competition. It‘s common for a disruptive start-up to find controversy. Uber, however, seems to have earned more than its share as its reach has broadened—opening up doors for competitors while hindering its reputation among its drivers and the business press. For example, Lyft—a ridesharing service with its own app—seized on the surge pricing issue by branding itself as ―your friend with a car.‖ Kalanick himself outraged Uber‘s drivers by looking ahead to driverless car technology, suggesting, ―Once we get rid of the dude in the car, Uber will be cheaper.‖ Such reputational issues may not seem like much when Uber is dominating its market. Still, technologies can be copied and market share leads can eventually be lost. At that point, customers may choose the most trustworthy service and traditional cabbies might migrate to the company that values them the most. One of Uber‘s most public missteps was directed at the business press—a group that can have a significant impact on the reputation of any company. At a dinner in New York attended by policy and media figures, Uber‘s senior vice president of business, Emil Michael, was reacting to some of the unflattering articles that had been written about the company. According to reports, he floated the idea of spending a million dollars to hire opposition researchers to look into the personal lives and families of business journalists. The remarks were chilling, of course, given that Uber has data on pickup and dropoff locations for its clients. Once the controversy hit, Michael clarified things with this statement: ―The remarks attributed to me at a private dinner—borne out of frustration during an informal debate over what I feel is sensationalistic media coverage of the company I am proud to work for—do not reflect my actual views and have no relation to the company‘s views or approach. They were wrong no

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matter the circumstance and I regret them.‖ Still, the comments and resulting fallout deepened concerns about what Uber can do with its cache of data on user habits and whereabouts. There are signs that Uber has begun to attend more carefully to its reputation. For example, it recently launched a program that partners with General Motors, Toyota, and Ford that allows drivers to borrow money at better rates. Uber serves as a middleman of sorts between drivers who may have subpar credit and the car salespeople and lenders they are shopping with. This initiative is meant to get drivers on the streets in Uber-worthy vehicles sooner, while allowing drivers to turn a profit more quickly. Here‘s the interesting part: Uber takes no commission on these transactions when it easily could. Perhaps it feels that the goodwill the program generates with its drivers is worth more than the economic gain of such transactions. Questions: 1.

In general, do you think potential customers are aware of the broader reputational issues faced by the companies who make their products and services? How sensitive are you to such issues? In general, many students may be relatively unaware of the reputational issues faced by many companies. They will be aware of the most recent, high profile cases—the ones that make national headlines. They may be unaware of less recent cases or cases that only made a more limited ―splash‖ in the 24-hour news cycle. As for how sensitive students are, that will vary. One interesting question is why the more sensitive students feel as they do, and why the less sensitive students feel like they do.

How sensitive to you think employees are to the sometimes controversial statements that might be made by their CEO‘s? How important are CEO comments to an employee‘s own sense of the trustworthiness of the organization? This too will vary. Ask students who have worked for larger companies if they recall their CEO‘s making any controversial statements. How did those comments make them feel about the company, and how trustworthy it was from an employee‘s perspective?

One of the ethical challenges faced by Uber—concerns about the privacy and use of the user data it collects—is shared by many tech firms. Is this the type of issue that will decrease in importance over time, with customers being desensitized to it? Or will it instead grow in importance? It will likely grow in importance, for two reasons. First, the more technology advances, the more things there are for technology to track. Second, the issue of privacy and security has become more salient in the zeitgeist of society in recent years. The question is whether younger generations are more desensitized to the issue—more ―used‖ to having sensitive data tracked and gathered.

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BONUS CASE: APPLE23 Assume you‘re in the market for a new tablet. There are probably several factors you‘ll consider when making your purchase, including screen size, speed, operating system, and—of course—price. But what about how and where the tablet is made? Is that a factor? What about how the company that makes the tablet handles its responsibilities to its employees, shareholders, government, and community? Do you consider those issues? Maybe you do, especially in cases where the features of two tablets seem equivalent. Apple, the leader in tablet sales with its iPad and iPad mini, has gained an increased appreciation for these sorts of issues. As the company has grown to become one of the most valuable in the world, it‘s begun to draw even more attention from customers, media, analysts, and officials. That attention has focused on the working conditions in the factories where Apple‘s products are made, whether it evades some of its rightful tax burden, how ―green‖ its products are, whether its new headquarters is irresponsibly expensive, and why it doesn‘t manufacture iPads, iPhones, or Macs in North America. Such factors could serve as threats to Apple‘s six-year run atop Fortune‘s ―Most Admired Companies‖ list. Tim Cook, Apple‘s CEO, seems to understand the importance of such issues. Since assuming the reins at Apple, Cook has taken a number of steps to better showcase the company‘s values. For example, Cook instituted a policy where the company matches charitable donations by its 80,000 employees. As another example, Cook has brought more transparency to the famously secretive company. ―We decided being more transparent about some things is great . . . we‘ve stepped it up in places where we think we can make a bigger difference, where we want people to copy us.‖ One of the biggest challenges of Tim Cook‘s tenure as Apple‘s CEO was brought to a head by a Pulitzer Prize–winning exposé in The New York Times. The story detailed violations in factories owned by Foxconn Technology, one of China‘s largest employers and a critical supplier to Apple, Samsung, Amazon, Dell, and Hewlett-Packard. The story noted that the factory that manufactures the iPad allowed employees to exceed the limit of 60 hours and/or 6 days worked per week. Insufficient safety precautions were also cataloged, as were failures to compensate overtime, overcrowded dormitories, and poor ventilation. Worst of all, an explosion resulting from excessive aluminum dust—a byproduct of polishing iPad cases— killed 4 Foxconn employees while injuring 18 others. 23

Sources: Duhigg, C.; and D. Barboza. ―In China, Human Costs are Built into an iPad.‖ The New York Times, January 25, 2012, http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html (July 14, 2013); Duhigg, C.; and D. Kocieniewski. ―How Apple Sidesteps Billions in Taxes.‖ The New York Times, April 28, 2012, http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html (July 14, 2013); Wong, G. ―Apple Products are Now Green Again.‖ Ubergizmo, August 13, 2012, http://www.ubergizmo.com/2012/07/apple-products-now-green (July 14, 2013); Burrows, P. ―Spaceship Apple.‖ Bloomberg Businessweek, April 4, 2013, http://www.businessweek.com/articles/2013-04-04/apples-campus-2-shapes-up-as-an-investorrelations-nightmare (July 14, 2013); Tyrangiel, J. ―Tim Cook‘s Freshman Year.‖ Bloomberg Businessweek, December 6, 2012, pp. 62–76; Lashinsky, A. ―Lonely at the Top.‖ Fortune, March 18, 2013, p. 148; Tyrangiel, ―Tim Cook‘s Freshman Year.‖; Duhigg and Barboza, ―In China, Human Costs are Built into an iPad.‖; Bradsher, K.; and C. Duhigg. ―Signs of Changes Taking Hold in Electronics Factories in China.‖ The New York Times, December 26, 2012; http://www.nytimes.com/2012/12/27/business/signs-of-changes-taking-hold-in-electronics-factories-in-china.html (July 14, 2013)

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Such practices violate Apple‘s supplier code of conduct, which was established in 2005. But critics contend that Apple didn‘t go far enough in auditing compliance and was not punitive enough when punishing violations. Unfortunately, experts suggest that Foxconn may be the only company in the world capable of manufacturing the annually refreshed iterations of the iPad, iPhone, and iPod. For his part, Cook has pushed Apple to do more. It has increased its auditing while enlisting the aid of the Fair Labor Association, which publishes its own independent inspections of suppliers. Apple has published the working hours for a million supplier employees while training two million on their rights as an employee. Its employees have stayed in Foxconn‘s dormitories, both to monitor conditions and to work with the facilities on improving manufacturing processes. All this has accompanied a 300 percent increase in Apple‘s corporate social responsibility staff. Cook articulates this more aggressive philosophy this way: ―From our point of view, we don‘t want to find zero issues. If we‘re finding zero issues, our bar is in the wrong place. So we begin to raise the bar to find issues.‖ That raising of the bar has become evident at Foxconn‘s factories.The company has pledged that no employee will be allowed to work more than 49 hours per week, as mandated by Chinese law. It has also increased wages by 50 percent to offset that forced reduction in hours. Still, critics contend that Apple‘s secretive culture has prevented it from attaining a transformative leadership role in the industry, as Nike did with shoes and Patagonia did with apparel. ―Apple is scared that if we open the kimono too wide, it will ruin what has made Apple special,‖ explains one former employee. ―But that‘s the only way to really improve things. If you don‘t share what you know, then no one else gets a chance to learn from your mistakes and discoveries.‖ Questions: 1.

Should a company like Apple require suppliers to exceed—not just match—the prevailing standards for wages and working conditions in their home countries? Answers to this question may vary across students, but most students will expect a company like Apple—a company ―at the top‖—to be held to a higher standard that a company that is straining to keep its books in order. Holding Apple accountable for supplier actions would likely be part of that standard.

Is Apple ethically obligated to more aggressively share its ―lessons learned‖ with its competitors in the computer, tablet, and smartphone industries? This will likely be a bit more debatable. On the one hand, Apple shares many of its suppliers with its competitors, so it cannot really ―move the needle‖ on supplier behaviours without addressing issues on a more systemic level. On the other hand, Apple could eventually gain customers by being ―more responsible‖ than its competitors. In the end, it probably does have that ethical obligation.

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When reflecting on Apple‘s position atop Fortune‘s ―Most Admired Companies‖ list, how much of an impact does its corporate social responsibility have on that positioning? Do you think that impact will rise over time or stay stagnant? At this point, Apple‘s position likely has little to do with its corporate social responsibility and more to do with the halo from ―cool‖ products like the iPad Air, iPhone 5s/c, and Macbook Air. If those innovations give way to more incremental advancements, however, it may be that corporate social responsibility will take on a greater role in the overall perception of the company.

EXERCISE: UNETHICAL BEHAVIOUR Instructions: Have students read the scenario in step 8.1. It‘s important that they not skip ahead and read 8.3, so impress upon them to just do step 8.1. Once they‘ve read the scenario, put the students in groups and have them come to consensus on three ideas for reducing employee theft at The Grocery Cart. Have them write the behaviours on the board, making sure to leave a bit of space for additional writing later. Sample Ideas: Here‘s an example of the kinds of ideas students might come up with for reducing employee theft. Install cameras in stockroom Post warnings about the consequences of being caught stealing Offer store-level incentives for theft reduction Next Steps: Now have students read the continuation of the scenario in 8.3. In the context of Figure 8-6, this added information paints the situation at The Grocery Cart as a case of a ―bad barrel‖, not just some ―bad apples.‖ Theft seems to be a reaction to distributive and interpersonal injustices, much like the study described in Figure 8-5. It also seems to be fostered by a culture of poor ethics, with managers themselves committing or sanctioning unethical actions. Some groups will have focused on Drew in their original ideas. Those groups may or may not add any additional ideas to what they‘ve written on the board. Other groups won‘t have focused on Drew, however, so they‘ll add some ideas to their original three. Those ideas could include: Fire Drew Ensure that the pay levels for Grocery Cart employees are competitive Questions:

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If you examine the ideas that the groups wrote on the board, you‘ll typically see that the ideas are geared toward moral intent. The employees at the grocery cart are not sufficiently motivated to do the right thing. It‘s not clear that theft will be punished, and there‘s no clear incentive to help keep other employees in line. In fact, the employees actually seem to be incented to do the wrong thing, as they may be underpaid, they are the victim of disrespectful communication, and they are able to model their boss doing it. Given that, ideas that focus on increasing moral intent (cameras, warnings, incentives, better treatment of employees) will be quite common. One way to structure class discussion is to challenge students to come up with ideas that address the moral awareness or moral judgment portions of Figure 8-6. For moral awareness, The Grocery Cart could hold a training session on the bottom-line costs of employee theft, to make the issue have more moral intensity. They could also prioritize moral attentiveness in their hiring process, either through interviews or personality testing (see the discussion of integrity testing in Chapter 4). For moral judgment, The Grocery Cart could gear a training session toward moral development, getting the employees to view theft from a more sophisticated set of moral principles (e.g., ethics of duties, ethics of rights, virtue ethics).

Chapter 9: Learning and Decision Making

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LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 9.1 9.2 9.3 9.4 9.5 9.6 9.7

What is learning, and how does it affect decision making? What types of knowledge can employees gain as they learn and build expertise? What are the methods by which employees learn in organizations? What two methods can employees use to make decisions? What decision-making problems can prevent employees from translating their learning into accurate decisions? How does learning affect job performance and organizational commitment? What steps can organizations take to foster learning?

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CHAPTER OUTLINE 31.

LEARNING AND DECISION MAKING

Learning reflects relatively permanent changes in an employee‘s knowledge or skill that result from experience

Decision making is the process of generating and choosing from a set of alternatives to solve a problem

32.

WHY DO SOME EMPLOYEES LEARN TO MAKE DECISIONS BETTER THAN OTHERS?

Expertise refers to the knowledge an skills that distinguish experts from novices and less experienced people – these differences are almost always a function of learning

Types of Knowledge 1.

Explicit Knowledge – information that can be communicated verbally or in writing

Tacit Knowledge – information that is gained from experience

Try This! Ask students to raise their hand if they consider themselves to be experts at something. Maybe you have expert musicians or athletes in the class, or maybe students are experts at certain hobby or task-related activities. Then ask some of the experts to explain how to do their skill to students who are novices at that activity. Are they able to articulate the tacit knowledge that they may have taken for granted? C.

Methods of Learning 1.

Reinforcement – people learn by observing the link between voluntary behaviour and the consequences that follow it a.

Operant Conditioning Components i. ii. iii.

Antecedent – condition that precedes behaviour Behaviour – action performed by employee Consequence – result that occurs after behavior

Contingencies of Reinforcement i.

Positive Reinforcement – positive outcome follows a desired behaviour, increasing the likelihood that the behaviour will appear again

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a.) To be successful, employee must see direct link between behaviour and reward

ii.

Negative Reinforcement – unwanted outcome is removed following a desired behaviour, increasing the likelihood that the behaviour will appear again

iii.

Punishment – unwanted outcome follows an unwanted behaviour, decreasing the likelihood that the behaviour will appear again

iv.

Extinction – no consequence (either positive or negative) to a behaviour, which decreases the likelihood that the behaviour will appear again

Schedules of Reinforcement i.

Continuous reinforcement – specific consequence follows each and every occurrence of a desired behaviour

ii.

Fixed interval schedule – workers rewarded after a certain amount of time, and time between reinforcement stays the same

iii.

Variable interval schedule – workers rewarded after a certain amount of time, and time between reinforcement varies

iv.

Fixed ratio schedule – behaviours reinforced after a certain number of them have been exhibited

Variable ratio schedule – people are rewarded after a varying number of exhibited behaviours

vi.

Variable schedules lead to higher performance than fixed schedules, but variable schedules are not always appropriate for work rewards (e.g. paychecks)

Observation a.

Social learning theory says that people in organizations learn by watching others

Behavioural modeling involves observing the actions of others, learning from what is observed, and then repeating the observed behaviour (Figure 9-3)

our steps are involved in behavioural modeling:

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i. ii. iii. iv.

Attentional processes – learner must notice critical behaviours Retention processes – learner must remember critical behaviours Production processes – learner must reproduce critical behaviours Reinforcement processes – learner must be rewarded for exhibiting critical behaviours

Goal Orientations – affect learning behaviours and outcomes a.

Learning orientation – building competence is seen as more important than demonstrating competence i.

Improves self-confidence, feedback-seeking behaviour, learning strategy development, and learning performance

Performance-prove orientation – focus is on demonstrating competence so others will think favorably of the performer

Performance-avoid orientation – focus is on demonstrating competence so other will not think unfavorably of the performer

OB Assessments: Goal Orientation. This brief assessment will allow your students to determine their own goal orientation. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. Ask students how especially high and low levels of learning orientation impact the kinds of classes students sign up for, and the way they approach those classes. Then ask the same kinds of questions about performance-prove and performance-avoid orientations. D.

Methods of Decision Making 1.

Programmed Decisions a.

Decisions that become somewhat automatic because a person‘s knowledge allows him or her to recognize and identify a situation and the course of action that needs to be taken i.

Often made using intuition – an emotionally charged judgment that arises through quick, unconscious, and holistic associations

Non-Programmed Decisions a.

Decisions made in situations that are new, complex, and not recognized

Non-programmed decisions are best made using the rational decisionmaking model

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i. ii. iii. iv. v. vi.

Determine the appropriate criteria for making a decision Generate a list of available alternatives Evaluate the alternatives against criteria Choose the solution that maximizes value Implement appropriate solution Determine whether or not the solution delivers the expected outcome

Rational decision-making model does not take into account that people are not always rational

OB on Screen: The Big Short. The clip referenced in the book begins around the 1:26:20 mark of the film, continuing until about the 1:28:20 mark. The clip in question is pretty short and can be expanded to include Mark Baum‘s (Steve Carrell) conversation with the arrogant financial manager if you want more context around the financial crisis. However, the clip in question depicts Richard Thaler (who just won the Nobel Prize for Economics) and Selena Gomez (pop singer) demonstrating the ―hot hand fallacy‖ through the use of basketball and blackjack. It is a great way to introduce decision-making biases and faulty decisionmaking processes to the class (Table 8-4, Decision-Making Biases, is filled with errors that students love to talk about). Ask students if they ever feel that they have been on a ―hot streak‖ before in some scenario (if they are hold enough—using a casino as an example tends to resonate well) and probably over-estimated the probability of a certain outcome. Why do they think they did that? It‘s worth having a conversation about how such a seemingly straight-forward decision-making error can have such calamitous consequences at the national level (financial crisis of 2008). Have students expand on some of the causes as to why individuals tend to make decisions that aren‘t perfectly rational. Do your best to come to conclusions that fall into the buckets of limited information, faulty perceptions, and faulty attributions. BONUS OB on Screen: Interstellar. The clip referenced begins around the 1:25:32 mark of the film, continuing until about the 1:29:07 mark. The clip depicts a discussion amongst the astronaut/scientists as to which direction (planet) they should go as they continue their journey to save the human species from extinction. The clip is an excellent example of a group trying to go through the rational decision-making process together. Both alternatives have promising data to support them, but the crew only has enough resources to try one of them. Amelia lays out a strong case why the right decision lies with one alternative, but Cooper calls her out for making a decision in a non-rational way (Amelia is in love with a scientist that is on one of the two planets). He implores her to remember that she is a ―scientist‖ who is supposed to not allow information that might bias her decision making come into play. Have students develop a list of the things in their life (or things they have experienced on the job) that might affect their ability to make decisions in a rational way. Use Table 8-3, Rational Decision Making vs. Bounded Rationality, as a guide for why, as human beings, we are subject to bounded rationality. For those sympathetic with Amelia‘s plight of being in love with a scientist on one of the two planets - ask students if there is

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a time when ―love‖ makes us more rational. Some students may point out that, ultimately, even though the crew went the opposite direction—Amelia‘s choice would have been the correct one. If you are willing to spoil the movie yourself, you could be the one to bring up that fact. It‘s worth having a conversation that just because one might be ―biased‖ in certain direction—that doesn‘t necessarily make the alternative wrong. The rational argument could still win out. They key is recognizing those biases and taking them into account when making the decision. BONUS OB on Screen: Star Trek Into Darkness. The clip referenced begins around the 1:19:56 mark of the film, continuing until about the 1:22:45 mark. The clip depicts the crew of the U.S.S. Enterprise being threatened by a much larger and more powerful Starship. Faced with few options, Captain Kirk (Chris Pine) appears to make the decision to attempt a solution that a) involves befriending a known enemy (Khan) and b) seems to have a very low probability of working. Kirk‘s first officer - Spock (Zachary Quinto), the ultimate rational thinker - is quick to remind him of this and the fact that as a Captain, he has other responsibilities he needs to keep in mind. Kirk opens up to Spock about the fact that he is making a decision based on a ―gut feeling‖ because this option is all he can think of and he needs to do something (anything). The clip is an excellent opportunity to discuss rational vs. non-rational decision making. The two characters will likely be well known to most of the students in the class and both represent opposite ends of the continuum. A discussion of when to use both types of decision-making would be a fruitful discussion. It is worth pointing out the advantages of having people with different mindsets (diversity) when an important decision needs to be made. Kirk and Spock are effective together for this reason. Would there be an advantage to having people in a group play a role such as devil‘s advocate when members of a group are similar in the way they think? Why? A time of crisis like the one in this case is obviously one of those times where intuition can play an important role in effective decision making. Encourage your students to think of time where they have used their intuition in making a decision – have they ever followed the leadership of someone who was using their intuition but couldn‘t explain why they were making a certain decision? What made them trust their leader under that circumstance? Try This! Use the Star Trek clip for a different chapter. The clip would make for a helpful discussion of trust issues in Chapter 8 on Trust, Justice, and Ethics. Does Spock seem to trust Kirk‘s judgment? Why or why not? The clip is also relevant to the time-sensitive model in Chapter 13 on Leadership: Styles and Behaviours. What decision making style does Kirk seem to be using? What should he be using? E.

Decision-Making Problems 1.

Limited Information

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Bounded rationality – decision makers do not have the ability or resources to process all available information and alternatives to make an optimal decision

Satisficing – decision makers often use the first acceptable alternative they encounter, rather than evaluating all alternatives to see which one is best

Faulty Perceptions a.

Selective perception – people see only those things in the environment which affect them and are consistent with their expectations

Projection bias – people project their own thoughts, attitudes, and motives onto other people

Social identity theory – people identify themselves by the groups to which they belong and perceive and judge others by their group memberships

Stereotypes – occur when people make assumptions about others on the basis of their membership in a social group

Heuristics – simple, efficient, rules of thumb that allow people to make decisions more easily

Availability bias – the tendency for people to base their judgments on information that is easier to recall

Faulty Attributions a.

Fundamental Attribution Error – people have a tendency to judge others‘ behaviours as due to internal factors i.

Self-serving bias suggests that people attribute their own failures to external factors, and their own successes to internal factors

OB Internationally. This box examines the role biases play in assigning blame for major corporate accidents or breaches of ethics. Note especially the role culture plays in determining who will be blamed for the problem – for example, in an individualistic culture, a single person will get the blame, while in a collectivistic culture, the entire organization accepts the blame. ii.

Decisions about the causes of behaviour are linked to three judgments:

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a.) Consensus – Did others act the same way under similar situations? b.) Distinctiveness – Does this person tend to act differently in other circumstances? c.) Consistency – Does this person always do this when performing the task? 4.

Escalation of Commitment a.

Refers to the decision to continue to follow a failing course of action

Summary: Why Do Some Employees Learn to Make Decisions Better Than Others? (Figure 9-6)

33.

HOW IMPORTANT IS LEARNING?

Learning has a moderate positive effect on job performance

Learning has a weak positive effect on commitment

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APPLICATION: TRAINING

Organizations can improve learning by training, a systematic effort to facilitate the learning of job-related knowledge and behaviour Try This! Ask students to share training experiences they‘ve had in jobs that they‘ve held. What method of instruction was used to impart explicit knowledge and tacit knowledge? What did the organizations do that was effective and what did they do that was ineffective?

Companies are heavily focused on knowledge transfer from older, experienced workers to younger, inexperienced workers 1.

Behavioural modeling training, pairs experienced workers with inexperienced workers so the inexperienced workers can observe and learn from the more skilled employees Communities of practice are groups of employees that work together and learn from one another by collaborating over an extended period of time

The success of organizational training depends on transfer of training – when the knowledge, skills, and abilities gained in a class are actually used by the employee back on the job 1.

Transfer of training is fostered when organizations create a climate for transfer – an environment that can support the use of new skills

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DISCUSSION QUESTIONS 9.1

In your current or past workplaces, what types of tacit knowledge did experienced workers possess? What did this knowledge allow them to do? Answers will vary from student to student, but for example, an experienced marketing professional might know whether or not an ad campaign would work just by glancing at it. This would enable him or her to tell whether or not the company should pitch a particular campaign to a client.

9.2

Companies rely on employees with substantial amounts of tacit knowledge. Why do companies struggle when these employees leave the organization unexpectedly? What can companies do to help ensure that they retain tacit knowledge? Companies struggle when employees with tacit knowledge leave because tacit knowledge isn‘t typically written down, and it is something that is difficult to transfer from one person to another without extensive interaction and observation. Companies can implement mentoring programs and techniques such as behaviour modeling training and communities of practice to transfer tacit knowledge before it is lost.

9.3

What does the term ―expert‖ mean to you? What exactly do experts do that novices don‘t? An expert is someone with exceptional knowledge or skills. Experts see problems differently and offer different solutions than novices do. Experts are often able to see how many things fit together, and they can see the ―big picture‖ more clearly than those with less experience do. Experts are able to deal with harder, more complex problems than novices can handle, and they typically solve problems more quickly than someone with less skill.

9.4

Do you consider yourself a ―rational‖ decision maker? For what types of decisions are you determined to be the most rational? What types of decisions are likely to cause you to behave irrationally? Most people do consider themselves to be rational decision makers – very few of us actually believe that we make the kinds of decision errors suggested in this chapter of the text. The exercise at the end of this chapter can be an eye-opening experience for students who believe that they make all of their decisions rationally.

9.5

Given your background, which of the decision-making biases listed in the chapter did you most struggle with? What could you do to overcome those biases to make more accurate decisions? Again, this answer will vary from student to student, but most people will benefit from taking more time to determine what the problem is before solving it, and to identify additional solutions prior to picking the one that they want to use. If students are

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managers, they should be well aware of the impact the fundamental attribution error has on performance reviews, but they should also know that simply being aware of the problem can go a long way towards solving it.

CASE: SLACK TECHNOLOGIES Questions 1.

What are the issues (good and bad) with working for a company that uses a messaging application like Slack? The answer to this question likely lies in how comfortable you are with the accuracy of the data being input into the system and the ongoing applicability of the principles upon which it makes decisions. Does a ―rational‖ decision always win out when it comes to making decisions about people who are inherently non-rational in their approach to many decisions? The rate at which people leave Bridgewater certainly suggests that not all people are.

What rules would a company need to put in place to ensure efficient use of Slack in order to help employees make better decisions? Companies should develop a set of best practices for the use of Slack and make it clear to employees when Slack is likely to produce the best results. It would also be beneficial for a company to have a strong training program on how to take advantage of the new access to information that Slack has the potential to provide. If a company actually finds that its workers can‘t let go of Slack in their off time, they might consider instituting some rules about access to Slack. (To be fair, that‘s unlikely at most places, but there are companies who have installed ―no work‖ hours to lessen the pressure of their employees feeling that they need to always be ―on‖.)

How might artificial intelligence help employees to make decisions using the data that is stored in conversations that take place through Slack? Would you be comfortable with a company accessing all your messages? Artificial intelligence could have ability to help employees make more rational decisions by providing an increased number of options in a shorter amount of time. At the end of the day, rational decision making hinges on our ability to judge as many alternatives as possible. If AI could somehow go through every time someone in the company made a similar decision – both looking at the alternatives that were considered, the similarity of situations, and the outcomes that came from them – it would give employees a huge leg up in terms of making future decisions. Employees might not be comfortable with a company having access to everything that gets posted, especially if many of those posts are social in nature. However, they had better get used to it as many companies already are.

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BONUS CASE: KPMG Canada (SANDI)24 KPMG Canada is affiliated with KPMG International, a global network of professional firms that provide audit, tax, and advisory (consulting) services to public and private business, notfor-profit, and public sector organizations. With more than 700 partners and more than 6,000 employees spread across the country in 35 locations, KPMG Canada generated roughly $1.4 billion of revenue in 2016. One of the major challenges facing KPMG Canada is to sustain a labour-intensive business at a time when many of its seasoned professional staff are approaching retirement age. An example of a large office facing this challenge is KPMG Vancouver. Every year, this office tries to hire between 40 and 60 chartered accountant (CA) students. Some of these may have worked for the firm in co-op positions, but many come to the firm directly from universitybased accounting programs. Becoming or replacing a CA is not an easy process. In addition to an appropriate university degree, CA students need several years of practical experience with a public practice accounting firm, and need to pass the Common Final Evaluation (CFE), which is the CA exam. Once this exam is passed, employees start to be moved around to different areas of the firm. By the employee‘s fifth year, the firm usually promotes the employee to manager or signals that it is time to move on to other career paths. Sandi, 25, was one of the top accounting students in her hiring year. Growing up outside of the city, she had always wondered what it would be like to work in a downtown office. So when she was presented with an opportunity to work as a CA student at KPMG‘s Vancouver office, it was like a dream come true. During new-staff orientation, Sandi quickly realized that she couldn‘t just rely on the technical competence she had mastered in her university courses. She had always impressed her professors and performed well on class assignments and exams, but this was different. Not only did KPMG expect incoming CA students to have a good working Page 230knowledge of accounting and applicable audit standards, it was also evident that new competencies would have to be acquired and mastered on the job. How would she survive in such a highly competitive and driven culture? Could she work with clients (some difficult) and identify improvement opportunities for them? How would she be able to manage time and stress? Who could she trust? Would she be able to form allies and networks to help her get things done? Could she portray the right attitude to command respect from people in the firm who were much more experienced? All these questions ran through her mind. With no textbooks, no lectures, and certainly no professors to provide answers, how was she ever going to learn what she needed to know in order to be successful? Without classrooms, textbooks, lectures, or professors, how was Sandi going to survive her challenging new job at KPMG? Well, as it turned out . . . very well! In fact, after the first year, 24

Sources: KPMG International, www.kpmg.com/GLOBAL/EN/ABOUT/OVERVIEW/Pages/default.aspx; KPMG Canada, www.kpmg.com/ca/en/about/performance/pages/default.aspx, retrieved January 27, 2015; CPA Canada, ―CA UFE Guide and Report,‖ www.cpacanada.ca/en/become-a-cpa/cpa-certification-program-evaluation/ca-ufe-guide, retrieved April 14, 2015; CPA Canada, www.becomeacaincanada.ca/item47117.html, retrieved April 14, 2015.

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Sandi found herself working closely with people she liked and with high-profile clients on complex and interesting projects. It wasn‘t long before Sandi was working 60 to 70 hours per week. As her reputation increased, she noticed that it was much easier to get her manager to approve training opportunities, and that key people within the firm were seeking her out. Some of her peers, however, were not as fortunate. Many were put on easy jobs that were not big money-makers or were assigned jobs that others did not want to do. This was the worst kind of punishment—not to get training opportunities and to be ignored by the movers and shakers within the firm! After passing the CA exam, Sandi was quickly promoted to a management position. It would appear that her dream had indeed come true! If her dream had really come true, then why did she feel so conflicted? The long working days combined with the high pressure were starting to take their toll. Is this the life she really wanted? But after investing so many years preparing for a career in a prestigious accounting firm like KPMG, could she leave? She was aware that an alternative career in the profession would be to work as an auditor or controller in government or industry. Although the work would be more routine, potentially boring, and would require a more focused set of technical skills, it would be a lot more predictable and structured in terms of hours—she could have a life! And another thought occurred to her. Because she had always performed so well in university, perhaps she should pursue graduate study and work toward a doctorate degree and become a professor. One of her professors had strongly encouraged her to look at that option. Going back to school would require Sandi leave the accounting profession altogether. Questions: 1.

How does the organization facilitate learning of tacit knowledge? As Sandi correctly assessed it was critical for her to acquire and master the tacit knowledge necessary to be an effective professional accountant. KMPG, in this case, facilitated this type of learning among the new recruits through its socialization and job-assignment process, informal feedback and social reinforcement (via team leaders and partners), and by providing ample opportunities for CA students to observe desirable professional behaviours (observational learning). Students in the class who have served co-op placements in accounting firms may have other insights into how tacit knowledge is learned.

What kind of decision is Sandi currently faced with? What kind of information should she consider? What area the risks that may lead to a poor choice? What do you think she will do? Sandi is faced with a non-programmed decision, in the sense that she has likely never encountered anything like this before. The prescribed decision making process is as follows (see Figure 9-4). First, she needs to carefully define and understand the problem. Sandi then needs to determine the decision criteria – in other words, how will she know if a correct decision is made? What defines success in this decision context? Next, a number of solution alternatives need to be generated that address the problem as defined in Step 1. Each of these should then be evaluated against the decision

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criteria. On the basis of this evaluation, the solution alternatives are prioritized and one is selected. The next step is the hardest part, implementation. She needs to act on her decision, and monitor the implementation process to ensure the chosen course of action delivers the results she needs to be successful. In short, the non-programmed decision calls for a rational process. Of course, many people don‘t actually made decisions this way. Too often people, when faced with big personal decisions tend to satisfice. This may result because people have limited information, their perceptions are faulty, or they make mistakes when interpreting cause-effect relationships. Moreover, there are many biases that can creep into the perceptual and attribution processes. All of these factors introduce risk and may lead to a poor choice. What did Sandi decide to do? She left the firm and is currently working on her doctorate degree in accounting so that one day she can become a professor. BONUS CASE: IBM25 For many people over 50 years old, the three letters together—IBM—still signify a company whose employees all wear dark suits, white shirts, and similar ties. IBM is also remembered as the first major technology company and for getting left in the dust as it failed to adjust to the personal computer revolution in the 1980s. Now? One thing‘s for certain—this isn‘t your father‘s IBM. Number 12 on Fortune‘s most admired companies list, IBM has 420,000 employees and earns $100 billion in annual revenue by providing systems integration services to clients around the world. IBM‘s employees have to deal with massive amounts of information and its success lies in the ability of its employees to learn how to be more efficient and innovate on a daily basis. To accomplish this feat, IBM relies largely on various forms of social networking and other Web 2.0 applications. In fact, there is perhaps no other company that has adopted social networking as a learning tool as wholeheartedly as IBM (over 350,000 of its employees are involved in one form or another). If you were a manager or a salesperson at IBM with a question about how to best get something done, wouldn‘t it be nice to tap into the knowledge of many people at once who have an expertise in the area of your question? Luckily, many IBM employees have access to online learning communities that allow them to do just that. IBM, like many other organizations including Caterpillar, Raytheon, World Bank, and hundreds more, have developed online ―communities of practice‖ that are designed as workplace learning tools.5 These tools, whether 25

Sources: Agnvall, E. ―Hitchhiker‘s Guide to Developing Leaders.‖ HR Magazine, September 2008, pp. 121–24; Anonymous. ―How Social Networking Increases Collaboration at IBM.‖ Strategic Communication Management, January 2010, pp. 32–35; Azua, M. The Social Factor: Innovate, Ignite, and Win through Mass Collaboration and Socia Networking. New York: IBM Press, 2009; Bulkeley, W. M. ―Business Solutions; Playing Well with Others: How IBM‘s Employees Have Taken Social Networking to an Unusual Level.‖ The Wall Street Journal, June 18, 2007, p. R10; Collins, J. ―It‘s All In Here!: How Do We Get It Out?‖ T + D, January 2011, pp. 58–61; Emelo, R. ―Creating a New Mindset: Guidelines for Mentorship in Today‘s Workplace.‖ T + D, January 2011, pp. 44–49; Espinosa, C.; M. Ukleja; and C. Rusch. Managing the Millennials: Discover the Core Competencies for Managing Today‘s Workforce. New York: John Wiley & Sons, 2010; and Randstad USA. ―2008 World at Work,‖ (n.d.), http://www.us.randstad.com/2008WorldofWork.pdf ; Hempel, J. ―IBM‘s Super Second Act.‖ Fortune, March 21, 2011, pp. 114–24; Ladika, S. ―Socially Evolved.‖ Workforce Management, September 2010, pp. 18–22; Lawson, M. ―Survey Reveals Alarming Lack of Generational Workplace Interaction.‖ Workforce Management, July, 2008. http://www.workforce.com/archive/feature/25/68/23/index.php?html ; Morrison, S. ―A Second Chance for Second Life.‖ The Wall Street Journal, August 19, 2009, p. B5; Pontefract, D. ―Learning with and from Others: Restructuring Budgets for Social Learning.‖ T + D, January 2011, pp. 54–57; Salopek, J.J. ―Knowledge in Numbers.‖ T + D, July 2008, pp. 24–26.

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they be wikis, blogs, IBM‘s internal directory ―Blue Pages,‖ or social tagging and bookmarking, attempt to put employees with similar jobs, interests, or problems together, allowing them to take advantage of the collective wisdom of the group or the tacit knowledge of a highly experienced member.6 In fact, social tagging and expertise ratings allow IBM employees to identify where the ―true‖ experts lie within the company. These Web 2.0 applications give IBM employees a means to share the types of information that used to take years of experience on the job to learn. In essence, they take the unwritten knowledge that IBM employees possess and provide a conduit to other employees who need that information to perform their jobs effectively. These types of online social networking tools are highly useful in passing information between employees who might be geographically dispersed. To aid in that endeavor, IBM is also utilizing virtual worlds in which coworkers can do everything from holding brainstorming sessions to practicing presentations online. These virtual worlds allow employees to create personal avatars and interact with one another remotely with the goal of training or sharing knowledge. One of the major factors behind the push for knowledge sharing in companies is the large group of older workers in the Baby Boom generation who will soon be retiring and taking their tacit knowledge with them. Companies want these older workers to mentor and interact with younger workers so they don‘t lose that knowledge. However, numerous sources reveal that the four generations that currently appear in the U.S. workforce actually interact much less than we might hope. Much of the reason has to do with faulty perceptions. Eric Buntin, managing director of marketing and operations for Atlanta–based Randstad USA, finds that ―Stereotyping is real. If Gen X‘ers think their baby boomer colleagues are less flexible—even if they‘re not— they believe it.‖ IBM and other companies are banking on knowledge-sharing practices such as social networking and Web 2.0 technologies, to help bridge this gap between generations and create learning that is necessary for future success. This reliance introduces certain dilemmas though. One such dilemma is that social networking is much more natural for the newest generation in the workforce than it is for the older ones. For most Millennials (born between 1978 and 1996), social networking is simply part of life. From a learning perspective, one key difference between the older generations and the Millennials is that the younger group is the first generation that has had immediate access to many types of information that other generations had to develop relationships with their authority figures in order to acquire. Baby Boomers, and to a certain extent those in Generation X, are used to going to their superiors to ask questions on how to do things. Millennials have been found to either not recognize the need to do that or to not know how. This gap implies that passing along tacit knowledge from one generation to the next is going to need to occur in various forms. From a technology perspective, IBM‘s experience is that the social behaviour involved with various forms of technology is very different and each serves its own purpose. For instance, blogs are written by fewer people (although at IBM ―few‖ is 26,000 employees with registered blogs) and are generally seen as a ―push‖ technology—they‘re sent out to a large set of passive readers. Corporate wikis on the other hand are a ―pull‖ technology, which involves gathering information from and the collaboration of a large number of employees over time. IBM‘s

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corporate wiki program has been highly successful (over 150,000 employees in daily volume visited IBM‘s WikiCentral within the first year of the program). If done well, wikis have a much higher potential to pass along and make explicit ―tacit knowledge‖ that has built up within a company due to the collaboration and problem solving involved. From a nontechnology perspective, many if not most organizations have used mentoring as a primary way in which more experienced workers pass along both explicit and tacit knowledge. However, many companies including IBM and others are recognizing that mentoring can‘t hold the same forms it has taken in the past. Today‘s more project-based environments and geographical dispersion makes natural mentoring relationships between employees extremely difficult, and it doesn‘t help with traditional forms of knowledge sharing. So how are many companies attempting to overcome this issue? Through technology and social networking! Questions: 1.

Which types of social networking are more likely to bridge the generation gap and allow knowledge sharing between the generations of employees at IBM? Explain. Communities of practices, as a heavily technology based method of passing along information, might be problematic for passing along information from an older workforce. However, IBM has always been a highly technological oriented company so its chances might be substantially better than the average company.

Given these generational issues and the type of work life that IBM employees tend to have, can you think of another possible way to encourage knowledge sharing within the organization? Formal apprenticeship and mentoring programs have been proven to be highly effective under these types of situations, but as mentioned in the case they are harder to set up given the changing nature of work. Forcing employees from different generations to sit on the same project teams and interact with one another is another way to begin to break down the fact that the two groups don‘t typically interact with one another.

How might IBM attempt to break down the perceptions and stereotypes that exist between generations in order to help the knowledge-sharing process? Training programs on understanding diversity as well as finding ways to show each group that the other is really not as different as they think they are would be useful. For the most part though, forcing some type of interaction between the groups is really the most useful method of breaking down such stereotypes.

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EXERCISE: DECISION-MAKING BIAS Answers to Questions in Text: A.

The correct answer is b. Because probabilities are not linked, you have to consider each hospital as a separate entity, and each day as a separate occasion. Sampling theory entails that the expected number of days on which more than 60 percent of the babies are boys is much greater in the small hospital than in the large one, because a large sample is less likely to stray from 50 percent.

The correct answer is b. In prior studies 85% of respondents choose option b. The ―more likely‖ answer though mathematically is clearly option a. The probability of two events occurring together is always less than or equal to the probability of either occurring alone. (If b is true, a must be true by definition. However, if a is true, b does not have to be true.) People who answer b fall prey to the representativeness heuristic because b seems more representative of Linda based on the description of her.

41% This question requires that you think about underlying probabilities, and is a good example of the impact of representativeness bias on decision making, since most students answers will range from 50% to 80% probability that the cab was correctly identified as Blue. The correct answer, found using Bayes‘ theorem, is lower than these estimates:  There is a 12% chance (15% times 80%) of the witness correctly identifying a blue cab.  There is a 17% chance (85% times 20%) of the witness incorrectly identifying a green cab as blue.  There is therefore a 29% chance (12% plus 17%) the witness will identify the cab as blue.  This results in a 41% chance (12% divided by 29%) that the cab identified as blue is actually blue.

Most students will pick ―a‖ in Decision I and ―b‖ in Decisions II and III, not realizing that statistically, all of these choices are equal. This is an excellent example of framing, where the way in which a question is asked influences the decision a person makes. Kahneman and Tversky found that when questions were framed positively (a sure win), people were less likely to take risks, but when questions were framed negatively (a sure loss), people were more likely to take risks, even if the risk in both cases was the same.

Most students will answer ―no‖ to E-a, but ―yes‖ to E-b, again, not realizing that the two choices are exactly equal from a rational point of view. In both cases, the person who chooses to buy a new ticket will be down $80 by the end of the evening. The difference is the perception that one has spent $80 on buying the same ticket twice, versus spending $40 on a ticket and simply losing the other $40. This is a good place to discuss escalation of commitment, as well as sunk costs.

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Surgery. The trick here is looking at the probability of survival at the end of the treatment, not just looking at initial survival probabilities. Show students that this same question can also be asked in the following way: Would you choose surgery, which has a 44% probability of survival at the end of five years, or radiation, which has a 22% probability of survival at the end of five years?

OMITTED TOPICS The field of organizational behaviour is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Team Decision Making – Many of the most important decisions made in organizations are entrusted to teams. Team decision making is affected by a unique set of issues, including the distribution of information within the team and the degree to which the team censors or pressures its members. The factors that affect team decision making accuracy are covered in our discussion of team processes in Chapter 11. Self-Efficacy – One by-product of the modeling process described by social learning theory is an increase in self-efficacy, a sort of task-specific self-confidence. Self-efficacy is covered in our discussion of motivation in Chapter 7. Ethics in Decision Making – Aside from making accurate decisions, managers must also attempt to make ethical decisions. A model of ethical decision making (including issues such as moral awareness, moral judgment, and moral intent) is included in our discussion of ethics in Chapter 8. Weiner‘s Model of Attribution – This model describes how individuals‘ attributions for their own success or failure can go on to impact their future self-esteem and performance. For example, the model suggests that successes that are attributed to ability and effort, as opposed to luck, will be associated with strong increases in self-esteem and performance. For more on this, see: Weiner, B. ―An Attributional Theory of Achievement Motivation and Emotion.‖ Psychological Review (1985), pp. 548-73.

Chapter 10: Communication

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW Communication involves a process by which information and meaning is transferred from a sender to a receiver, and is fundamental to many of the topics covered in the book. The chapter begins with a review of the communication process, including a discussion of the different forms of face-to-face (verbal and nonverbal) and computer-mediated communication (email, videoconferencing, wikis, and Web 2.0 social network applications). Then the chapter reviews some of the more important issues that potentially helps or hinders the communication process. Formal and informal communication networks within organizations are then examined. The practical application focuses on the job interview, and describes how students can learn to be more effective communicators.

LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 10.1 10.2 10.3 10.4 10.5 10.6 10.7

What is communication, and how does this relate to organizational behaviour? How does the communication process work? What do face-to-face and computer-mediated communication offer? What are some of the more important issues that can affect the communication process? How does information flow within organizations? How does communication affect job performance and organizational commitment? What can people do to facilitate effective communication during the job interview?

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CHAPTER OUTLINE 35.

COMMUNICATION

Communication refers to the processes by which information and meaning is transferred from a sender to a receiver. Communication is the primary means by which the organization coordinates the efforts of its members.

Communication is fundamental to other topics covered in the book

The cognitive and emotional processes that underlie models of job satisfaction, stress, motivation, trust, justice, moral development, learning and decision making assume the capability to process, interpret, and respond to verbal and nonverbal messages provided by others

Teams can‘t function if the members are unable to communicate effectively. An individual‘s and team‘s ability to use power effectively or to exhibit leadership is rooted in strong communication skills, and the ability to leverage communication networks

Organizational structure and culture reflect both formal and informal information flows with the organization

The Communication Process 1.

The communication process involves the steps needed to convey a message from one entity to another.

It begins with a sender having an idea or concept that needs to be communicated.

Senders must translate (encode) their ideas into a message, which in turn is expressed through an appropriate channel.

Receivers begin with the sender‘s expressed message that then has to be processed and interpreted (decoded) so that the true meaning is known.

The communication is successful when senders and receivers are able to accurately exchange information and meaning.

36.

WHAT DOES IT MEAN TO BE A GOOD COMMUNICATOR?

Face-to-Face Communication 1.

Face-to-face communication refers to exchange of information and meaning when one or more individuals are physically present, and where communication occurs without the aid of any mediating technology

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Verbal Communication refers to a form of communication in which messages are sent and received using written and spoken language.

Nonverbal Communication refers to any form of information exchange that doesn‘t involve spoken or written words

OB Assessments: Are You an Active Listener? The assessment at the end of the chapter can be a real ―eye-opener‖ for students who are required to work in teams. Scoring instructions for three active listening dimensions, sensing, evaluating, and responding, are presented at the end of this document. Assume that most students believe they are good listeners in a face-to-face context. What can be revealing is when they see how others, who interact and communicate with them, fill out the survey on their behalf – then compare SELF versus OTHER scores. Why might discrepancies in perception exist? Ask students to think about listening skills generally, and whether people these days have more or less of these skills – and why this might be? Have then think why listening is so important for teamwork, but other topics covered in the book. What are the benefits and costs of high and low listening skills? Again, the scoring instructions for this assessment are located at the end of this document. B.

Computer-Mediated Communication 1.

Computer-mediated communication refers to exchange of information and meaning using an electronic, digital medium. a.

Web 2.0. Describes websites and applications through which users actively interact, create, collaborate, and communicate with each other. Social networking tools (based on Web 2.0 technology) have found their way into many workplaces, allowing large numbers of users (across organizational levels and geographically dispersed units) to actively interact, create, collaborate, and communicate.

Email (electronic mail). A popular method of exchanging written digital messages from an author to one or more recipients.

Videoconferencing. A communication medium that permits real-time, live interaction and discussion between remote individuals or groups via satellite or Internet.

Wikis. A highly flexible Web 2.0 application that allows people to quickly exchange verbal information, and collaboratively solve, problems, learn, manage projects, and create knowledge

Social Network Applications a.

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b. c. C.

Achievers Connections

The Communication Processes: Potential Issues 1.

Computer Competence. The ability of communicators to encode and interpret messages. Do senders and receivers have the ability to effectively encode and decode messages, and do they have the emotional intelligence to respond appropriately?

Noise. Disturbing or distracting stimuli that block or interfere with the transmission of a message.

Information Richness. The amount and depth of the information transmitted in a message. When messages are deficient in their information quality the likelihood that the intended meaning will be received is reduced.

OB on Screen: A Beautiful Day in the Neighbourhood. At the core of this heartwarming story lie some valuable lessons about communication. Notice how skillfully Fred uses his tone of voice, clear pronunciation, simple words, and a carefully crafted (slow) pace to send a very specific message to his audience, who are primarily children aged two to five years old. Note that it‘s not just what Fred says, but how the message is delivered. As we learn in this chapter, being a good communicator takes a lot of skill. Think how much more difficult it is to effectively communicate with children, especially when dealing with emotionally laden topics. To support messages about difficult topics, such as feeling sad or lonely, Fred frequently uses puppets, stories, and skits. The invitation to Lloyd to quietly self-reflect amid the noise of the city is a technique, but it is also reminder to block out the distractions of life and take more time to listen—to others and to ourselves. BONUS OB on Screen: Arrival. The clip begins around the 1:05:25 mark of the film, continuing until about the 1:09:25 mark. The scene depicts a team of military personnel and scientists charged with the task of trying to understand an alien language. The team, which is located in Montana, is in contact with teams in 11 other locations across the globe where aliens have also touched down. Everyone wants to know what the aliens are up to. The stakes are high because it‘s clear that the aliens possess advanced technology and their intentions might not be good. Dr. Louise Banks, an expert linguist, asks what the aliens‘ intensions are, and one responds with a symbol that Dr. Banks interprets as ―offer weapon.‖ A major theme running throughout the film concerns the challenges of extracting meaning from rich displays of symbols that are both complex and novel. Engineers and scientists, as well as other technical personnel desperately collaborate to try and decode the messages being sent by the aliens. The film also demonstrates how fragile the communication process can be and the potential consequences when communication fails. We see the communication challenges within teams, especially between people who see the world in very different ways (e.g., scientists viewing an encounter with alien life as a chance to

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learn more versus military personnel who fear this encounter and prepare to attack). We also see communication challenges between teams. As the tension mounts, disagreements among the teams begin to surface, and the different teams stop communicating with one another. However, because the aliens are communicating with each other, it‘s clear to all that an action taken by one team has consequences to all the teams. For example, when it becomes evident that the Chinese team is preparing to attack the aliens, members of Weber‘s team argue for a preemptive strike against the aliens in anticipation of their potential retaliation. 4.

Gender Differences. Different ways men and women tend to process and interpret information and communicate with others. These differences can interfere with the communication process.

Privacy. Refers to a state in which individuals can express themselves freely without being observed, recorded, or disturbed by other, unauthorized individuals or groups. The issue of communication privacy is becoming more and more important as are the effects of privacy (or the lack thereof) on the communication process.

Summary: What Does It Mean to Be a Good Communicator? (Figure 10-3)

37.

COMMUNICATION NETWORKS

Formal Communication. 1.

Downward Communication (Vertical Channel). Information and meaning that flows from the top of the organization to the bottom of the vertical channel. a.

Directives, goals, plans, instructions conveyed from superiors to managers

Written policies, procedures and rules that originate at the top of the organization and used to coordinate and control the activities of people at lower levels.

Upward Communication (Vertical Channel). Information and meaning that flows from the bottom of the organization to the top of the vertical channel a.

When members at lower levels inform those at higher levels about relevant activities (e.g., solved work problems, suggestions for improvement, or how subordinates feel about their jobs).

Horizontal Communication (Lateral-Horizontal Channel). Information and meaning that flows among members or work groups, teams, or functional units who reside at the same level in the organization

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Information that travels through horizontal channels is used to coordinate effort, solve problems, resolve conflicts, and build teams.

Formal Networks 1.

All-Channel. A communication network in which any member can send and receive messages from any other

Circle. A communication network in which members send and receive messages from individuals who are immediately adjacent to them

Chain. A communication network in which information is passed from member to member, from one end of the chain to the other

Y. A communication network in which one member controls the flow of information between one set of members and another

Wheel. A communication network in which all communication between members is controlled by a single member

Informal Communication Networks 1.

Refers to the exchange of spontaneous information and emergent patterns of information flow under the control of individual members.

These networks tend to be rooted in personal friendships, physical proximity, and shared interests

Transmission is very fast

Often the informal communication network is used to elaborate, clarify, or help with the interpretation of formal communication. a.

Grapevine. The primary informal communication network within an organization

Rumours and Gossip. Rumours refer to messages that travel along the grapevine that lack evidence as their truth or validity. Gossip refers to rumours about other people.

38.

HOW IMPORTANT IS COMMUNICATION?

Relationship between supervisor feedback and job performance is positive but weak (Figure 10-5)

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Relationship between supervisor feedback and organizational commitment is strong and positive (Figure 10-5) 1.

39.

The relationship is complex. Performance feedback from a supervisor can have a strong positive effect on performance, providing the feedback is accepted by the subordinate as relevant and credible, providing feedback is combined with other performance-enhancing inducements (e.g., goal setting), and providing the subordinate has the level of knowledge, skills, abilities, and personality traits necessary for higher job performance.

Accurate and timely (helpful) downward communication by a supervisor, manager, or leader should enhance the work environment, and convey messages of genuine support and confidence—perhaps encouraging subordinates to share information, offer suggestions to solve problems, and participate in decision making. In turn, this should make it easier for employees to understand their role and to feel valued, appreciated, and emotionally connected with the work, the leader, and the organization.

APPLICATION: INTERVIEWING 1.

Face-to-face employment interviews are rife with verbal and nonverbal cues that signal to interviewers whether candidates are suitable and interested in the position, and the extent to which they will fit with the culture. a.

Perhaps most telling are the body language answers to the interviewers‘ questions.

At the same time, interviewees are using their exchange with interviewers to learn about the company and assess the fit

Given all of the issues that can interfere with effective communication, both interviewers and interviewees should be wary of inferences drawn from these brief exchanges.

Ways to increase the validity and reliability of interviews include keeping the focus job relevant and structured. a. b.

Behaviour description interviews Situational interviews.

DISCUSSION QUESTIONS 10.1

Due to the complex nature of the communication process, it is relatively easy to misinterpret verbal and nonverbal messages. Has this ever happened to you? Describe

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what took place and your reactions to the incident (i.e., briefly share the circumstances leading up to the event, the messages sent, your interpretation, and what happened next). Student answers will vary. This question has been designed to get students thinking about their own personal experiences. By asking them to consider the context for the communication (i.e., the circumstances), the intended or received message, and the consequences of the communication, students should be able to come up with brief anecdotal descriptions of actual communication experiences that can be shared and analyzed with respect to the communication process (Figure 10-1) and potential issues (Figure 10-3). 10.2

Do you trust body language? Why or why not? In your own life and interactions do you pay more attention to verbal or nonverbal communication? Student answers will vary, as this question has been designed to bring forward personal experiences and opinions. In terms of preferences, most students will likely say prefer both verbal and nonverbal but often have to work with verbal only due to the fact that so much of our day-to-day communication with others is mediated by some form of technology. It might be helpful to have students reflect on the material in Chapter 8 in terms of the foundations of trust, justice, and ethics. Ask students to reflect on whether it would be easier or harder to ―tell a lie‖ if they were limited to body language only.

10.3

In spite of the fact that computer-mediated communication has been shown to be inferior to face-to-face communication, why is the former becoming the preferred mode of communication in today‘s workplaces? Are these preferences driven by the values of the people involved, the nature of the work performed, or something else? Explain. Student views will vary. It is plausible that these preferences are driven by corporate and personal values, client needs, the nature of the work, as well as the broader needs of the organization to coordinate itself, speed up information flow and decision making, and keep up with a very dynamic and complex external environment. Computermediated communication within work settings have some very attractive features with great potential to motivate and engage organizational members (as discussed in this chapter). But there is a darker side too. Computer-mediated communication may put at risk to one‘s reputation, may impact how competent others perceive them, and might affect employees‘ standing within a social group. The result is that a technique designed to facilitate creativity, collaborative problem solving, and engagement, might inadvertently lead people to become more cautious, censor their messages, and engage in impression management (politically correct) behaviour.

10.4

Describe the communication process in a student team of which you‘ve been a member. Were there examples of ―noise‖ that detracted from the team members‘ ability to communicate with one another? What was the primary mode of communication among members? Did this mode of communication possess an appropriate level of information richness? Which network structure comes closest to describing the one that the team used to communicate? Was the level of centralization appropriate?

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Answers to this question will vary depending on the students‘ experiences in team situations (e.g., project groups). Try to have students focus on each of the issues described in Figure 10-3, and how these helped or hindered the communication processes within their project group. How did communication affect teamwork (more on this issue will be covered in Chapter 11)? With respect to network structure, have students work through and think about the different configurations described in Figure 10-4, and which one best described the information flow within their project groups. 10.5

Should the informal communication network of an organization (e.g., rumour mill, grapevine) be monitored and managed, and why might managers want to do this? How might information gleaned from the grapevine help or hinder some of the other topics we‘ve covered in the course? Why do you think information travels so fast through the grapevine, and what drives this? Student responses and reactions to this set of questions will vary with their experiences and opinions. Most managers would see the informal communication as a very valuable way of ―taking the pulse of the organization‖ and assessing how formal messages have been interpreted – and the reaction to these messages. To be sure, monitoring and managing the grapevine is a great way for managers to anticipate conflict and problems. On the other hand, I doubt too many people would like to have their informal communications monitored and analyzed. That act, in itself, sends a message. Ask students what that message might be? How would it affect their job performance, commitment, job satisfaction, motivation, or trust? One suggestion is that information travels so fast through informal channels because of its importance, with the potential to help or protect individuals (i.e., allows them time to prepare for bad news); self-serving and self-protective behaviour. Students may have other insights.

CASE: ZOOM Questions 1. Is it all Zoom and gloom? Going beyond the suggestions in Table 10-1, what are some other practical ways we can reduce feelings of fatigue during videoconferencing communication? Student answers will vary, and expect some very creative responses given that many of the students will have had had exposure to online learning. 2. Is it possible to build and sustain meaningful work relationships characterized by trust and commitment when co-workers or team members have a hard time communicating with one another or are socially isolated or geographically dispersed? How might technology like Zoom help or hinder this process?

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Although video conferencing tools like zoom has its shortcomings, at a very basic level it does serve to connect people –and offer interaction opportunities to those who might otherwise have not come in contact with each other. A fulsome answer to this question will rely on student‘s appreciation for the different forms of trust and the basis for trustworthiness (Chapter 8) and organizational commitment (Chapter 3). To form emotional bonds, coworkers will need to invest significant time in getting to know each other. It‘s a very unnatural thing to form emotional attachment to images on a screen, but it can work for some people providing the interactions are rooted in honesty, openness, and humor. For people who are geographically dispersed/isolated, videoconferencing tools offer a social life-line. A downside is that conflicts are harder to resolve because the non-verbal cues are not as rich when filtered through a digital medium. 3. Can the informal communication network within an organization, like ―the grapevine,‖ be sustained using applications like Zoom? As the functionality of these video-conferencing tools develop to mimic informal human interactions, then the answer is yes. For instance, we can see evidence of this ―informal life‖ by monitoring the chat function and the many side conversations that go on within a typical on-line class. However, in a formal zoom meeting there will be pressure to self-censor and restrain from gossiping or sharing rumors, hopes and fears with coworkers. The one thing we can count on is that humans are highly adaptable. Although maintaining an informal network is harder, it will likely find a way. Expect coworkers to not rely solely on video-conferencing, but use other formats such as phone for informal communication. BONUS CASE: TD CANADA TRUST26 TD Bank Group is a world-class company that understands the importance of communication. The company, headquartered in Toronto, represents a number of financial subsidiaries, including retail banking in both Canada and the United States. With well over a trillion dollars in assets and 25 million customers worldwide, TD Bank Group has now been recognized as one the top 10 banks in North America. It also ranks among the world‘s leading online financial services firms, with approximately 11.5 million online and mobile users. Not surprisingly, it has also emerged as a leader in customer service. In Canada, the company has been consistently ranked by J.D. Power as having the highest customer satisfaction among the Big Five domestic retail banks.

Sources: TD Bank Corporate website, http://www.td.com/about-tdbfg/corporate-information/tds-guidingprinciples/guidingprinciples.jsp, accessed June 18, 2014; William Keenan Jr. ―‗Wow Moments‘ Helps TD Canada Trust Nurture Employee Engagement, Grow." Engagement Strategies Magazine, Winter 2010, http://www.engagementstrategiesonline.com/Wow-Moments-Helps-TD-Canada-Trust-Nurture-Employee-EngagementGrowth/, accessed May 22, 2014; W. Arnott, ―Becoming a Social Organization: TD Group (2010 to 2014),‖ presentation delivered at the Work and Workplaces of the Future: Implications for Western Canada conference, The Conference Board of Canada, Calgary, May 5, 2014.

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TD Canada Trust‘s reputation as a high-performing, customer service–driven organization has evolved over time. The retail bank we see today has its roots in a critical merger that occurred back in 2000 between Toronto-Dominion Bank and Canada Trust. Tim Hockey, a senior manager during that period, recalled, ―the complementary element was that TD had a strong commercial banking presence and sales culture but its service culture wasn‘t as strong. Canada Trust had a very strong service culture, but it had no business banking presence to speak of, and its sales culture (as is usual with service organizations) was probably a little less strong.‖ Today, the challenge for the bank has been to develop and sustain its strong sales and service culture among a large, increasingly diverse, technology-savvy, and geographically dispersed workforce. To facilitate the bank‘s ability to connect its various stakeholders, TD Canada Trust has increasingly been focused on becoming a social organization. To actively engage and communicate with its customers, the company has established an active presence on major social media and networking sites such as Facebook, Twitter, and YouTube. One of the best illustrations of this innovation has been the introduction of WOW Moments, an internal social networking program that gives employees the opportunity to post stories about the things they have observed others doing, or done themselves, to build and support the bank‘s service and sales culture. WOW Moments was developed for TD Canada Trust by TemboSocial, a Toronto-based provider of interactive engagement and community-building software. The actual program is based on The Hive, a social networking system that allows anyone within the bank to post a story related to customer experience which other employees, managers, and even top executives are then able and encouraged to comment on. ―Sharing stories with one another is a fantastic way to communicate clearly what we all need to be focused on,‖ says Karey Stanley, a senior manager at the bank. Since the onset of this program, TD Canada Trust employees have sent more than 300,000 WOW Moments messages to each other. Once the stories have been checked for relevance and appropriateness, they are tagged with a corporate value and stored in a searchable database that allows users to browse and search stories by value, keyword, region, or person. ―One of the great things about the stories that we‘ve seen thus far is that very often they‘re not just by one person about one other person, they‘re about two or three other people,‖ Stanley says. ―For every WOW Moment created in the system, there are 1.4 recipients. So it really touches many people within the organization.‖ To build and sustain a consistent service and sales culture across 1,150 branches and support offices, TD Canada Trust faced the challenge of aligning the behaviours of thousands of employees with a set of corporate values (e.g., ―legendary customer experiences,‖ ―operate with excellence‖). To accomplish this goal, the bank has had to develop a sophisticated communication network capable of handling the exchange of technical and social information within the organization, and capable of connecting meaningfully with customers. The WOW Moments program featured in the chapter-opening profile is an example of how the bank has harnessed the power of computer-mediated communication to support its strategic goals. By collecting and maintaining a searchable archive of WOW Moments (i.e., a history of personal anecdotes and stories), the company has a homegrown knowledge base tailored to its corporate values. Not only does this resource promote learning within the organization (e.g.,

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training materials can be developed around the client interactions; new employees can look up how others handled similar situations; featured WOW moments communicate to new employees how they need to perform their day-to-day activities), but the intrinsic appeal of Web 2.0 technology provides a powerful source of feedback and rewards for those employees who are recognized by their peers and managers. In addition to facilitating communication processes within the bank, these tools have important management implications. The Hive—the program that hosts the social media applications and on which WOW Moments is based—is fully integrated with the firm‘s human resources database, so that basic details about the individuals being recognized are automatically incorporated, and so that stories can be linked to employees‘ personnel files. It also provides some very powerful metrics so that, among other things, management can see how many employees are posting stories, how many have stories posted about them, and how many are just reading the stories. High performers and those who epitomize the company‘s core values are easily spotted, and will likely, over time, be groomed and prepared for new roles and increased responsibilities within the bank. However, for most employees, the virtues of social media applications might be offset to some degree by the reality that this technology allows one‘s messages and posts to potentially reach everyone (bottom to top) within the organization. Poorly crafted messages or messages that might (accidentally or inadvertently) reflect negatively on one‘s competence, loyalty, or reputation are as easily distributed and archived as WOW Moments. A senior manager at the bank said it best: ―Knowing that one‘s peers, managers, and other organizational members might see their contributions does predispose people to think carefully before sending messages or participating in social applications.‖ Questions 1.

Might there be a problem if employees thought and acted with elevated concerns about the personal consequences and risks before sending messages? Explain. Anxiety and fear will lead to very cautious and guarded responses to avoid or minimize the likelihood of incurring the potential negative outcomes associated with public, archived, and searchable communication errors (recall the concept of negative reinforcement in Chapter 9). When you think about it, exceptional customer service often means doing little extras, showing flexibility with rules and procedures to deal with unique customer circumstances. Students should see that when employees are focused on ―staying safe‖ they will be less likely to take chances and engage in the kind of discretionary acts or contribute/share messages that might put them at risk.

Is full, open, and candid communication desirable from the bank‘s perspective? Why or why not? Should the bank control what and how messages are sent within the organization (and externally to customers)? Explain. Is there a darker side to this issue? Students should recognize the dilemma. On the one hand, open and candid communication can be desirable, appreciated by both internal staff (for related

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discussion, see Chapters 5 on job satisfaction and Chapter 8 on trust, justice, and ethics), and external customers and clients. On the other hand, open and candid communication introduces risk for managers and the bank generally speaking with respect to a control. In some cases, losing control of the messaging may result in lost business (e.g., a mortgage specialist candidly advising her client not to buy the bank‘s insurance because it is too expensive relative to other banks – good customer service but undermines the bank‘s mission to sell its products and services) or lost reputation (e.g., an employee openly talks about the bank‘s management practices on facebook). Students should be encouraged to think of ways to resolve this dilemma. There might be a tendency to emphasize control. However, students should see that controls create a situation where communication and information exchange feels censored and carefully managed; in turn, reducing spontaneity, creativity, and autonomy. Reasonable controls combined with training consistent with core values of the organization might work well. 3.

Do you like how social-media applications such as Wow Moments are integrated with the human resources information system? Do you have any concerns? Explain. Student answers will vary. By integrating with the formal management system, those observable behaviours that align well with company goals can be measured, archived, and rewarded. Tracking value-congruent behaviours can form the basis for selection tools (e.g., behavioural interviews featured at the end of the chapter), performance appraisal tools (e.g. BARS in Chapter 2), compensation/bonuses, and training scenarios for new recruits or employees in need of development. However, formalizing the WOW Moments increases social pressure on employees to conform to group and cultural norms, and raises the personal stakes for the employee if mistakes are made. One could be left with a feeling that ―everyone is watching me‖ which could lead to withdrawal behaviours.

Is there any value in incorporating nonverbal content into these computer-mediated communication processes? Explain. Yes. Nonverbal content added to verbal messaging will provide a richer, more nuanced communication, especially when dealing with complex interpersonal exchanges that characterize customer service and sales activities. As technology develops it will no doubt be possible to capture more of the body language that accompanies verbal messaging within Web 2.0 social-media applications. Many programs have these features already.

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BONUS CASE: MICROSOFT27 Founded in 1975, Microsoft gained prominence by dominating the world‘s personal computer operating systems market, first with MS-DOS, and later, with Windows. With Microsoft Office, the company also came to dominate the world‘s office productivity applications market. Because of these products in particular, Microsoft experienced phenomenal success and growth during its first two-and-a-half decades. Since then, however, companies like Google, Facebook, and Apple have surpassed Microsoft in the development of innovative software, social media, and other tech products. By 2012, it was clear that Microsoft‘s standing in the tech industry had eroded. Apple‘s iPhone, which was only five years old at the time, had higher sales than absolutely everything Microsoft had to offer. What exactly went wrong? Although Microsoft hired the best and brightest, the company had adopted management practices that unintentionally hindered the type of teamwork needed to bring innovative products to market. The best example is the company‘s stack ranking system, which required managers to put a specific percentage of their subordinates in ―top‖, ―good‖, ―average‖, ―below average‖, and ―poor‖ performing categories. Even if a manager had a team of 10 superstars, two would get great reviews, seven would get mediocre reviews, and one would get a horrible review (and would likely be looking for a new job the next day). It doesn‘t take too much of an imagination to understand how this system promoted unhealthy competition among teammates. Rather than sharing an idea with a teammate to move a project forward, employees would wait until right before a performance evaluation and then tell their manager to make sure they got credit for the idea. Employees did whatever they could to escape being on the bottom. They avoided working on a team with other really good employees, they sabotaged their teammates‘ efforts, and they spent a lot of time schmoozing managers who would be rating them. Microsoft realized that to collaborate more effectively employees would need to improve the way they communicated with one another. To that end, abandoning the stack ranking system was a no-brainer. Importantly, Microsoft also changed the focus of the feedback given to employees about their job performance. For example, employees began receiving feedback on how well they use ideas and information from others, and also how well they contribute to others‘ success and the success of their team and organization. In essence, Microsoft believed that a key to improving its competitive position was to refocus the mindset of their employees in a way that promotes sharing of information, knowledge, and expertise throughout the company. In 2013, there were several product groups at Microsoft that not only operated in silos, but also viewed each other as competitors for resources and bonuses. An engineer on a product team in one division might discover something that could be useful in another division‘s product, but there was no incentive for the engineer to share what was learned with the other product team. To address this problem, and to promote teamwork across the organization, Microsoft replaced the product groups with four broad divisions based on functions that absolutely need to 27

Sources: T. Halvorson, K. Eichenwald. ―Microsoft‘s Lost Decade,‖ Vanity Fair, July 24, 2012, http://www.vanityfair.com/news/business/2012/08/microsoft-lost-mojo-steve-ballmer; J. Warnick, ―Productivity by Design,‖ Microsoft/Story Labs, https://news.microsoft.com/stories/b16/; and T. Warren, ―Microsoft Axes its Controversial EmployeeRanking System,‖ The Verge, November 12, 2013, http://www.theverge.com/2013/11/12/5094864/microsoft-kills-stackranking-internal-structure.

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collaborate to get anything done. For example, a team responsible for developing a new Xbox would now likely include engineers from the devices and studio engineering division, the operating systems division, the applications division, and the cloud division. To support Microsoft‘s new structure and emphasis on teamwork, the company redesigned two buildings at corporate headquarters. The corridors and private offices that once filled these buildings were completely torn out. Now the buildings are filled with large open shared rooms called neighborhoods, which teams can customize using stipends provided by the company. There are smaller ―focus‖ rooms and cozy alcoves that employees can use when privacy is needed, but there are no private offices. The buildings are light and airy, and are decorated with art and interesting objects that encourage employees to walk around and to meet and communicate. Rather than e-mailing, employees are encouraged to engage with each other in person and to connect in ways that are more spontaneous and rich. Employees who may have never met face-to-face may run into each other at one of the coffee bars and discover they‘re working on similar projects. Of course, the redesigned buildings may present the company and its employees with certain challenges. For example, some employees likely have a strong preference for privacy, or may be bothered by the distractions and interruptions from teammates. As another example, limited private space may make it less likely that employees speak up and challenge others on the team for fear that conflict will be exposed. Finally, because employees play an important role in the Page 400design and development of their neighborhoods, they may not be as open to changing teams as projects evolve and the needs of the company change. Questions: 1.

Is communication with other organizational members a necessary ingredient for creativity and innovation? If so, explain. The main idea here is for students to discover that creativity and innovation arise, for instance, when people are able to look at problems and opportunities in new ways, see connections between ideas/things that weren‘t obvious before, come up with new ideas and approaches that captivate the attention of others. Some students might disagree and emphasize the role of individual differences, in essence, arguing that the main driver of creatively and innovation are those individuals who have a lot of knowledge about the subject matter and/or who exhibit high rather than low levels of one or more of the abilities described in Chapter 4. Other students might agree and argue that creativity and innovation is fostered when smart, knowledgeable, and passionate individuals share information, experiences, and insights with one another - and especially if these individuals are sharing and expressing diverse points of view. In this sense, effective communication doesn‘t cause creative and innovation, but rather creates conditions where people are able to come up with new insights and ways of doing things.

From a communications perspective (see Figure 10-3), why did Microsoft‘s initial approach to managing performance (e.g., stack ranking system) fail to encourage high job performance and organizational commitment?

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We can see from Figure 10-5 that the manner in which supervisors provide formal performance feedback to employees (i.e., top-down communication) makes a difference in terms of their future behavior and the attachments they form with the organization. Encourage students to explain why the stack ranking system did more to create anxiety than motivation, and how these effects can be explained by the communication process model described in Figure 10-3. 3.

What are the advantages and disadvantages of the building redesign with respect to communication? What can be done to mitigate potential disadvantages? The main advantage of the building redesign is that it enhances information richness. When communicating face to face, employees can read body language for signs of misunderstanding and the need to elaborate on points. Accordingly, potential misunderstandings may be reduced. However, given that informal meeting may be held in locations with others around, and with other distractions, there may be noise that make it difficult for sent messages to be received. Communicators may also be less than forthcoming in face to face meetings for fear of sparking conflict with others around. Finally, some individuals may find it more difficult to communicate and interact in a face-to-face setting. These individuals may strongly prefer time to plan what they might say to ensure that their messages are received as intended. Microsoft could deal with these issues by ensuring there are spaces available for private meetings and training for employees who are less comfortable communicating face to face.

EXERCISE: COMMUNICATING WITHOUT WORDS This exercise builds upon the classic party game, ―Charades.‖ The emphasis is to demonstrate how hard it can be to manage nonverbal communication. It should help to improve students‘ nonverbal skills by allowing them to practice. There are different levels of this exercise. If time is an issue, simply run through the first 5 steps. Shuffle a deck of playing cards and then give each student a single card. Students are instructed to keep their card secret, and are then left to organize themselves in to suits (hearts, clubs, diamonds, spades) using nonverbal communication only. If the instructor has more time, then once the students have organized themselves into suits break them into same-suit groups of four. Run steps 6-9 in these small groups. This is where the students are given a work or phrase (on their initial card) and then required to act it out using nonverbal communication. Discussion can focus on several questions (Step 10) and why developing nonverbal skills might be important for success at work.

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OB ASSESSMENT: ARE YOU AN ACTIVE LISTENER?28 Scoring Instructions: 1.

Use the scoring key below for the statements: 1, 2, 3, 5, 6, 8, 9, 10, and 12 Rarely/never = 1; Seldom = 2; Sometimes = 3; Often = 4; Almost always = 5

Use the reverse-keyed scoring key for the statements: 4, 7, and 11 Rarely/never = 5; Seldom = 4; Sometimes = 3; Often = 2; Almost always = 1

The next step is to calculate your scores on the three listening dimensions: Sensing (add your responses to items 1, 4, 7 and 10); Evaluating (add your responses to items 2, 5, 8, and 11); and Responding (add your response to items 3, 6, 9, and 12). Finally, you can compute an overall score for Active Listening by adding up all three dimension scores. Active Listening Dimension

Calculation

Sensing

+ (1)

+ (4)

+ (7)

Your Score = (10)

Evaluating

+ + + = (2) (5) (8) (11)

Responding

+ + + = (3) (6) (9) (12)

Active listening total

Add up all dimension scores =

Interpreting Your Scores 1.

Sensing: Sensing is the process of receiving signals from the sender and paying attention to them. Active listeners improve sensing in three ways. They postpone evaluation by not forming an opinion until the speaker has finished, avoid interrupting the speaker‘s conversation, and remain motivated to listen to the speaker. Evaluating: This dimension of active listening includes understanding the message meaning, evaluating the message, and remembering the message. To improve their evaluation of the conversation, active listeners empathize with the speaker—they try to understand and be sensitive to the speaker‘s feelings, thoughts, and situation. Evaluation also improves by organizing the speaker‘s ideas during the communication episode. Responding: Responding, the third dimension of active listening, is feedback to the sender, which motivates and directs the speaker‘s communication. Active listeners show interest through nonverbal cues (eye contact, nodding, symbiotic facial

Source: Steven McShane, Canadian Organizational Behaviour, Ninth Edition, pp. 242–3. Reprinted with permission of McGraw-Hill Education.

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expression) and by sending back channel signals (e.g., ―I see‖). They also clarify the message, such as by summarizing or rephrasing the speaker‘s ideas at appropriate breaks (―So you‘re saying that . . . ?‖). Norms. Scores on the three Active Listening dimensions range from 4 to 20. The overall score ranges from 12 to 60. Norms vary from one group to the next. The following table shows norms from a sample of 70 MBA students in two countries (Australia and Singapore). For example, the top 10 percentile for Sensing is 17, indicating that 10 percent of people score 17 or above and 90 percent score below 17 on this dimension. Keep in mind that these scores represent self-perceptions. Evaluations from others (such as through 360-degree feedback) may provide a more accurate estimate of your active listening on one or more dimensions, particularly the responding dimension which is visible to others. Active Listening Norms Percentile (% with scores at or below this number) Average score

Sensing Score

Evaluating Score

Responding Score

Total Score

14.5

14.4

16.7

45.6

Top 10 percentile

Top 25th percentile

Median (50th percentile)

Bottom 25th percentile

Bottom 10 percentile

Chapter 11: Team Characteristics and Processes

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW Teams – two or more people who work interdependently to accomplish some task related purpose– are an important part of organizational life. This chapter describes the characteristics of teams in terms of team types, interdependence, and composition. In addition to team structure, the chapter also explores what happens within teams - team processes. Some processes are directly related to core team tasks, while other processes integrate or support accomplishment of core tasks. A number of states underlying team process are reviewed, including cohesion, potency, mental models, and transactive memory. Relationships between both team structure (task interdependence) and teamwork processes and our two focal outcomes (performance and commitment) are described. Finally, the practical issue of how to compensate employees who work in teams is considered. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8

What are the five general team types and their defining competencies? What are the three general types of team interdependence? What factors are involved in team composition? What are the types of team diversity and how do they influence team functioning? What are task work and teamwork processes, and what are some examples of team activities that fall into these process categories? What are team states, and what are some examples of the states that fall into this process category? How do team characteristics and processes affect team performance and team commitment? What steps can organizations take to improve team processes?

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CHAPTER OUTLINE 40.

TEAM CHARACTERISTICS

A team consists of two or more people who work interdependently over some time period to accomplish common goals related to some task-oriented purpose

Teams differ from groups in two primary ways 1.

Interactions in teams involve greater dependence than interactions in groups

Interactions within teams occurs with a specific task-related purpose in mind

Teams are widely used in organizations today

41.

WHAT CHARACTERISTICS CAN BE USED TO DESCRIBE TEAMS?

Team Types (Table 11-1) 1.

Work teams – produce goods or services

Management teams – integrate activities of subunits across business functions

Parallel teams – provide recommendations and resolve issues

Project teams – produce a one-time output (product, service, plan, design, etc.)

Action teams – perform complex tasks that are short in duration and take place in highly visible or challenging circumstances

Note that teams often fit into more than one category

Try This! If students are working in teams, it is interesting to ask them to categorize their teams using the taxonomy. Because student teams often complete a series of discrete assignments, many will suggest that their teams are project teams. However, because they work together for a series of projects over an extended time period— maybe a semester—others will suggest that their teams are work teams. This can lead to a good discussion about the complexity of teams, and that perhaps the most important aspect of the team taxonomy is that it helps to clarify the underlying characteristics. This discussion can provide a good segue to the topics that follow. B.

Variations Within Team Types One general way that teams vary is the degree to which they have autonomy or are selfmanaged. There is no single best level of self-management. Rather the appropriate level of self-management depends on a variety of factors.

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Virtual teams – are teams in which members are geographically dispersed, and interdependent activity occurs through electronic communications

Team Development Stages a.

Standard stages of team development i. Forming ii. Storming iii. Norming iv. Performing v. Adjourning

OB on Screen: Avengers: Infinity War. The clip begins around the 1:21:53 mark of the film, continuing until about the 1:24:15 mark. The scene depicts how two groups of superheros come together to form a larger team that is trying to defeat an all-powerful villain named Thanos. After watching the clip you can ask students if there‘s any evidence that the team develops through the stages described in the book. Students should point out that forming is evident in so far as members are trying to figure each other out, what they need to do, and who‘s in charge. Storming is also evident in the back and forth banter and disagreements about who‘s in charge. The clip also shows there is pressure to move towards norming, but the clip ends before there is complete agreement about how to move forward. You can then ask what Dr. Strange‘s assertion that the group‘s chances of success are extremely slim will likely do to the team‘s rate of development. After a brief discussion, students should realize that the importance of the goal of defeating Thanos, and the difficulty of accomplishing it, will require them to immediately set aside self-interests and begin to work together. You can then ask students to give other examples from their experiences of how time and other pressures influence the team development process. If they have difficulty coming up with examples, you can ask them about student teams they‘ve been on. Their responses often provide a good segue to discuss the concept of punctuated equilibrium. BONUS OB on Screen: Inception. The clip referenced begins around the 51:10 mark of the film, continuing until about the 1:01:18 mark. The clip shows the members of the team planning for an inception (planting an idea in someone‘s mind during a dream within a dream) and discussing their roles and how they relate to each other and the overall success of the mission. The discussion conveys a strong sense that if anyone makes a mistake, the team is doomed to failure. A good opening for discussion would be to have students identify the type of team in the clip. Students should be able to identify the team as an action team. If you ask why, they should explain that this team performs a very complex task in a very challenging circumstance. A second topic for discussion can focus on the stage of this team‘s development depicted in the clip. Students will likely respond by saying the scene depicts early stages of group life—most notably forming. There appears to be

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some norming, but not much storming. The reason why the team may skip this stage may relate to the fact that the members have pre-defined roles—they were brought onto the team to do specific things. Students may also note that the punctuated equilibrium model might not apply because of the importance of the task. The members should be engaged right from the start, they don‘t need a calendar midpoint to signal that it‘s time to start making progress. A third topic for discussion can focus on the type of task and interdependence that characterizes this team and the work it does. Students should be able to identify the task as one that is conjunctive (the team will be as strong as a weakest link). The team also has high levels of interdependence. The members clear depend on one another, and they appear to share a common goal and the outcomes of achieving (or not achieving) the goal. BONUS OB on Screen: Spotlight. The clip referenced begins around the 0:04:34 mark of the film, continuing until about the 0:08:40 mark. The clip depicts the boundary spanning activities of Spotlight, a team of investigative reporters at the Boston Globe. Before watching the clip, you can ask students what it takes for a team to be effective. If you haven‘t introduced the topic of team processes yet, most students will volunteer answers having to do with characteristics of the team members, a common purpose, leadership, and so forth. If students don‘t mention team processes, you can ask them what teams do to be effective. If you ask the question this way, they will identify general team process concepts: teamwork, cooperation, communication, managing conflict, and so forth. They will generally miss boundary-spanning types of things. Then ask them to watch the clip of the Spotlight team and see if they notice anything else. After they watch the film, students will point out that the team members were communicating with each other and trying to figure out what the new editor was going to be like (the previous one had retired). Focus the students on two other activities: (a) the team member who is on the phone trying to gather facts for a story from someone he apparently knew, and (b) the team member having lunch with the newspaper editor. You can ask students what these two activities have in common. The answer is that both involve interaction with individuals outside the team. Note that this is called boundary spanning. You can then ask how these activities differ from each other. The former involves getting help from someone outside the team so that the team can do its job. This is called task coordinator activity. The latter involves interactions with someone higher in the organization‘s hierarchy who could provide or withhold support and resources from the team. This is called an ambassador activity. You can ask them what else investigative reporters do that might result in interactions with others outside the team. As mentioned at the lunch meeting, the members of Spotlight ―troll‖ the environment and others for information regarding potential stories. This is referred to as scout activity. You can ask students for examples of team experiences where team success depended on different types of boundary spanning. You can wrap up by noting that activities with others outside the team—boundary spanning—are often more important than activities and processes that occur within the team.

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BONUS OB on Screen: Avengers. The clip referenced begins around the 1:39:10 mark of the film, continuing until about the 1:42:10 mark. The clip depicts a conversation between Iron Man Tony Starks and Loki, an exiled god who has a plan to subjugate earth. Starks puts himself in a situation where he is completely defenseless against Loki in order to convey that he is confident in his team of super heros (The Avengers). He admits to Loki that although it has taken his team a while to ―get traction‖, they will come together to defeat him. One topic for class discussion could center on the idea of synergy. You could begin by asking students why synergy is necessary. The Avengers are up against an insurmountable force—Loki is not only extremely powerful himself, but he is receiving help from a race of aliens who wish to take over the Galaxy. The Avengers clearly need to become more than the sum of the parts if they want to accomplish this feat. The conversation can then turn to how the Avengers can achieve synergy. One part of the solution involves leveraging the strengths of each of the individual team members. Starks mentions these strengths in the conversation. The other element is getting the team members to work with each other so that process gain can occur. Students should be able see that the motivation for working together is the common goal of defeating Loki and saving Earth. b.

Not all teams go through the same stages in the same order i.

Punctuated equilibrium (Figure 11-2) – Patterns of behaviour develop, and are continued because of inertia until a process revision takes place, leading the team to higher levels of performance.

Team Interdependence 1.

Task interdependence – refers to the degree to which team members interact with and rely on other team members for the information, materials, and resources needed to accomplish work for the team (Figure 11-3) a.

Pooled interdependence – group members complete their work assignments independently, and then this work is simply ―piled up‖ to represent the groups output

Sequential interdependence – different tasks are done in a prescribed order, and the group is structured such that the members specialize in these tasks

Reciprocal interdependence – members are specialized to perform specific tasks, and members interact with a subset of other members to complete the team‘s work

Comprehensive interdependence – each member has a great deal of discretion in terms of what they do and with whom they interact in the course of collaborating on the team‘s product

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OB Assessments: Interdependence. This assessment can be an eye-opener for students who are required to work in teams. While most professors expect students to work on assignment as a group together, many student teams function as small groups of individual contributors—members split up the work and then stick it together right before the assignment is due. Ask students to characterize both structures in terms of task interdependence. After this, ask students about reasons why different teams choose different strategies. What are the benefits and costs of high task interdependence? 2.

Goal Interdependence a.

Outcome Interdependence a.

Goal interdependence exists when team members have a shared vision of the team‘s goal and align their individual goals with that vision as a result

Outcome interdependence exists when team members share in the rewards that the team earns

Team Composition (see Figure 11.4) 1.

Member Roles a.

Role – the behaviours a person is expected to display in a given context i.

Leader-staff roles – leader makes decisions for the team and provides direction and control over members who perform assigned tasks

ii.

Team task roles refer to behaviours that directly facilitate the accomplishment of team tasks

iii.

Team building roles refer to behaviours that influence the quality of the team‘s social climate

iv.

Individualistic roles reflect behaviours that benefit the individual at the expense of the team

Member Ability a.

In disjunctive tasks, the member who possesses the highest level of ability relevant to the task will have the most influence on the effectiveness of the team

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In conjunctive tasks, the team‘s performance depends on the ability of the ―weakest link‖

In additive tasks, the contributions from every member of the team add up to determine team performance

Member Personality a.

Many personality characteristics affect team performance i. ii. iii.

Conscientiousness Agreeableness Extraversion

Member Diversity a.

The extent to which team members differ from one another

Two different theories related to diversity in teams i. ii.

Diversity is valuable because different people have different approaches to solving problems Diversity is detrimental because people are more attracted to those who are like them than they are to those who are not like them

Must consider both type of diversity and length of time team has known each other to understand real impact of diversity i.

Surface-level diversity – diversity based on observable attributes. Can leads to problems initially because people may have difficulty communicating with others who are perceived to be different, however, these problems tend to fade over time as members gain experience with one another.

ii.

Deep-level diversity – diversity based on attributes that are inferred with experience. Differences with respect to attitudes, values, and personality may not cause problems initially, but it they can lead to problems over time

OB Internationally. Increasingly, companies are using multicultural teams that are composed of members from different cultural backgrounds. In turn, members are often differ from one another in terms of their attitudes, values, ideas, goals, and behaviours. Cultural diversity also allows teams to serve a diverse customer base that may differ in terms of culture and nationality. Unfortunately, the attributes that give multicultural teams these advantages also give them disadvantages. As an example, people from

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different cultures communicate differently, which can lead to misunderstandings. For instance, to people in Canada and the United States, the phrase ―to table something‖ means to put it off until later, whereas to people in some European countries, it means to discuss it right now. There are differences in the directness of communications as well. Westerners tend to be very direct and to the point, but to people in other countries, such as Japan, this directness may cause embarrassment and a sense of disrespect. There are also cultural differences in decision-making processes. In some cultures, decisions can be made only after careful consideration and reconsideration of all relevant issues, which is much different from the style in other cultures, such as Canada, where decisions are made rather quickly and with less analysis. Although these differences might seem trivial, they often lead to misunderstandings that reduce the willingness of team members to cooperate. 5.

Team Size a.

Larger teams are good for management and project teams, but not for teams engaged in production tasks

Summary: What Characteristics Can Be Used to Describe Teams? (Figure 11-5)

42.

TEAM PROCESSES

Team process is a term that reflects the different types of communication, activities, and interactions that occur within teams that contribute to their ultimate end goals

43.

WHY ARE SOME TEAMS MORE THAN THE SUM OF THEIR PARTS?

Process gain – similar to ―synergy‖, the term refers to the fact that some teams perform at a level which is higher than the level of their combined individual members

Process loss is the opposite of process gain – you get less from the team than you would expect, based on the team‘s individual members 1.

Coordination loss – when integrating team activities consumes more time and energy than the activity itself a.

Coordination loss is driven by production blocking – when team members have to wait on one another before they can do their part of the team task

Motivational loss – when team members don‘t work as hard as they could, due to the reduced accountability of being in the team a.

Motivation loss is driven by social loafing - where members exert less effort due to the presence of others

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Taskwork Processes – the activities of team members that relate directly to the accomplishment of tasks (Figure 11-6) 1.

Creative behaviour – activities focused on generating novel and useful ideas and solutions a.

Brainstorming i.

A creative process guided by four rules a.) Express all ideas that come to mind, no matter how strange b.) Go for quantity of ideas rather than quality c.) Don‘t criticize or evaluate the ideas of others d.) Build on the ideas of others

ii.

Brainstorming rarely works as well as individual idea generation a.) People tend to social loaf in groups b.) Members may be hesitant to express ideas that are not well developed c.) Production blocking occurs when members have to wait their turn to give ideas

Nominal Group Technique i. ii. iii. iv. v. vi.

Bring team together Have members of team write down their ideas Each member shares his or her ideas with the team After recording ideas, they are discussed for clarification Members rank order ideas individually Facilitator tabulates scores to get winning idea

Try This! To illustrate the limitations of brainstorming, split the class in half. Identify a brainstorming problem (e.g., how to encourage recycling on campus), and give one half of the class 10 minutes to brainstorm (assign a facilitator from the group to write the ideas on the board). When the group is finished, outline a modified nominal group procedure that will be used by the other group. Members write down as many ideas as they can, and after three minutes, they‘ll take turns sharing the non-redundant ideas with the facilitator who writes them down on the board until 7 minutes is up (NOTE: The other students in this group can also share their ideas with the class, but keep these ideas separated). Then count up the number of ideas each group unidentified in their allotted ten minutes. The nominal group will always generate more ideas. Class discussion can focus on why this happened. Students will recognize coordination loss, motivation loss, and self-censuring as the major issues. 2.

Decision Making

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In a team context, decision making requires that multiple members gather and consider ideas relevant to their specializations, then make recommendations to a team leader who is ultimately responsible for a final decision

Three factors account for team‘s ability to make effective decisions: i. ii. iii.

Decision informity – do members possess adequate information about their own task responsibilities? Staff validity – do members make good recommendations to the team leader? Hierarchical sensitivity – does the leader effectively weigh the ideas of the members?

Boundary Spanning a.

Activities with individuals and groups who are not part of the team.

Activities include: i.

Ambassador activities – communications intended to protect the team, persuade others to support the team, or obtain important resources for the team

ii.

Task coordinator activities – involve communications that are intended to coordinate task-related issues with people or groups in other functional areas

iii.

Scout activities – things that team members do to gain information about technology, competitors, or the broader marketplace

Teamwork Processes (Figure 11-7) 1.

Teamwork processes are the interpersonal activities that facilitate the accomplishment of the team‘s work, but are not directly related to task accomplishment

Transition Processes a.

Teamwork activities that focus on preparation for future work. Such activities can include mission analysis, strategy formulation, and goal specification. These processes can take place before the team begins to do taskwork, or between identifiable periods of taskwork (e.g., parts of a project).

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Action Processes a.

Action processes are important as taskwork is being completed, and can include things such as monitoring progress toward team goals and coordination

Interpersonal Processes a.

Interpersonal processes relate to the manner in which team members manage their relationships. They include processes such as motivating and confidence building, and conflict management i.

Types of team conflict a.) Relationship conflict – based on incompatibilities with respect to personal values or preferences, these almost always harm the team b.) Task conflict – based on disagreements about the team‘s task, these can be beneficial to team

Try This! Ask students to share an example of task conflict that occurred in one of their student teams. What exactly did the disagreement revolve around, and did the task conflict ultimately have a positive or negative effect on the group‘s performance? Then ask students to share an example of relationship conflict, so long as it involves a person or team that is not also in the class. Was that instance more detrimental to the team‘s effectiveness than the task conflict? Why exactly? E.

Team States 1.

Team states refer to the specific types of thoughts and feelings that coalesce in the minds of team members as a consequence of working together. Figure 11-8

Team states include: a.

Cohesion – the emotional attachment that bonds team members together i.

May lead to groupthink

ii.

To leverage benefits of cohesion, teams should: a.) Acknowledge that cohesion can be detrimental b.) Formally institute the role of devil‘s advocate

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Potency – the degree to which team members think that the team can be effective across a variety of situations and tasks i.

Strong potency has a strong positive impact on team performance

Mental Models – the level of common understanding among team members with regard to important aspects of the team and its task

Transactive Memory – refers to how specialized knowledge is distributed among members in a manner that results in an effective system of memory for the team

F. Summary: Why Are Some Teams More Than the Sum of Their Parts? (Figure 11-9) 44.

HOW IMPORTANT ARE TEAM CHARACTERISTICS AND PROCESSES?

Two aspects of team effectiveness

Team performance – may include metrics such as quantity and quality of goods or services produced, customer satisfaction, the effectiveness or accuracy of decisions, victories, completed reports, etc.

Team viability – the likelihood that the team can work together effectively into the future. Low viability implies less commitment to the team.

Relationship between task interdependence and team performance is moderately positive (Figure 11-10) 1.

Relationship is significantly stronger for teams involved in complex, knowledge work, rather than simple tasks

Relationship between task interdependence and team commitment is positive, but weak (Figure 11-10)

Teamwork processes have a moderate positive impact on team performance, especially for teams involved in complex knowledge work (Figure 11-11)

Teamwork processes have a strong positive effect on team commitment, especially for teams involved in complex knowledge work (Figure 11-11)

45.

APPLICATION: TRAINING TEAMS

Transportable Teamwork Competencies

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Organizations may try to help individual members gain individual competencies such as conflict resolution and communications skills, that are related to effective team processes

Cross-Training 1.

Organizations may train team members in the duties that are normally performed by their teammates. This helps people to learn how the jobs of the individuals on the team come together

Three levels of cross training a. b. c.

Team Process Training 1.

Personal clarification – members receive information regarding the roles of other team members Positional modeling – team members observe how others do their jobs Positional rotation – members actually do the work of other team members

Team process training is an experience that helps the team work together more effectively, for example action training, where a team is given a real problem, and then is held accountable for solving the problem

Team Building 1.

Typically facilitated by a consultant, these activities are intended to improve goal setting, interpersonal relations, problem solving, and role clarification. Sample activities include ropes courses, laser tag, paintball and scavenger hunts. a.

Team building may or may not be effective – one meta-analysis shows that it does not have a positive effect on team performance, but it may have a positive effect for smaller teams and when the exercise emphasizes the importance of clarifying role responsibilities.

DISCUSSION QUESTIONS 11.1

In which types of teams have you worked? Were these teams consistent with the team types discussed in this chapter, or were they a combination of types? Most teams will be a combination of types. For example, many students who work at banks will have both a work team and a management team. A person on a team in an organization may also be a part of a parallel team, project team, or action team, while at the same time being part of a production or management team.

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11.2

Think about your student teams. Which aspects of both models of team development apply the most and least to teams in this context? Do you think these teams function best in an additive, disjunctive, or conjunctive manner? What are the advantages and disadvantages of each structure? Most student teams spend little time forming and storming, but move directly into the norming phase. This is particularly true when assignments are well outlined and expectations of students are fairly clear. The development that occurs typically centers on norms for group members. Only if the team is very skilled or very lucky, do they get to the performing stage. Of course, it often happens that a student team will form and then hit a period of inertia where very little gets done until the calendar midpoint of a project. Then, a state of punctuated equilibrium occurs when the team realizes it needs to change its strategy if it is going to be successful. Student teams typically function best on additive or disjunctive tasks. When student performance is based on the weakest member in the group, students with low motivation or low skills can significantly impact team performance.

11.3

How would you describe your student team in terms of its diversity? In what ways would there be advantages and disadvantages to increasing its diversity? How might you be able to manage some of the disadvantages so that your team is able to capitalize on the potential advantages? Student answers will vary, but their descriptions should cover a range of characteristics. Some of these differences will be observable attributes such as skin color, whereas other differences will be based on attributes that inferred over time and experiences, such as attitudes, values, and personality. The similarity-attraction model rests on the premise that communication, coordination, cohesion, and social integration tends to be higher among similar others. Initially, diversity – especially the more salient ones (i.e., surface-level), will probably interfere with effective team function. As the level of interaction increases among members, the team will begin to learn and appreciate deep-level attributes and discover their similarities; which, according to similarity-attraction theory, should have positive effects on team process. In terms of remedies, student answers will vary. Anything that can be done to help team members to find their ―common ground‖ or similarities should expedite social integration and allow the team to leverage the potential benefits of member diversity (e.g., innovation; creativity).

11.4. Think about a highly successful team with which you are familiar. What types of task, goal, and outcome interdependence does this team have? Describe how changes in task, goal, and outcome interdependence might have a negative impact on this team. Answers to this question will vary by student, depending on their team experiences. For example, take an airline flight crew that has been flying together for an extended period of time. While the pilots have very different tasks than the attendants, all of them rely on each other for information to keep the flight going smoothly. Goal interdependence is high, because all members of the flight crew want their plane to get where it is going

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safely. Outcome interdependence may seem to be low, since attendants and pilots belong to different unions and are compensated differently, but if the airline gives a bonus for on-time arrival, for example, outcome interdependence might be higher. 11.5

Think of a team you worked in that performed poorly. Were any of the causes of the poor performance related to the forces that tend to create process loss? If so, which force was most particularly problematic? What steps, if any, did your team take to deal the problem? Answers will vary from student to student, but many students may identify interpersonal processes as the source of their team difficulties. An additional problem is that often, teams take no action at all when dealing with interpersonal processes.

11.6

Think of a team you worked in that performed exceptionally well. What type of taskwork process did the team engage in? Which teamwork processes did the team seem to depend on most to produce the exceptional results? Typically, teams will perform exceptionally well when they are working on a conjunctive task, and all team members have high levels of ability and respect one another.

11.7

Think about the team states described in this chapter. If you joined a new team, how long do you think it would take you to get a feel for those team states? Which states would you be able to gauge first? Which would take longer? Some states might be very easy to see immediately – for example, the group‘s cohesion might be readily apparent at first meeting. Other states would take longer to discern, especially things like mental models and transactive memory, since they are so heavily based on group history.

11.8

Which types of teamwork training would your student team benefit most from? What exactly would this training cover? What specific benefits would you expect? What would prevent a team from training itself on this material? Answers to this question will vary by student, depending on their team experiences. Try to have students base their answers on the material presented in the chapter – with examples of these concepts.

CASE: GOOGLE Questions: 1. Describe how the Project Zero achieves process gain? What factors might create process losses for this team?

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From the description in the case, members seem to work independently until they find a potential problem. Process gain occurs when members meet to discuss the issue. Members share insights, learn from each other, and together develop an understanding of the situation that is superior to that of what any individual team member would have arrived at on their own. Process low might occur during meetings when members discuss non-relevant matters, argue about trivial differences of opinion, or when members hold back from contributing for self-serving purposes. 2. Describe how the three general types of taskwork processes are important to the success of Project Zero. Creative behavior is needed to identify and root-out new types of bugs in the code. Decision-making comes into play when trying to determine the best way of approaching a potential problem, and also when deciding how to work with the responsible company and setting deadlines. Boundary spanning comes into play when team members do research on vulnerabilities, and related to the previous point, when working with the responsible companies to resolve problems. BONUS CASE: CANADIAN SPACE AGENCY29 In the 1970s hit ―Rocket Man,‖ Elton John sings about an astronaut who finds himself alone on a long space flight. This lonely image, while poetic, stands in stark contrast to the everyday experiences faced by real astronauts. Astronauts do, in fact, often work and live in isolated and extreme environments for extended periods of time. But it is also true that they spend much of their time as members of small teams, more often referred to as a crew, in quarters that are quite cramped. Supporting these small teams in space are very impressive and large teams working on Earth, such as the Canadian Space Agency (CSA). Over the past 25 years, the CSA has worked closely and collaboratively with the National Aeronautics and Space Administration (NASA) and its international partners on a range of space programs. The CSA has about 670 employees, approximately 90 percent of them employed at the John H. Chapman Space Centre, the Agency‘s headquarters located in Longueuil, Quebec. Its mission, simply, is to develop and apply space knowledge for the benefit of Canadians and humanity. Since the early 1980s, in cooperation with NASA, Canada has developed its own astronauts, with eight participating in 16 space missions. Some of them have become household names: Julie Payette, Roberta Lynn Bondar, Marc Garneau, and Chris Hadfield. Together, these brave people have flown missions, conducting scientific research and helping to advance and develop technology. 29

Sources: Based on C. Moskowitz, ―Farming on Mars? NASA Ponders Food Supply for 2030 Mission,‖ FoxNews.com, May 15, 2013, www.foxnews.com/science/2013/05/15/farming-onmars-nasa; A. Novotney, ―I/O Psychology Goes to Mars,‖ Monitor on Psychology, March 2013, pp. 38–41; R. Plushnick-Masti, ―NASA Builds Menu for Planned Mars Mission in 2030s,‖ AP Online, July 17, 2012, bigstory.ap.org/article/nasa-builds-menuplanned-marsmission-2030s.

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A great example of space technology was the famous robotic arm, the Canadarm, which debuted on the Space Shuttle Columbia in November 1981. The design and building of the Canadarm marked the beginning of Canada‘s close collaboration with NASA in human space flight and represented a sterling example of successful international cooperation in space. This history of collaboration continues to this day. Currently the CSA, in conjunction with over 40 Canadian companies and universities, is working hard to design and build a fleet of terrestrial rovers—the grandparents of the robots that may one day explore the surface of new worlds, acting as eyes and ears for scientists, or even working hand in hand with astronauts as robotic helpers. As you might imagine, working in space is not for everyone. Astronauts not only have to cope with the discomfort of travelling, working, and living in artificial environments, but also have to learn to function with other astronauts as a cohesive unit to accomplish complex and dangerous tasks. Obviously, the crews need to carry out activities involved in safely flying or orbiting their vessels; they also have to carry out all the tasks of their missions—exploration and experiments intended to better understand the Earth and other bodies in space. What might be less obvious is that they need to plan and coordinate their activities, monitor resources, and help each other. Crews that fail to effectively carry out any of these activities put not only the mission in jeopardy but their lives as well. Currently, the international space community continues to recruit and train astronauts for duty on the International Space Station and for planned missions to asteroids and Mars. Recruits are quite diverse with regard to demographic characteristics and areas of expertise. On the one hand, this type of diversity allows organizations like NASA to compose crews for a wide variety of missions. On the other hand, it increases opportunities for misunderstandings during missions that could undermine crew cohesion and effectiveness. Although training for astronaut candidates emphasizes the development of knowledge and skills related to operating equipment and systems, the ultimate effectiveness of astronaut crews is likely to depend on knowledge and skills related to teamwork as well. NASA, in collaboration with the international space community, is planning a mission to send a crew of astronauts to Mars. Among other objectives, scientists are interested in the possibility of growing food in space, and there are now reasons to believe that Mars may be a good place to farm. Although this mission isn‘t scheduled to take place until the 2030s, NASA has already begun to explore how aspects of the mission are likely to impact the crew‘s ability to function effectively. You see, the assigned crew of six to eight will be living and working together in a noisy capsule about the size of an average kitchen for three years—it takes 6 months to get there, they‘ll stay for 18 months, and then there‘s the 6-month journey home. Given the constraints of their environment, and the fact that the crew will be working long hours under very demanding conditions, it‘s inevitable that they‘ll get on one another‘s nerves on occasion. There‘s literally no place to go to escape minor annoyances, and as frustration builds, the probability of emotional outbursts and interpersonal conflict increases.

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Of course, it goes without saying that conflict among astronauts in a small space capsule millions of miles away from Earth is not a good thing. Astronauts who fail to fulfil a responsibility because they‘re preoccupied with conflict could put the mission, and the lives of the entire crew, in jeopardy, and this is true whether the conflict is bubbling under or has risen to the surface. Hard feelings might hinder teamwork as well, and the failure to communicate an important piece of information or to provide help to a member of the crew in need of assistance, for example, might also lead to disaster. Unfortunately, the duration and demands of the mission are almost without precedent, and therefore the specific practices that need to be implemented to facilitate crew functioning in this context are unknown. To address this issue, NASA has awarded grants to psychologists to study teams that have to live and work together in isolated, confined, and extreme environments for extended periods. To help increase understanding of conflict and teamwork and how it can be better managed, the psychologists are working on technology that tracks the whereabouts of each crew member, and his or her vocal intensity and vital functions, such as heart rate. This information would be used to pinpoint where and when conflict occurs and to understand how conflict influences subsequent crew interactions. The crew will be given feedback so they can learn how conflict hurts teamwork and cohesion. This feedback could also motivate crews to take the time to discuss teamwork issues and to devise ways to manage conflict and other process problems. Although it‘s impossible to anticipate all the issues that might arise on the mission to Mars, NASA believes that research on team processes is necessary to enhance the viability and performance of the crew that is ultimately charged with the task. Questions: 1.

Which team processes do you believe are most important to the crew of astronauts travelling to Mars? Why? Are there specific team processes you feel are relatively unimportant? Explain. The case seemed to emphasize conflict, and although this process is certainly important, there are reasons to believe that all types of team processes are important. In terms of specific types of taskwork behaviours, creativity and decision making may be quite important for solving problems that happen while in space. Boundary spanning will likely be unimportant since the crew will be isolated from other teams and individuals. Of the specific types of teamwork processes, action and interpersonal processes are important while in space. Transition processes, such as goal specification and mission analysis may be less important in space. However, these processes likely serve as a vital function before and between missions.

Describe additional types of information that could be collected by the psychologists to help crews better understand their interactions and how they influence crew effectiveness. From the case it does not seem that information regarding the content of the communication among team members is being collected. Without this information, it is

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difficult to infer much about the crew‘s effectiveness with regard to specific types of taskwork and teamwork processes. It would be unknown, for example, if communication among team members was focused on creative problem solving, decision-making, goal specification, or something completely unrelated to the mission. 3.

Discuss how team training could be used to build effective processes for the crew travelling to Mars. Once the data from the technology pinpoints the source of problems, training could be designed to address the issues. Members of the crew could receive training in transportable teamwork skills in areas such as conflict resolution, collaborative problem solving, and communication. Team process training could also be used to help teams diagnose and fix problems with their interactions. Action learning could be especially useful in this regard.

BONUS CASE: LUFTHANSA30 Headquartered in Cologne, Germany, Deutsche Lufthansa AG consists of more than 500 subsidiaries and associated companies organized into several groups, including passenger transportation, airfreight, MRO (maintenance, repair, and overhaul), catering, and flight training. For those of you who travel, the airlines in Deutsche Lufthansa AG‘s passenger transportation group may be familiar to you. These include the company‘s namesake, Lufthansa Passenger Airlines, as well as Austrian Air, Brussels Airlines, Germanwings, Sun Express, and SWISS. The core business of Deutsch Lufthansa AG is passenger transportation, so it may be obvious to you that some of the most crucial employees to the company are those who serve as members of the flight crews responsible for getting passengers from one destination to another. The composition of a flight crew depends on the specific aircraft being flown, as well as the length and purpose of the flight. In the cockpit, where the aircraft controls are located, there‘s a pilot in command and a co-pilot. These crew members are often referred to as the captain and first officer, respectively. For longer flights, the crew may include relief pilots—fully qualified captains and first officers—who fill in when someone needs to rest. In the main cabin, there are flight attendants responsible for the safety and comfort of the passengers. A lead flight 30

Sources: S. Almasy and L. Smith-Spark, "Reports: Antidepressants Found at Home of Co-Pilot Andreas Lubitz," CNN Online, March 28, 2015, http://edition.cnn.com/2015/03/28/europe/france-germanwings-planecrash-main/index.html; V. Bryan, "Lufthansa CE Stunned that Co-Pilot Apparently Crashed Plane," Reuters, US Edition Online, March 26, 2015, http://www.reuters.com/article/2015/03026/us-france-crash-lufthansaidUSKBN0MM1R520150326; K. Cripps, "What are the World‘s Safest Airlines?" CNN Online, January 6, 2015, http://edition.cnn.com/2015/01/06/intl_travel/world-safest-airlines/?iid=EL; Lufthansa Corporate Website, "Passenger Airline Group," 2015, http://www.lufthansagroup.com/en/company/business-segments/passengerairline-group.html; R. L. Helmreich and H. C. Foushee, ―Why CRM? Empirical and Theoretical Bases of Human Factor Training," in B. Kanki, R. Helmreich, and J. Anca (Eds.), Crew Resource Management, 2nd ed. (San Francisco: Academic Press, 2010), pp. 3–57; "The World‘s Biggest Public Companies: #932 Deutsche Lufthansa," Forbes Online, 2015, http://www.forbes.com/companies/deutsche-lufthansa/; and ―What Happened on the Germanwings Flight,‖ The New York Times Online, March 27, 2015, http://www.nytimes.com/interactive/2015/03/24/world/europe/germanwings-plane-crash-map.html?_r=0.

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attendant coordinates among the other members of the flight crew to ensure compliance with safety procedures and that passengers in the different cabin classes are taken care of. Although each crew member has a set of well-defined responsibilities, they function together as a team. First, they look the part. They all wear uniforms, and there‘s no mistaking a member of the crew for a passenger. Second, crew members share the same overarching goal of flight safety. Third, crew members will likely share the same fate if, for some reason, they don‘t achieve the goal of flight safety. Finally, crew members need to interact and coordinate throughout a flight. In the end, the ability of crew members to perform effectively as a team plays a key role in facilitating Lufthansa‘s strategic objectives, which are centered on quality, punctuality, dependability, and safety. Although fatal crashes are exceedingly rare in aviation—approximately one fatality for every 1.3 million flights—they‘re highly visible. They‘re also quite memorable in the minds of potential customers who have choices when making travel plans. Based on examinations of fatality records, incident reports, and audits from aviation associations and governments, Lufthansa Passenger Airlines has been rated as being among the world‘s top 10 airlines in terms of safety. Lufthansa‘s safety record is a function of several factors, but perhaps most important is the company‘s investment in flight crew training. Lufthansa‘s world class flight training subsidiary is the most obvious example of this type of investment. Training delivered in facilities located throughout Germany. and in Phoenix, Arizona, ranges from basic pilot instruction to courses in the effective management of flight crews and their processes. The rationale for expenditures in flight crew training comes from knowledge that the vast majority of fatal airline accidents are due to the human limitations rather than random mechanical failures or fluke weather phenomena. Unfortunately, on March 25, 2015, Germanwings Flight 9525, on route from Barcelona, Spain, to Dusseldorf, Germany, crashed in the French Alps, killing all 144 passengers and six crew members (two pilots and four flight attendants). Germanwings is a wholly owned subsidiary of Lufthansa and provides low-cost direct flights between European destinations. What is shocking about this particular incident is that one of the pilots crashed the plane intentionally. The co-pilot waited until the captain left the cockpit and locked the door so that the captain could not get back in. Recall that locks were installed on reinforced cockpit doors after the 9/11 terrorist attacks in 2001. The co-pilot then set the autopilot to 100ft, which initiated a descent that resulted in the Airbus A320 crashing into the mountains 10 minutes later. Following the tragedy, Lufthansa CEO Carsten Spohr indicated that flight crews at Lufthansa and Germanwings are composed with great care and that pilots are subjected to technical and psychological tests. He also noted that even with tough standards and safety regulations in place, it‘s impossible to rule out one-off events like this. Subsequent investigations of the crash have centered on two issues. First, the co-pilot had been treated for depression. Although he had apparently recovered and been cleared for flying, he remained troubled. This raises the question of whether someone on the flight crew should have detected something odd about the co-pilot‘s behavior and reported it. Second, the incident provides evidence that it‘s not a good idea to leave a single individual alone in a cockpit with complete responsibility and control of an aircraft carrying passengers. This has led to changes in policies that now require at least two

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members of the flight crew in the cockpit at all times. A complete explanation of the co-pilot‘s motives for this horrific tragedy may never come to light. However, the incident does highlight the fact that transporting passengers on an airliner requires a team effort. Questions: 1. What type of team is a flight crew? What are the defining characteristics of a flight crew? What role did these characteristics play in the crash of Flight 9525? A flight crew is an action team. They perform a highly complex task, sometimes in highly challenging circumstances. Failing to perform effectively has implications that are highly visible. Flights are relatively short duration tasks and the crews are together for a short period of time (the duration of the flight). This last characteristic may have played a role in the crash of Flight 9525. Specifically, the members may not have known each other long enough to detect that something was wrong with the co-pilot. 2. How did the locking of the cockpit door change the nature of the flight crew‘s task? How did the change in policies after the crash address this issue? The locking of the cockpit door essentially made the task conjunctive. That is, flight safety became a function of the one very troubled member. Maintaining presence of two members of the flight crew in the cockpit makes the task somewhat less conjunctive. 3. How do the two models of team development apply to flight crews? Describe a model that better depicts how flight crews develop over time. How could the team development process be modified to help prevent incidents like this in the future? Neither model of team development describes flight crew development very well. Rules, regulations, and norms make the forming, storming and norming phases irrelevant. And although there is obviously a midpoint in a flight, there really isn‘t any punctuated equilibrium that creates tension and drive to revisit the crew‘s progress. Although it might sound extreme, a better description of flight crew development might be ―procedure and exceptions review‖  ―performing.‖ One change would be to provide the opportunity for crew members to get to know each other. Although this might require a structural change in the way crews are scheduled/rotated, this would help members detect problems related to members‘ mental/emotional states.

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BONUS CASE: LOGITECH31 When‘s the last time you used a computer mouse or keyboard? What about a universal remote for your home entertainment system, external speakers for your iPod, or a controller or racing wheel for your PlayStation 3? If you‘ve used any of these things recently, chances are good that it was designed and manufactured by Logitech, a Swiss company known for highly innovative and reasonably priced ―personal peripherals‖ involved in computer navigation, Internet communications, digital music, home entertainment control, and gaming. Founded in 1981, the company has experienced double-digit growth in sales each year for the past decade, with revenues of almost $2.5 billion per year. Logitech‘s success can be attributed to its ability to bring a large number of highly innovative products to market. In a recent year, for example, Logitech introduced 130 new products, many of which were honored with industry awards for superior innovation and design. Today, it ships approximately 165 million products to customers in more than 100 countries. So what gives Logitech the ability to offer such a large number of innovative products? Logitech‘s success in bringing a large number of innovative products to market can be attributed to the type of teams they use to accomplish product development and manufacturing. The teams consist of members who are highly specialized in a given functional area and who are geographically dispersed across different countries and continents. Additionally, Logitech manages these teams in such a way that they can accomplish work continuously. Specifically, work in these teams is accomplished on an on-going basis as members in one location use electronic communications to coordinate their efforts and to hand off their work to members in other locations. Consider, for example, the team that developed and manufactured Logitech‘s mouse, the Revolution. Product design and mechanical engineering took place in Ireland, electrical engineering took place in Switzerland, tooling took place in Taiwan, manufacturing took place in China, and software engineering and quality assurance took place in California. Although you might be inclined to believe that time zone differences would be a hindrance to this sort of team, Logitech turned it into a competitive advantage by letting the work follow the sun. Specifically, work was accomplished continuously because members of a team who finished their workday in one country electronically handed off the work to team members in another country who had just arrived at the office. Because these electronic hand-offs occurred continuously, product development and other work needed to bring the mouse to market was completed much more quickly. Although ―follow the sun‖ teams are gaining attention in many companies that operate globally, there are some issues that need to be considered. As one example, imagine how difficult it must be for members of this sort of dispersed team to find convenient times to communicate with one 31

Sources: Godinez, V. ―Sunshine 24/7: As EDS‘ Work Stops in One Time Zone, It Picks Up in Another.‖ Knight Ridder Tribune Business News, January 2, 2007, ProQuest database (February 12, 2007). Logitech, ―Annual Report 2008,‖ http://ww3.ics.adp.com/streetlink_data/dirLOGI/annual/HTML2/default.htm (accessed June 20, 2009). Logitech, corporate Web site, http://www.logitech.com/index.cfm/175/481&cl=us,en (accessed June 23, 2008). Schiff, D. Global Teams Rock around the Clock. Electronic Engineering Times, 1435, (August 7, 2006), pp. 12-20. Treinen and Miller-Frost, ―Following the Sun: Case Studies in Global Software Development.‖ IBM Systems Journal 45 (2006), pp. 773–83.

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another. If a team member in California needed to meet virtually with the team on Friday at noon (Pacific Standard Time), it would be 8:00 p.m. Friday evening in Ireland and 4:00 a.m. Friday morning in Taiwan. More important, perhaps, language and cultural differences among team members can create misunderstandings that prevent work from being accomplished effectively. Peter Sheehan, a creative director from Ireland, noted that people tend to approach the work very differently based on their functional areas, which is a problem because the members of the Logitech teams are very specialized. Although all members may understand that the ultimate goal is to develop a successful product, members from different areas may have different ideas about what ―successful‖ means and what processes and outcomes need to be achieved to get there. Because of the geographical separation, inconsistencies in the way different members are approaching the work may not become apparent until significant problems occur. Other companies in the electronics industry that use the ―follow the sun‖ approach are struggling with similar issues. For example, IBM uses the approach in its chip design business, whereby design changes made during the day in North America get sent to India for additional work and physical implementation. As noted by Mike Gruver, an IBM program manager, it‘s often difficult to tell whether someone from a different culture really understands what you‘re saying, and it‘s uncomfortable to keep on asking if they want you to restate something that you said. As another example, Kathleen Gillam, a manager from Intel, noted that despite the positives from the use of globally distributed virtual teams, there are very simple things, such as having different holidays and working days, that make the process difficult. In the end, the follow the sun approach to accomplishing work appears to have advantages, but there are also significant challenges having to do with managing differences among members in their functional and cultural backgrounds. Questions: 1.

Describe the teams that Logitech uses to develop new products in terms of the characteristics outlined in this chapter. Do these teams fit into one of the ―types‖ from the taxonomy presented in this chapter? If so, which one? If not, why? From the information provided in the case, the teams appear to conduct work with either sequential or reciprocal interdependence. There are low to moderate levels of goal interdependence, and the level of outcome interdependence is unclear. The other characteristic discussed is diversity in terms of functional expertise and cultural background. These teams appear to function as project teams, but they work together virtually.

In what ways are the teams at Logitech diverse? Describe the potential advantages and disadvantages to these types of diversity. Why might the advantages of these types of diversity outweigh the disadvantages in the context of the follow the sun teams? From the information provided in the case, the teams are diverse in terms of functional expertise and cultural background. These characteristics reflect surface rather than deep level diversity. The types of problems that these teams have (e.g., communication,

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stereotypes) fade as they gain experience working together, and at some point they can take advantage of their diversity to deliver the type of innovations that are important in the high tech industries. Although people from different functional and cultural backgrounds may differ in terms of values and beliefs, there is not enough information in the case to predict how this will play out. However, the members the members may be quite similar in terms of their beliefs about the importance of producing high quality deliverables. 3.

If you were charged with creating a follow the sun team to develop a new product, what specific team processes would cause the majority of the issues? What specific team processes and communication factors would the training need to emphasize to ensure the team is effective in this context? I would implement practices to increase the level of goal and outcome interdependence. The physical distance between members might reduce the level of accountability members feel towards each other, and goal interdependence might enhance members‘ perceptions that they are in fact a team working towards a common goal, and outcome interdependence might serve as an incentive for cooperation. From a process perspective, limited communication and interpersonal interactions present primary challenges. Technology-mediated communication (e.g., email; skype; video conference) will naturally impose constraints on the communication process outlined in Chapter 10. Information richness would be especially problematic, and generally speaking, the lack of interpersonal connections may undermine both communication and team processes. In addition it might be harder to foster critical team states, such as cohesion, potency, or mental models. On the other hand, it might be easier to establish transactive memory because conservations and other information exchange can be recorded or archived for future reference. Training would likely be focused on fortifying those structure and process characteristics required for a global virtual team to work effectively.

EXERCISE: PAPER PLANE CORPORATION Preparation: The Paper Plane Corporation Exercise requires that you supply students with enough paper so that they can progress through three five minute rounds of paper airplane folding. Recycled paper works well for this exercise – just let students know that whatever is printed on the paper is irrelevant to the exercise. You may have to start saving paper a few weeks in advance in order to have enough for your class, especially if you are teaching a large lecture section. You will also want to re-familiarize yourself with the fine art of airplane folding, since you will be demonstrating this for the class! Be sure that your airplane meets the following quality standards. Plane is symmetrical. All corners must match evenly.

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Both wings must be exactly the same size, and tailfins must be the same height. Plane must be able to fly at least two meters. In Class: Prior to starting the exercise, have students get together in teams and pick a team manager and a team inspector. Ask all of the team inspectors to come to the front of the room, and provide each inspector with a summary sheet. Team inspectors will be responsible for distributing the supplies to the team, and keeping track of bids, along with evaluating final products. Then send each inspector to a team that is different from their original team. This ensures that inspections are being done fairly. Next, show students how to fold a paper airplane, as it is not always easy to visualize how this is done from the instructions in the text. Be sure that you explain the quality standards listed above to the class, and demonstrate how your plane meets those standards. Again, remind the class that they must Time the rounds of airplane building carefully – they should not be longer than five minutes, and all rounds should be the same. If you are pressed for time in the class, you can eliminate the final round of folding. Questions: In the discussion part of this exercise, point out that if all members of the team have relatively high skills, sequential interdependence is going to be more effective in this task than pooled interdependence. This is because, even in a five minute period, people will quickly learn to specialize at a task, and they will be more efficient at doing a single task than they are at trying to fold an entire airplane by themselves. However, one slow member will slow down the entire group in sequential interdependence, as this is a conjunctive task.

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Team Based Organizations—Team based organizations are different than traditional ―jobbased‖ organizations in several important ways. For a discussion of these differences, and also factors that need to be taken into account in designing a team based organization, see: Mohrman, S. A., S. G. Cohen, & A. M. Mohrman, Jr. Designing Team-based Organizations: New Forms of Knowledge Work. San Francisco: Jossey Bass. (1995). Designing Work Teams – There are many different characteristics of teams that influence team processes and outcomes. For a discussion regarding how to take these characteristics into account when designing teams see: Hackman, J. R. ―The Design of Work Teams. In J. W. Lorsch (Ed.) Handbook of Organizational Behaviour. Englewood Cliffs. N. J.: Prentice-Hall. pp. 315-342. (1987). Team Leadership – Effectiveness in the leader role is an important factor for team success. For more information about leadership, see Chapter 13 in this text. For information regarding the particulars of leading teams, see: Hackman, J. R. Leading teams: Setting the Stage for Great Performances. Boston: Harvard Business School Press (2002). Majority and Minority Influence -- Members of groups who hold a minority or majority position may have an important influence on group functioning and effectiveness. For more information see: Moscovici, S. ―Social Influence and Conformity.‖ In G. Lindzey and E. Aronson (eds.), The Handbook of Social Psychology (Vol. 2). New York: Random House. pp. 347-412 (1985). * Team Decision Making Problems – Biases and heuristics that influence individual decision makers can impact decision making in teams. For more information on these biases and heuristics see Chapter 9 of this text. For additional information on decision making problems that are more specific to small groups and teams, see: Organizational Behaviour and Human Decision Processes, (73)1998. Whole Issue. Harvey, J. ―The Abilene Paradox: The Management of Agreement‖ Organizational Dynamics, 3 (1974). pp. 63-80. Ross, J. and B. M. Staw. ―Organizational Escalation and Exit: Lessons from the Shoreham Nuclear Power Plant.‖ Academy of Management Journal, 36(1993). pp. 701733. * Intergroup Relations – Research on relationships among groups has a long history. For information see:

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Alderfer, C. P. ―An intergroup perspective on group dynamics.‖ In J. W. Lorsch (Ed.) Handbook of Organizational Behaviour. Englewood Cliffs, NJ: Prentice Hall. pp. 190222. Marks, M. A., L. A. DeChurch, J. E. Mathieu, and F. J. Panzer. ―Teamwork in multiteam systems. Journal of Applied Psychology, 90(2005). pp. 964-971. * Creativity – For information regarding the role of creative personality and creative thinking, see Chapter 9 of this text. * Resolving Conflict – For a discussion regarding how conflict can be managed by taking into account concern for the outcome and concern for others, see Chapter 11 of this text.

Chapter 12: Power, Influence, and Negotiation

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What is power? What are the different types of power that people can have, and when can they use those types most effectively? What behaviours do people exhibit when trying to influence others, and which of these are most effective? What is organizational politics, and when is political behaviour most likely to occur? How do individuals use their power and influence to resolve conflicts in the workplace? What are the ways in which leaders negotiate in the workplace? How do power and influence affect job performance and organizational commitment?

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CHAPTER OUTLINE 46.

POWER, INFLUENCE, AND NEGOTIATION A. Leaders who know how to acquire and use power can make a huge difference to the success of a company or group.

Try This! Ask students to think of names that occur to them when you say ―great leader‖. The names can be business or non-business, and the people can be living or historical. Write the list of names as they are said, encouraging diversity in the list. For example, one list might be Gandhi, Martin Luther King, Norman Bethune, Queen Elizabeth II, Mother Theresa, Connor McDavid, and Jody Wilson-Raybould. When you cover the types of power, circle the names that have the various kinds of power as you cover them, perhaps using different colors or shapes for organizational vs. personal power. For example, the Queen of England would be an example of someone with legitimate power. Gandi, King, Bethune, Mother Theresa, and Wilson-Raybould would be examples of people with referent power. Bethune and McDavid would be examples of leaders with expert power. 47.

WHY ARE SOME PEOPLE MORE POWERFUL THAN OTHERS?

Power is defined as the ability to influence the behaviour of others and to resist unwanted influence in return

People must choose to influence others

Resistance is as important as influencing others when discussing power

Acquiring Power 1.

Organizational Power – derived from a person‘s position in the organization a.

Legitimate Power – derived from having a position of authority within the organization. Also known as ―position power‖

Reward Power – exists when someone has control over the resources or rewards another person wants

Coercive Power – exists when a person has control over the punishments in an organization i.

Leads to negative feelings toward those who use it

Personal Power – comes from the person themselves a.

Expert Power – derived from the person‘s expertise, skill, or knowledge on which others depend

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Referent Power – exists when others have a desire to identify and be associated with a person

Guidelines for Using Power

Contingency Factors a.

Substitutability – Leader power increases when there are no substitutes for the rewards or resources the leader controls

Centrality – Leader power increases when the leader‘s role is important and interdependent with others in the organization

Discretion – Leader power increases when the leader has the freedom to make his or her own decisions without being restrained by organizational rules

Visibility – Leader power increases when others know about the leader and the resources he or she can provide

Using Influence 1.

Influence is the use of an actual behaviour that causes behavioural or attitudinal changes in others a.

Influence is directional – it most frequently occurs downward, but can also be lateral or upward

Influence is all relative – the absolute power of the influencer and influence isn‘t relative, but the disparity between them is

Influence Tactics a.

Most Effective i.

Rational Persuasion – the use of logical arguments and hard facts to show the target that the request is a worthwhile one

ii.

Inspirational Appeal – a tactic designed to appeal to the target‘s values and ideals

iii.

Consultation – asking the target to participate in deciding how to carry out a request

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iv.

Collaboration – making it easier for the target to complete the request

Moderately Effective i.

Ingratiation – the use of favours, complements, or friendly behaviour to make the target feel better about the influencer

ii.

Personal Appeals – when the requestor asks for something on the basis of friendship or loyalty

iii.

Apprising – when the requestor clearly explains why performing the request will benefit the target personally

OB Internationally. This box describes how Kai-Fu Lee, the president of Google Greater China, uses guanxi (relationships) to influence decisions. In China, guanxi refers to friendly feelings, but also a sense of obligation to the other person based on a common background. It is a much deeper relationship than the traditional North American business relationship, and it is important for Canadian managers working in China to be aware of the differences. c.

Least Effective i.

Pressure – the use of coercive power through threats and demands

ii.

Coalitions – enlisting other people to help influence the target

iii.

Exchange Tactic – used when the requestor offers a reward or resource in exchange for performing a request

Influence tactics tend to be most successful when used in combination

―Softer‖ influence tactics tend to be more successful than ―harder‖ ones

Responses to Influence Tactics a.

Internalization – Target agrees with and becomes committed to request

Compliance – Target is willing to perform request, but does so with indifference

Resistance – Target is opposed to request and attempts to avoid doing it

Power and Influence in Action

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Organizational Politics – Actions by individuals that are directed toward the goal of furthering their own self-interests (note that self-interests can also be in the interests of the corporation) a.

Political Skill – the ability to effectively understand others at work and to use that knowledge to influence others in ways that enhance personal and/or organizational objectives. Political skill includes: i.

Networking abilities – adeptness at identifying and developing diverse contacts

ii.

Social astuteness – the tendency to observe others and accurately interpret their behaviour

OB Assessments: Political Skill. This brief assessment measures a student‘s level of networking ability and social astuteness. When discussing this test, it is important to note that results are likely to be linked to a person‘s level of introversion/extroversion, with extraverts being more likely to score highly on this test. It may also be useful to point out (again) the situational nature of behaviour – just because one is an introvert, doesn‘t mean that he or she cannot network, only that networking might be more difficult, and may occur in a more limited number of settings. b.

Environments that are perceived as extremely political have been shown to cause lower job satisfaction, increased strain, and lower organizational commitment among employees

Organizational Politics Process i.

Factors that Foster Organizational Politics a.) Personal Characteristics i.) ii.) iii.)

Need for power High self monitors Machiavellianism

b.) Organizational Characteristics i.) ii.) iii.) iv.) 2.

Limited or changing resources Ambiguity in roles High performance pressure Unclear performance evaluations

Conflict Resolution

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Five approaches to conflict resolution (Figure 12-5): i.

Competing – one party attempts to get his or her goals met without regard for the other party‘s goals

ii.

Avoiding – one party stays away from the conflict

iii.

Accommodating – one party gives in and acts unselfishly

iv.

Collaboration (as a conflict-resolution method not as an influence tactic) – both parties work together to maximize outcomes

Compromise – each party‘s losses are offset by gains

When to Use Conflict Resolution Styles (Table 12.3)

OB on Screen: Schitt’s Creek. Season 3, Episode 3. Resolving conflicts is particularly challenging when individuals come to the issue from very different perspectives and world views. David, for instance, is deeply immersed in the artistic and high-end design world, and this confidence precludes any willingness on his part to compromise or deviate from his vision. His partner, Patrick, is a ―numbers guy‖ and is focused exclusively on the practical realities of running a viable business—like attracting customers, selling products, and generating profits. These different world views come to a head during the planning of the store‘s launch party. Patrick is adamant that the way to launch a new business is to take out a full-page advertisement in the local newspaper and make it ―a thing,‖ saying, ―If we‘re going to go big, let‘s go big!‖ David, on the other hand, is very much married to the idea of a soft launch, testing the store out on a small group of people. He feels it would be better to do an exclusive VIP guest list, offering a friends-and-family discount as incentive. As the episode unfolds, we see how David‘s and Patrick‘s orientations effectively lock them into competitive (win–lose) mindsets, as each feels the need to press their respective agendas. Ultimately, the partners decide to put their relationship above all else and opt for a compromise strategy. Watch the episode and see how it all turns out! BONUS OB on Screen: Bridge of Spies. The clip referenced begins around the 1:45:41 mark of the film, continuing until about the 1:55:51 mark. The clip depicts James Donovan (Tom Hanks) negotiating through the East German Attorney General‘s secretary. Donovan is trying to secure the release of two prisoners for one. It is a complicated situation, but the gist is that the Soviet Union wants to trade a U.S. U-2 spy plane pilot for a convicted Soviet spy. Donovan has been brought in by the CIA to arrange the swap (even though he‘s not technically a government employee). In the meantime, an American graduate student is arrested by East German officials. East Germany wants to trade the graduate student for the Soviet spy so that the United States will have to politically recognize them. They also don‘t want to anger the Soviet Union in the process. The CIA wants Donovan to ignore the

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student, but Donovan is convinced he can get both parties. In the scene in question (and against the CIA‘s wishes), Donovan finally lays down the gauntlet with the GDR. Students can be walked through the situations in Table 13-4, When to Use the Various Conflict Resolution Styles, considering the use of various conflict resolution styles. In the film clip, the trade is under great time-pressure as it is scheduled for the next morning. Donovan believes that it is crazy not to get both of these parties and is convinced that leaving the graduate student behind is unacceptable. He also knows that at the end of the day, the GDR cannot afford to be the party that upsets the trade with the Soviet Union. These three situations call for a ―competing‖ approach. Students can be asked what other situations might have caused Donovan to change his approach to one of the other resolution styles. There are other instances in the movie of Donovan attempting to do just that, but competing is what he finally uses when the other tactics don‘t work. BONUS OB on Screen: Skyfall. The clip referenced begins around the 35:06 mark of the film, continuing until about the 36:54 mark. The clip depicts James Bond (Daniel Craig), M (Judi Densch), and Gareth Mallory (Ralph Fiennes) in a discussion about whether Bond should continue in his role as an agent for MI6. M informs the two men that Bond has passed his tests (which he actually did not) and that she is restoring him to active duty. Mallory, Chairman of the British Parliament‘s Intelligence Committee, is in complete disagreement. The clip is an excellent example of someone taking a competitive stance in conflict resolution (M) and the other taking an accommodating style once he‘s put to the test (Mallory). The clip provides an excellent opportunity to discuss in the class when each type of conflict resolution is most appropriate. Table 12-5 provides a great background. Ask students if they have a style they use most often. Do they think that people change their styles or do they have a tendency to remain the same (perhaps due to their personality) regardless of the situation. Have students name examples of when they used each of the styles (use Figure 12-5 as a guide). Many of the students will have a tendency to think that collaborating is the style that one should always strive towards because it is the ―winwin‖ outcome. It is worth stressing that this is not always the case. Push students to think of personal examples of examples they can think of where collaborating is not the preferred method. E. Negotiations 1.

Negotiation – A process in which two or more interdependent parties discuss and attempt to come to an agreement about their different preferences a.

Distributive bargaining – involves win-lose negotiations over a ―fixed pie‖ of resources

Integrative bargaining – aimed at accomplishing a win-win scenario

Negotiation Stages

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Preparation - each party determines its goals for the negotiation, including its best alternative to a negotiated agreement (BATNA)

Exchanging information - each party makes a case for its position and put all favourable information on the table

Bargaining - each party uses distributive or integrated strategies to gain something of value

Closing and commitment - an agreement is formalized

Negotiator Biases a.

Perceived Power

Negotiator Emotions

Summary: Why Are Some People More Influential than Others?

48.

HOW IMPORTANT IS POWER AND INFLUENCE?

Power and influence have a moderate positive effect on job performance

Power and influence can have a moderate positive effect on organizational commitment, however hard influence tactics decrease commitment

49.

APPLICATION: ALTERNATIVE DISPUTE RESOLUTION

Alternative Dispute Resolution - A process by which two parties resolve conflicts through the use of a specially trained, neutral third party 1.

Mediation – requires a third party to facilitate the dispute resolution process, though he/she has no formal authority to dictate a solution

Arbitration – occurs when a third party has the authority to determine a binding settlement to the dispute

DISCUSSION QUESTIONS 12.1

Which forms of power do you consider to be the strongest? Which types of power do you currently have? How could you go about obtaining higher levels of the forms that you‘re lacking? Most students still believe that legitimate power is the strongest, and they often feel that they have little power themselves. When discussing the answer to this question, it may

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be useful to explain the following ―power pyramid‖ to students. At the base of the pyramid, and fundamental to organizational power, is acquiring expertise in a given area. Next, people who want power must nurture critical organizational relationships, and then develop a network of resource people. Fourth, people who want power need to have good communication skills, and finally, the most direct way to gain power is to use all four of the pyramid levels to target and achieve key organizational goals. 12.2

Who is the most influential leader you have come in contact with personally? What forms of power did he or she have and which types of influence did he or she use to accomplish objectives? Typically, students will talk about people who have high levels of referent power when answering this question. This is a good question to ask in writing, because identifying powerful leaders can be personally revealing.

12.3

What would it take to have a ―politically free‖ environment? Is that possible? Politics are always operating, but they may be less noticeable in an organization where everyone is truly focused on achieving the same organizational goal, above and beyond any of their personal goals. People being people, however, make this type of situation extremely rare.

12.4

Think about the last serious conflict you had with a coworker or group member. How was that conflict resolved? Which approach did you take to resolve it? Answers to this question will vary by student. Students may differ in their most commonly used approaches, and may also react to the same situation with different styles.

12.5

Think of a situation in which you negotiated an agreement. Which approach did you take? Was it the appropriate one? How might the negotiation process have gone more smoothly? Again, answers will vary by student. The points to emphasize in discussion, however, are that most negotiations are more effective if both parties work together towards a solution that meets the needs of everyone.

CASE: GSK (GLAXOSMITHKLINE) Questions: 1. What types of power do you think are most important for a new CEO, especially if they are considered an ―outsider‖?

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Although there is not a ―right‖ answer to this question – this CEO automatically carries as much organizational power as one can have. Therefore, establishing the personal forms of power needs to take precedence. As an outsider, this becomes even more important as there are no parts of the company that have seen this side of you. In Walmsley‘s case, although she was technically an insider – she was still seen as an outsider by 2/3 of the company including the pharmaceutical division which is seen as GSK‘s core division. 2. Although it‘s not uncommon for new CEOs to rebuild their management team, what kind of message do you think it sends to employees? One can only imagine how insiders felt about Walmsley as she replaced 50 executives. It certainly had to have sent a message that things ―are not going to be the same around here‖. Walmsley probably had a pretty good idea of the direction that she was planning to take GSK and today‘s CEO‘s rarely have the luxury of having 10 years to implement that vision. She took quick stock of who was on board with the new direction for the company and let go of the people who were not on board. 3. How can a CEO use power effectively when there are so many competing priorities on their plate at the same time? A CEO (or any good leader) must have a clear understanding of when it is appropriate to use each form of power and how to generate that power effectively. Knowing when it is important to lean on the personal forms of power to accomplish an objective and when one can simply push things through with organizational power is a skill the best leaders learn over time. The fact that it is such a complex job is one of the reasons why becoming a CEO is so difficult (especially in a company the size of GSK). Ultimately, knowing which decisions are the most important and which will rely on the most trust from followers to get them accomplished is the key to success.

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BONUS CASE: CANADIAN PACIFIC RAILWAY32 The history of Canada is closely tied to railway. Not long after Confederation, July 1, 1867, the Canadian Pacific Railway Limited (CP) was founded to connect Canada‘s emerging population centres in Ontario and Quebec with the vast potential of its relatively unpopulated West. In spite of great political obstacles and the enormous engineering challenges associated with traversing the Canadian Rockies, the ―last spike‖ was finally driven in on November 7, 1885 at Craigellachie, British Columbia. Although the cost of construction nearly ruined the fledgling company, within three years of the first transcontinental train leaving Montreal and Toronto for Port Moody, B.C., on June 28, 1886, CP‘s financial house was once again in order. Over the years, as CP grew, so did the company‘s interest in non-railway ventures, such as manufacturing, shipping, hotels, airlines, natural oil and gas extraction, bus transportation, trucking, pulp and paper, and waste management. Since 2001, CP has returned to its roots as a freight railway company with headquarters in Calgary, Alberta. The company owns roughly 22,500 kilometres of track all across Canada and in the United States, stretching from Montreal to Vancouver, and as far north as Edmonton. Today CP is a model of efficiency and customer service. One of the hallmark innovations for the company has been its commitment to a precision-railroading philosophy. Customer shipments are now prioritized and delivered as quickly as possible, even if trains are not completely full. This has meant the company has had to increase its focus on scheduling, monitoring, and optimizing every asset (e.g., locomotives, rail cars), and it has had to increase coordination of all aspects of the business, such as crew scheduling, equipment availability, track and rail car repairs, customers, and supply-chain partners. How has precision railroading affected the company? In its 2017 annual report, Keith Creel, president and CEO, stated that in spite of a challenging year (e.g., low commodity prices, a weather-delayed harvest, weak economic growth), CP continued to lower its annual operating ratio—a productivity index that represents operating costs as a percentage of revenue—to 58.2, which put it among the leaders of North American railroads! Evidently, increased efficiency has not come at the cost of safety. In the same year, CP led the industry in safety for the twelfth consecutive year. 32

Sources: Canadian Pacific Railway Ltd. website, www.cpr.ca/en/about-cp/our-history, retrieved February 12, 2015; en.wikipedia.org/wiki/Canadian_Pacific_Railway, retrieved February 12, 2015; Gordon Pitts, ―Turnaround Ace: Inside the Hunter Harrison Era at CP Railway,‖ The Globe and Mail, April 25, 2014, www.theglobeandmail.com/report-on-business/rob-magazine/hunter-harrisoncp-report-on-businessmagazine/article18190120, retrieved February 15, 2015); Kristine Owram, ―CP Rail‘s Hunter Harrison: ‗We‘re Doing Things That People Didn‘t Think Were Imaginable,‘‖ Financial Post, October 4, 2014, business.financialpost.com/2014/10/04/cp-rails-hunter-harrison-were-doing-things-that-people-didnt-think-wereimaginable, retrieved February 15, 2015; ―Federal Government Orders End to CP Rail Strike,‖ CTV News, June 11, 2012, www.ctvnews.ca/federal-government-orders-end-to-cp-rail-strike-1.832408, retrieved February 15, 2015; Alison Bailey, ―Union Sees CP Rail Training Program as a Safety Problem,‖ Vancouver News 1130, July 22, 2014, www.news1130.com/2014/07/22/union-sees-cp-rail-training-program-as-safetyproblem/comment-page1, retrieved February 12, 2015; Kyle Bakx, ―CP Rail Encourages Office Workers to Learn How to Drive Trains: Safety Concerns Arise over Training, Qualifications, and Experience Level, as Possible Strike Looms,‖ CBC News, February 2, 2015, www.cbc.ca/news/business/cp-rail-encourages-office-workers-to-learn-how-to-drivetrains-1.2935065, retrieved February 15, 2015; Kristine Owram, Financial Post, February 11, 2015, business.financialpost.com/2015/02/11/canadian-pacific-railway-ltd-prepares-for-weekend-strike-amid-ongoingtalks, retrieved February 15, 2015; Eric Atkins, ―‗Difficult‘ CP Labour Dispute Nears Strike Deadline,‖ The Globe and Mail, February 13, 2015, www.theglobeandmail.com/report-on-business/difficult-cp-labour-disputenears-strikedeadline/article22992898, retrieved February 15, 2015.

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The outlook for the company was not always as rosy. Throughout the 2000s, the company had battled strong headwinds, and by 2012 CP was in very rough shape, sporting the worst operating performance among all the major North American railroads. For instance, the company‘s operating ratio was a dismal 80 percent, making it one of the least profitable railroads in North America. As in its beginning, the company was forced to overcome great challenges. In mid-2012, Hunter Harrison, a seasoned railway executive and proven turnaround expert, was brought out of retirement to run the company and manage the change process. Harrison‘s vision for CP included longer, faster trains and better customer service at lower cost. Achieving these goals meant that Harrison would have to use his influence to implement changes within an established (and resistant) bureaucracy. Examples of these changes included the elimination of surplus positions (mainly through attrition and/or voluntary turnover), shedding older equipment, dropping some terminals, and initiating disciplinary actions against employees who failed to comply with safety and working rules. Change happened very quickly, and by the end of 2013, the company‘s operating ratio had dropped to 65.99 percent, a full three years ahead of schedule. To quote Hunter Harrison, who passed away in December of 2017, CP was ―doing things that people didn‘t think were imaginable.‖ Few would argue with Hunter Harrison‘s ability to influence how things are done within a company. In addition to restructuring the CP organization, Harrison worked hard to instill a new culture built on the core values of good service, safe operations, asset optimization, cost control, and developing people (for related discussion on culture change, see Chapter 15). According to the late Harrison, it all boils down to more personal accountability and responsibility when it comes to performing your job: ―[If] you don‘t (do it), you aren‘t going to stay.‖ Doug Finnson, a Teamsters vice-president who at the time represented the running trades (e.g., locomotive engineers and conductors), noted that the number of arbitrated discipline and dismissal cases had skyrocketed in his area of the company. Brian Stevens, an official within the Unifor union, acknowledged that having the Board‘s backing enabled Harrison to implement the changes more quickly and farther than he was ever able to do at CN. To communicate the new vision and to drive his message of personal accountability and responsibility home, Harrison instituted whiteboard sessions in which managers could ―bluesky‖ ideas. He also revived his Hunter Camps, first introduced during his time at CN Rail, as three-day retreats that brought people at all levels, including the occasional union leader, together to learn the principles straight from Harrison‘s mouth. The camps provided Harrison a forum to communicate directly, thus ―cutting through the mud.‖ Harrison‘s new vision for the company also affected employees in the management ranks. Traditional roles and the scope of work activities, particularly among the non-unionized management ranks (roughly 2,000 employees), were blurred. For example, all management employees—in addition to their administrative roles—were required to take training and get certified to work on freight trains. Rapid change was not easy for the company‘s unionized employees. In response to CP‘s move toward greater efficiency and flexibility, union leaders raised (and continue to raise) concerns about their pensions, benefits (e.g., health spending accounts), and new work rules. The unions have long expressed concerns about the safety of having office workers being cross-trained to operate large, heavy equipment, potentially replacing conductors and locomotive engineers.

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Moreover, the unions alleged that Harrison‘s changes contributed to dysfunctional working conditions within the company, and raised concerns over work schedules, fatigue management (e.g., work breaks, mandatory rest periods), and the installation of crew-recording devices in train cabs. Complicating matters for the unions at the time was the fact that the federal government was not likely to tolerate lengthy rail strikes within Canada. Questions: 1.

Analyze the different influence tactics available to Hunter, and discuss how these options relate to his power source(s). Which of his available tactics have been used thus far to bring about change at the company? Do you think his approach will lead to internalization, compliance, or resistance? Explain. Why? Hunter Harrison has the enviable position of being an extremely powerful leader. To complement his organizational power base (strong legitimate, reward and coercive power) Hunter has acquired considerable person power given his reputation with the railroad industry and business community as a hard-nosed, ―turnaround ace‖ with a long history of success; factors that increase perceptions of expert and referent power (e.g., charisma). Strong leaders like Hunter will likely use a range of tactics, from being very assertive/directive and using pressure to force change to softer techniques such as rational persuasion, inspirational appeals and consultation tactics (e.g., Hunter Camps). Some students will feel that the unions and employees may simply be demonstrating compliance with the demands of a powerful leader. However, the fact Hunter‘s new vision for the company has led to some rather dramatic increases in productivity (and profitability) may lead some employees to ―get on board‖ and experience commitment (internalization) to the change initiative. Thus far there has not been significant resistance to Hunter‘s initiatives, but this might be a result of the company‘s ability (through its leadership) to resist influence.

Analyze the different influence tactics available to the unions, and discuss how these options relate to their power source(s). If the threat of a strike is muted due to potential intervention by the federal government, then what other influence tactics are likely to be used? Explain Relative to the company (under Hunter‘s leadership), the unions are in a far less powerful position. The unions will also have their traditional organizational power bases (e.g., legitimate authority; coercive power), but not necessarily expert or referent power given the low productivity and poor financial state of the company prior to Hunter‘s arrival. Influence will likely take the form of rational appeals, exchange, and coalitions. Actions by the federal government will have the greatest impact on the unions‘ ability to enact their traditional coercive power (e.g., preventing or limiting work slowdowns and strike action), and therefore, reducing the unions‘ ability to force compliance with its demands. Removing the ability to impose pressure on management negotiators means that the unions will need to find other ways to reach their objectives (e.g., imposing external pressure on the company through use of traditional and social media - linking these rapid changes to increased safety concerns).

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As the trend toward increased efficiency continues, when negotiating, what approach do you feel would be most effective for the company? For the unions involved? Is it possible to achieve a win–win solution? Explain. Going into the negotiations, both sides will have a broad agenda that represents desired outcomes across a range of issues. So, initially, both sides will likely adopt a distributive approach. For many routine, non-confrontational issues a distributive approach might work well. Bargaining becomes especially difficult around issues where both parties have very different aspirations and interests, such as wages and new work rules. In situations where the parties are far apart on one or more of these emotionally-charged issues, an integrative approach might be more effective than a distributive approach in reaching a solution. However, as we saw in the chapter, an integrative approach to negotiations tends to be more feasible when both parties are relatively equal in power. At this time, the company negotiators are very powerful relative to union negotiators; thus, a true, integrative (win-win) solution might not be likely. But unions in this case need not come away empty handed. While they might have to accept the thrust of management‘s overall change agenda, unions might be able to achieve small concessions in specific areas that are most important to the membership (e.g., protect pension rights for long-serving employees); in doing so, ―live to fight another day.‖

What are the risks in this situation? Consider this question from the perspective of the company, of the unions, and of the federal government. Consider topics covered in other chapters. The risk in this situation for management is that union compliance to contract demands might be achieved at the expense of union-management relations. Not only will poisoned relations adversely affect future negotiations but it will likely affect day-to-day behaviours of the membership (e.g., employees will work ―to rule,‖ and withdraw discretionary (citizenship) behaviour; increased continuance commitment and lower affective/normative commitment). The risk for unions, especially if seniority rights are weakened or if gains in previous contracts are repealed, is that union leaders might lose credibility and legitimacy in the eyes of the membership, inviting changes within the union ranks (or the overall union affiliation). The risk for government is if the public sides with the unions, and views its intervention has heavy-handed and unfair.

BONUS CASE: THERANOS33 Elizabeth Holmes, at 31, is number one atop Forbe‘s list of self-made women and was named one of Time magazine‘s 100 most influential people. She is the founder and CEO, and has a 51 33

Sources: ―The 100 Most Influential People,‖ Time, April 16, 2015; ―Elizabeth Holmes Profile,‖ Forbes.com (accessed July, 2015); K. Auletta, ―Blood, Simpler.,‖ New Yorker, December 15, 2014, pp. 26–32; R. Parloff, ―New Blood,‖ Fortune, June 30, 2014, pp. 64–72; and D. Peterson, ―Theranos CEO Elizabeth Holmes: ‗Avoid Backup Plans,‘‖Inc., February 10, 2015.

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percent equity stake, in Theranos, a hardware and medical company now valued at more than $9 billion. The company‘s goal is to revolutionize the way blood testing is done worldwide. Theranos (a combination of the words therapy and diagnose) is a private company headquartered in Palo Alto, California, with 700 employees and a 265,000-square-foot facility in Newark, California, that manufactures the blood testing devices that have the potential to upend a $73 billion diagnostic-lab industry. The crux of Theranos‘s plan lies in its ability to run hundreds of blood diagnostic tests using only a few drops of blood (less than 1/100th of what is typically required) that can be acquired with a painless (and patented) finger stick. It also costs less than a quarter of what normal testing does! All of this came about largely because of Elizabeth Holmes‘s aversion to needles. As CEO, she has used her influence to raise more than $400 million for Theranos from investors like Oracle founder Larry Ellison by pushing her mission to consumerize the health care experience—which, to Holmes, means being able to walk into a Walgreens and order whatever diagnostic or preventive-oriented tests you want. Theranos‘s board of directors is a who‘s who of company and political leaders. What is it about Holmes that gives her the power to influence and lead so many people? Expertise in her field is one thing. When asked to assess Holmes as a leader, Henry Kissinger (former U.S. Secretary of State and board member) responded, ―I can‘t compare her to anyone else because I haven‘t seen anyone with her special attributes. She has iron will, strong determination. But nothing dramatic. There is no performance associated with her. I have seen no sign that financial gain is of any interest to her. She‘s like a monk. She isn‘t flashy. She wouldn‘t walk into a room and take it over. But she would once the subject gets to her field.‖ Charisma and presence are another. Known as a careful listener, employees say they can‘t remember a time when she‘s raised her voice. Holmes has been compared to any number of visionary leaders, including Steve Jobs. Former Defense Secretary William Perry, who knew Jobs says, ―She has a social consciousness that Steve never had. He was a genius; she‘s one with a big heart.‖ While Elizabeth Holmes brings a lot of qualities to the table—including a healthy dose of all five forms of power—she isn‘t without her critics. She has been roundly criticized by her industry peers for being overly secretive, and they insist that Theranos should publish some peerreviewed studies of its work. One former associate at the FDA said, ―It‘s trying to apply the Steve Jobs way of keeping everything secret until the iPhone was released. But a health test is more consequential than a consumer product. It needs to be clinically valid and provide useful information.‖ Holmes insists that the secrecy is necessary in order to protect the technology of the product and that none of the other diagnostic lab companies are asked to provide this kind of information. She says, ―There isn‘t a company that does what we do. We‘re creating a new space. We‘re in the market for people that don‘t like having a needle stuck in their arm.‖ One reason Theranos has been able to maintain secrecy is because it manufactures the equipment it uses. Other diagnostic companies purchase their equipment. In order to sell such equipment, a company has to have FDA approval, but Theranos doesn‘t sell the equipment it manufactures. The mystique of Theranos is amplified by the type of people Holmes insists on hiring. She only wants employees who match her level of passion. ―This is not, you know, ‗I‘m going to go to this company and try it for two years and then go somewhere else,‘ and so on and so forth. This is about ownership of a mission,‖ she says. Theranos promotes mainly from within, ―putting

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people in leadership positions who can not only do the work but also embrace the company‘s values, and live what that means.‖ Holmes believes experimenting and failures as the key to success, but not when it comes to the overall mission of the company. ―I think that the minute that you have a backup plan, you‘ve admitted that you‘re not going to succeed,‖ Holmes says. The ability of most employees to keep up with Holmes is questionable due to the fact that Holmes‘s entire life is Theranos. She works seven days a week and regularly puts in 80 to 100 hours. Holmes doesn‘t date or devote time to friends, doesn‘t own a television, and hasn‘t taken a vacation in 10 years. She is a vegan who doesn‘t partake in caffeine or alcohol. To many, it seems that she lives mainly off of a blended mixture consisting of cucumber, parsley, kale, spinach, romaine lettuce, and celery, which she drinks several times a day. In fact, you will rarely see Holmes outside of her black suit with a black turtleneck. To her, the outfit is like a kind of uniform: ―It makes it easy, because every single day you put on the same thing and don‘t have to think about it—one less thing in your life. All my focus is on the work. I take it so seriously; I‘m sure that translates into how I dress.‖ Questions: 1.

Is it appropriate for Theranos to be so secretive given the kind of work that it is doing? It‘s an interesting question. On the one hand, how Theranos is technologically processing blood samples could be revolutionary for the industry and making the process public could speed up a medical diagnostic revolution which could benefit millions of people. On the other hand, Theranos deserves the right to capitalize on this breakthrough. If companies were forced to release proprietary information simply because someone thinks it could benefit society—the incentive for companies to spend money on these types of innovations would be greatly lessened. The fact that other companies don‘t have to release this kind of information either is a strong argument for Theranos‘ position.

Do you think Holmes can sustain the level of effort she seems to currently put into her work? If you were on Theranos‘ board of directors, is this something you would be concerned about? One has to think that the Board would be concerned about this long term, but Holmes has a track record so far of being able to maintain this pace. As the company progresses and grows larger though, it‘s clear that Holmes is going to have to learn to delegate more effectively and adopt some of the different leadership styles mentioned in Chapter 14.

Do you think women naturally use different forms of power or influence tactics? Does Holmes show this? There is no real evidence that this is the case. Clearly, all the women listed in the front of the chapter effectively use all of the different forms of power and influence. We also see a great diversity among women leaders in the types of influence they specialize in.

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Sheryl Sandberg‘s book would insinuate that perhaps it‘s not that they use power/influence differently, but rather how they are perceived by others when they use those different forms to achieve objectives.

EXERCISE: LOBBYING FOR INFLUENCE In this exercise, students use influence techniques to lobby other students for points. The student with the most points after several rounds of lobbying, wins a cash prize (typically around $10.) The competition can get fast and furious, as long as the prize is meaningful, and the rules of the game are followed. From a vote counting perspective, it is easier to run this exercise when you have fewer than 25 students, but with teaching assistants, you may be able to use it with more. Prior to class, create a list of the students who will be participating in the exercise. Each student should receive a different number of points – for example, give Student 1 ten points, Student 2 twenty points, etc. Be sure to also create a list of everyone's assigned points for the students – this can be done on an overhead or PowerPoint as necessary. The total number of points should appear at the bottom of the list. You will also want to get stacks of index cards (or slips of scrap paper) that can serve as ballots during the exercise. I also distribute slips of paper for memos, but if students typically bring notebooks to class, that may not be necessary. When going over instructions with the students, tell them about all five voting periods. Also, tell them that you will insist on silence during the writing periods of the exercise, and that no memos can be distributed until the end of the writing period. When voting, tell the students to be sure to put the name of the person who is getting votes on the ballot, and then collect ballots by name. That will make counting up the points easier. Questions: Students may use a wide variety of social influence tactics as they write their memos, including rational persuasion, inspirational appeals, ingratiation, and personal appeals. The writing format will make some tactics more practical and appropriate than others. The success of the tactics will vary from student to student, as the same tactic can work for an effective communicator but not for a less effective communicator. The other relevant factors will also vary from student to student, but will typically revolve around past relationships, levels of personal power, and political skills.

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where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Ethics – A natural byproduct of discussing power in organizations is the discussion of ethical decision making. Ethics is discussed in detail in our book in Chapter 8. Sexual Harassment – A popular topic to cover when discussing power in organizations is that of sexual harassment. Our focus on power mainly in regards to leadership did not allow for a full discussion of the topic. While a list of the myriad of sexual harassment references is large, for a specific look at harassment by leaders, see: Offerman, L.R.; and A.B. Malamut. ―When leaders harass: The impact of target perceptions of organizational leadership and climate on harassment reporting and outcomes‖. Journal of Applied Psychology, 87, 2002, pp. 885-893. Impression Management – The methods by which individuals attempt to control what is thought of them by others. Although some of the ―tactics‖ of impression management are covered under influence tactics in this chapter, for a detailed discussion of the topic, see: Rosenfeld, P.R.; R.A. Giacalone; and C.A. Riordan. Impression Management in Organizations: Theory, Measurement, and Practice. New York, NY: Routledge, 1995. Zivnuska, S; K. M. Kacmar; L.A. Witt; D.S. Carlson and V.K. Bratton. ―Interactive effects of impression management and organizational politics on job performance.‖ Journal of Organizational Behaviour, August (2004), pp. 627-640.

Chapter 13: Leadership Styles and Behaviours

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW Effective leaders use power and influence to improve the performance and well-being of their overall units, while cultivating high-quality relationships with their followers. The effectiveness of a leader is a function of both traits and behavioural styles. This chapter summarizes research on decision-making styles, the use of transactional and transformational leadership styles, and the difference between consideration vs. initiating structure behaviours. Students are asked to consider a central question throughout the chapter – ―Is leadership innate, or can people be trained to be leaders?‖ LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 13.1 13.2 13.3 13.4 13.5 13.6 13.7

What is leadership and what does it mean for a leader to be ―effective‖? What traits and characteristics are related to leader emergence and leader effectiveness? What four styles can leaders use to make decisions, and what factors combine to make these styles more effective in a given situation? What two dimensions capture most of the day-to-day leadership behaviours in which leaders engage? How does transformational leadership differ from transactional leadership, and which behaviours set it apart? How does leadership affect job performance and organizational commitment? Can leaders be trained to be more effective?

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CHAPTER OUTLINE 50.

LEADERSHIP STYLES AND BEHAVIOURS

Leadership: The use of power and influence to direct the activities of followers toward goal achievement

Leadership Effectiveness 1.

Can be judged in a number of different ways a.

By objective evaluations, including profit margins, market share, etc.

By employee actions, including absenteeism, number of grievances filed, etc.

By subjective evaluations, including employee surveys, perceived respect, etc.

Is a function of who is asked, since members of a group often disagree about the effectiveness of the group‘s leader

Leader-member exchange theory describes how leader-member relationships develop over time a.

Role-taking phase – period in new leader-member relationships where manager describes role expectations to employee, and employee attempts to fulfill those expectations with behaviour

Role-making phase – period in which expectations of employees for leader-member dyad get mixed in with those of the leader

Resulting relationships can be either ―high quality‖ (in-group) dyads, characterized by frequent exchanges of information, influence, latitude, support, and attention, or ―low quality‖ (out-group) dyads, characterized by limited exchanges of information, influence, latitude, support, and attention

Suggests that leadership effectiveness should be judged by gauging how effective the most critical leader-member dyads appear to be

51.

WHY ARE SOME LEADERS MORE EFFECTIVE THAN OTHERS?

Leader Effectiveness – the degree to which the leader‘s actions result in the achievement of the unit‘s goals, the continued commitment of the unit‘s employees, and the development of mutual trust, respect, and obligation in leader-member dyads.

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Trait Theories 1.

Leaders are effective because of who they are a.

Traits studied include conscientiousness, agreeableness, neuroticism, openness to experience, extraversion, general cognitive ability, energy level, stress tolerance, and self-confidence

Traits may be more related to leadership emergence (who is seen as a leader) than they are to leadership effectiveness

C. Leader Decision-Making Styles 1.

Decision-making style reflects the process used by the leader to generate and chose from a set of alternatives – it is how the leader decides, not what the leader decides

Four primarily styles with regard to follower involvement in decision-making process a. b. c. d.

Autocratic – leader makes the decision alone Consultative – leader presents the problem to employees, gets their input, but then makes the final decision alone Facilitative – leader presents the problem to a group of employees and seeks consensus on the solution Delegative – leader gives employees the responsibility for making the decision

Although allowing employees to participate in decision-making increases employee satisfaction, it also takes up time

Time-Driven Model of Leadership a.

Proposes that choice of decision-making style should be based on answers to questions in seven areas: i. ii. iii. iv. v. vi. vii.

decision significance importance of commitment leader expertise likelihood of commitment shared objectives employee expertise teamwork skills

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In one study, managers who used the time driven model made successful decisions 68 percent of the time, while those who didn‘t made successful decisions 22 percent of the time

Managers tend to overuse the consultative style, and underutilize autocratic and facilitative styles

Try This! Take a particular class decision, say, the decision to make more of the final grade dependent on a peer-evaluation from the members of one‘s student workgroup. Use the questions in the time-sensitive model to suggest whether you as the professor should make that decision autocratically, or whether some other style would be more appropriate. Depending upon how one responds to the likelihood of commitment question in Figure 13-3, the likely choice will be autocratic or consultative. D.

Day-to-Day Leadership Behaviours Try This! Ask students to think about what leaders actually ―do‖ on a day-today basis. Then list what‘s said on the board. Try to write what‘s said into two unlabeled columns, one reflecting initiating structure behaviours and one reflecting consideration behaviours. Students will typically begin listing more structure-focused behaviours before transitioning to consideration issues. If students say something that fits better into some other category (for example, ―inspire‖ would fit better under transformational leadership), list that to the side and come back to it later. Once the columns have been created, ask students who have read the book to guess what the columns reflect. 1.

Ohio State studies boiled leadership behaviours down into two categories: a.

Initiating Structure – extent to which the leader defines and structures the work of employees leading to goal attainment. Includes initiation, organization, and production factors i.

Strong positive relationship with employee motivation

ii.

Moderate positive relationship with overall unit performance

Consideration – extent to which leaders create job relationships characterized by mutual trust, respect for employee ideas, and consideration of employee feelings i.

Strong positive relationship with perceived leader effectiveness, employee motivation, and employee job satisfaction

ii.

Moderate positive relationship with overall unit performance

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OB Assessments: Initiating Structure and Consideration This assessment gives students some insight into whether their ―natural‖ leadership style is to initiate structure or provide consideration for their employees. An interesting discussion question after students take this assessment is to ask them if they feel that it would be possible for them to assume the other leadership style. Under what conditions might they do so? What training might they need before they could do so? Are there conditions which might make them slip back into their preferred style? These questions can start a discussion about whether leadership approaches are innate or learned behaviours (probably a little of both); how training impacts the ability to lead (greatly); and how environmental conditions affect both the most effective leadership behaviour to use, and the behaviour that is most likely to be used (stress causes people to revert to their ―natural‖ style.) 2. Life Cycle Theory of Leadership a.

The optimal combination of initiating structure and consideration depends on the readiness (ability and willingness to work) of the employees in the work unit i. Low Readiness – Telling (high initiating structure, low consideration) ii. Low/Medium Readiness – Selling (high initiating structure, high consideration) iii. Medium/High Readiness – Participating (low initiating structure, high consideration) iv. High Readiness – Delegating (low initiating structure, low consideration)

Transformational Leadership Behaviours 1.

Transformational leaders inspire their followers to commit to a shared vision that provides meaning to their work while also serving as a role model who helps followers develop their own potential and view problems from new perspectives

Levels of Leadership Behaviours – arranged in order from most passive/ineffective to most active/effective a. b. c. d.

Laissez-Faire – hands off leadership Transactional (Passive Management by Exception) – leader waits for mistakes, then corrects them Transactional (Active Management by Exception) – leader monitors for mistakes, then corrects them Transactional (Contingent Reward) – leader attains follower agreement on what needs to be done, and gives promised or actual rewards in return for adequate performance Transformational

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OB Internationally. This box describes ―Project GLOBE‖ a collection of researchers from different countries who are trying to determine how cultural variables impact perceptions of effective leadership. The box shows that transformational leadership is the most universally accepted approach to leadership of any of the styles studied by the Project GLOBE team. 3.

The ―Four Is‖ of Transformational Leadership a.

Idealized Influence – behaving in ways that earn the trust and respect of followers, causing followers to want to identify with and emulate the leader (synonymous with ―charisma‖)

Inspirational Motivation – behaving in ways that foster an enthusiasm for and commitment to a shared vision of the future

Intellectual Stimulation – behaving in ways that challenge followers to be creative and innovative

Individualize Consideration – behaving in ways that help followers achieve their potential through coaching, development, and mentoring

OB on Screen: Darkest Hour. The clip referenced in the book begins at around the 1:54:10 mark of the film, continuing until the 2:00:00 mark. The clip depicts Winston Churchill delivering the ―We Shall Fight On The Beaches‖ speech. While many of the members of Parliament are already on his side, this impassioned speech convinces the leader of the opposing party to switch sides on the issue and favor war over negotiating a one-sided peace agreement. It is a great opportunity to ask students what this speech delivers that makes it so effective. Some might discuss the actual words used or the level of emotion that Churchill brings to his delivery. (Keeping in mind that ―emotion‖ looks differently in 1940‘s Britain than it might today.) Try to push them to identify the certain aspects of the speech that are transformational (or the specific ―I‖‘s). Ask the students if they can remember a leader delivering a speech that made them want to rise to an occasion? It doesn‘t have to be a politician, but it could be a coach, a teacher, a parent, etc. (Maybe even just a character in a movie!). How did it make them feel? Why did it work? Remembering these moments might help students to lock into why a speech might be transformational in nature. BONUS OB on Screen: The Martian. The clip referenced begins around the 1:26:34 mark of the film, continuing until about the 1:30:40 mark. The clip depicts Commander Melissa Lewis (Jessica Chastain) going through the process of making an important decision and demonstrating a specific style of leadership (facilitative). This is a great example to use the Time-Driven Model of Leadership depicted in Table 14-3. You can literally walk the students through the entire model by showing the clip and then asking them questions: 1) Does the decision have high or low significance? (high)

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2) 3) 4) 5) 6) 7)

Does Commander Lewis need high or low commitment from the crew? (high) Is Commander Lewis‘s expertise high or low? (Does she know everything it would take to be successful?) (low) Is the likelihood her crew will be committed high or low? (high) Are shared objectives among the crew high or low? (high) Is crew expertise high or low? (high) Does the crew have high or low teamwork skills? (high)

The model will result in the facilitative leadership style being the appropriate choice (which is exactly what Commander Lewis uses). It is worth talking to students about when they think a model like this might not be a useful or what other factors might have changed the right style to be something else. For instance, had the crew either not shared the same objectives, not been experts, or not have had proven teamwork skills, the correct style would have resulted in a ―consultative‖ style where Commander Lewis should have taken the opinions of the crew into account, but ultimately made the decision herself. BONUS OB on Screen: The King’s Speech. The clip begins around the 1:35:50 mark of the film, continuing until about the 1:38:35 mark. Please also note that the clip contains language that is generally considered profane. If you have seen the movie, you will realize that the profanity is an integral part of the story – the King does not stutter when he cusses or sings. That being said, an alternate clip which is equally as effective runs in Chapter 20 of the movie from 1:41:44 to 1:48:30 which is the King actually delivering his war time speech. The first clip is King George VI preparing to deliver his speech and growing increasingly frustrated as he can‘t get the words out and questioning why he is in the position he is. The second clip is the King actually delivering his speech to all of England over the ―wireless‖ which is still a relatively new technology at the time. Regardless of which clip you use, the discussion could revolve around why we place transformational outcomes on our political leaders in times of war or crisis and don‘t necessarily do the same at other times. Encourage your students to differentiate those times and why different sets of expectations are called for. F.

Summary: Why Are Some Leaders More Effective Than Others? (Figure 13-6)

52.

HOW IMPORTANT IS LEADERSHIP?

Units led by transformational leaders tend to be more financially successful and bring higher quality products and services to market at a faster rate

Transformational leaders tend to foster leader-member exchange relationships that are of higher quality, marked by especially strong levels of mutual respect and obligation

Employees with transformational leaders have higher levels of motivation than other employees, setting higher goals and standards for themselves, and trusting the leader more

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Employees with transformational leaders have higher levels of commitment and job satisfaction than other employees

Substitutes for Leadership Model 1.

Substitutes reduce the importance of a leader while simultaneously providing a direct benefit to employee performance (e.g. task feedback)

Neutralizers reduce the importance of the leader, but have no impact on performance (e.g. spatial distance)

Try This! Ask students to share what their most boring summer job ever was. These jobs will often be very high on neutralizers, especially task stability. Then ask the students to consider whether their boss‘s impacted their behaviour very much (if they were even around on a regular basis). 53.

APPLICATION: LEADERSHIP TRAINING

One of the most important things organizations can do to maximize the effectiveness of their leaders is to train them

Transformational leadership behaviours can be learned, and managers who take the time to learn them demonstrate improved effectiveness

DISCUSSION QUESTIONS 13.1

Before reading this chapter, which statement did you feel was more accurate: ―Leaders are born‖ or ―Leaders are made‖? How do you feel now, and why do you feel that way? Hopefully, after reading the chapter, students will see that leaders can be ―made‖ (trained), as well as ―born‖.

13.2

The time-sensitive model of leadership argues that leaders aren‘t just concerned about the accuracy of their decisions when deciding among autocratic, consultative, facilitative, and delegative styles; they‘re also concerned about the efficient use of time. What other considerations could influence a leader‘s use of the four decision making styles? Another thing that could influence which decision making style a leader uses is whether or not development of employees is a priority. The more leaders want employees to gain skills, the more likely they may be to choose participative or delegative decision making styles.

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13.3

The time-sensitive and life cycle models of leadership both potentially suggest that leaders should use different styles and behaviours for different followers. Can you think of any negative consequences of that advice? How could those negative consequences be managed? The problem with using different styles and behaviours for different followers is that followers might perceive the leader as being unfair. It would be important that the leader be open about what he or she was doing, and employees understand that they will be rewarded equally for doing equal work.

13.4

Consider the four dimensions of transformational leadership: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Which of those dimensions would you respond to most favorably? Why? Students will have different responses to this question, but it may be useful to remind them of what they learned earlier about leadership-member dyads, and in-groups and out groups. If an employee responds particularly well to a specific behaviour favored by a transformational leader, that employee may very well be in the leader‘s ―ingroup‖.

13.5

Can you think of any ―dark sides‖ to transformational leadership? What might they be? The ―dark sides‖ to transformational leadership are that transformational leaders can sometimes get so wrapped up in their vision that they forget to listen to their followers – if the vision is wrong, that can be problematic. In addition, followers may be swayed by a powerful vision, and not take the time to analyze whether or not it is the best strategy for the company. Charismatic leaders can also be likeable, but unable to accomplish anything, and resentful.

CASE: SPOTIFY Questions: 1. Is it reasonable for a CEO like Ek to expect his employees to have the same passion and commitment to their work as he does? The easy answer to this question is ―Yes, absolutely!‖ The more difficult part is what the ramifications seem to be for high-level Spotify employees that can‘t articulate that passion in the same way. One could argue that it is the responsibility of the leader to help develop and motivate that passion, not simply get rid of people that don‘t have it. Ek seems to take more of a ―surround myself with passionate people‖ approach. 2. What are the advantages and disadvantages of having a leader with such a strong vision for the company?

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The advantages are that a strong vision can be a very compelling motivator for employees. It also helps a leader to be transformational in that it is easier to provide inspirational motivation when a leader develops that shared vision across employees. The disadvantages likely stem from the effectiveness of that vision and whether it is easy or difficult for other people to buy into it. If a leader is so focused on a vision and can‘t get others to buy into it or if clouds their judgment so that they cannot make effective decisions – that strong vision could become a weakness. 3. Does Ek fit your perception of what a "transformational leader" is supposed to be? When most people just think ―transformational leader‖, they probably picture an outgoing, charismatic, stand in front of a lot of people, and deliver a passionate message type of person. In other words, someone high on ―idealized influence‖. While on the surface, Ek is probably not that, when one boils down what a transformational leader actually is, Ek probably rates pretty highly on the other three I‘s. He certainly would be high on inspirational motivation and intellectual stimulation. Aspects of the case make it sound like he also may be high on individualized consideration given that he wants and coaches employees to follow through on their true passions. BONUS CASE: GENERAL MOTORS34 Mary Barra, 56, has topped Fortune‘s list of most powerful women for two years in a row. As CEO and Board Chairman of General Motors, she is ultimately responsible for the leadership of an organization with over 200,000 employees and $160 billion in revenue in 2016. It‘s quite a daunting task, but so far Barra seems to be perfectly up to it. Barra took over the company shortly after GM declared bankruptcy and was forced to take a government bailout in order to survive. She stepped in right as GM was fighting through the recall of 2.6 million cars due to a faulty ignition switch that was deemed responsible for 21 deaths and more than 500 injuries. Barra was placed front and centre, testifying before Congress about the dysfunctional culture at GM. Most believe she handled herself incredibly well, primarily by being open and honest about the safety scandal both inside and outside the company—even going so far as to commission an independent investigation (which resulted in a number of firings and early retirements). Known for having a collaborative leadership style, Barra is not one to shirk from issues, and encourages those around her to tackle things head-on. ―I want bad news,‖ she insists, ―the sooner the better. I want it when the person closest to it realizes there‘s a problem. Almost every problem at the start is solvable. The longer it takes to solve, the higher it gets in the organization and the bigger the problem gets.‖ Barra, who has spent 38 years at GM (she 34

Sources: M. DeBord. ―Mary Barra Is About to Become the Most Influential CEO in GM History,‖ BusinessInsider.com, February 17, 2017: http://www.businessinsider.com/mary-barra-most-influential-ceo-in-gmhistory-2017-2; C. Fussman. ―What I‘ve Learned: Mary Barra,‖ Esquire.com, April 26, 2016: http://www.esquire.com/lifestyle/cars/interviews/a44325/what-ive-learned-mary-barra/; P. Ingrassia. ―Hail Mary,‖ Fortune, September 15, 2016, pp. 84–89; B. Luscombe. ―13 Questions with Mary Barra,‖ Time, June 2, 2016: http://time.com/4354740/mary-barra/; and R. Tetzeli. ―The Accelerators,‖ Fast Company, November 2016, pp. 68– 74, 100.

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started when she was 18), partly developed her leadership skills during her early career in factory management. Some believe the reason she‘s been so successful is a controlled ego—the exact opposite of many of her predecessors. Barra is willing to share credit when it is deserved, which has allowed her to hang on to the upper-level executives that were competing with her for the CEO job. Arguably, she‘s assembled the best management team in GM‘s history. One of Barra‘s major gifts has been her ability to inspire accountability inside a culture that has been known for complacency and passing the buck. Barra, speaking to a room full of newly promoted executives, said, ―Remember your whole career, how you‘ve been talking about them? If only they would get it? If only they would work this out? Well, you are now they. If you don‘t like something, you have to talk to yourself.‖ When she gets out of bed, what does Mary Barra (CEO of GM) think about? ―I spend a lot of early mornings thinking about executing our plan quickly. The big thing I worry about is speed,‖ says Barra. CFO Chuck Stevens agrees, highlighting a statement from the faulty ignition switch internal investigation about the culture at GM, ―No sense of urgency. No accountability or responsibility. A siloed mentality.‖ Barra has reacted quickly and with force to make culture change a reality by implementing a number of initiatives including ―GM 2020,‖ which is a program designed to create cross-functional labs throughout the company. Barra has also pushed hard to create a new culture of speed by creating a year-long transformational leadership course for upper-level executives that Barra personally leads. It‘s not focused on company strategy, but rather the interpersonal skills she believes are necessary to create change. When the behaviours of top managers change, then the people who work with them will emulate these new ways. Barra‘s major vision for GM is to lead in safe autonomous driving. This puts them directly up against the fast-moving cultures of Google, Uber, and Tesla. Barra believes GM‘s recent acquisition of Cruise Automation ($581 million) puts them square in the driver‘s seat. After a successful, high-profile test of an autonomous Chevy Bolt (with Barra riding in the back seat), Barra told a large group of Cruise employees, ―If somebody [at GM] says you can‘t have something, or you can‘t do something, or it‘s going to take this much time, and it doesn‘t make sense to you, challenge them. I want you to take the energy and speed and how you look at doing things and drive it into the core of GM.‖ GM believes that they have the advantage. According to GM product chief Mark Reuss, a challenge faced by everyone within the automotive industry has been to take technology and integrate it into a car. Reuss has suggested, in fact, that often the effort to integrate technology into a vehicle is equal to or more than the technology itself. ―A car has to work right every time, all the time.‖ So far, the technology companies have spent billions of dollars in development and have little to show for it. Still, Barra is not willing to bask in success for long. Onstage at GM‘s headquarters she told her group, ―Don‘t confuse progress with winning. Are you doing what you can? Or are you doing what it takes to win?‖ Questions:

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Do you think GM can outduel the technology companies for safe autonomous driving vehicles? The initial evidence certainly supports that notion. GM carries with it an enormous amount of history in making safe, reliable automobiles. The question is which part of autonomous vehicles is the hardest to imitate? GM is betting that the software side is easier to copy than building a reliable car—the purchase of a software company (Cruise Automation) might mean exactly that.

Would you consider Mary Barra to be the prototypical transformational leader? In what ways does she fit or not fit that model? Barra would probably rank highest along the dimensions of individualized consideration (coaching and showing people how they fit into the bigger picture) followed by inspirational motivation (pushing GM to think of its role in the automotive industry differently than it has before). Those that know her well tend to be willing to follow her lead and emulate her behavior (idealized influence). However, most people perceive transformational leaders to be individuals with big egos and bigger ideas and Barra certainly does not fit that description given her collaborative style.

Given GM‘s history, why does Barra put a premium on her executives‘ leadership behaviors? Barra recognizes that many of the reasons for GM‘s past problems lie in its culture. The only way to change that culture is to drive a change in leadership behaviors throughout the organization.

BONUS CASE: SPACE X35 At 43, Elon Musk has already helmed three companies that have revolutionized their respective industries: PayPal, Tesla, and SpaceX. He is chairman of the board of directors for a company that is likely to be another: SolarCity. If you were to ask the average person for businesspeople who have the grandest visions for changing humanity, Elon Musk would likely be a name mentioned often. He is known for being brilliant, a true visionary, and a great motivator. At the same time, he‘s also known for having an extraordinarily demanding leadership style that isn‘t for everybody. This contrast is what makes the roots of leadership complicated. As grandiose as all of these companies are in terms of their potential impact, SpaceX (an aerospace manufacturer and space transport services company) is perhaps the biggest. Using the money he made from the sale of PayPal to eBay, Musk started the company in 2001 after the Russians turned him down when he tried to purchase a used ICBM missile. His friends thought he was crazy. One friend stated, ―We wound up literally having an Alcoholics Anonymous– 35

Sources: T. Junod, ―Elon Musk: Triumph of His Will,‖ Esquire, December 2012, pp. 139–149; A. Vance, Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future (New York: HarperCollins, 2015); and A. Vandermey, ―The Shared Genius of Elon Musk and Steve Jobs,‖ Fortune, December 9, 2013, pp. 98–106.

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style intervention where I flew in people to Los Angeles and we all sat around a room and said, ‗Elon, you cannot start a launch company. This is stupid.‘ Elon just said, ‗I‘m going to do it. Thanks.‘‖ Musk‘s initial vision for the company was to build an inexpensive, reusable rocket that would make space travel not that different from airline travel. The company has succeeded spectacularly— including being awarded a $1.6 billion contract with NASA to resupply the International Space Station. To some degree, it‘s his vision that makes people want to work for him. One employee says, ―His vision is so clear, he almost hypnotizes you. He gives you the crazy eye, and it‘s like, yes, we can get to Mars.‖ While his vision for the future can be enthralling, his up-and-down leadership styles can cause problems for those he works with. He is known for moving back and forth between being gentle and loyal and then being really hard on people. Those who know him best see him as more of a general than a CEO. While all of Musk‘s roles and companies get to experience this, the biggest stories tend to come out of SpaceX. A recent biography states, ―Part of it stems from SpaceX being the apotheosis of the Cult of Musk. Employees fear Musk. They adore Musk. The give up their lives for Musk, and they usually do all of this simultaneously.‖ Elon Musk is known for his passion in everything he works on and for being able to instill that passion in others. That passion can lead to incredible emotional highs and lows, especially when you are launching rockets into space. Early in SpaceX‘s tenure, one of their rockets (a Falcon 1) exploded shortly after takeoff. Dolly Singh, a recruiter at SpaceX said, ―It was so profound seeing the energy shift over the room in the course of thirty seconds . . . You don‘t usually see grown-ups weeping, but there they were. We were tired and broken emotionally. Musk addressed the workers right away and encouraged them to get back to work. He said, ‗Look. We are going to do this. It‘s going to be okay. Don‘t freak out.‘ It was like magic. Everyone chilled out immediately and started to focus on figuring out what just happened and how to fix it. It went from despair to hope and focus.‖ SpaceX has now completed dozens of launches successfully and has more than 50 flights planned over the next few years (totaling $5 billion in revenue). The future is bright, but will require continued improvement and a steady focus. Musk is known for being a hands-on manager and incredibly task focused. Employees have learned not to tell Musk that what he‘s asking is impossible. A SpaceX employee says, ―Elon will say, ‗Fine. You‘re off the project, and I am now the CEO of the project. I will do your job and be CEO of two companies at the same time. I will deliver it. What‘s crazy is that Elon actually does it. Every time he‘s fired someone and taken their job, he‘s delivered on whatever the project was.‖ When asked about this kind of approach Musk says, ―I certainly don‘t try to set impossible goals. I think impossible goals are demotivating. You don‘t want to tell people to go through a wall by banging their head against it. I don‘t ever set intentionally impossible goals. But I‘ve certainly always been optimistic on time frames.‖ When SpaceX first started, Musk interviewed almost every single one of SpaceX‘s first 1,000 hires—janitors and technicians included. (SpaceX now employs more than 3,500 workers). He still continues to interview the engineers. Candidates are warned before walking in that the interview could be as short as thirty seconds or as long as fifteen minutes. Once in, engineers have a range of experiences from great to torturous depending on how they handle questions.

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Not everyone is cut out to work at SpaceX. Singh says, ―The recruiting pitch was SpaceX is special forces. If you want as hard as it gets, then great. If not, then you shouldn‘t come here.‖ A reporter who wrote a book on Musk had this to say: ―Numerous people interviewed for this book decried the work hours, Musk‘s blunt style, and his sometimes-ludicrous expectations. Yet almost every person—even those who had been fired—still worshipped Musk and talked about him in terms usually reserved for superheroes or deities.‖ Questions: 1.

Does Elon Musk sound like the kind of leader that you would like to work for? Why or why not? Obviously this is a personal opinion, however, Musk is clearly a transformational leader in many ways and the research is clear that people respond to leadership very well under those circumstances. The quote at the end of the case is likely telling— everyone who has worked there seems to revere him. At the same time, those that work there generally self-selected into SpaceX so there could be a selection bias as well.

Is there a danger to having such a strong, charismatic leader as the head of a company? Would you have reservations investing in the stock of SpaceX if it were to go public? As long as that company‘s success isn‘t built into that leader being there, there probably aren‘t a lot of reasons to argue against wanting those characteristics in a leader. In SpaceX‘s case, this could likely be a problem. If Musk were no longer involved in SpaceX (for whatever reason), you‘d have to think that the company would not be nearly as successful. Many people said the same thing about Steve Jobs and Apple though and Tim Cook (clearly very different from Steve) has stepped in and most people think he has performed very well. SpaceX is a little newer than Apple though so the loss might be more significant.

Would you consider Musk to be a transformational leader? In what ways does he fit that model and in which ways does he not? Musk exhibits many of the transformational leadership behaviors. Idealized influence, inspirational motivation, and certainly intellectual stimulation. He is probably lowest (by far) on individualized consideration based on the information that‘s out there. One could argue that his autocratic style at times detracts from that ―transformational‖ feeling.

EXERCISE: TAKE ME TO YOUR LEADER Instructions: Emphasize that each member should choose a leader that is personally interesting to them, but that they should also make their choices as diverse as possible within the group. If you want,

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you could also allow some group members to choose ―write-in leaders‖ that are not represented in the table. Sample Individual Output: Fitness Trainer:  Does a lot of leading by example (showing clients how to do exercises)  Does a lot of cheering on clients to bang out a few more reps in each set  Only sees clients a few hours a week, so lacks day-to-day input into diet, nutrition, etc.  Often knows a lot more than clients about relevant things (like how to do exercises, how to avoid injury, how to eat well)  Can only gauge his/her effectiveness over a long time period (because changes in outward physical appearance occur slowly, as may improvements on specific exercises) Sample Group Output: Leadership Universals:  Serve as example  Use persuasion to influence  Help followers through struggles  Share expertise Situational Challenges:  Limited time spent with follower  Limited control over key facets of task  Limited ability to gauge effectiveness  Difficulties dealing with outside ―shocks‖ Questions: It will almost certainly be the case that the universals will represent some combination of proper decision-making styles, initiating structure, consideration, or transformational leadership. If the ―universal‖ listed does not seem relevant to one of those concepts, consider whether the listed concept would indeed be universal. The situational challenges will likely be represented, in some form, in the time-sensitive model, the life-cycle model, or the substitutes for leadership model. It may well be though, given the sheer spectrum of situational challenges, that the items listed in this section will not be found in one of those models.

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Blake and Mouton‘s Managerial Grid – Complements the Ohio State and Michigan Studies by more fully describing various combinations of initiating structure (labeled concern for production) and consideration (labeled concern for people). For example, low levels of initiating structure and high levels of consideration is termed ―country club management.‖ For more on this, see: Blake, R. R.; and J. S. Mouton. ―A Comparative Analysis of Situationalism and 9,9 Management by Principle.‖ Organizational Dynamics 10 (1982), pp. 20-43. Path-Goal Theory of Leadership – Like the time-driven and life cycle models, this theory argues that the effectiveness of four leader behaviours (directive behaviours, akin to initiating structure, supportive behaviours, akin to consideration, participative behaviours, and achievement-oriented behaviours) on leader effectiveness depends on follower characteristics (skills, experiences, locus of control) and environmental characteristics (task structure, team dynamics). For more on this, see: House, R. J. ―A Path-Goal Theory of Leader Effectiveness.‖ Administrative Science Quarterly 16 (1971), pp. 321-38. Fielder‘s Contingency Model – This model also focuses on how the effectiveness of leader behaviours varies across situations. More specifically, the model suggests that the effectiveness of task-oriented behaviours (akin to initiating structure) and relationship-oriented behaviours (akin to consideration) varies according to leader-member relations, task structure, and position power. The theory is best known for its unique measurement of the leader‘s preference for task vs. relationship-oriented behaviours. That preference is assessed by asking leaders how much they like their ―least preferred coworker‖ (LPC). If leaders like even their least preferred coworker, they purportedly lean toward relationship-oriented behaviours. If leaders describe that least preferred coworker in very unfavorable terms, they purportedly lean toward taskoriented behaviours. For more on this, see: Fiedler, F. E. A Theory of Leadership Effectiveness. New York: McGraw-Hill, 1977. Authentic Leadership – This concept integrates the study of leadership with the study of trust and ethics (see Ch. 7). The authentic leadership perspective argues that leaders need to know their own ethical principles and act on those principles when in a leadership role. Avolio, B. J.; W. L. Gardner; F. O. Walumbwa; F. Luthans; and D. R. May. ―Unlocking the mask: A look at the process by which authentic leaders impact follower attitudes and behaviours.‖ Leadership Quarterly 15 (2004), pp. 801-23.

Chapter 14: Organizational Structure

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW This chapter identifies and describes the key factors in designing an organization‘s structure, including work specialization, chain of command, span of control, centralization of decision making, formalization, business environment, strategy, technology, size, and organizational form. It also points out some of the pitfalls inherent in restructuring and describes how to manage them. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 14.1 14.2 14.3 14.4 14.5 14.6

What is an organization‘s structure, and what does it consist of? What are the major elements of an organizational structure? What is organizational design, and what factors does the organizational design process depend on? What are some of the more common organizational forms that an organization might adopt for its structure? When an organization makes changes to its structure, how does that restructuring affect job performance and organizational commitment? What steps can organizations take to reduce the negative effects of restructuring efforts?

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CHAPTER OUTLINE 54. ORGANIZATIONAL STRUCTURE A.

An organizational structure formally dictates how jobs and tasks are divided among and coordinated between individuals and groups within the company

55. WHY DO SOME ORGANIZATIONS HAVE DIFFERENT STRUCTURES THAN OTHERS? A.

Organizational chart – a drawing that represents every job in the organization, and the formal relationship between jobs

Elements of Organizational Structure 1.

Work Specialization – the way in which the tasks in an organization are divided into separate jobs a.

Highly specialized jobs, where workers do only one kind of task, may be efficient, but workers will lack flexibility and job satisfaction

Chain of Command – deals with reporting relationships within an organization, capturing the flow of authority down through the levels of the organization a.

Modern organizations may have very complex chains of command, with people reporting to two or more managers

OB on Screen: Aquaman. The clip referenced in the book begins at around the 26:20 mark of the film, continuing until the 31:19 mark. Bureaucracy and chain of command in a superhero flick? Who would‘ve thought it! Much like King Orm, most people have a tendency to get frustrated with chain of command and policy/rule issues inside large organizations. Have students think about moments when they couldn‘t get somebody to do something because they didn‘t have the ―authority‖ to tell them what to do. It doesn‘t take long for students to come up bureaucracy issues they have run into. Remind them that the more bureaucratic structures become, the less likely they are to have the ―organizational power‖ it takes to get something done and the more likely they will have to lean on other forms of influence. It‘s also a great opportunity to talk about how certain organizational structures can increase the political behaviors of employees. In Aquaman, even a King can be held up by rules, approvals, and politics. BONUS OB on Screen: The Imitation Game. The clip referenced begins around the 20:20 mark of the film, continuing until about the 23:26 mark. The clip depicts Alan Turing requesting resources from Commander Alistair Dennison in order to build a machine that will solve the riddle of the ―Enigma Machine‖ which is a code-based system the Nazi‘s used in WWII. Turing, who is not

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used to being in an ―organization‖ (much less a military structure), has clearly run into some obstacles he doesn‘t believe should exist for him. As explained by Commander Dennison, in the military, organization and chain of command are essential for survival. You cannot simply ―go around‖ them if you don‘t like what your supervisor says. As it turns out, Turing attempts (and succeeds) to do exactly that by writing a letter to Winston Churchill requesting that he be put in charge of the unit. Once that happens, the commander is forced to oblige Turing‘s wishes. Although this is a unique scenario, it is worth having a discussion with students about when it might be appropriate in an organization to go around the ―chain of command.‖ What are the possible repercussions of that decision for the organization and the person who ignores the company structure? Posing a line of questioning about what the benefits are for an organization in having a strict chain of command can be fruitful. As students, what are they going to do when their boss tells them ―no‖ to a request they believe is in the best interests of the organization? How are organizations set up to minimize these kinds of issues with their employees? Ask students if anyone has ever been a manager in an organization. Have they ever experienced an employee who tried to go around them to do something? How did it make them feel and how did they react? BONUS OB on Screen: The Departed. The clip begins around the 1:36:53 mark of the film, continuing until about the 1:38:03 mark. The clip depicts Colin Sullivan and Police Captain Queenan discussing the fact the ramifications of the fact that Sullivan is going to be investigating other members of the SIU to find a ―rat‖ that has been tipping off a major criminal (Frank Costello). The situation provides an example of how, by creating a subunit, the information flow between two different groups is blocked. One topic for class discussion is under what circumstances a company might want to create units like this on purpose. Following that, a discussion of how many companies do this inadvertently (creating silos) and then spend lots of time and money trying to keep the information flowing between the groups. It is a great time to discuss how this has happened in the Sony example in the book (or through the extra case provided below in the IM). (Instructor note: Be careful when you start this scene. It should begin immediately as Matt Damon enters the Captain‘s office. If you start it too early, right at the beginning of the chapter, you will end up with some questionable language.) BONUS OB on Screen: Star Wars II: Attack of the Clones. The clip begins around the 1:33:34 mark of the film, continuing until about the 1:35:22 mark. The clip depicts Chancellor Palpatine being awarded ―emergency powers‖ over the Galactic Senate. This move centralizes all decision-making authority within the organizational structure of the Republic. Clearly, Yoda and Mace Windu (the two characters at the beginning and ending of the scene) recognize what has just been done—even if the rest of the assembly does not. In addition to discussing what this might mean for Star Wars, encourage students to think about the structures they come into contact with every day. How might the structure of the university or system they belong to affect them? What about the structure of the groups they belong to? 3.

Span of Control – represents how many people report to a given manager

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Narrow spans of control allow for close working relationships, but can significantly increase labor costs, and cause employees to become resentful of being too closely supervised

Current research suggests that a moderate span of control is best for an organization‘s productivity, but spans of control in organizations have increased significantly in recent years, creating flatter structures

Small spans of control create ―tall‖ organizational structures, while large spans of control create ―flat‖ structures

Centralization – shows where decisions are made in the organization a.

Centralized – managers at the top of the organizational chart make decisions

Decentralized – managers at the bottom of the organizational chart make decisions

OB Assessments: Centralization. This assessment determines whether or not a student‘s job is centralized or decentralized, based on the hierarchy of authority and the level of participation in decision making. Have the students fill out the assessment based on their current job or the last job they held. Focus discussion on whether the students preferred the structure they experienced, or whether they would have liked a different kind of structure better. 5.

Formalization – refers to the number of rules and procedures that are used to standardize behaviours and decisions – companies that have a lot of rules are formal, those with fewer rules, less formal a.

Formalization is a necessary coordination mechanism when organizations want to deliver a standardized product or service

Elements in Combination a.

All of the above elements can be combined to paint a picture of two different types of organizations: i.

Mechanistic – Efficient, rigid, predictable, standardized, these companies thrive in a stable environment. They have a structure that relies on high levels of formalization, a rigid and hierarchical chain of command, high degrees of work specialization, centralization of decision-making, and narrow spans of control.

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ii.

Organic – Flexible, adaptive, outward-focused organizations that thrive in dynamic environments. They have structures that rely on low levels of formalization, weak or multiple chains of command, low levels of work specialization, and wide spans of control.

iii.

Most organizations fall somewhere between the two types, and whether or not a type is effective depends on the environment of the organization

Organizational Design 1.

Organizational design is the process of creating, selecting, or changing the structure of an organization

Factors Influencing Organizational Design a.

Business Environment i. Consists of customers, competitors, suppliers, distributors, and other factors external to the firm a.) Stable environments don‘t change rapidly – more suitable to mechanistic designs b.) Dynamic environments change rapidly – more suitable to organic designs

Company Strategy i.

Describes the organization‘s objectives and goals and how it will capitalize on its assets to make money a.) Low cost producers rely on selling products at the lowest possible cost and being as efficient as they can, often taking a mechanistic approach b.) Differentiators focus on providing high quality or unusual products and adapting to their environment quickly, often taking an organic approach

Technology i.

The method by which an organization transforms inputs into outputs

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ii.

Research suggests that the more routine a technology is, the more mechanistic a structure should be

Company Size i.

The larger an organization becomes, the more likely it will be to have a mechanistic design

D. Common Organizational Forms 1.

Simple Structure a.

A small organization with one person at the top who is the owner/manager, companies with simple structures have little specialization or formalization

Try This! Ask students if any of them grew up in a family business. Have them describe the business to see if it fits the characteristics of a simple structure. Does the student see anything limiting or inefficient about the business‘s current structure? Can the student point to the need for a structure that is more bureaucratic in nature? 2.

Bureaucratic Organizations a.

Bureaucracies are designed for efficiency, and rely on high levels of work specialization, formalization, centralization of authority, rigid and well-defined chains of command, and relatively narrow spans of control

Functional Structure i.

Groups employees by the functions they perform for the organization – most mechanistic of bureaucratic organizations

Multi-Divisional Structure i.

Product structure – employees are grouped around products

ii.

Geographic structure – employees are grouped by location

OB Internationally. This text box looks at IBM‘s organizational structure, noting that IBM is moving from a geographic structure to a more functional structure. As the world becomes flatter through technology, clients expect the best talent from around the world, not just the best talent that happens to be sitting in their city. One discussion question that might be asked is, ―Are there any drawbacks to this

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approach?‖ Students should consider time zones, language difficulties, and cultural differences in their answers. iii.

Client structure – employees are grouped around a specific client

iv.

Matrix structures – combine two types of structure into one, typically based on functional and projects or product divisions a.) Matrix structures are very flexible, and allow organizations to put together teams based on employee experience and skill b.) Matrix structures give each employee two chains of command, two groups with which to interact, and two sources of information to consider – can create high stress levels for employees

Summary: Why Do Some Organizations Have Different Structures Than Others? (Figure 14-6)

56. HOW IMPORTANT IS STRUCTURE? A.

Changes to an organization‘s structure (restructuring) can have negative effects on performance, at least in the short term, because they hinder learning and decision making and increase employee stress

Restructuring has a moderate negative effect on commitment, with affect commitment being much lower in organizations that restructure

57. APPLICATION: RESTRUCTURING A.

Organizations today frequently restructure – often laying off managers in an attempt to create a flatter organization

One of the best ways in which managers can help a restructuring to succeed is to help to manage the guilt and remorse felt by layoff survivors – those people who don‘t leave the company – by giving them a stronger sense of control and communicating with them frequently and honestly. Try This! Ask students to give you a show of hands if their families have been affected by the restructuring of an organization. The show of hands will likely be larger than you might expect. For those students who have not been affected, this demonstration helps to bring home how widespread this issue is, especially over the last two decades. How did their families feel about the companies that restructured? Perhaps some of them have been affected personally as well.

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DISCUSSION QUESTIONS 14.1

Is it possible to be a great leader of employees in a highly mechanistic organization? What special talents or abilities might be required? In a highly mechanistic organization, great leaders often have one of two types of skills – they are either technically expert, or they are proficient at improving the processes by which work is done, so employees are able to work more efficiently. On the other hand, a leader who had high levels of consideration may stand out in a highly mechanistic organization, simply for providing care and concern in an environment dominated by production issues.

14.2

Why do the elements of structure, such as work specialization, formalization, span of control, chain of command, and centralization, have a tendency to change together? Which of the five do you feel is the most important? As one of these elements of structure changes, the others must change as well. Take, for example, work specialization. As employees are given more and more specialized jobs to do, senior level managers are more and more likely to develop rules by which those jobs should be done, and the organization becomes more formalized and centralized. In addition, with increasing specialization, senior management may perceive an increased need to control employees, which will lead to hiring more managers and a decreased span of control.

14.3

Which is more important for an organization: the ability to be efficient or the ability to adapt to its environment? What does this say about how an organization‘s structure should be set up? Much of this depends on how dynamic the organization‘s environment is. The more dynamic, the more adaptable a company needs to be. To some extent, increasing efficiency is one way in which organizations adapt to a changing environment. When the environment is characterized by high competition and decreasing prices, increased efficiency may be the only way in which the organization is able to compete.

14.4

Which of the organizational forms described in this chapter do you think leads to the highest levels of motivation among workers? Why? Although there are so many variables that preclude a clear answer to this question, divisional structures, especially those centered around clients, are likely to lead to the highest levels of motivation, because they allow employees to get a better understanding of the importance of their work (how what they do impacts customers.)

14.5

If you worked in a matrix organization, what would be some of the career development challenges that you might face? Does the idea of working in a matrix structure appeal to you? Why or why not?

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Matrix organizations are highly political, due to their dual reporting relationship structure. Employees may be torn between becoming a generalist (moving from product to product, using different skills) and becoming a specialist (focusing on skill development in their functional areas.) It may be hard for employees to find the right mentor, especially since they change work groups on a regular basis. Whether or not a student will find a matrix structure appealing, depends in large part on their design for a rapidly changing, highly politically charged, work environment.

CASE: MATTEL Questions: 1. If you were a Mattel employee, would you be encouraged by what CEO Ynon Kriez said about how he is following up on restructuring? Is there a way he could have said it better? Statements that CEO‘s make either immediately before or after a major restructuring are always picked apart by employees trying to make sense of what is going on around them. Kriez‘s statement essentially says that he‘s going to try to talk to as many employees as possible about where he feels Mattel is heading, but that is not going to slow him down in terms of making future changes. Although the case doesn‘t present a full picture of the message that Kriez delivered, research would suggest that the more groups he talks to in person (allowing them to have a voice) and the more he communicates the company‘s new strategy, the better off employees will be. 2. Given that Mattel‘s structure is still organized around brands (toys), how do you expect a new film division to fit in from a structural standpoint? If Kriez‘s belief that the creation of a media empire is strategically linked to the future success of the company, that film division will have to touch all aspects of what Mattel brings to the table in terms of brands. The logical way to incorporate it (and other media divisions) would be in a matrix type of structure where certain numbers of employees not only support the brand, but also different aspects of media publicity for it. 3. How might Mattel change its structure to be more efficient or successful? Generally speaking, making the structure more ―efficient‖ would involve moving toward a more functional structure. However, functional structures don‘t tend to work well for companies that have as many different products as Mattel does. A geographic structure doesn‘t seem to make sense either. One organizing option might be for Mattel to ―group‖ products that are similar to take advantage of some economies of scale. The other might be to move to a more matrix like structure as mentioned in the prior question. Matrix structures are rarely more ―efficient‖ though. However, it sounds in the case that it isn‘t as much how Mattel is organized as much as it is how many layers

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of management there are within each division. Removing some of these layers might lessen the bureaucracy that seems to be plaguing the company. BONUS CASE: APPLE36 When you sit down with the next Apple product you are using—whether that be your iPhone, your iPad, your MacPro, or whatever else—it‘s worth taking the time to think about why Apple has been so successful at creating products that seem to flow and work so well. You might think, ―They‘ve had some great visionary leaders like Steve Jobs and Tim Cook.‖ (They have.) You might think, ―Well, they‘ve got some brilliant people working there.‖ (They do.) However, one of the big and somewhat hidden reasons for Apple‘s success over the years has been … wait for it … its organizational structure. Wait, what? That‘s right, how Apple organizes its work, reporting relationships, and information flow have had a lot to do with why they have been so successful. So how does Apple do it? The company is organized using a functional organizational structure. If you look at the executives in Apple (SVP of Software Engineering, Chief Design Officer, SVP of Hardware Engineering, SVP of Hardware Technologies), employees are organized around their expertise—what they bring to the table in terms of knowledge or skill. What you don‘t see are executives in charge of specific products (iPhone VP, MacPro VP) or regions (VP North America, VP Europe). When Steve Jobs came back and took over Apple for the second time, the first thing he did was reorganize the company back into a purely functional structure. Apple believes that this structure allows them to move more quickly, focus on collaboration above all things, and have ―best in class‖ employees. One advantage of not organizing around a product is that it makes it easier to get rid of products when they‘ve outlived their usefulness (iPod, Airport routers, Apple monitors). There simply isn‘t anyone worried about losing their job when a product needs to go away. So why don‘t more companies take this approach? Simply put, it‘s really hard to hold on to a functional structure as a company grows in size. That‘s why a lot of Apple stakeholders and critics have been trying to push Apple to change as they‘ve gotten bigger, because they believe Apple is leaving a lot of money on the table. Apple CEO Tim Cook has fought back, though, saying, ―Apple is this unique company, unique culture that you can‘t replicate. And I‘m not going to witness or permit the slow undoing of it, because I believe in it so deeply.‖ After five years under Apple CEO Tim Cook‘s leadership, Apple‘s revenue had tripled, it had doubled the number of employees working for the company to over 115,000, and its cash reserves had grown to a record $246 billion. Cook says, ―Our reason for being is the same as 36

Sources: A. Lashinsky. ―Inside Apple,‖ Fortune, May 23, 2011, pp. 125–34; R. Tetzeli. ―Playing the Long Game Inside Tim Cook‘s Apple,‖ Fast Company, August 8, 2016: https://www.fastcompany.com/3062090/playingthe-long-game-inside-tim-cooks-apple; B. Thompson. ―Apple‘s Organizational Crossroads,‖ Stratechery.com, April 19, 2016: https://stratechery.com/2016/apples-organizational-crossroads/; C. Wang. ―Apple‘s Cash Hoard Swells to Record $246.09 Billion,‖ cnbc.com, January 31, 2017: http://www.cnbc.com/2017/01/31/apples-cashhoard-swells-to-record-24609-billion.html; and M. Yglesias. ―Apple May Have Finally Gotten Too Big for its Unusual Corporate Structure,‖ vox.com, April 4, 2017: http://www.vox.com/newmoney/2016/11/27/13706776/apple-functional-divisional.

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it‘s always been. To make the world‘s best products that really enrich people‘s lives.‖ Apple‘s functional structure has helped that product development to be wildly successful through collaboration, beating out a number of competitors like Sony, whose multi-divisional structures keep them from sharing information, expertise, and technology in the most effective way. However, Apple‘s structure causes problems for them as well. Apple desktop users are frustrated with a lack of updates (over three years running) and iPhone/iPad users get frustrated that Apple waits to provide major updates to its software systems until it has a new product on the market. Apple shareholders are upset that Apple isn‘t making more money off of their services (iTunes and other apps). These kinds of issues arise partly because nobody is ―in charge‖ of those products or services. One of the reasons companies eschew functional (expertise) structures is that it makes it more difficult to hold managers accountable for things when they go wrong. In a multi-divisional structure, if a product fails or a region or unit doesn‘t make a certain amount of profit—there is someone to point to. When an issue arises with Windows or Office or Microsoft Cloud, Microsoft knows where to go and whom to hold responsible because someone is in charge of those products. Apple‘s philosophy is different. Apple CEO Tim Cook said, ―They‘re not things where we run separate [profits and losses] on, because we don‘t do that—we don‘t believe in that. We manage the company at the top and just have one [profit and loss] and don‘t worry about the iCloud team making money and the Siri team making money. We want to have a great customer experience, and we think measuring all these things at that level would never achieve such a thing.‖ As Apple becomes even larger, though, their structure is going to be harder to maintain. The fact is that they could be making updates much more frequently to a wide range of products, upgrading software, and providing services that could allow them to be much more profitable if they were to adopt a different structure. They have also been blessed with great leadership given their very centralized approach to decision making. The question is, where do they go from here? Questions: 1.

Why do you think Apple‘s functional structure has been so important for their products? Apple has consistently focused on how a customer experiences their products above other things. Their structure has forced them to be highly collaborative across functions that don‘t collaborate in many other organizations. This allows their products to achieve a certain ―flow‖ that other companies don‘t have. Every product has the benefit of the best of each functional area as opposed to the software engineering group for iPhone and the software engineering group for the Mac Pro not talking to one another.

What are the outside forces that might make Apple change their organizational structure in the future? The largest outside force is likely to be the company‘s shareholders who believe that company profits are worth more than the advantages that a functional structure creates.

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The market might also play a role in terms of how quickly product changes within each market segment are expected by consumers. 3.

How might Apple change their structure in a way that allows them to have the best of both worlds? The obvious answer is a matrix structure that allows the company to take advantage of both a product and a functional structure at the same time. Apple would have to deal with the substantially higher coordination costs that a matrix structure would bring though.

BONUS CASE: CISCO SYSTEMS37 Cisco Systems, based in San Jose, California, is the world‘s largest provider of Internet networking and communications equipment and also an employer of more than 65,000 persons. The company plays the role of the ―plumber of the technology world,‖ because three-quarters of its business comes from routers, switches, and other networking products, all designed to keep information flowing around the globe. John Chambers, the CEO of Cisco Systems, states, ―From a business-model and leadership perspective, we‘re seeing a massive shift from management by command and control to management by collaboration and teamwork. You could almost say this shift is as revolutionary as the assembly line. Business processes are being turned upside down to better compete in a global environment.‖ So how has Cisco met this challenge head on? By making changes to its organizational structure that allow its employees and executives to gain ―speed, skill, and flexibility.‖ These organizational changes are many, from adopting matrix structures in which employees report to more than one boss to instituting highly developed and formalized cross-functional teams at multiple levels within the organization. The transition has not been easy. The restructuring required immense collaboration between employees and executives, who were used to a more traditional, hierarchical structure. The new system receives support from the compensation system, which rewards collaborative abilities instead of individual performance. Approximately 20 percent of Cisco‘s top managers were not cut out for the change— according to Chambers, ―It‘s not that they weren‘t successful working on their own or that that they weren‘t good people; they just couldn‘t collaborate effectively.‖ The goal for the reorganization has been to spread leadership and decision making throughout the company, to such a wide level that people and teams feel as if they have the authority to move ahead with important initiatives. For example, Cisco‘s three-year-old Emerging Technologies Group already has generated eight products, each expected to earn around $1 billion in revenue. And, says Chambers, ―We now have a whole pool of talent who can lead these working groups, like mini CEOs and COOs.‖

Sources: ―50 of the World‘s Most Innovative Companies.‖ Fast Company, March 2009, p. 52; Fryer, B.; and T.A. Stewart. ―Cisco Sees the Future.‖ Harvard Business Review, November 2008, pp. 72–79; Kimes, M. ―Cisco Layers It On.‖ Fortune, December 8, 2008, p. 24.; McGirt, E. ―Revolution in San Jose.‖ Fast Company, January 2009, p. 88.

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Although some parts of this reorganization have been informal, many of the structural changes represent formal initiatives. Major priorities are no longer managed at the top but rather through ―councils‖ and ―boards‖ that consist of multiple executives and managers. For example, Cisco‘s engineering organization (one-third of its employee base) reports to a ―Development Council,‖ which comprises nine senior vice presidents. The combination of multiple managers from various disciplines across the organization attempts to reduce the silo mentality that keeps people from developing a broad picture, allowing them to make better and faster decisions. Cisco says that this team structure enabled it to make a decision about a major acquisition in a mere eight days—something that would have been impossible under the old structure. Despite the constant state of flux, Cisco maintains at least 10 boards and more than 30 councils (the councils target $10 billion plus market opportunities). In this sense, Cisco‘s ability to adjust to an ever-changing technology market appears better than ever. Prior to its reorganization, Cisco Systems had a reputation for having a kind of ―cowboy culture‖ in which people with the most aggressive and strong personalities pushed and shoved to try to gain John Chambers‘s approval. Those who controlled the most resources had the most power, and they used that power for personal gain instead of the best interest of the company. Now the company exhibits a sense of pride in managers who do something to help others succeed, even if they don‘t receive explicit or instant credit for it. John Chambers will be the first to tell you that the current collaborative structure could not have emerged without the systems put in place to facilitate communication between employees spread across the globe. Cisco had to figure out a way to allow everyone to work together without hopping on a plane every time they needed a meeting. Therefore, the company developed a technology called ―TelePresence,‖ which Chambers calls ―a lifelike, ultra-high-definition videoconferencing system that enables meetings so realistic that they truly feel like everyone is in the same room even if they‘re thousands of miles away.‖ The technology seems to provide a competitive advantage to Cisco, though for $300,000, it will set up the very same system for anyone who wants one! An issue that keeps popping up, however, is what happens when Chambers (who, at age 59, is recognized as one of the top CEOs in the world) retires. The current structure is mainly a result of his influence, though he also argues that the new structure minimizes his importance. The succession plan remains up in the air. One thing is for certain though: The nimble decisionmaking ability of Cisco‘s councils and boards might be put to use very shortly, because as of late 2009, Cisco had $26 billion in cash laying around, waiting to be spent. Questions: 1.

Given the technology available at Cisco, is it possible for other companies to emulate its organizational structure? What might prevent other companies from doing so? It is difficult to keep other organizations from copying an organizational structure per se – especially when Cisco has been very open about sharing the structure with just about anyone. However, the success of a structure does not come simply from the lines on an organizational chart, it is a function of matching the structure with Cisco‘s

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unique environment, culture, and technology. Other companies would be hard pressed to try to duplicate the structure and get the same effects. 2.

Evaluate Cisco‘s organizational structure in terms of its ability to compete effectively with its competitors. What specific advantages does it provide? Cisco‘s structure allows it to process information and make decisions much more quickly than most companies. For the type of business Cisco‘s operates in, technology and the environment changes at an incredibly rapid pace which allows Cisco‘s structure to give it an advantage that other companies are hard pressed to match.

What types of employees is Cisco likely to attract with the structure it has put in place? Does this prediction bode well or ill for the future? Cisco will probably tend to attract employees who are comfortable with ambiguity, willing to change, and interested in technology. These types of employees should suit Cisco well as they move into the future, but will become a hindrance if they have to shift their strategy or change their structure to become more traditional.

EXERCISE: CREATIVE CARD COMPANY Instructions: This exercise allows students to analyze the effectiveness of a given organizational structure (shown below), and to create a new structure that is more effective. If possible, give students time to work on their structures in class, then tell them to take the structures home and prepare to report on them during the next class period. Then, in the next class period, have all the groups present their structures to the class, and as a class, identify which structure would be most effective for the company. Another option is to assign each student group a particular type of structure – functional, product, geographic, customer, or matrix, and to see how easy or difficult it is to structure the company along those lines. Finally, you can encourage the students to experiment with mixed structures by asking them to create a structure that combines two different structures - for example, functional and geographic.

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Organizational Chart – Creative Cards Mixed Functional and Geographic Structure President Payroll Mgr.

Finance Dir.

Sales V.P.

Creative Dir.

Art Design Mgr.

Verse Writer

Admin. Asst.

Exec. V.P.

West Coast Operations V.P.

Printing Sup.

Sympathy Card Sup.

Birthday Card Sup.

E-Card Sup.

Card Cutting Sup.

4 emps.

60 emps.

25 emps.

10 emps.

H.R. V.P.

East Coast Sales Mgr.

Legal 4 emp.

Sanitation Engineer

Quality Control Mgr.

14 emps.

Janitors 4 emp.

Buyer I Inks

Press Operator

Distribution Manager. – Northern Region

Sales Reps. 8 emps.

Problems with Organization Structure for Creative Cards Note that the problems listed below are just a sample, Students will find many more! • • • • • • • •

Administrative Assistant is at the same level (reporting directly to President) as Vice Presidents and Directors. Levels of senior staff are inconsistent – some are Vice Presidents, some are Directors – they should be one or the other. Creative Director reports to both Executive Vice President and CEO. HR V.P. doesn‘t report to anyone. Company structure at the top is not consistent—is it a functional or a geographic organization? East Coast Sales Manager doesn‘t report to anyone. H.R. V.P. is in charge of employees from the Sales, Operations, and Distribution areas. Sanitation Engineer and Janitors would be better off reporting to production managers, since they work on the shop floor.

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• • • • •

Art Design Manager, Verse Writer, and Printing Supervisor don‘t report to anyone. If there is a Creative Director, there should also be corresponding Manufacturing and Sales Directors. The Printing Supervisor is not a Creative Position. The various ―product supervisors‖ (sympathy, birthday, etc.) all report to both the art design manager and the verse writer. The Birthday Card Supervisor has 60 people reporting to him or her. That span of control is too broad.

OMITTED TOPICS The field of organizational behaviour is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. Other organizational structures – Boundaryless, Networked (Virtual), Team, etc. are all other ―names‖ for structures. This list can be somewhat endless. While there are many other ―forms‖ of structure, most are simply versions of the types of structures already covered in the chapter. Organizational Strategy – It is difficult to have a conversation about structure without discussing which types of organizational structures are ―the best‖. While our focus is mainly on how structure affects individuals within organizations, which structure is best for the organization itself is a different question altogether and depends largely on the strategy of an organization. For more on organizational strategy and the implications of strategy on structure, see: Porter, M. Competitive Strategy. New York, N.Y.: Free Press, 1980. Culture – Most of the effects of organizational structure happen because of the general feelings it might create among organizational members. A detailed discussion of organizational culture follows in Chapter 15.

Chapter 15: Organizational Culture and Change

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NOTE FROM THE AUTHOR My name is Ian Gellatly, and I‘m the author responsible for the 5th Canadian edition of Colquitt-LePine-Wesson-Gellatly textbook, Organizational Behaviour. I want to encourage Canadian adopters to reach out to me if I can help in any way with the book. I‘m also happy to share the PowerPoints I use in my own teaching, that go along with the 5th Canadian edition of our book. The PowerPoints also include my own teaching notes. In sum, I enjoy corresponding with adopters very much, so please do not hesitate to reach out to me. My email address is ian.gellatly@ualberta.ca. CHAPTER OVERVIEW The focus of Chapter 15 is organizational culture – the shared social knowledge that shapes the attitudes and behaviour of employees – and how culture is maintained and changed. Four general culture types are presented – networked, communal, fragmented, and mercenary – along with the concepts of strong and weak cultures. The chapter then looks at how organizations maintain their cultures. We then describe a change process that includes problem diagnosis and evaluation, issues that threaten the change process, and a discussion of how management practices can be used to bring about and support desired culture change. Finally, the chapter looks at how person-organization fit impacts job performance and organizational commitment. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 15.1 15.2 15.3 15.4 15.5 15.6 15.7

What is organizational culture, and what are its components? What general and specific types can be used to describe an organization‘s culture? What makes a culture strong, and is it always good for an organization to have a strong culture? How do organizations maintain their culture? Can organizational culture change? How does change happen? What is person-organization fit and how does it affect job performance and organizational commitment? What steps can organizations take to make sure that newcomers will fit with their culture?

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CHAPTER OUTLINE 1. ORGANIZATIONAL CULTURE A.

There are many different definitions of the term ―organizational culture‖, but for the purposes of the chapter, organizational culture is the shared social knowledge within an organization regarding the rules, norms, and values that shape the attitudes and behaviours of employees

2. WHY DO SOME ORGANIZATIONS HAVE DIFFERENT CULTURES THAN OTHERS? A. Culture Components 1.

Observable Artifacts – manifestations of culture that employees can easily see and discuss a.

Symbols – everything from corporate logos to employee uniforms

Physical Structures – things like office layout, location of buildings, etc.

Language – the jargon, slang, and slogans used within the walls of an organization

tories – anecdotes, accounts, legends, and myths that are passed down from cohort to cohort in an organization

Rituals – daily or weekly planned routines in an organization

Ceremonies – formal events, generally performed in front of an audience of organizational members

Espoused Values – the beliefs, philosophies, and norms that a company explicitly states a.

Enacted Values – what a company does – in other words, whether or not a company‘s actions live up to its espoused values

Basic Underlying Assumptions – taken-for-granted beliefs and philosophies that are so ingrained that employees simply act on them rather than questioning the validity of their behaviour in a given situation – for example, safety in an engineering firm

General Culture Types 1.

Fragmented – low sociability, low solidarity

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Mercenary – low sociability, high solidarity

Communal – high sociability, low solidarity

Networked – high sociability, high solidarity

Specific Culture Types 1.

Customer Service Culture – focused on service quality

Safety Culture – a culture where safe behaviours at work are expected and valued

Diversity Culture – a culture that values diversity of all types

Sustainability Culture – a culture that encouraging values and behaviours that support and confirm survival over the longer term

Creativity Culture – a company focused on fostering innovation OB Assessments: Creativity Culture. This assessment determines whether or not students have held a job at an organization with a creativity culture. Ask students to fill out the assessment relative to their current job, or the last job they held. Then focus discussion on whether the students viewed themselves as a good ―fit‖ for their particular culture. For example, if the students are low in openness to experience (see Chapter 4 on Personality, Cultural Values, and Ability), did they feel like a good fit in a culture that emphasized high innovation and low formalization?

Culture Strength 1.

A high level of culture strength exists when employees definitively agree about the way things are supposed to happen within the organization (high consensus) and when their subsequent behaviours are consistent with those expectations (high intensity)

Weak cultures exist when employees disagree about the way things are supposed to be or what is expected of them

Strong cultures are not necessarily the same as ―good‖ cultures – they may not lead to the most positive organizational outcomes

Subcultures unite smaller subsets of an organization‘s employees

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Subcultures can turn into countercultures when their values don‘t match those of the larger organization

Try This! This is a great time to ask students about organizations they perceive as having strong cultures. Have they ever worked for an organization with a strong culture? What did it feel like? What were the expectations placed on them? Was it a positive or negative experience? Try to draw out varying experiences students have had in the places they have worked. Explore whether ―everyone‖ thought it was a bad place to work or whether it was just them as an individual who didn‘t fit. E.

Maintaining an Organizational Culture 1.

Attraction-Selection-Attrition (ASA) framework holds that companies maintain their organizational cultures by: a.

attracting people whose personalities fit the culture

electing candidates based on whether or not their personalities match the culture

letting people go whose personalities don‘t fit the culture

OB on Screen: The Circle. The clip referenced in the book begins around the 28:45 mark of the film, continuing until about the 38:30. The clip depicts Mae Holland (Emma Watson), one week after being hired by The Circle (think Google and Apple had a baby—that‘s The Circle). Two employees approach Mae to talk to her about being more ―participative‖ with The Circle and her colleagues outside of work. They walk her through how to get more engaged through online posting and other processes. Mae is a bit startled by this, including the fact that they actually know quite about her (and the fact that her father has MS). The employees push her to recognize that life at The Circle is about more than just her task performance and how it involves so much more. The clip goes on to show how The Circle starts tracking Mae‘s health and other personal information every second of the day and even goes so far as to put her parents on The Circle health insurance plan. Conversations around this clip can go in multiple directions. The first, most logical direction is to talk about Mae‘s socialization. How is the Circle getting Mae to adopt its goals and values? The second would be to encourage students to think about how a company can create a culture that builds all three forms of organizational commitment in its employees. How is The Circle building affective, continuance, and normative commitment through its culture as Mae becomes socialized? BONUS OB on Screen: Price Check. The clip referenced begins around the 5:15 mark of the film, continuing until about the 6:43 mark. (Note the use of the use of a profane word at the immediate beginning of the transition to this scene and avoid it by starting the clip immediately after the two men have their discussion at the table.) The clip depicts a newly promoted manager in Susan

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Felders (Parker Posey) meeting all of her subordinates for the first time in a conference room where she takes the floor. The talk she gives to the group leaves much to be desired on every level. Most students will find her talk to be awkward and will laugh at times. Encourage them to think about how difficult that first moment is for a newly promoted manager (especially one from the outside). Would they want to meet all of their new employees in a format like this? To some degree a meeting like this is probably expected so is there another way to do it? Ask them how big an effect they think a first meeting like this will have on the ongoing culture of the group. How would they picture the culture being on a go-forward basis? Make them be specific. Ask students to picture themselves sitting around that conference table during that meeting. What would the manager have to do to overcome it now? It‘s also worth discussing how a manager/leader creates a subculture within the larger firm. Even though the larger organization might have a very different culture, can that culture outweigh a strong culture created within a group by a manager? BONUS OB on Screen: New In Town. The clip begins around the 18:34 mark of the film, continuing until about the 25:53 mark. The clip depicts corporate office, executive-in-waiting Lucy Hill‘s first day of work at a food processing plant in New Ulm, Minnesota. The scene provides a case study of how different subunits of a large company can have radically different cultures and perspectives. Students will find the stereotypical depictions of Minnesotans to be funny, but push them to understand the differences in perspective between a manufacturing plant and corporate offices. Neither type of culture is right or wrong, but they can be dramatically different. How might Lucy Hill have been better prepared for this meeting? What could she have done differently? How important is it to fit in with the culture of a group you are trying to influence? Encourage the students to try to think of times when it might be beneficial NOT to fit in with the culture. Are there advantages to allowing organizational subunits to have a different culture? When might this not be the case? BONUS OB on Screen: In Good Company. The clip begins around the 1:25:02 mark of the film, continuing until about the 1:30:50 mark. The clip depicts the arrival of Teddy K for a speech at his recently acquired company, Sports America Magazine. In the scene it is evident that the surface-level, synergistic culture of Globecom doesn‘t match very well with its newly acquired company (or its new employees). One topic for class discussion is why many mergers fail. What happens when two distinct cultures come together and are forced to interact? Have any of the students worked for a culture that didn‘t match their own personality? What did that make them feel like everyday when they went to work in that environment? 2.

Socialization a.

The primary process by which employees learn the social knowledge that enables them to understand and adapt to an organization‘s culture

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Three Stages of Socialization i.

Anticipatory Stage – begins as soon as a potential employee develops an image of what it must be like to work for an organization

ii.

Encounter Stage – begins the day an employee starts work a.) Reality shock – when expectations don‘t match reality

iii.

Understanding and Adaptation Stage – when newcomers change to internalize the norms and expected behaviours of the organization

Summary: Why Do Some Organizations Have Different Cultures Than Others? (Figure 15-6)

3. THE CULTURE CHANGE PROCESS A.

One of the oldest and widely held perspectives on change suggests a basic process that involves three steps: unfreezing, the change initiative itself, and refreezing. While this overall three-stage view is a helpful start, a more recent approach has been to emphasize the day-to-day details of change. Attention to the details of culture change requires an awareness of and answers to the following four broad sets of questions:

Analysis and Diagnosis: Is There a Need to Change? 1.

In order to answer this question, leaders within the organization need to assess the status quo of the culture (i.e., the current state), assess where the culture should be, and assess whether a gap exists between the current and desired states. A variety of data-collection methods can be used including interviews, focus groups, and structured diagnostic surveys. i.

Occupational Cultural Assessment Instrument (OCAI) is based on the Competing Values Framework (see Figure 15-7)

ii.

Using the OCAI for Diagnosis and Analysis (see Figure 15-8)

Understanding and Managing Resistance: What Conditions Might Help or Hinder Change Efforts? 1.

Unfortunately, the vast majority of change efforts fail to live up to expectations, in part, because employees deliberately oppose or withstand change initiatives.

Suggestions for minimizing resistance is to have buy-in from senior management and involve employees in the planning process (e.g., explain the

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change process to organizational members and why change is necessary; answer questions; invite participation) D.

How Appropriate Are the Change Interventions? 1.

New Selection Procedures. Low Resistance; Speed of Change is Slow

New Training Procedures. Low Resistance; Speed of Change is Slow

New Performance Management Practices. Moderate Resistance; Speed of Change is Moderate

New Leadership. High Resistance; Speed of Change is Fast

Mergers and Acquisitions. High Resistance; Speed of Change is Fast

OB Internationally. This box points out the role culture plays in the success or failure of mergers and acquisitions. When companies with two strong cultures merge, they will only be successful if they take steps to handle cultural integration directly. E.

Was the Change Effort Successful? 1.

Is there evidence that the interventions produced culture change occurred? Did the change happen in the desired direction? Consider using some of the datacollection methods used earlier to diagnose and plan the change effort (e.g., OCAI). Other indicators would be evidence of improved job performance, stronger (and the right kind of) commitment, reduced turnover, less stress, increased trust, less conflict, etc. Many of these indicators are covered in the book.

4. HOW IMPORTANT IS ORGANIZATIONAL CULTURE? A.

Person-organization fit is the degree to which a person‘s personality and values match the culture of an organization (Table 15-3)

Employees who have high person-organization fit have more job satisfaction and trust toward their managers, and experience lower stress than people who have low levels of person-organization fit

Person-organization fit is more related to citizenship behaviours than task performance

5. APPLICATION: MANAGING SOCIALIZATION A.

Realistic Job Previews – Companies can give job applicants an accurate picture of what working for an organization is going to be like by providing information on both the positive and negative aspects of the job

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Orientation Programs – Companies that have newcomer orientation programs have increased levels of employee satisfaction, commitment, and performance, compared to those who don‘t

Mentoring – A process by which a junior-level employee develops a deep and lasting relationship with a more senior-level employee within the organization

DISCUSSION QUESTIONS 15.1

Have you or a family member ever worked for an organization with a strong culture? If so, what made the culture strong? Did you or they enjoy working there? What do you think led to that conclusion? Answers will differ from student to student, but in most cases, people leave companies with strong cultures because of poor person-organization fit.

15.2

Is it possible for an employee to have personal values that are inconsistent with the values of the organization? If so, how is this inconsistency likely to affect the employee‘s behaviour and attitudes while at work? If an employee has personal values that are inconsistent with the organization, they may feel dissatisfied, but as the text points out, there may not be any impact on their task performance. In the long run, however, people who have less satisfaction at work are more likely to leave the organization than those who are more satisfied.

15.3

How can two companies in the same industry with very different cultures both be successful? Shouldn‘t one company‘s culture automatically be a better fit for the environment? Not necessarily. There are multiple ways to service customers and different strategies for making money. Similar to organizational structure (which is a good point of comparison here), there is not a ―one size fits all‖, best culture. Companies that learn to take advantage of and use the culture they have created are more likely to be successful. Have students compare their perceptions of WestJet‘s culture with that of Air Canada‘s.

15.4

Imagine what the Canada Revenue Agency‘s culture must be like. Where do these impressions come from? Do you think your impressions are accurate? What has the potential to make them inaccurate? When most students think of Canada Revenue Agency they will likely think of a very serious, highly-regulated, formal bureaucracy with a mechanistic structure (Chapter 14). Furthermore, students might believe that corporate values such as compliance and enforcement would dominate leaving little opportunity for employees to be creative and

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use their discretion. Where do these impressions come from? Some of these perceptions will be based on stereotypes that we have learned through television, movies, and social media. In all likelihood these perceptions will be exaggerated and possibly erroneous. Recall the discussion of anticipatory socialization earlier in the chapter. 15.5

Think about the last job you started. What are some unique things that companies might do to reduce the amount of reality shock that new employees encounter? Are these methods likely to be expensive? Student answers to this question will differ, but most techniques designed to reduce reality shock are not expensive. Realistic Job Previews, for example, simply involve giving the potential employee a little extra information during the interview process.

CASE: HBO Questions: 1. What do you imagine HBO employees were thinking when they heard John Stankey‘s words? It‘s likely that they heard exactly what they had hoped they wouldn‘t hear: ―AT&T is going to try to turn us into something that makes us just like everyone else.‖ It‘s also likely that they felt underappreciated and that their past hard work was going unnoticed. Stankey‘s comments certainly signaled that business was not going to be ―as usual‖ going forward. 2. What causes companies like AT&T and HBO to become so different in regard to organizational culture? The case certainly insinuates that a lot of those differences were due to the forces that shaped the cultures over time. AT&T and HBO are fundamentally two completely different types of companies. Outside regulatory influences, different types of leaders, short vs. long-term strategies, and the types of employees each company has typically hired are all likely to have an effect over time. 3. What are the dangers for AT&T (or WarnerMedia) as they continue to attempt to merge HBO into its own culture? Do you think it is possible for HBO to maintain its own identity? The danger is that HBO‘s culture changes in a way that keeps them from being successful in the market in which they compete. In addition, a real fear should be that if the culture changes significantly then all the employees who no longer feel that they have a high degree of person-organization fit decide to leave. Having ―some‖ people choose to leave is not necessarily bad, but if the highly talented employees are the ones

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that walk out the door, it will create a large problem. It is possible for HBO to remain a ―subculture‖, but it will need to be a purposeful and well thought through strategy on the part of AT&T. For instance, Amazon did this with Zappos when they were purchased – Amazon purposefully left them alone to operate as they had before. The case does not read in a way that makes you feel this will be AT&T‘s strategy. BONUS CASE: A TALE OF TWO CULTURES38 The airline industry within North America is known for being one of the most demanding and stressful work environments to work within. Employees have to deal with all kinds of potential issues, including irate customers, and many times they have very little control over the situations they are placed in. Two airline companies, Delta and United, have been in the news largely because of their organizational cultures. Delta has been praised for handling issues while relying on a culture based largely on positive values and empowerment, while United has been excoriated for high-profile poor decision making and disastrous customer relations. Each airline has about 85,000 employees and has gone through a major merger within the last decade. During a merger, companies have to decide which of the two company cultures to adopt moving forward (or potentially they may opt for a mix of both). Most outsiders say that Delta picked the right culture to maintain (over Northwest‘s) and United picked the wrong one (over Continental‘s). Delta‘s organizational culture can be traced all the way back to founder C.E. Woolman, who was constantly focused on customer service and asked employees to put themselves in the passenger‘s shoes when making decisions. Delta‘s employees see themselves as part of a ―family‖ and are pushed to think that way starting the day they are hired. Company programs— such as active employee involvement groups and ―Velvet 360,‖ which lets around 8,000 front line employees meet and interact with company executives every year—help to maintain this mindset. Delta CEO Ed Bastian says, ―Keeping a values-based culture vibrant and alive isn‘t easy. It takes a relentless focus and commitment, and it has to be more than just lip service.‖ United, on the other hand, has developed a culture focused more on efficiency and cost-cutting. Taking these values to the extreme has resulted in a workplace where employees are constantly scared to break rules out of fear of being fired and executives are seen as ―elitist.‖ United has been rated the lowest on most major performance metrics over the last five years and is responsible for 43 percent of all consumer complaints filed against U.S. airlines. It is not only customers feeling the cost-cutting measures, either; even United‘s new uniforms were seen as 38

Sources: E. Bastian. ―What I‘ve Learned in My First Days as Delta‘s New CEO,‖ linkedin.com, May 26, 2016: https://www.linkedin.com/pulse/what-ive-learned-my-first-days-deltas-new-ceo-ed-bastian; D. Bennett. ―The United Way,‖ Bloomberg Businessweek, January 18, 2016, pp. 50–55; S. Carey. ―Behind United Airlines‘ Fateful Decision to Call Police,‖ The Wall Street Journal, April 16, 2017: https://www.wsj.com/articles/behind-unitedairlines-fateful-decision-to-call-police-1492384610; A. Hartung. ―Why United Airlines Abuses Customers: The Risks of Operational Excellence,‖ forbes.com, April 10, 2017: https://www.forbes.com/sites/adamhartung/2017/04/10/why-united-airlines-abuses-customers-the-risks-ofoperational-excellence/#78b1a38fbb10; J. Ostrower. ―United CEO Oscar Munoz Is Walking a Tightrope to Fix an Airline,‖ cnn.com, April 18, 2017: http://money.cnn.com/2017/04/18/news/companies/united-oscar-munozemployees/; and J. Roberts. ―Delta,‖ Fortune, March 15, 2017, pp. 106–9.

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cheap by employees. However, employees are hopeful that CEO Oscar Munoz can help balance various aspects of their culture, although progress has been slow going. When Munoz took the helm as CEO, a United flight attendant said, ―The airline was just incredibly sick and Oscar Munoz is like a shot of penicillin. It‘s going to get better, but it has to have some time to actually settle in and work.‖ Although all airlines have an incredibly long list of policies and rules they have to follow in order to be consistent and to guarantee passenger safety and security, two examples show that there can be a great deal of latitude in how employees approach unique and novel situations. On April 9, 2017, a video of United Flight 3411‘s passenger Dr. David Dao went viral. The video showed Dr. Dao being forcibly removed from the airplane by airport officers after he refused to leave his seat when the airline had overbooked the flight and needed to sit some of its own employees on the plane. Dr. Dao ended up with a broken nose and two missing teeth. United ended up with a public relations nightmare, a drop in its stock price, petitions to boycott the airline, and calls for the CEO to resign. Dr. Dao settled with the company for damages, but United is still feeling the impact of what many say were culture-based decisions to this day. According to insiders and ex-employees, United had developed an efficiency culture to where employees were expected to ―follow manuals‖ and were hesitant to do anything that wasn‘t strictly according to written guidelines. On the day in question, once United gate agents found they had no takers for their offer of $800 and a hotel voucher, the agents (following the rules) used a computer program to identify the passengers of ―least value‖ to the airline. Once Dr. Dao was identified and refused to de-plane, the agents (following the rules) called for airport security. The airline was vilified on social media for not coming up with other options. United CEO Oscar Munoz called the event a ―system failure‖ and said that United hadn‘t given employees ―the proper tools, policies, and procedures that allow them to use their common sense.‖ In contrast, six months prior to that United episode, a computer outage caused all of Delta‘s flights to be grounded for an entire day. (Delta was forced to cancel about 1,000 flights on the day of the outage and another 1,000 over the next two days.) Delta employees recall the event being a horrible experience for themselves and all the passengers involved. CEO Ed Bastian credits Delta‘s culture for saving the day. Stories of Delta employees‘ empathy with passengers and consistent showing of positive emotions seemed to go a long way with customers, some of whom even expressed support in various ways to Delta employees during the outage. Although most expected a decline, Delta‘s monthly customer satisfaction scores actually went up following the incident. Questions: 1.

Why is an organization's culture perhaps the most evident during crisis situations? Crisis situations (ambiguous and highly time-sensitive) tend to relegate decisions to being made on the basis of values as opposed to a rational decision-making model. Employees and processes either rise to the occasion or fail based on how well those values meet their environmental and crisis-based needs.

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What causes companies like Delta and United to become so different in regard to organizational culture? In the case of both of these companies, prior (recent) mergers led to some values being upheld and others discarded. Leadership is the other major driver of what a culture becomes.

What will it take for United to overcome its culture that has been built up over such a long period of time? Barring another merger (and even if), it will take strong leadership to push for changes that better allow United to fit its environment. Leadership can focus on pushing people toward making decisions using different sets of values by constantly reinforcing good decisions made by employees (stories), talking publicly about how things need to change (espoused values), and establishing new norms (rituals, ceremonies).

BONUS CASE: YAHOO39 When multinational Internet corporation Yahoo hired Marissa Mayer away from Google to be its new CEO, it was supposed to help Yahoo rejuvenate its culture. When it was founded in the 1990s, Yahoo was the place to be in Silicon Valley. That changed when Yahoo‘s top talent started leaving for other companies. Its board of directors felt that Mayer—a computer programmer well versed in Google‘s enviable hacker-centric culture—could breathe new life into Yahoo‘s Sunnyvale, California, headquarters and make it the place to work again. During her first interview as CEO, Mayer stated, ―I believe that really strong companies have strong cultures. Each has their unique and individual flavor. I want to find Yahoo‘s and amplify it. 39

Sources: Hehn, S. ―‗Serendipitous Interaction‘ Key to Tech Firms‘ Workplace Design.‖ NPR, March 13, 2013, http://www.npr.org/blogs/alltechconsidered/2013/03/13/174195695/serendipitous-interaction-key-to-tech-firmsworkplace-design; Lee, T.B. ―Yahoo Can‘t Decide If It‘s a Media Company or a Tech Company.‖ Washington Post, May 20, 2013, http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/20/yahoo-cant-decide-if-its-amedia-company-or-a-tech-company/; Moulton, M. ―What Culture Means to Yahoo.‖ Corvirtus.com, April 17, 2013, http://www.corvirtus.com/the-importance-of-company-culture-to-grow-yahoo; Baskin, K. ―Executive Privilege: Marissa Mayer‘s HR Decisions at Yahoo.‖ Boston Globe, March, 17, 2013, http://www.bostonglobe.com/magazine/2013/03/16/marissa-mayer-why-yahoo-ceo-proves-changes-corporateamerica-won-come-from-top/YSmDXsoLc1nhqmJuWMPNkJ/story.html; Carlson, N. ―Forget iPhones and Free Food, This Story Illustrates the Real Big Change Marissa Mayer Is Bringing to Yahoo.‖ Business Insider, August 23, 2012, http://www.businessinsider.com/forget-iphones-and-free-food-heres-the-real-big-change-marissa-mayeris-bringing-to-yahoo-2012-8; Nordfors, D. ―Mayer‘s Challenge: Merging the Cultures of Yahoo and Tumblr.‖ Xconomy, May 23, 2013, http://www.xconomy.com/san-francisco/2013/05/23/mayers-challenge-merging-thecultures-of-yahoo-and-tumblr/; Efrati, A. ―Google Seals Its Reputation for Minting Tech Executives.‖ The Wall Street Journal, July 17, 2012, p. B7; Surowiecki, J. ―Face Time.‖ The New Yorker, March 18, 2013, p. 26; Tkaczyk, C. ―Marissa Mayer Breaks Her Silence on Yahoo‘s Telecommuting Policy.‖ Fortune, April 19, 2013, http://tech.fortune.cnn.com/2013/04/19/marissa-mayer-telecommuting/; Guthrie, D. ―Marissa Mayer: Choosing Corporate Culture over Worker Independence.‖ Forbes, March 8, 2013, http://www.forbes.com/sites/dougguthrie/2013/03/08/marissa-mayer-choosing-corporate-culture-over-workerindependence/; Maisto, M. ―Yahoo CEO‘s Criticized Hiring Changes Suggest a Cultural Shift.‖ EWEEK, March 21, 2013, http://www.eweek.com/mobile/yahoo-ceos-criticized-hiring-changes-suggest-a-cultural-shift/.

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One of the things Mayer is trying to focus on is changing the culture to one that acts more quickly simply by being willing to work harder—something she exemplified at Google where she pulled 250 all-nighters during her first five years on the job. To help in that regard, two of Mayer‘s first actions as CEO were to buy everyone in the company a new iPhone (and pay their phone bill), and to make the food in Yahoo‘s cafeterias free to full-time employees. She evidently plans for everyone to be around more. One story has Mayer meeting with a product development team early after arriving and liking what she saw so much that she moved the product‘s planned shipping date up by a substantial margin. She told the team that they had a week to figure out how to make it happen, or she would find another team that could. While Yahoo wrestles with revamping its own culture, it also has to deal with other firms‘ cultures as well, since the company has gone on a massive buying spree including the $1 billion acquisition of Tumblr (a popular blogging and social networking website). That purchase pits the 14,000-employee behemoth against the 200-employee start-up. Mayer is pretty clear about the fact that Tumblr will be allowed to stay independent of Yahoo‘s culture. She states, ―Tumblr has a really good thing going. I‘m cognizant of the fact that we don‘t want to mess that up. Especially when you have a hyper-growth company, you want them to operate independently so they can run as fast as they can.‖ How acquisitions like Tumblr will affect Yahoo and how Yahoo will affect Tumblr remains to be seen. Sometimes companies try to change their culture quietly and behind the scenes, whereas others are forced to react to their proposed changes in public. Yahoo‘s push to change its culture landed square in the latter category during the spring of 2013. Of course, when you are a $5 billion company whose main business is the Internet, changes are harder to hide. New Policies to Promote Faster Culture Shift New CEO Marissa Mayer introduced some bold and major changes partially on the basis of what she had learned about creating an effective culture at Google. The hiring of Mayer got glowing reviews and Yahoo recorded a stock price increase of 35 percent. But once the first, easy, and fun initiatives of providing free iPhones and meals in the cafeteria were in place, Mayer took two major controversial steps to stimulate an even faster culture shift. First, she banned employees from telecommuting. Second, she had to personally approve all new employees. Neither decision went over exceptionally well. While many organizational experts believed the no-telecommuting policy was a good one given what Yahoo was trying to do, the general public and media reacted differently. ―Epic fail,‖ ―hypocrite,‖ and ―idiotic‖ were some of the nicer criticisms flung in Mayer‘s direction following that edict. Part of the problem was the way the new policy was delivered—in a poorly worded memo from an HR executive, which was then leaked to a tech blogger and released for the world to see online. The change in policy stood fast, though. Mayer said, ―People are more productive when they are alone, but they‘re more innovative and collaborative when they‘re together.‖ She knew this directly from helping Google foster its culture using the same technique. The move wasn‘t because Yahoo believes its workers aren‘t working, but because being in the office increases human interaction. Mayer believes that when

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workers run into each other in the office, they are more likely to share ideas and talk about work-related issues and solutions, and the goal is to create a collaborative culture. One of the other major ways companies can control culture is through hiring, and one of the low-key, unwritten policies at Google is that executives have the final say in the hiring process. Mayer‘s recent decision to take the same stance has ruffled some feathers. Those who don‘t like it say that needing Mayer‘s approval on every hire slows the hiring process too much in an environment such as Silicon Valley where quick hiring is an imperative. Dan Flinnigan, CEO of a job recruitment and applicant tracking firm, notes: ―With a company the size of Yahoo‘s, it‘s a challenge to meet every hire—there‘s only so much time in a day, and she knows that. So clearly, she‘s decided that the downside risk is worth the upside benefit of changing the culture into something she thinks is more competitive and likely to win. No big decision is going to influence culture without risks. Questions: 1.

Is it possible for a company the size of Yahoo to change its culture dramatically without the push of a forceful leader? If yes, how could that happen? It‘s possible, but certainly more difficult to change a culture without the push of a strong leader - especially if company leadership wants to be in control of that culture. However, culture change can come from a number of places including major shifts in the outside environment, a groundswell of employees pushing for a change, or a merger with another firm. The real worry for a company is that the culture morphs into something that isn‘t effective if it isn‘t being done actively from the top.

What are the dangers for Yahoo in having Marissa Mayer trying to duplicate much of the culture at Google? It‘s possible that the employees at Yahoo simply don‘t match the culture that has been created at Google. This could result in the loss of a number of key employees and much stress and anxiety among employees who stay. It‘s also possible that developing a ―Google-like‖ culture is not what Yahoo needs to be successful in the market-place because it doesn‘t allow them to differentiate themselves in any meaningful way.

Do employees have to be present to have a strong culture? As a tech company, what are the advantages and disadvantages of Yahoo‘s no-telecommuting policy? If a company wanted to have a culture of freedom and independence, having employees work from home could be a key aspect of what a company‘s culture is. So, employees don‘t have to be present for a strong culture to exist as long as the company does other things to foster and encourage that culture. Yahoo‘s (or Marissa Mayer‘s) belief is that Yahoo needs its employees to collaborate and cooperate for them to be successful. Having employees present makes that much easier and some would even argue that it can‘t happen without employee interaction. The downside would be if Yahoo starts to lose employees and ends up at a recruiting disadvantage as a result of their policy.

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EXERCISE: WHAT’S THE CULTURE OF YOUR UNIVERSITY Instructions: Put students into groups and make sure they each have a copy of the exercise and Table 15-3 (the list of values used in Step 2 of the exercise). In Step 1, ask the groups to consider the questions associated with the six cultural artifacts (symbols, physical structures, language, stories, rituals, ceremonies). Some artifacts will be more relevant to the university‘s culture than others—it‘s fine if groups feel like they need to skip some artifacts to devote more attention to others. For example, a given university may not have any physical structures that stand out but may have a wide variety of symbols and language factors that convey the culture. Once the groups have finished discussing the artifacts, have them move on to Step 2 by analyzing Table 15-3. What one value seems to be most intensely transmitted through the cultural artifacts? Have groups present the one value that they came up with, along with the three artifacts that most transmit that value, to the class. Teaching Tips: Students will likely vary in the degree to which they like the depiction of their university‘s culture in the group presentations. There may be disagreement in the key values of the university, which would be indicative of a weak culture. Even if there is a high level of agreement about the key values, students will vary in their degree of person-organization fit. That is, some students may appreciate the university‘s values whereas others would prefer a different set of priorities. Regardless, the culture of the organization can only be changed by altering the artifacts that transmit the culture. Symbols can be changed, physical structures can be altered, new ceremonies and rituals can be instituted, and so forth.

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