+1 (208) 254-6996 essayswallet@gmail.com

Read the Chapter 7-9 of the book,(I uploaded)  Out of all the reading assignments, prepare a Discussion Question (DQ). The DQ should focus on something about the material that you found to be INTERESTING, STIMULATING, IMPORTANT, UNCLEAR, or CONTROVERSIAL. Prepare only one DQ (not one from each reading source or chapter).  (I don’t think you should read all of those, just skim it and find a part you are interested in and write the DQ based on that)

The DQ example:   — When implementing Management by Walking Around (p. 12), how do you find a balance between being holed up at your desk versus risking your employees feeling that you are micromanaging them? Do you see examples of this happening in your office?

Besides, you should also reply to other two DQs from others. You can comment on others’ DQ once you have submitted yours. So after you deliver the answer of your DQ, I’ll send you two of others’ DQs and please reply to them. 


Motivation Concepts7

7-1 Describe the three key elements of motivation.

7-2 Compare the early theories of motivation.

7-3 Contrast the elements of self-determination theory and goal-setting theory.

7-4 Understand the differences among self-efficacy theory, reinforcement theory, and expectancy theory.

7-5 Describe the forms of organizational justice, including distributive justice, procedural justice, informational justice, and interactional justice.

7-6 Identify the implications of employee job engagement for managers.

7-7 Describe how the contemporary theories of motivation complement one another.

LEARNING OBJECTIVES After studying this chapter, you should be able to:

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Motivation Concepts CHAPTER 7 215

Myth or Science?

Career OBjectives

An Ethical Choice

Point/ Counterpoint

Experiential Exercise

Ethical Dilemma

Case Incident 1

Case Incident 2

Critical Thinking ✓ ✓ ✓ ✓ ✓

Communication ✓ ✓ ✓ Collaboration ✓ ✓ ✓ Knowledge

Application and Analysis

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Social Responsibility ✓ ✓ ✓ ✓ ✓ ✓

Employability Skills Matrix (ESM)


“Next week, I’ll be on the beach in Kauai, sipping a mai tai in the sun, as the waves lap the shore . . . and 500 of my employees, franchise part- ners, and their families will be there with me.” Brian Scudamore, the founder and CEO of O2E Brands, and his company made their trip to Hawaii happen. In 2012, in the wake of the financial crisis, they set a challenging goal: to double their revenue over a five-year period. Scudamore attests to the power of setting specific, challenging goals and even recognizes that, when done correctly, goal setting can even help pay for the reward to the goal you set.

Goal-setting theory has had an undeniable impact on the study of motiva- tion in organizational behavior. A voluminous literature suggests that goal set- ting can help improve motivation and performance in employees, and many organizations recognize this and try to harness their power. But sometimes goal setting may not be used in the “right” way and can lead to perceptions of unfairness or injustice from employees, who may even engage in counter- productive work behaviors (like cheating) to accomplish the goal.

For example, in September 2016, it was revealed that over 5,000 employees of the Wells Fargo bank “cheated the system” by opening more than 2 million unauthorized customer accounts using personally identifiable information to meet “indiscriminate” sales goals. Essentially, an employee would move funds from cardholders’ accounts into new accounts to meet their sales goals.

MyLab Management Chapter Warm Up If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the chapter warm up.

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216 PART 2 The Individual

To make matters worse, nearly 15,000 customers were charged interest, over- draft, and annual fees for accounts they never authorized to be opened.

Although likely satirical or exaggerated, early cartoon YouTube videos using the site xtranormal.com perhaps tapped into employees’ underlying perceptions of injustice. For example, one 2011 depiction of a conversa- tion between a banking manager and supervisor provides insight into these unrealistic goals: “Please share with me how you plan to hit 400 checking accounts and 2,000 solutions this month,” asks the supervisor. The man- ager answers, “Well, I plan to work 90 hours a week for the next four weeks.” “That’s not good enough,” responds the supervisor. Susan Fischer, one bank manager from Phoenix, recalled, “[T]he challenges that I faced were the astronomical goals that were set . . . it was the pressure of having to hold the team accountable to very unrealistic standards.” Not only have these events upset customers, clients, and employees alike, but shareholders were irate as well: Prior to an annual shareholders meeting, the Sisters of St. Francis of Philadelphia, an order of nuns who were also shareholders in Wells Fargo, wanted to see “real, systematic change in culture, ethics, values and finan- cial sustainability,” further characterizing the perceptions of injustice.

Despite these challenges, Wells Fargo tried to repair their relationships with their customers, employees, and all involved. It appears as if the current goal system is on its way out, and the organization has already engaged in remedial action. Wells Fargo has since fired most of the employees who par- ticipated in the practices and will also be paying millions in fines and refunds to the customers affected. Paradoxically, some research suggests that, when organizations go above and beyond to repair damaged relationships after ethical transgressions or injustices, sometimes employees and customers can become more satisfied than if the transgressions never occurred at all.

Sources: Based on M. Egan, “5,300 Wells Fargo Employees Fired over 2 Million Phony Accounts,” CNN Money, September 9, 2016, http://money.cnn.com/2016/09/08/investing/ wells-fargo-created-phony-accounts-bank-fees/?iid=EL; M. Egan, “Wells Fargo Still Faces over a Dozen Probes Tied to Fake Account Scandal,” CNN Money, March 31, 2017, http://money.cnn .com/2017/03/31/investing/wells-fargo-investigations-fake-account-scandal/; E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation,” American Psychologist 57, no. 9 (2002): 705–17; L. D. Ordóñez, M. E. Schweitzer, A. D. Galin- sky, and M. H. Bazerman, “Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting,” Academy of Management Perspectives 31, no. 1 (2017): 6–16; M. P. Regan, “Wells Fargo Scandal Gets Cartoonish,” Bloomberg: Gadfly, October 21, 2016, https://www .bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal- after-wells-fargo; M. Schminke, J. Caldwell, M. L. Ambrose, and S. R. McMahon, “Better Than Ever? Employee Reactions to Ethical Failures in Organizations, and the Ethical Recov- ery Paradox,” Organizational Behavior and Human Decision Processes 123 (2014): 206–19; B. Scudamore, “Why I’m Spending My Spring Break with 500 of My Closest Co-Workers,” Inc., March 14, 2017, http://www.inc.com/brian-scudamore/we-put-500-employees-on-a-plane-to- hawaii-for-1-very-good-reason.html; S. Woolley, “Next Time Your Boss Sets a Crazy Sales Goal, Show Him This,” Bloomberg, September 14, 2016, https://www.bloomberg.com/news/ articles/2016-09-14/how-sales-targets-encourage-wrongdoing-inside-america-s-companies.

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Motivation Concepts CHAPTER 7 217

As we read in the chapter-opening vignette, motivation is a powerful force: It can drive employees through encouragement and reward to accom- plish challenging goals. It can also drive employees to cheat when they experience injustice or are threatened by unattainable goals. As a manager, navigating and attempting to predict these forces becomes a challenge, but knowing more about different theories of motivation can help increase an understanding of how motivation may operate and how employees become motivated.

Motivation is one of the most frequently researched topics in organizational behavior (OB).1 In one survey, 69 percent of workers reported wasting time at work every day, and nearly a quarter said they waste between 30 and 60 minutes each day. How? Usually by surfing the Internet (checking the news and visiting social network sites) and chatting with coworkers.2 Although times change, the problem of motivating a workforce stays the same.

In this chapter, we’ll review the basics of motivation, assess motivation theo- ries, and provide an integrative model that fits these theories together. But first, look at the potential that a little motivation to ask for a raise can yield, shown in the OB Poll.

Motivation Defined The same young student who struggles to read a textbook for more than 20 minutes may devour a Harry Potter book in a day. The difference is the situ- ation. As we analyze the concept of motivation, keep in mind that the level of motivation varies both between individuals and within individuals at different times.

We define motivation as the processes that account for an individual’s inten- sity, direction, and persistence of effort toward attaining a goal.3 While general motivation is concerned with effort toward any goal, we’ll narrow the focus to organizational goals.

Intensity describes how hard a person tries. This is the element most of us focus on when we talk about motivation. However, high intensity is unlikely

7-1 Describe the three key elements of motivation.

motivation The processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal.

Asking for a Raise: Business Executives

Note: Survey of 3,900 executives from 31 countries. Source: Based on Accenture, “The Path Forward” (2012), http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture- IWD-Research-Deck-2012-FINAL.pdf#zoom=50, 36.

When you asked for a pay raise, did you receive one?

Yes 79%

No 21%


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218 PART 2 The Individual

to lead to favorable job performance outcomes unless the effort is channeled in a direction that benefits the organization. Therefore, we consider the qual- ity of effort as well as its intensity. Effort directed toward, and consistent with, the organization’s goals is the kind of effort we should be seeking. Finally, motivation has a persistence dimension. This measures how long a person can maintain effort. Motivated individuals stay with a task long enough to achieve their goals.

Early Theories of Motivation Three theories of employee motivation formulated during the 1950s are prob- ably the best known. Although they are now of questionable validity (as we’ll discuss), they represent a foundation of motivation theory, and many practic- ing managers still use their terminology.

Hierarchy of Needs Theory The best-known theory of motivation is Abraham Maslow’s hierarchy of needs,4 which hypothesizes that within every human being there is a hierarchy of five needs. Recently, a sixth need has been proposed for a highest level—intrinsic values—which is said to have originated from Maslow, but it has yet to gain widespread acceptance.5 The original five needs are:

1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily needs.

2. Safety-security. Security and protection from physical and emotional harm.

3. Social-belongingness. Affection, belongingness, acceptance, and friendship. 4. Esteem. Internal factors such as self-respect, autonomy, and achievement,

and external factors such as status, recognition, and attention. 5. Self-actualization. Drive to become what we are capable of becoming;

includes growth, achieving our potential, and self-fulfillment.

According to Maslow, as each need becomes substantially satisfied, the next one becomes dominant. So if you want to motivate someone, you need to understand what level of the hierarchy that person is currently on and focus on satisfying needs at or above that level. We depict the hierarchy as a pyramid in Exhibit 7-1 because this is its best-known presentation, but Maslow referred to the needs only in terms of levels.

Maslow’s theory has received long-standing wide recognition, particularly among practicing managers. It is intuitively logical and easy to understand, and some research has validated it.6 Unfortunately, however, most research does not, and it hasn’t been frequently researched since the 1960s.7 But old theories, especially intuitively logical ones, die hard. It is thus important to be aware of the prevailing public acceptance of the hierarchy when discussing motivation.

7-2 Compare the early theories of motivation.

hierarchy of needs Abraham Maslow’s hierarchy of five needs—physiological, safety, social, esteem, and self-actualization—in which, as each need is substantially satisfied, the next need becomes dominant.

MyLab Management Watch It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the video exercise.

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Motivation Concepts CHAPTER 7 219

Two-Factor Theory Believing an individual’s relationship to work is basic, and that the attitude toward work can determine success or failure, psychologist Frederick Her- zberg wondered, “What do people want from their jobs?” He asked people to describe, in detail, situations in which they felt exceptionally good or bad about their jobs. The responses differed significantly and led Hertzberg to his two-factor theory (also called motivation-hygiene theory, but this term is not used much today).8

As shown in Exhibit 7-2, intrinsic factors such as advancement, recogni- tion, responsibility, and achievement seem related to job satisfaction. Respon- dents who felt good about their work tended to attribute these factors to their

two-factor theory A theory that relates intrinsic factors to job satisfaction and associ- ates extrinsic factors with dissatisfaction. Also called motivation-hygiene theory.

Maslow’s Hierarchy of NeedsExhibit 7-1

Self- actualization

Esteem Social-belongingness



Source: Based on H. Skelsey, “Maslow’s Hierarchy of Needs—the Sixth Level,” Psychologist (2014): 982–83.

Comparison of Satisfiers and DissatisfiersExhibit 7-2

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Source: Based on Harvard Business Review, “Comparison of Satisfiers and Dissatisfiers,” An exhibit from One More Time: How Do You Motivate Employees? by Frederick Herzberg, January 2003. Copyright © 2003 by the Harvard Business School Publishing Corporation. All rights reserved.

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situations, while dissatisfied respondents tended to cite extrinsic factors, such as supervision, pay, company policies, and work conditions.

To Herzberg, the data suggest that the opposite of satisfaction is not dis- satisfaction, as was traditionally believed. Removing dissatisfying characteristics from a job does not necessarily make the job satisfying. Herzberg proposed a dual continuum: The opposite of “satisfaction” is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction” (see Exhibit 7-3).

Under two-factor theory, the factors that lead to job satisfaction are separate and distinct from those that lead to job dissatisfaction. Therefore, managers who seek to eliminate factors that can create job dissatisfaction may bring about peace but not necessarily motivation. They will be placating rather than moti- vating their workers. Conditions such as quality of supervision, pay, company policies, physical work conditions, relationships with others, and job security are hygiene factors. When they’re adequate, people will not be dissatisfied; nei- ther will they be satisfied. If we want to motivate people on their jobs, we should emphasize factors associated with the work itself or with outcomes directly derived from it, such as promotional opportunities, personal growth opportu- nities, recognition, responsibility, and achievement. These are the characteris- tics people find intrinsically rewarding.

The two-factor theory has not been well supported in research. Criticisms center on Herzberg’s original methodology and his assumptions, such as how the participants may be biased in thinking back to times when they felt good or bad about their jobs.9 Furthermore, if hygiene and motivational factors are equally important to a person, both should be capable of motivating.

Regardless of the criticisms, Herzberg’s theory has been quite influential and has been used in many studies in Asian countries, such as Japan and India.10 Few managers worldwide are unfamiliar with its recommendations.

McClelland’s Theory of Needs You have one beanbag and five targets set up in front of you, each farther away than the last. Target A sits almost within arm’s reach. If you hit it, you get $2. Target B is a bit farther out and pays $4, but only about 80 percent of the people who try can hit it. Target C pays $8, and about half the people who try can hit it. Very few people can hit Target D, but the payoff is $16 for those who do. Finally, Target E pays $32, but it’s almost impossible to achieve. Which would you try for? If you selected C, you’re likely to be a high achiever. Why? Read on.

hygiene factors Factors—such as company policy and administration, supervision, and salary—that, when adequate in a job, placate workers. When these factors are adequate, people will not be dissatisfied.

Contrasting View of Satisfaction and DissatisfactionExhibit 7-3


Traditional view

Herzberg’s view


Satisfaction No satisfaction

No dissatisfaction Dissatisfaction


Hygiene factors

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Motivation Concepts CHAPTER 7 221

McClelland’s theory of needs was developed by David McClelland and his associates.11 Compared to Maslow’s hierarchy, these needs are more akin to motivating factors than strict needs for survival. There are three:

• Need for achievement (nAch) is the drive to excel, to achieve in relation- ship to a set of standards.

• Need for power (nPow) is the need to make others behave in a way they would not have otherwise.

• Need for affiliation (nAff) is the desire for friendly and close interper- sonal relationships.

McClelland and subsequent researchers focused most of their attention on nAch. In general, high achievers perform best when they perceive their proba- bility of success as 0.5—that is, a 50–50 chance. They dislike gambling with high odds because they get no achievement satisfaction from success that comes by pure chance. Similarly, they dislike low odds (high probability of success) because then there is no challenge to their skills. They like to set goals that require stretching themselves a little.

McClelland’s theory has research support across cultures, particularly (when cultural dimensions including power distance are considered).12 Based on prior nAch research, we can predict some relationships between nAch and job performance. First, when employees have a high level of nAch, they tend to exhibit more positive moods and be more interested in the task at hand.13 Second, employees high on nAch tend to perform very well in high-stakes conditions on the job, like work walkthroughs or sales encounters.14

The need for achievement has received a great deal of research attention and acceptance in a wide array of fields, including organizational behavior, psy- chology, and general business.15 The nPow also has research support, but it may be more familiar to people in broad terms (e.g., a need to obtain power) than in relation to the original definition (e.g., a need to make others behave in a way that you want them to).16 We will discuss power much more in Chapter 13. The nAff is also well established and accepted in research—for example, one recent study of 145 teams from Korean organizations suggests that, out

McClelland’s theory of needs A theory that states achievement, power, and affiliation are three important needs that help explain motivation. need for achievement (nAch) The drive to excel, to achieve in relationship to a set of standards, and to strive to succeed.

need for power (nPow) The need to make others behave in a way in which they would not have behaved otherwise.

need for affiliation (nAff) The desire for friendly and close interpersonal relationships.

Entrepreneur Fred DeLuca is a high achiever motivated by work that demands a high degree of personal responsibility. He cofounded a Subway sandwich shop in 1965 at the age of 17 to help finance his college educa- tion and grew the company into the world’s largest fast-food franchise, with almost 44,000 shops in more than 100 countries. Source: Geoff Caddick/EMPPL PA Wire/AP Images

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222 PART 2 The Individual

of all the needs, groups composed of employees with a high nAff tend to per- form the best, exhibit the most open communication, and experience the least amount of conflict.17 Both nAff and nPow tend to be closely related to manage- rial success. The best managers may be high in their need for power and low in their need for affiliation.18

Additional research on Cameroonian and German adults suggests that our personalities may affect whether we can satisfy these needs. For example, a high degree of neuroticism can prevent one from fulfilling the nAff, whereas agreeableness supports fulfillment of this need; interestingly, extraversion had no significant effect.19

The degree to which we have each of the three needs is difficult to measure, and therefore the theory is difficult to put into practice. A behavior may be directed at satisfying many different needs, and many different behaviors may be directed at satisfying one given need, making needs difficult to isolate and examine.20 It is more common to find situations in which managers aware of these motivational drivers label employees based on observations made over time. Therefore, the concepts are helpful, but they are not often used objectively.

Career OBjectives Why won’t he take my advice?

The new guy in the office is nice enough, but he’s straight out of col- lege, and I have 20 years of experi- ence in the field. I’d like to help him out, but he won’t take it no matter how I approach him. Is there anything I can do to motivate him to accept my advice? He badly needs a few pointers.

— James Dear James: It’s great that you want to help, and surely you have wisdom to offer. But let’s start with this: When is the last time you took someone else’s advice? Chances are it’s easier for you to remember the last time you didn’t take someone’s advice than when you did. That’s because we want success on our own terms, and we don’t like the idea that a ready answer was out there all along (and we missed it). “When some- body says, ‘You should do something,’ the subtext is: ‘You’re an idiot for not already doing it,’” said psychologist Alan Goldberg. “Nobody takes advice under those conditions.” So under what conditions do people take advice?

There are two parts to the motiva- tion equation for advice: what your coworker wants to hear, and how you

can approach him. For the first part, keep this rule in mind: He wants to hear that whatever decisions he’s made are brilliant. If he hears anything different from that, he’s likely to tune you out or keep talking until you come over to his side.

For the second part, your coworker’s motivation to accept and, more impor- tant, act on advice has a lot to do with how you approach him. Are you likely to “impart your wisdom to the younger generation”? Anything like “I wish I had known this when I was just start- ing out like you” advice will likely have him thinking you (and your advice) are out of date. Are you going to give “if I were you, I would do this” advice? He may resent your intrusion. According to research, what is most likely to work is a gentle suggestion, phrased as a request. Ravi Dhar, a director at Yale, said, “Interrogatives have less reac- tance and may be more effective.” You might say, for instance, “Would you con- sider trying out this idea?”

Take heart. The problem isn’t that we don’t like advice—we do, as long as we seek it. According to research, we are more motivated toward advice when

we are facing important decisions, so good timing may work in your favor. When he does ask, you may suggest that he writes down the parameters of his choices and his interpretations of the ethics of each decision. Researcher Dan Ariely has found that we are much more motivated to make morally right decisions when we’ve considered the moral implications in a forthright man- ner. In this way, your coworker may motivate himself to make the right decisions.

Keep trying!

Sources: Based on D. Ariely, “What Price for the Soul of a Stranger?” The Wall Street Jour- nal, May 10–11, 2014, C12; J. Queenan, “A Word to the Wise,” The Wall Street Journal, February 8–9, 2014, C1–C2; and S. Reddy, “The Trick to Getting People to Take the Stairs? Just Ask,” The Wall Street Journal, February 17, 2015, R4.

The opinions provided here are of the manag- ers and authors only and do not necessar- ily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here.

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Motivation Concepts CHAPTER 7 223

Contemporary Theories of Motivation Contemporary theories of motivation have one thing in common: Each has a reasonable degree of valid supporting documentation. We call them “contempo- rary theories” because they represent the latest thinking in explaining employee motivation. This doesn’t mean they are unquestionably right, however.

Self-Determination Theory “It’s strange,” said Marcia. “I started work at the Humane Society as a volunteer. I put in 15 hours a week helping people adopt pets. I loved coming to work; but then, 3 months ago, they hired me full-time at $11 an hour. I’m doing the same work I did before. But I’m not finding it as much fun.”

Does Marcia’s reaction seem counterintuitive? There’s an explanation for it. It can be found in self-determination theory, which proposes (in part) that people prefer to feel they have control over their actions, and anything that makes a previously enjoyed task feel more like an obligation than a freely cho- sen activity undermines motivation.21 The theory is widely used in psychology, management, education, and medical research.

Much research on self-determination theory in OB has focused on cognitive evaluation theory, a complementary theory hypothesizing that extrin- sic rewards reduce intrinsic interest in a task. When people are paid for work, it feels less like something they want to do and more like something they have to do. Self-determination theory proposes that, in addition to being driven by a need for autonomy, people seek ways to achieve competence and make positive connections with others. Of all the three needs, however, the autonomy need is the most important for attitudinal and affective outcomes, whereas the compe- tence need appears to be most important for predicting performance.22

What does self-determination theory suggest about providing rewards? It suggests that some caution in the use of extrinsic rewards to motivate is wise and that pursuing goals from intrinsic motives (such as a strong interest in the work itself) is more sustaining to human motivation than are extrinsic rewards. Similarly, cognitive evaluation theory suggests that providing extrinsic incen- tives may, in many cases, undermine intrinsic motivation. For example, if a computer programmer values writing code because she likes to solve problems, a bonus for writing a certain number of lines of code every day could feel coer- cive, and her intrinsic motivation would suffer. She may or may not increase her number of lines of code per day in response to the extrinsic motivator. In support, a recent meta-analysis confirms that intrinsic motivation contrib- utes to the quality of work, while incentives contribute to the quantity of work. Although intrinsic motivation predicts performance regardless of incentives, it may be less of a predictor when incentives are tied to performance directly (such as with monetary bonuses) rather than indirectly.23

A more recent outgrowth of self-determination theory is self-concordance, which considers how strongly people’s reasons for pursuing goals are consis- tent with their interests and core values. OB research suggests that people who pursue work goals for intrinsic reasons are more satisfied with their jobs, feel they fit into their organizations better, and may perform better.24 Across cul- tures, if individuals pursue goals because of intrinsic interest, they are more likely to attain goals, are happier when they do so, and are happy even when they are unable to attain them.25 Why? Because the process of striving toward goals is fun regardless of whether the goal is achieved. Recent research reveals that when people do not enjoy their work for intrinsic reasons, those who work because they feel obligated to do so can still perform acceptably, though

7-3 Contrast the elements of self-determination theory and goal-setting theory.

self-determination theory A theory of mo- tivation that is concerned with the beneficial effects of intrinsic motivation and the harmful effects of extrinsic motivation.

cognitive evaluation theory A version of self-determination theory in which allocating extrinsic rewards for behavior that had been previously intrinsically rewarding tends to decrease the overall level of motivation if the rewards are seen as controlling.

self-concordance The degree to which people’s reasons for pursuing goals are con- sistent with their interests and core values.

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they experience higher levels of strain.26 Research on Australian, British, and American employees suggests that organizations can increase certain behaviors of interest from their employees, such as environmentally sustainable behaviors (e.g., conserving energy and commuting), by connecting them with goals that are important to them.27

What does all this mean? For individuals, it means you should choose your job for reasons other than extrinsic rewards. For organizations, it means man- agers should provide intrinsic as well as extrinsic incentives. Managers need to make the work interesting, provide recognition, link organizational and employee goals, and support employee growth and development. Employees who feel that what they do is within their control and a result of free choice are likely to be more motivated by their work and committed to their employers.28

Goal-Setting Theory You’ve likely heard this sentiment several times: “Just do your best. That’s all anyone can ask.” But what does “do your best” mean? Do we ever know whether we’ve achieved that vague goal? Research on goal-setting theory, proposed by Edwin Locke, reveals the impressive effects of goal specificity, challenge, and feedback on performance. Under the theory, intentions to work toward a goal are considered a major source of work motivation.29

Goal-setting theory is well supported. Evidence strongly suggests that specific goals increase performance; that difficult goals, when accepted, result in higher performance than do easy goals; and that feedback leads to higher performance than does nonfeedback.30 Why? First, specificity itself seems to act as an inter- nal stimulus. When a trucker commits to making 12 round-trip hauls between

goal-setting theory A theory stating that specific and difficult goals, with feedback, lead to higher performance.

Myth or Science? Helping Others and Being a Good Citizen Is Good for Your Career

We might think we should moti-vate employees to display orga-nizational citizenship behavior (OCB), and that helping others would benefit their careers. We would prob- ably also believe our own OCB will yield us career benefits. Surprisingly, there is some evidence that these assump- tions are false, at least in certain orga- nizations. Why?

In some organizations, employees are evaluated more on how their work gets done than on how much they do. If they possess the requisite knowledge and skills, or if they demonstrate the right behaviors on the job (for exam- ple, always greeting customers with a smile), they are determined by man- agement to be motivated, “good” per- formers. In these situations, OCBs are

considered as the next higher level of good employee behavior. Employees’ careers thus benefit because of their helpfulness toward coworkers.

In other organizations, however, em- ployees are evaluated more on what gets done. Here, employees are deter- mined to be “good” performers if they meet objective goals such as billing clients a certain number of hours or reaching a certain sales volume. When managers overlook employee OCB, frown on helpful behaviors, or create an overly competitive organizational cul- ture, employees become unmotivated to continue their helpful actions. Those who still engage in OCB can find their career progress is slowed when they take time away from core tasks to be helpful.

The upshot? There may be a trade- off between being a good performer and being a good citizen. In organiza- tions that focus more on behaviors, following your motivation to be a good citizen can help to accomplish your career goals. However, in organizations that focus more on objective outcomes, you may need to consider the cost of your good deeds.

Sources: Based on D. M. Bergeron, “The Potential Paradox of Organizational Citi- zenship Behavior: Good Citizens at What Cost?” Academy of Management Review 32, no. 4 (2007); and D. M. Bergeron, A. J. Shipp, B. Rosen, and S. A. Furst, “Organiza- tional Citizenship Behavior and Career Out- comes: The Cost of Being a Good Citizen,” Journal of Management 39, no. 4 (2013): 958–84.

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Motivation Concepts CHAPTER 7 225

Toronto and New York each week, this intention gives him a specific objective to attain. All things being equal, he will outperform a counterpart with no goals or the generalized goal “do your best.”

Second, if factors such as acceptance of goals are held constant, the more difficult the goal, the higher the level of performance. Of course, it’s logical to assume easier goals are more likely to be accepted. But once a hard task has been accepted, we can expect the employee to exert a high level of effort to try to achieve it.

Third, people do better when they get feedback on how well they are pro- gressing toward their goals because it helps identify discrepancies between what they have done and what they want to do next—that is, feedback guides behavior. For example, managers who coach their sales employees can directly facilitate sales goal attainment if the managers are good at coaching.31 But all feedback is not equally potent. Self-generated feedback—with which employ- ees can monitor their own progress or receive feedback from the task process itself—is more powerful than externally generated feedback.32

If employees can participate in the setting of their own goals, will they try harder? The evidence is mixed, although across studies it appears that they will not perform any better.33 In some studies, participatively set goals yielded supe- rior performance; in others, individuals performed best when assigned goals by their boss. One study in China found, for instance, that participative team goal setting improved team outcomes.34 Another study found that participation results in more achievable goals for individuals.35 Without participation, the individual pursuing the goal needs to clearly understand the goal’s purpose and importance.36

Three personal factors influence the goals–performance relationship: goal commitment, task characteristics, and national culture.

Goal Commitment Goal-setting theory assumes an individual is committed to the goal and determined not to lower or abandon it. The individual (1) believes he or she can achieve the goal and (2) wants to achieve it.37 Goal commitment

Cofounders Anthony Thomson, left, and Vernon Hill launched the Metro Bank in London in 2010 with the goal of adding 200 new branches and cap- turing 10 percent of London’s banking market. This challenging goal moti- vates employees to exert a high level of effort in giving customers exception- ally convenient, flexible, and friendly— including pet-friendly—service. Source: Toby Melville/Reuters

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226 PART 2 The Individual

is most likely to occur when employees expect that their efforts will pay off in goal attainment, when accomplishing the goal is attractive to them, and when they actively participate in goal setting.38

Task Characteristics Goals themselves seem to affect performance more strongly when tasks are simple rather than complex, and when the tasks are independent rather than interdependent.39 On interdependent tasks, group goals along with delegation of tasks are preferable. Paradoxically, goal aban- donment following an initial failure is more likely for individuals who self- affirm their core values, possibly because they internalize the implications of failure more strongly than others do.40

National Culture Setting specific, difficult, individual goals may have differ- ent effects in different cultures. In collectivistic and high power-distance cul- tures, achievable moderate goals can be more motivating than difficult ones.41 Assigned goals appear to generate greater goal commitment in high than in low power-distance cultures.42 However, research has not shown that group- based goals are more effective in collectivist than in individualist cultures. More research is needed to assess how goal constructs might differ across cultures.

Although goal setting has positive outcomes, it’s not unequivocally benefi- cial. For example, some goals may be too effective.43 When learning something is important, goals related to performance undermine adaptation and creativ- ity because people become too focused on outcomes and ignore the learning process. Nor are all goals equally effective. For rote tasks with quantifiable stan- dards of productivity, goals that reward quantity can be highly motivating. For other jobs that require complex thinking and personal investment, goals and rewards for quantity may not be effective.44 And individuals may fail to give up on an unattainable goal even when it might be beneficial to do so.

Research has found that people differ in the way they regulate their thoughts and behaviors during goal pursuit.45 Generally, people fall into one of two cat- egories, though they could belong to both. Those with a promotion focus strive for advancement and accomplishment, and approach conditions that move them closer toward desired goals. This concept is similar to the approach side of the approach-avoidance framework discussed in Chapter 5. Those with a prevention focus strive to fulfill duties and obligations and avoid conditions that pull them away from desired goals. Aspects of this concept are similar to the avoidance side of the approach-avoidance framework. Although you would be right in noting that both strategies are in the service of goal accomplish- ment, the way they get there is quite different. As an example, consider study- ing for an exam. You could engage in promotion-focused activities such as reading class materials, or you could engage in prevention-focused activities such as refraining from doing things that would get in the way of studying, such as playing video games.

You may ask, “Which is the better strategy?” Well, the answer depends on the outcome you are striving for. A promotion (but not a prevention) focus is related to higher levels of task performance, citizenship behavior, and innovation; a prevention (but not a promotion) focus is related to safety per- formance. Ideally, it’s probably best to be both promotion- and prevention- oriented.46 Keep in mind that a person’s job satisfaction is more heavily affected by low success when that person has an avoidance (prevention) out- look,47 so set achievable goals, remove distractions, and provide structure for these individuals.48

promotion focus A self-regulation strat- egy that involves striving for goals through advancement and accomplishment.

prevention focus A self-regulation strategy that involves striving for goals by fulfilling duties and obligations.

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Motivation Concepts CHAPTER 7 227

Implementing Goal Setting How do managers make goal-setting theory opera- tional? That’s often left up to the individual. Some managers set aggressive per- formance targets—what General Electric called “stretch goals.” Some leaders, such as Procter & Gamble’s former CEO Robert McDonald and Best Buy’s CEO Hubert Joly, are known for their demanding performance goals. But many managers don’t set goals. When asked whether their jobs had clearly defined goals, a minority of survey respondents said yes.49

A more systematic way to utilize goal setting is with management by objectives (MBO), an initiative most popular in the 1970s but still used today.50 MBO emphasizes participatively set goals that are tangible, verifiable, and mea- surable. As Exhibit 7-4 shows, the organization’s overall objectives are trans- lated into specific cascading objectives for each level (divisional, departmental, individual). But because lower-unit managers jointly participate in setting their own goals, MBO works from the bottom up as well as from the top down. The result is a hierarchy that links objectives at one level to those at the next. For the individual employee, MBO provides specific personal performance objectives.

Four ingredients are common to MBO programs: goal specificity, partici- pation in decision making (including the setting of goals or objectives), an explicit time period, and performance feedback.51 Many elements in MBO pro- grams match the propositions of goal-setting theory.

You’ll find MBO programs in many business, health care, educational, gov- ernment, and nonprofit organizations, and many of these programs have led to a performance gain.52 A version of MBO, called management by objectives and results (MBOR), has been used for 30 years in the governments of Denmark, Norway, and Sweden.53 However, the popularity of these programs does not mean they always work.54 When MBO fails, the culprits tend to be unrealistic expectations, lack of commitment by top management, and inability or unwill- ingness to allocate rewards based on goal accomplishment.

Goal Setting and Ethics The relationship between goal setting and ethics is quite complex: If we emphasize the attainment of goals, what is the cost? The answer is probably found in the standards we set for goal achievement. For example, when money is tied to goal attainment, we may focus on getting

management by objectives (MBO) A program that encompasses specific goals, participa- tively set, for an explicit time period, with feedback on goal progress.

Cascading of ObjectivesExhibit 7-4

Overall organizational


Divisional objectives

Departmental objectives

Individual objectives

XYZ Company

Industrial products divisionConsumer products division

Production Sales Marketing Research DevelopmentCustomerservice

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228 PART 2 The Individual

the money and become willing to compromise ourselves ethically. If we are instead primed with thoughts about how we are spending our time when we are pursuing the goal, we are more likely to act more ethically.55 However, this result is limited to thoughts about how we are spending our time. If we are put under time pressure and worry as a result, thoughts about time turn against us. Time pressure often increases as we are nearing a goal, which can tempt us to act unethically to achieve it.56 Specifically, we may forego mastering tasks and adopt avoidance techniques so we don’t look bad,57 both of which can incline us toward unethical choices.

Other Contemporary Theories of Motivation Self-determination theory and goal-setting theory are well supported contem- porary theories of motivation. But they are far from the only noteworthy OB theories on the subject. Self-efficacy, reinforcement, and expectancy theories reveal different aspects of our motivational processes and tendencies. We begin with the concept of self-efficacy.

Self-Efficacy Theory Self-efficacy theory, a component of social cognitive theory or social-learning theory, refers to an individual’s belief that he or she is capable of performing a task.58 The higher your self-efficacy, the more confidence you have in your ability to succeed. So, in difficult situations, people with low self-efficacy are more likely to lessen their effort or give up altogether, while those with high self-efficacy will try harder to master the challenge.59 Self-efficacy can (but not always) create a positive spiral in which those with high efficacy become more engaged in their tasks and then in turn increase performance, which increases efficacy further.60 One study introduced a further explanation: Self-efficacy was associated with a higher level of focused attention, which led to increased task performance.61

Feedback influences self-efficacy; individuals high in self-efficacy seem to respond to negative feedback with increased effort and motivation, while those low in self-efficacy are likely to lessen their effort after negative feedback.62 Changes in self-efficacy over time are related to changes in creative perfor- mance as well.63 How can managers help their employees achieve high levels of self-efficacy? By bringing goal-setting theory and self-efficacy theory together.

Goal-setting theory and self-efficacy theory don’t compete with each other; they complement each other. As Exhibit 7-5 shows, employees whose managers set difficult goals for them have a higher level of self-efficacy and set higher goals for their own performance. Why? Setting difficult goals for people com- municates your confidence in them.

Increasing Self-Efficacy in Yourself The researcher who developed self-efficacy theory, Albert Bandura, proposes four ways that self-efficacy can be increased:64

1. Enactive mastery. 2. Vicarious modeling. 3. Verbal persuasion. 4. Arousal.

The most important source of increasing self-efficacy is enactive mastery—that is, gaining relevant experience with the task or job. If you’ve been able to do the job successfully in the past, you’re more confident that you can do it in the future.

7-4 Understand the differences among self-efficacy theory, reinforcement theory, and expectancy theory.

self-efficacy theory An individual’s belief that he or she is capable of performing a task.

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Motivation Concepts CHAPTER 7 229

The second source is vicarious modeling—becoming more confident because you see someone else doing the task. If your friend quits smoking, it increases your confidence that you can quit, too. Vicarious modeling is most effective when you see yourself as similar to the person you are observing. Watching Tiger Woods play a difficult golf shot might not increase your confidence in being able to play the shot yourself, but watching a golfer with a handicap simi- lar to yours is persuasive.

The third source is verbal persuasion: We become more confident when someone convinces us we have the skills necessary to be successful. Motiva- tional speakers use this tactic.

Fourth, arousal increases self-efficacy. Arousal leads to an energized state, so we get “psyched up,” feel up to the task, and perform better. But if the task requires a steady, lower-key perspective (say, carefully editing a manuscript), arousal may in fact hurt performance even as it increases self-efficacy because we might hurry through the task.

Intelligence and personality are absent from Bandura’s list, but they too can increase self-efficacy.65 People who are intelligent, conscientious, and emotion- ally stable are so much more likely to have high self-efficacy that some research- ers argue that self-efficacy is less important than prior research would suggest.66 They believe it is partially a by-product in a smart person with a confident personality.

Influencing Self-Efficacy in Others The best way for a manager to use verbal persuasion is through the Pygmalion effect, a term based on a Greek myth about a sculptor (Pygmalion) who fell in love with a statue he carved. The Pygma- lion effect is a form of self-fulfilling prophecy in which believing something can make it true. Here, it is often used to describe “that what one person expects of another can come to serve a self-fulfilling prophecy.”67 An example should make this clear. In some studies, teachers were told their students had very high IQ scores when, in fact, they spanned a range from high to low. Consistent with the Pygmalion effect, the teachers spent more time with the students they

Joint Effects of Goals and Self-Efficacy on PerformanceExhibit 7-5

Individual has higher level of job

or task performance

Manager sets difficult, specific

goal for job or task

Individual sets higher personal

(self-set) goal for his or her performance

Individual has confidence that given level of performance

will be attained (self-efficacy)

Source: Based on E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation: A 35-Year Odyssey,” American Psychologist (September 2002): 705–17.

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230 PART 2 The Individual

thought were smart, gave them more challenging assignments, and expected more of them—all of which led to higher student self-efficacy and better achievement outcomes.68 This strategy has been used in the workplace too, with replicable results and enhanced effects when leader–subordinate relation- ships are strong.69

Training programs often make use of enactive mastery by having people practice and build their skills. In fact, one reason training works is that it increases self-efficacy, particularly when the training is interactive and feed- back is given after training.70 Individuals with higher levels of self-efficacy also appear to reap more benefits from training programs and are more likely to use their training on the job.71

Reinforcement Theory Goal setting is a cognitive approach, proposing that an individual’s purposes direct his or her action. Reinforcement theory, in contrast, takes a behavioristic view, arguing that reinforcement conditions behavior.72 The two theories are clearly at odds philosophically. Reinforcement theorists see behavior as envi- ronmentally caused. You need not be concerned, they would argue, with inter- nal cognitive events; what controls behavior are reinforcers—any consequences that, when they immediately follow responses, increase the probability that the behavior will be repeated.

Reinforcement theory ignores the inner state of the individual and con- centrates solely on what happens when he or she takes some action. Because it does not concern itself with what initiates behavior, it is not, strictly speak- ing, a theory of motivation. But it does provide a powerful means of analyzing what controls behavior, and therefore we typically consider it in discussions of motivation.

Operant Conditioning/Behaviorism and Reinforcement Operant conditioning theory, probably the most relevant component of reinforcement theory for manage- ment, argues that people learn to behave to get something they want or to avoid something they don’t want. Unlike reflexive or unlearned behavior, operant behavior is influenced by the reinforcement or lack of reinforcement brought about by consequences. Reinforcement strengthens a behavior and increases the likelihood it will be repeated.

B. F. Skinner, one of the most prominent advocates of operant condition- ing, demonstrated that people will most likely engage in desired behaviors if they are positively reinforced for doing so; rewards are most effective if they immediately follow the desired response; and behavior that is not rewarded, or is punished, is less likely to be repeated. The concept of operant conditioning was part of Skinner’s broader concept of behaviorism, which argues that behav- ior follows stimuli in a relatively unthinking manner. Skinner’s form of radical behaviorism rejects feelings, thoughts, and other states of mind as causes of behavior. In short, people learn to associate stimulus and response, but their conscious awareness of this association is irrelevant.73

You can see illustrations of operant conditioning everywhere. For instance, a commissioned salesperson wanting to earn a sizable income finds doing so is contingent on generating high sales in his territory, so he sells as much as pos- sible. Of course, the linkage can also teach individuals to engage in behaviors that work against the best interests of the organization. Assume your boss says that if you work overtime during the next three-week busy season, you’ll be compensated for it at your next performance appraisal. However, when perfor- mance appraisal time comes, you are given no positive reinforcement for your overtime work. The next time your boss asks you to work overtime, what will you do? You’ll probably decline!

reinforcement theory A theory suggesting that behavior is a function of its consequences.

behaviorism A theory stating that behavior follows stimuli in a relatively unthinking manner.

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Motivation Concepts CHAPTER 7 231

Social-Learning Theory and Reinforcement Individuals can learn by being told or by observing what happens to other people, as well as through direct experi- ence. Much of what we have learned comes from watching models—parents, teachers, peers, film and television performers, bosses, and so forth. The view that we can learn through both observation and direct experience is called social-learning theory.74

Although social-learning theory is an extension of operant conditioning— that is, it assumes behavior is a function of consequences—it also acknowledges the effects of observational learning and perception. People respond to the way they perceive and define consequences, not to the objective consequences themselves.

Models are central to the social-learning viewpoint. Four processes deter- mine their influence on an individual:

1. Attentional processes. People learn from a model only when they recognize and pay attention to its critical features. We tend to be most influenced by models that are attractive, repeatedly available, important to us, or similar to us (in our estimation).

2. Retention processes. A model’s influence depends on how well the indi- vidual remembers the model’s action after the model is no longer readily available.

3. Motor reproduction processes. After a person has seen a new behavior by observing the model, watching must be converted to doing. This process demonstrates that the individual can perform the modeled activities.

social-learning theory The view that we can learn through both observation and direct experience.

An Ethical Choice Motivated by Big Brother

T echnology is a great thing. The Internet provides us with instant access to an abundance of information, and smartphones allow us to stay connected with others through e-mail, texting, and tweeting. Yet that ease of connectivity has also given employees the sinking feeling they are being watched—and they are right. But is tracking employees ethical?

Some companies are using tech- nology to track their employees’ activi- ties, and some of this tracking is done in the name of science. For example, Bank of America Corp. wanted to learn whether face-to-face interaction made a difference to the productivity of its call center teams, so it asked around 100 workers to wear badges for a few weeks that tracked their whereabouts. Discovering that the most productive workers interacted most frequently with others, the company scheduled work

breaks for groups rather than individu- ally. This is a nice outcome, but how did the monitoring affect the behavior and motivation of the workers?

Other companies track employees to ensure that they are hard at work, which risks completely demotivating some. Accurate Biometrics, for exam- ple, uses computer monitoring to over- see its telecommuters. Says Timothy Daniels, VP of operations, looking at websites his employees have visited “enables us to keep a watchful eye without being overinvasive.” Currently, around 70 percent of organizations monitor their employees.

Practically speaking, managers may not want to adopt technologies that demotivate their employees through micromanagement. Perhaps more im- portant, though, how can they use mon- itoring technology ethically in workplace applications? First and foremost, em- ployees should be informed that their

activities will be tracked. Second, the purpose of tracking should be made clear to employees. Are workers being monitored to learn something that might help them and the organization as a whole? Or are they being moni- tored to ensure that they never slack off? Finally, it should be made clear which behaviors are inappropriate. Tak- ing a legitimate work break is different from spending hours on a social net- working site. These guidelines should increase the likelihood that monitoring programs are accepted and perceived to be fair.

Sources: Based on S. Shellenbarger, “Work- ing from Home without Slacking Off,” The Wall Street Journal, July 13–15, 2012, 29; R. Richmond, “3 Tips for Legally and Ethically Monitoring Employees Online,” Entrepreneur, May 31, 2012, http://www.entrepreneur .com/article/223686; and R. E. Silverman, “Tracking Sensors Invade the Workplace,” The Wall Street Journal, March 7, 2003, www.wsj.com.

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4. Reinforcement processes. Individuals are motivated to exhibit the mod- eled behavior if positive incentives or rewards are provided. Positively rein- forced behaviors are given more attention, learned better, and performed more often.

Expectancy Theory One of the most widely accepted explanations of motivation is Victor Vroom’s expectancy theory.75 Although it has critics, most evidence supports the theory.76

Expectancy theory argues that the strength of our tendency to act a cer- tain way depends on the strength of our expectation of a given outcome and its attractiveness. In practical terms, employees will be motivated to exert a high level of effort when they believe that it will lead to a good performance appraisal, that a good appraisal will lead to organizational rewards such as sal- ary increases and/or intrinsic rewards, and that the rewards will satisfy their personal goals. The theory therefore focuses on three relationships (see Exhibit 7-6):

1. Expectancy: the effort–performance relationship. The probability per ceived by the individual that exerting a given amount of effort will lead to performance.

2. Instrumentality: the performance–reward relationship. The degree to which the individual believes performing at a particular level will lead to the attainment of a desired outcome.

3. Valence: the rewards–personal goals relationship. The degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual.

Expectancy theory helps explain why a lot of workers aren’t motivated on their jobs and do only the minimum necessary to get by. Let’s frame the theo- ry’s three relationships as questions that employees need to answer in the affir- mative if their motivation is to be maximized.

First, if I give maximum effort, will it be recognized in my performance appraisal? For many employees, the answer is no. Why? Their skill level may be deficient,

expectancy theory A theory stating that the strength of a tendency to act in a certain way depends on the strength of an expecta- tion that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.

At Thai Takenaka, a leading construc- tion firm in Thailand, experienced employees teach younger workers construction management skills, building techniques, and the basics of craftsmanship through training by “looking, touching, and realization.” This social-learning view helps employ- ees succeed in meeting the firm’s high standards of quality and efficiency. Source: */Kyodo/Newscom

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Motivation Concepts CHAPTER 7 233

Expectancy TheoryExhibit 7-6

Individual effort

1 2 3Individual performance

Effort–performance relationship Performance–reward relationship Rewards–personal goals relationship

Organizational rewards

Personal goals




The performance–reward relationship is strong at Mary Kay Cosmetics, which offers a rewards and recognition program based on the achievement of personal goals set by each sales- person. The women shown here in China pose before a pink sedan, one of many rewards that motivate Mary Kay’s independent sales force. Source: China Photos/Getty Images

which means no matter how hard they try, they’re not likely to be high per- formers. Or the organization’s performance appraisal system may be designed to assess nonperformance factors such as loyalty, initiative, or courage, which means more effort won’t necessarily result in a higher evaluation. Another possibility is that employees, rightly or wrongly, perceive the boss doesn’t like them. Thus, they expect a poor appraisal, regardless of effort. These examples suggest that people will be motivated only if they perceive a link between their effort and their performance.

Second, if I get a good performance appraisal, will it lead to organizational rewards? Many organizations reward things besides performance. When pay is based on factors such as having seniority, being cooperative, or “kissing up” to the boss, employees are likely to see the performance–reward relationship as weak and demotivating.

Finally, if I’m rewarded, are the rewards attractive to me? The employee works hard in the hope of getting a promotion but gets a pay raise instead. Or the employee wants a more interesting and challenging job but receives only a few words of praise. Unfortunately, many managers are limited in the rewards they can distribute, which makes it difficult to tailor rewards to individual employee needs. Some managers incorrectly assume all employees want the same thing, thus overlooking the motivational effects of differentiating rewards. In these cases, employee motivation is not maximized.

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234 PART 2 The Individual

As a vivid example of how expectancy theory can work, consider stock ana- lysts. They make their living trying to forecast a stock’s future price; the accu- racy of their buy, sell, or hold recommendations is what keeps them employed. But the dynamics are not so simple. Analysts place few sell ratings on stocks, although many stocks are both falling and rising in a steady market. Expec- tancy theory provides an explanation: Analysts who place a sell rating on a company’s stock should balance the benefits they receive by being accurate against the risks they run by drawing that company’s ire. What are these risks? They include public rebuke, professional blackballing, and exclusion from information. When analysts place a buy rating on a stock, they face no such trade-off because, obviously, companies love it when analysts recommend that investors buy their stock. So the incentive structure suggests the expected out- come of buy ratings is higher than the expected outcome of sell ratings, and that’s why buy ratings vastly outnumber sell ratings.77

Equity Theory/Organizational Justice Ainsley is a student working toward a bachelor’s degree in finance. To gain some work experience and increase her marketability, she accepted a summer internship in the finance department at a pharmaceutical company. She is quite pleased at the pay: $15 an hour is more than other students in her cohort receive for their summer internships. At work she meets Josh, a recent graduate working as a middle manager in the same finance department. Josh makes $30 an hour.

On the job, Ainsley is a go-getter. She’s engaged, satisfied, and always seems willing to help others. Josh is the opposite. He often seems disinter- ested in his job and entertains thoughts about quitting. When pressed one day about why he is unhappy, Josh cites his pay as the main reason. Specifi- cally, he tells Ainsley that, compared to managers at other pharmaceutical companies, he makes much less. “It isn’t fair,” he complains. “I work just as hard as they do, yet I don’t make as much. Maybe I should go work for the competition.”

How could someone making $30 an hour be less satisfied with his or her pay than someone making $15 an hour and be less motivated as a result? The answer lies in equity theory and, more broadly, in principles of organizational justice.78 According to equity theory, employees compare what they get from their job (their “outcomes,” such as pay, promotions, recognition, or a bigger office) to what they put into it (their “inputs,” such as effort, experience, and education). They take the ratio of their outcomes to their inputs and com- pare it to the ratio of others, usually someone similar like a coworker or some- one doing the same job. This is shown in Exhibit 7-7. If we believe our ratio is equal to those with whom we compare ourselves, a state of equity exists and we perceive our situation as fair.

7-5 Describe the forms of orga-nizational justice, including distributive justice, proce- dural justice, informational justice, and interactional justice.

equity theory A theory stating that individu- als compare their job inputs and outcomes with those of others and then respond to eliminate any inequities.

MyLab Management Personal Inventory Assessments Go to www.pearson.com/mylab/management to complete the Personal Inventory Assessment related to this chapter.

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Motivation Concepts CHAPTER 7 235

Based on equity theory, employees who perceive inequity will make one of six choices:79

1. Change inputs (exert less effort if underpaid or more if overpaid). 2. Change outcomes (individuals paid on a piece-rate basis can increase their

pay by producing a higher quantity of units of lower quality). 3. Distort perceptions of self (“I used to think I worked at a moderate pace,

but now I realize I work a lot harder than everyone else”). 4. Distort perceptions of others (“Mike’s job isn’t as desirable as I thought”). 5. Choose a different referent (“I may not make as much as my brother-in-

law, but I’m doing a lot better than my Dad did when he was my age”). 6. Leave the field (quit the job).

Equity theory has support from some researchers but not from all.80 There are some concerns with the propositions. First, inequities created by overpay- ment do not seem to significantly affect behavior in most work situations. So don’t expect an employee who feels overpaid to give back part of his salary or put in more hours to make up for the inequity. Although individuals may sometimes perceive that they are overrewarded, they restore equity by rational- izing their situation (“I’m worth it because I work harder than everyone else”). Second, not everyone is equally equity-sensitive, for various reasons, including feelings of entitlement.81 Others prefer the outcome–input ratios to be lower than the referent comparisons. Predictions from equity theory are not likely to be very accurate about these “benevolent types.”82

Although equity theory’s propositions have not all held up, the hypothe- sis serves as an important precursor to the study of organizational justice or, more simply, fairness in the workplace.83 Organizational justice is concerned more broadly with how employees feel authorities and decision makers at work treat them. For the most part, employees evaluate how fairly they are treated, as shown in Exhibit 7-8.

Distributive Justice Distributive justice is concerned with the fairness of the outcomes, such as pay and recognition, that employees receive.84 Outcomes can be allocated in many ways. For example, we could distribute raises equally among employees, or we could base raises on which employees need money the most. As we said in our discussion about equity theory, however, employees tend to perceive their out- comes are fairest when they are distributed equitably.

Does the same logic apply to teams? At first glance, distributing rewards equally among team members would seem to be best for boosting morale and

organizational justice An overall perception of what is fair in the workplace, composed of distributive, procedural, informational, and interpersonal justice.

distributive justice Perceived fairness of the amount and allocation of rewards among individuals.

Equity TheoryExhibit 7-7

Ratio Comparisons* Perception

Inequity due to being underrewarded


Inequity due to being overrewarded

*Where represents the employee and represents relevant othersOIB O IA

> O IB


= O IB


< O IB


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teamwork—that way, no one is favored more than another. A study of U.S. National Hockey League teams suggests otherwise. Differentiating the pay of team members based on their inputs (how well they performed in games) attracted better players to the team, made it more likely that they would stay, and increased team performance.85

The way we have described things so far, it would seem that individuals gauge distributive justice and equity in a rational, calculative way as they com- pare their outcome–input ratios to those of others. But the experience of jus- tice, and especially of injustice, is often not so cold and calculated. Instead, people base distributive judgments on a feeling or an emotional reaction to the way they think they are being treated relative to others, and their reactions are often “hot” and emotional rather than cool and rational.86

Procedural Justice Although employees care a lot about what outcomes are distributed (distribu- tive justice), they also care about how they are distributed. While distributive justice looks at what outcomes are allocated, procedural justice examines how.87 For one, employees perceive that procedures are fairer when they are given a say in the decision-making process. Having direct influence over how decisions are made, or at the very least being able to present our opinion to decision makers, creates a sense of control and makes us feel empowered (we discuss empowerment more in the next chapter). Employees also perceive that proce- dures are fairer when decision makers follow several rules, including making decisions in a consistent manner (across people and over time), avoiding bias (not favoring one group or person over another), using accurate information, considering the groups or people that their decisions affect, acting ethically, and remaining open to appeals or correction.

procedural justice The perceived fairness of the process used to determine the distribution of rewards.

Model of Organizational JusticeExhibit 7-8

Organizational Justice

Definition: overall perception of what is fair in the workplace Example: I think this is a fair place to work.

Distributive Justice Definition: perceived fairness of outcome Example: I got the pay raise I deserved.

Procedural Justice Definition: perceived fairness of process used to determine outcome Example: I had input into the process used to give raises and was given a good explanation of why I received the raise I did.

Interactional Justice Definition: sensitivity to the quality of interpersonal treatment Example: When telling me about my raise, my supervisor was very nice and complimentary.

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If outcomes are favorable and individuals get what they want, they care less about the process, so procedural justice doesn’t matter as much when distribu- tions are perceived to be fair. It’s when outcomes are unfavorable that peo- ple pay close attention to the process. If the process is judged to be fair, then employees are more accepting of unfavorable outcomes.88 If employees are given a voice when experiencing unfavorable outcomes, an element of fair pro- cess, they will feel better about the situation, even when the outcomes continue to be poor.89

Think about it. If you are hoping for a raise and your manager informs you that you did not receive one, you’ll probably want to know how raises were determined. If it turns out your manager allocated raises based on merit and you were simply outperformed by a coworker, then you’re more likely to accept your manager’s decision than if raises were based on favoritism. Of course, if you get the raise in the first place, then you’ll be less concerned with how the decision was made.

Interactional Justice Beyond outcomes and procedures, research has shown that employees care about two other types of fairness that have to do with the way they are treated during interactions with others. Both of these fall within the category of interac- tional justice (see Exhibit 7-8).90

Informational Justice The first type is informational justice, which reflects whether managers provide employees with explanations for key decisions and keep them informed of important organizational matters. The more detailed and candid managers are with employees, the more fairly treated those employ- ees feel.

It may seem obvious that managers should be honest with their employees and not keep them in the dark about organizational matters; however, many managers are hesitant to share information. This is especially the case with bad news, which is uncomfortable for both the manager delivering it and the employee receiving it. Explanations for bad news are beneficial when they take

informational justice The degree to which employees are provided truthful explanations for decisions.

Nordstrom is legendary for its cus- tomer service. Its secret? Empowering employees to make decisions that directly affect how they work as well as including them in the decision- making process, giving them a sense of motivation through procedural justice. Employees such as this cos- metician at a Nordstrom in Seattle, Washington, are empowered to provide excellent customer service. Legend has it that one Nordstrom representa- tive drove all the way to an airport to bring a customer the bags she left at the store! Source: B. O’Kane/Alamy Stock Photo

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the form of excuses after the fact (“I know this is bad, and I wanted to give you the office, but it wasn’t my decision”) rather than justifications (“I decided to give the office to Sam, but having it isn’t a big deal”).91

Interpersonal Justice The second type of justice relevant to interactions between managers and employees is interpersonal justice, which reflects whether employees are treated with dignity and respect. Compared to the other forms of justice we’ve discussed, interpersonal justice is unique because it can occur in everyday interactions between managers and employees.92 This quality allows managers to take advantage of (or miss out on) opportunities to make their employees feel fairly treated. Many managers may view treating employees politely and respectfully as too soft, and instead choose more aggressive tac- tics out of a belief that doing so will be more motivating. Although displays of negative emotions such as anger may be motivating in some cases,93 managers sometimes take this too far. Consider former Rutgers University men’s basket- ball coach Mike Rice, who was caught on video verbally and even physically abusing players and was subsequently fired.94

Justice Outcomes After all this talk about types of justice, how much does justice really matter to employees? A great deal, as it turns out. When employees feel fairly treated, they respond in many positive ways. All the types of justice discussed in this section have been linked to higher levels of task performance and citizenship behaviors such as helping coworkers, as well as lower levels of counterproduc- tive behaviors such as shirking job duties.95 Distributive and procedural justice are more strongly associated with task performance, while informational and interpersonal justice are more strongly associated with citizenship behavior. Even more physiological outcomes, such as how well employees sleep and the state of their health, have been linked to fair treatment.96

Why does justice have these positive effects? Fair treatment enhances com- mitment to the organization and makes employees feel that the organization cares about their well-being. In addition, employees who feel fairly treated trust their supervisors more, which reduces uncertainty and fear of being exploited by the organization. Fair treatment elicits positive emotions, which in turn prompts behaviors like citizenship.97

Despite all attempts to enhance fairness, perceived injustices are still likely to occur. Fairness is often subjective; what one person sees as unfair, another may see as perfectly appropriate. In general, people see allocations or proce- dures favoring themselves as fair.98 People also make attributions when judging justice rule violations. Research suggests that violation of justice norms is gen- dered: Women are judged more harshly when they violate interactional norms than when they violate procedural norms.99

Others’ Reactions to Injustice Your coworker’ reactions to injustice can be just as important as your own. Research is beginning to suggest that third-party, or observer, reactions to injustice can have a substantial effect. Let’s say that you read about massive, unannounced layoffs at a restaurant chain you frequent. You find out that employees were let go without any warning and were not given any assistance in finding alternative arrangements. Would you continue to go to this restaurant? Research suggests that you may not.100

Why and how do we make judgments like this? One such model of third- party injustice suggests that several factors play into how we react: (1) our own traits and characteristics, (2) the transgressor’s and victim’s traits and charac- teristics (including an attribution of blame), and (3) the specifics of the justice

interpersonal justice The degree to which employees are treated with dignity and respect.

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event or situation.101 In turn, those who observed mistreatment perceive unfair- ness and react accordingly. For example, a coworker watches your supervisor berate you: If you deserved it, the coworker would probably be content; if you didn’t, the coworker would probably be angry with your supervisor.102 Research also suggests that how your coworkers and supervisors treat customers also affects your justice perceptions. Two studies in health care organizations found that patient mistreatment by one’s supervisor led to employee distrust and less cooperative behavior.103

Promoting Justice How can an organization affect the justice perceptions and rule adherence of its managers? This depends on the motivation of each manager. Some manag- ers are likely to calculate justice by their degree of adherence to the justice rules of the organization. These managers will try to gain greater subordinate compliance with behavioral expectations, create an identity of being fair to their employees, or establish norms of fairness. Other managers may be moti- vated in justice decisions by their emotions. When they have a high positive affect and/or a low negative affect, these managers are most likely to act fairly.

It might be tempting for organizations to adopt strong justice guidelines in attempts to mandate managerial behavior, but this isn’t likely to be universally effective. In cases where managers have more rules and less discretion, those who calculate justice are more likely to act fairly, but managers whose justice behavior follows from their affect may act more fairly when they have greater discretion.104

Culture and Justice Across nations, the same basic principles of procedural justice are respected: Workers around the world prefer rewards based on performance and skills over rewards based on seniority.105 However, inputs and outcomes are valued differ- ently in various cultures.106

We may think of justice differences in terms of Hofstede’s cultural dimen- sions (see Chapter 5). One large-scale study of over 190,000 employees in 32 countries and regions suggested that justice perceptions are most important to people in countries with individualistic, feminine, uncertainty avoidance, and low power-distance values.107 Organizations can tailor programs to meet these justice expectations. For example, in countries that are highest in individual- ism, such as Australia and the United States, competitive pay plans and rewards for superior individual performance enhance feelings of justice. In countries dominated by uncertainty avoidance, such as France, fixed pay compensation and employee participation may help employees feel more secure. The domi- nant dimension in Sweden is femininity, so relational concerns are considered important. Swedish organizations may therefore want to provide work-life bal- ance initiatives and social recognition. Austria, in contrast, has a strong low power-distance value. Ethical concerns may be foremost to individuals in per- ceiving justice in Austrian organizations, so it will be important for organiza- tions to justify inequality between leaders and workers and to provide symbols of ethical leadership.

We can also look at other cultural factors. Some cultures emphasize status over individual achievement as a basis for allocating resources. Materialistic cul- tures are more likely to see cash compensation and rewards as the most rel- evant outcomes of work, whereas relational cultures will see social rewards and status as important outcomes. International managers must consider the cul- tural preferences of each group of employees when determining what is fair in different contexts.

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Job Engagement When Joseph reports to his job as a hospital nurse, it seems that everything else in his life goes away, and he becomes completely absorbed in what he is doing. His emotions, thoughts, and behavior are all directed toward patient care. In fact, he can get so caught up in his work that he isn’t even aware of how long he’s been there. Because of this total commitment, he is more effective in pro- viding patient care and feels uplifted by his time at work.

Joseph has a high level of job engagement, the investment of an employee’s physical, cognitive, and emotional energies into job performance.108 Practicing managers and scholars have become interested in facilitating job engagement, believing factors deeper than liking a job or finding it interesting drives per- formance. Studies attempt to measure this deeper level of commitment. For example, one review found higher levels of engagement were associated with task performance and citizenship behavior.109

What makes people more likely to be engaged in their jobs? One key is the degree to which an employee believes it is meaningful to engage in work. This is partially determined by job characteristics and access to sufficient resources to work effectively.110 Another factor is a match between the individual’s values and those of the organization.111 Leadership behaviors that inspire workers to a greater sense of mission also increase employee engagement.112

One of the critiques of the concept of engagement is that the construct is partially redundant with job attitudes like satisfaction or stress.113 Other critics note there may be a dark side to engagement, as evidenced by positive relation- ships between engagement and work–family conflict.114 It is possible individuals might grow so engaged in their work roles that family responsibilities become an unwelcome intrusion. Also, an overly high level of engagement can lead to a loss of perspective and ultimately burnout. Additional research exploring how engagement relates to these negative outcomes may help clarify whether some highly engaged employees might be getting “too much of a good thing.”

7-6 Identify the implications of employee job engagement for managers.

job engagement The investment of an employee’s physical, cognitive, and emotional energies into job performance.

Integrating Contemporary Theories of Motivation Our job might be simpler if, after presenting a half dozen theories, we could say only one was found valid. But many of the theories in this chapter are complementary. We now tie them together to help you understand their interrelationships.

Exhibit 7-9 integrates much of what we know about motivation. Its founda- tion is the expectancy model that was shown in Exhibit 7-8. Let’s walk through Exhibit 7-9. (We will look at job design more closely in Chapter 8.)

We begin by explicitly recognizing that opportunities can either aid or hin- der individual effort. The individual effort box on the left also has another arrow leading into it, from the person’s goals. Consistent with goal-setting theory, the goals–effort loop is meant to remind us that goals direct behavior.

7-7 Describe how the contem-porary theories of motivation complement one another.

MyLab Management Try It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the Mini Sim.

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Expectancy theory predicts employees will exert a high level of effort if they perceive a strong relationship between effort and performance, performance and reward, and rewards and satisfaction of personal goals. Each of these rela- tionships is, in turn, influenced by other factors. For effort to lead to good performance, the individual must have the ability to perform and perceive the performance appraisal system as fair and objective. The performance–reward relationship will be strong if the individual perceives that performance (rather than seniority, personal favorites, or other criteria) is rewarded. If cognitive evaluation theory were fully valid in the actual workplace, we would predict that basing rewards on performance should decrease the individual’s intrinsic moti- vation. The final link in expectancy theory is the rewards–goals relationship. Motivation is high if the rewards for high performance satisfy the dominant needs consistent with individual goals.

A closer look at Exhibit 7-9 also reveals that the model considers achieve- ment motivation, job design, reinforcement, and equity theories/organiza- tional justice. A high achiever is not motivated by an organization’s assessment of performance or organizational rewards, hence the jump from effort to per- sonal goals for those with a high nAch. Remember, high achievers are internally driven as long as their jobs provide them with personal responsibility, feedback, and moderate risks. They are not concerned with the effort–performance, performance–reward, or rewards–goal linkages.

Reinforcement theory enters the model by recognizing that the organi- zation’s rewards reinforce the individual’s performance. If employees see a reward system as “paying off” for good performance, the rewards will rein- force and encourage good performance. Rewards also play a key part in orga- nizational justice research. Individuals judge the favorability of their outcomes

Integrating Contemporary Theories of MotivationExhibit 7-9

Individual performance

Organizational rewards

Personal goals

Opportunity Ability Performance evaluation


High nAch

Equity comparison/ Organizational justice

Objective performance evaluation


Individual effort

Reinforcement Dominant needs

Goals direct behavior

Job design



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(for example, their pay) relative to what others receive but also with respect to how they are treated: When people are disappointed in their rewards, they are likely to be sensitive to the perceived fairness of the procedures used and the consideration given to them by their supervisors.

Summary Motivation describes the processes (e.g., intensity, direction, and persistence) underlying how employees and other individuals in the workplace direct their efforts toward a goal. Although not well supported, many early foundational theories of motivation focused on the needs that employees have along with the consequences of need satisfaction. More contemporary theories focus on top- ics such as intrinsic and extrinsic motivation; setting goals in organizations; self- efficacy; reinforcement; and our expectations regarding effort, performance, reward, and outcome relationships. Beyond these theories, various forms of organizational justice (e.g., distributive, procedural, and interactional), all deriving from equity theory, are important in motivating employees. Motiva- tion is key to understanding employees’ contributions to their work, including their job engagement. Overall, motivation underlies how and why employees exert effort to engage in performance activities, which in turn meet personal or organizational goals.

Implications for Managers ● Make sure extrinsic rewards for employees are not viewed as coercive but

instead provide information about competence and relatedness. ● Either set or inspire your employees to set specific, difficult goals and

provide quality, developmental feedback on their progress toward those goals.

● Try to align or tie employee goals to the goals of your organization. ● Model the types of behaviors you would like to see performed by your

employees. ● Expectancy theory offers a powerful explanation of performance vari-

ables such as employee productivity, absenteeism, and turnover. ● When making decisions regarding resources in your organization, make

sure to consider how the resources are being distributed (and who is affected), the fairness of the decision, and whether your actions demon- strate that you respect those involved.

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Goals Get You to Where You Want to Be POINT

O f course this is a true statement. Goal-setting theory is one of the best-supported theories in the motivation literature. Study after study has consistently shown the benefits of goals. Want to excel on a test, lose a certain amount of weight, secure a job with a particular income level, or improve your golf game? If you want to be a high performer, merely set a specific, difficult goal and let nature take its course. That goal will dominate your attention, cause you to focus, and make you try harder.

All too often, people are told by others to simply “do their best.” Could anything be more vague? What does “do your best” actually mean? Maybe you feel that your “best” on one day is to muster a grade of 50 percent on an exam, while your “best” on another day is 80 percent. But if you were given a more difficult goal—say, to score a 95 on the exam—and you were committed to that goal, you would ultimately perform better.

Edwin Locke and Gary Latham, the researchers best known for goal-setting theory, put it best when they said: “The effects of goal set- ting are very reliable.” In short, goal-setting theory is among the most valid and practical theories of motivation in organizational psychology.


Sure, a lot of research has shown the benefits of goal setting, but those studies ignore the harm that’s often done. For one, how often have you set a “stretch” goal, only to see yourself later fail? Goals create anxiety and worry about reaching them, and they often create unrealistic expectations as well. Imagine those who set a goal to earn a promotion in a certain period of time (a specific, difficult goal), only to find themselves laid off once a recession hit. Or how about those who envision a retirement of leisure yet are forced to take on a part-time job or delay retirement altogether to continue making ends meet. When too many influential factors are out of our control, our difficult goals become impossible.

Or consider this: Goals can lead to unethical behavior and poorer performance. How many reports have you heard over the years about teachers who “fudged” students’ test scores to achieve educational standards? When Ken O’Brian, a professional quarterback for the New York Jets, was penalized for every interception he threw, he achieved his goal of fewer interceptions quite easily—by refusing to throw the ball even when he should have.

In addition to this anecdotal evidence, research has directly linked goal setting to cheating. We should heed the warning of Professor Maurice E. Schweitzer—“Goal-setting is like a powerful medication”— before blindly accepting that specific, difficult goal.

Sources: Based on E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation,” American Psychologist 57 (2002): 705–71; A. Tugend, “Expert’s Advice to the Goal-Oriented: Don’t Overdo It,” The New York Times, October 6, 2012, B5; and C. Richards, “Letting Go of Long-Term Goals,” The New York Times, August 4, 2012, B4.

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7-1 What are the three key elements of motivation? 7-2 What are some early theories of motivation? How applicable are they today?

7-3 What are the similarities and differences between self-determination theory and goal-setting theory?

7-4 What are the key principles of self-efficacy theory, reinforcement theory, and expectancy theory?

7-5 What are some of the different types of organizational justice and what are their outcomes?

7-6 Why is employee job engagement important to managers?

7-7 How do the contemporary theories of motivation compare to one another?


MyLab Management Discussion Questions Go to www.pearson.com/mylab/management to complete the problems marked with this icon .

APPLICATION AND EMPLOYABILITY Motivation is a fundamental aspect of organizational behavior. It drives effortful work processes toward the accomplishment of work tasks and the realization of work goals. Therefore, by gaining an understanding of the traditional and contemporary theories of motiva- tion and how workplace decisions affect motivation, you can develop your management skills and become more employable. An understanding of equity theory and orga- nizational justice can help you understand just how much of an impact fairness has in the workplace as well as help you consider others’ fairness perspectives when making organizational decisions. In this chapter, you developed your knowledge application and analysis skills; gained

an understanding of social responsibility issues by learn- ing how helping others is good (and bad) for your career, how to interact with others who won’t take your advice, and how electronic monitoring is used in the workplace; and debated whether goal setting works. In the following section, you will continue to develop these skills as well as your critical thinking by considering unjust situations in the workplace and developing recommendations for handling unfairness; learning to recognize the “folly of rewarding A, while hoping for B”; discussing how CEO pay can be demotivating and unfair to employees; and considering laziness in the workplace, especially how it can escalate and spread to others.

EXPERIENTIAL EXERCISE Organizational Justice Task Break the class into groups of three or four.

Questions 7-8. Each person should recall an instance in which

he or she was (a) treated especially fairly and (b) treated especially unfairly. Work-related instances are preferable, but nonwork examples are fine too. What do the stories have in common?

7-9. Spend several minutes discussing whether the instance was more distributive, procedural, infor- mational, or interpersonal in nature. What was the

source of the fair/unfair treatment? How did each student feel, and how did he or she respond?

7-10. Each group should develop a set of recommen- dations for handling the unfair situations in a positive manner, and select a leader group who will briefly summarize the unfair instances, along with the group’s recommendations for handling them better. The discussion should reflect the four types of justice discussed in this chapter (distributive, procedural, informational, and interpersonal).

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ETHICAL DILEMMA Follies of Reward Most of the time, we have good intentions when we try to reward others. We might give a bonus to an employee who has done an exceptionally good job all year. Or our reward systems might be a little more institutionalized. For example, a movie theater might reward an employee for eliciting charity donations from moviegoers, or a real- tor might receive a commission for each house she sells.

Sometimes, however, even with good intentions, we may be rewarding the wrong thing. In a classic article of the same title, Steven Kerr outlines this “Folly of Reward- ing A, While Hoping for B.” For example, if you go to the doctor’s office, the doctor can make two types of errors: (1) pronouncing you well when you are actually sick and (2) pronouncing you sick when you are actually well. If the doctor commits the first error, the consequences are grave—there could be a threat of a lawsuit, malpractice, or negligence. If the doctor commits the second error, the consequences have much less of an impact—the doctor generates more income, establishes a more regu- lar customer base, and is rewarded by society for taking a “conservative” approach to diagnosis. These reward and punishment differences persist, even when there is the chance that treatment without due cause can cause more harm than good. However, shouldn’t society seek to

minimize both types of errors and instead seek medical diagnostic accuracy as a goal?

In a more recent example, one study found that a monthly perfect attendance award program across five industrial laundry plants did not work the way it was intended to: When participants became ineligible for the award, they showed up less frequently. The employees became so focused on attendance that their efficiency decreased by 8 percent because many of them would become ineligible for the reward after coming in late or missing a day during the month period. The plant was rewarding attendance and hoping for good performance.

Questions 7-11. How do you think we might be able to recognize

when we are rewarding the wrong thing? What steps can organizations take to recognize these instances?

7-12. Is rewarding the unintended behavior or outcome always unethical? Why or why not?

7-13. Do you think it is possible for a reward program to start out rewarding the appropriate behavior at its inception but then begin to reward the wrong thing over time? Why or why not?

Sources : Based on T. Gubler, I. Larkin, and L. Pierce, “Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment,” Organization Science 27, no. 2 (2016): 286–303; and S. Kerr, “On the Folly of Rewarding A, While Hoping for B,” Academy of Management Journal 18, no. 4 (1975): 769–83.

CASE INCIDENT 1 The Demotivation of CEO Pay How much did your CEO get paid this year? What did any CEO get paid? You may not know the exact amounts, but you probably think the answer is, “Too much.” According to research from 40 countries that probed the thoughts of CEOs, cabinet ministers, and unskilled employees, we all think leaders should be paid less, but we don’t have any specific details about how much they are actually paid.

Where we err can be calculated by an organization’s pay ratio, or the ratio between CEO pay and average worker pay. In the United States, for example, the average S&P 500 CEO is paid 354 times what the lowest-ranking employee makes, for a ratio of 354:1 (eight times greater than in the 1950s). Yet U.S. participants in the study esti- mated that the ratio between CEOs and unskilled work- ers was only 30:1! Americans are not alone in making this gross underestimate: Participants from Germany, for instance, estimated a ratio of around 18:1 when the actual ratio is closer to 151:1.

In general, people worldwide are unhappy with—and demotivated by—their perception of inequity, even when their estimates of the ratios are far below the reality.

Taking the German example further, the ideal ratio of CEO pay to unskilled workers as judged by study partici- pants was around 7:1. To put it all together, then, people think the ratio should be 7:1, believe it is 18:1, and don’t realize it is actually 151:1. For all the countries worldwide in the study, the estimated ratios were above the ideal ratios, meaning participants universally thought CEOs are overpaid.

How does this affect the average worker’s motivation? It appears that the less a person earns, the less satisfied the person is with the pay gap. Yet virtually everyone in the study wanted greater equality. The ideal ratio, they indicated, should be between 5:1 and 4:1, whereas they thought it was between 10:1 and 8:1. They believed skilled employees should earn more money than unskilled indi- viduals but that the gap between them should be smaller.

No one in the United States would likely think the 354:1 ratio is going to dip to the ideal of 7:1 soon, although some changes in that direction have been sug- gested. Other countries have tried to be more progressive. The Social Democratic Party in Switzerland proposed a

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ceiling for the ratio of 12:1, but putting a cap into law was considered too extreme by voters. No countries have yet been able to impose a maximum ratio successfully.

Therefore, the job of restoring justice perceptions has fallen to CEOs themselves. Many CEOs, such as Mark Zuckerberg of Facebook and Larry Page of Google, have taken $1 annual salaries, though they still earn substantial compensation by exercising their stock options. In one extreme recent example, Gravity CEO Dan Price cut his salary by $1 million to $70,000 and used the money to give significant raises to the payment-processing firm’s employ- ees. Price said he expects to “see more of this.” In addi- tion, shareholders of some companies, such as Verizon, are playing a greater role in setting CEO compensation by reducing awards when the company underperforms.

Questions 7-14. What do you think is the ideal ratio for CEO to

worker compensation? Why might the ideal vary from country to country?

7-15. How does the executive compensation issue relate to equity theory? How should we determine what is a “fair” level of pay for top executives?

7-16. The study found that participants thought perfor- mance should be essential or very important in deciding pay. What might be the positive motiva- tional consequences for average employees if CEO pay is tied to performance?

Sources: Based on J. Ewing, “Swiss Voters Decisively Reject a Measure to Put Limits on Executive Pay,” The New York Times, November 24, 2013, http://www.nytimes.com/2013/11/25/business/ swiss-reject-measure-to-curb-executive-pay.html?_r=0; C. Isidore, “Gravity Payments CEO Takes 90% Pay Cut to Give Workers Huge Raise,” CNN Money, April 15, 2015, http://money.cnn .com/2015/04/14/news/companies/ceo-pay-cuts-pay-increases/; S. Kiatpongsan and M. I. Norton, “How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay,” Perspectives on Psychological Science 9, no. 6 (2014): 587–93; A. Kleinman, “Mark Zuckerberg $1 Salary Puts Him in Elite Group of $1 CEOs,” The Huffington Post, April 29, 2013, www.huffingtonpost.com; and G. Morgenson, “If Shareholders Say ‘Enough Already,’ the Board May Listen,” The New York Times, April 6, 2013, www.newyorktimes.com.

CASE INCIDENT 2 Laziness Is Contagious Being lazy is often a quality that is shunned or looked down on in the workplace. When someone is unwilling to put energy into their work, they are, essentially, not engaged with their job. It is still unclear whether some- one can have a “lazy” personality, but we can all most likely recall times when we did not want to or commit to putting forth the energy needed to do our work. In many cases, this leads to procrastination or excessive delegation, resulting in a failure to meet tight dead- lines. One laziness behavior includes fleeing the scene when one does not want to work; another one is playing the victim and making excuses to make up for a lack of effort.

Although there has not been much research on lazi- ness (perhaps anyone who has attempted to has not been able to muster the effort!), the research that does exist suggests that trait attributions of laziness are complex. For example, people tend to acknowledge that they have more personality traits than others (e.g., “I am a very com- plex, multifaceted person”). Although someone would not hesitate to say that they are “very energetic,” people tend to qualify laziness with “diminutive” words (e.g., “I am a little bit lazy”). Similar peculiar effects emerge when considering others’ attributions as well. Even though halo biases (see Chapter 6) can emerge for positive attributions of others (e.g., “She could have easily lied to me about

accidentally giving an extra twenty dollars in change back to the customer when she first started working here. She is a fantastic, industrious, and honest person!”), horns biases do not occur as broadly as these positive traits when considering laziness (e.g., a supervisor witnessing an employee lying when she first started working there may think that she will lie in many circumstances but will not see this person as lazy).

Even more worrisome, laziness can subtly escalate or catch on with others. For instance, one lazy behavior can lead to another, and sunk costs can add up to the point where you reason you will simply start over tomor- row. Recent research suggests that laziness can be con- tagious—participants, unaware of their shifts toward laziness, start to endorse the same lazy behaviors and decisions that fictional, computer-generated partici- pants made. The implications here are very intriguing: “[F]or example, if your lazy boss rewards you for having invested more effort in your work, will you become more or less lazy?”

Regardless of the negative air surrounding laziness, some have found merit in its practice. For example, Michael Lewis, author of Moneyball, asserts that laziness is not necessarily a bad thing and has even helped him suc- ceed: “My laziness serves as a filter. . . . Something has to be really good before I’ll decide to work on it.”

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Sources: Based on J. Boitnott, “5 Kinds of Lazy Employees and How to Handle Them,” Entrepreneur, May 17, 2016, https://www.entrepreneur.com/article/275845; W.-Y. Cheung, T. Wildschut, C. Sedikides, and B. Pinter, “Uncovering the Multifaceted Self in the Domain of Negative Traits: On the Muted Expression of Negative Self-Knowledge,” Personality and Social Psychology Bulletin 40, no. 4 (2014), 513-25; M. Gräf and C. Unkelbach, “Halo Effects in Trait Assessment Depend on Information Valence: Why Being Honest Makes You Industrious, but Lying Does Not Make You Lazy,” Personality and Social Psychology Bulletin 42, no. 3 (2016): 290–310; A. MacMillan, “Why Lazi- ness May Be Contagious,” Time, March 30, 2017, http://time.com/4718737/laziness-impatience- contagious-personality/; J. Selk, “Laziness Isn’t a Personality Flaw—It’s Just a Habit,” Forbes, July 10, 2014, https://www.forbes.com/sites/jasonselk/2014/07/10/laziness-isnt-a-personality-flaw- its-just-a-habit/#810a5c301627; and M. Zetlin, “Being Lazy Is the key to Success, According to the Best-Selling Author of ‘Moneyball,’ ” Inc., March 20, 2017, http://www.inc.com/minda-zetlin/why- being-lazy-makes-you-successful-according-to-the-bestselling-author-of-money.html.

Questions 7-17. Do you consider laziness to be more of a person-

ality trait or more of a motivational state that we experience from time to time? Why? Is there a potential that it could be a little bit of both?

7-18. Do you agree or disagree with Michael Lewis that there is an upside to laziness? Why or why not?

7-19. How do you think managers and organizations can “manage laziness” so that the negative effects are minimized and the positive effects maximized? What sorts of programs and initiatives could an organization implement to achieve these goals?

ENDNOTES 1 See, for example, W. F. Cascio and H. Aguinis, “Research in Industrial and Organizational Psychology from 1963 to 2007: Changes, Choices, and Trends,” Journal of Applied Psychology 93, no. 5 (2008): 1062–81; and C. C. Pinder, Work Motivation in Organizational Behavior, 2nd ed. (London, UK: Psychology Press, 2008). 2 A. Gouveia, “The 2013 Wasting Time at Work Survey: Everything You’ve Always Wanted to Know about Wasting Time in the Office,” Salary.com, 2013, http://www.salary .com/2013-wasting-time-at-work-survey/. 3 See, for instance, Pinder, Work Motivation in Organizational Behavior. 4 A. H. Maslow, “A Theory of Human Motiva- tion,” Psychological Review 50 (1943), 370–96; and R. J. Taormina and J. H. Gao, “Maslow and the Motivation Hierarchy: Measuring Satisfaction of the Needs,” American Journal of Psychology 126, no. 2 (2013): 155–57.

5 H. S. Guest, “Maslow’s Hierarchy of Needs— The Sixth Level,” The Psychologist 27, no. 12 (2014): 982–83. 6 Ibid. 7 T. R. Mitchell and D. Daniels, “Motivation,” in W. Borman, D. Ilgen, and R. Klimoski (eds.), Handbook of Psychology: Industrial/ Organizational Psychology, Vol. 12 (New York: Wiley, 2002): 225–54. 8 V. M. Bockman, “The Herzberg Contro- versy,” Personnel Psychology 24, no. 2 (1971): 155–89; and F. Herzberg, “The Motivation- Hygiene Concept and Problems of Man- power,” Personnel Administrator 27 (1964): 3–7. 9 N. Bassett-Jones and G. C. Lloyd, “Does Herzberg’s Motivation Theory Have Staying Power?,” Journal of Management Development 24, no. 10 (2005): 929–43. 10 See, for instance, V. S. R. Vijayakumar and U. Saxena, “Herzberg Revisited: Dimension- ality and Structural Invariance of Herzberg’s

Two Factor Model,” Journal of the Indian Academy of Applied Psychology 41, no. 2 (2015): 291–8; and R. Worthley, B. MacNab, R. Bris- lin, K. Ito, and E. L. Rose, “Workforce Moti- vation in Japan: An Examination of Gender Differences and Management Perceptions,” The International Journal of Human Resource Management 20, no. 7 (2009): 1503–20. 11 D. C. McClelland, Human Motivation (Cam- bridge, UK: Cambridge University Press, 1987); and D. C. McClelland, J. W. Atkinson, R. A. Clark, and E. L. Lowell, The Achievement Motive (New York: Appleton-Century-Crofts, 1953). 12 H. van Emmerick, W. L. Gardner, H. Wendt, et al., “Associations of Culture and Personality with McClelland’s Motives: A Cross-Cultural Study of Managers in 24 Countries,” Group and Organization Management 35, no. 3 (2010): 329–67. 13 R. Eisenberger, J. R. Jones, F. Stinglhamber, L. Shanock, and A. T. Randall, “Flow

MyLab Management Writing Assignments If your instructor has assigned this activity, go to www.pearson.com/mylab/management for auto-graded writing assignments as well as the following assisted-graded writing assignments:

7-20. Refer again to the Ethical Dilemma. Can you think of a situation in which students are rewarded for one thing when the intention was to reward something else? What could be or could have been done to change or stop this? Do you think the situation would have been better or worse if there were no rewards? Why or why not?

7-21. Refer again to Case Incident 1. Do you think the government has a legitimate role in controlling execu- tive compensation? How might aspects of justice (distributive, procedural, and interactional) inform this debate?

7-22. MyLab Management only—additional assisted-graded writing assignment.

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Experiences at Work: For High Need Achiev- ers Alone?” Journal of Organizational Behavior 26, no. 7 (2005): 755–75. 14 A. K. Kirk and D. F. Brown, “Latent Con- structs of Proximal and Distal Motivation Predicting Performance under Maximum Test Conditions,” Journal of Applied Psychology 88, no. 1 (2003): 40–9; and R. B. Soyer, J. L. Rov- enpor, and R. E. Kopelman, “Narcissism and Achievement Motivation As Related to Three Facets of the Sales Role: Attraction, Satisfac- tion, and Performance,” Journal of Business and Psychology 14, no. 2 (1999): 285–304. 15 See, for instance, F. Yang, J. E. Ramsay, O. C. Schultheiss, and J. S. Pang, “Need for Achieve- ment Moderates the Effect of Motive-Relevant Challenge on Salivary Cortisol Changes,” Motivation and Emotion (2015): 321–34; M. S. Khan, R. J. Breitnecker, and E. J. Schwarz, “Adding Fuel to the Fire: Need for Achieve- ment Diversity and Relationship Conflict in Entrepreneurial Teams,” Management Decision 53, no. 1 (2015): 75–79; M. G. Koellner and O. C. Schultheiss, “Meta-Analytic Evidence of Low Convergence between Implicit and Explicit Measures of the Needs for Achieve- ment, Affiliation, and Power,” Frontiers in Psychology 5, no. 826 (2014): 1-20; and T. Bipp and K. van Dam, “Extending Hierarchical Achievement Motivation Models: The Role of Motivational Needs for Achievement Goals and Academic Performance,” Personality and Individual Differences 64 (2014): 157–62. 16 Koellner and Schultheiss, “Meta-Analytic Evidence of Low Convergence between Implicit and Explicit Measures of the Needs for Achievement, Affiliation, and Power.” 17 J. S. Chun and J. N. Choi, “Members’ Needs, Intragroup Conflict, and Group Per- formance,” Journal of Applied Psychology 99, no. 3 (2014): 437–50. 18 D. G. Winter, “The Motivational Dimen- sions of Leadership: Power, Achievement, and Affiliation,” in R. E. Riggio, S. E. Murphy, and F. J. Pirozzolo (eds.), Multiple Intelligences and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002): 119–38. 19 J. Hofer, H. Busch, and C. Schneider, “The Effect of Motive-Trait Interaction on Satis- faction of the Implicit Need for Affiliation among German and Cameroonian Adults,” Journal of Personality 83, no. 2 (2015): 167–78. 20 J. T. Austin and J. B. Vancouver, “Goal Con- structs in Psychology: Structure, Process, and Content,” Psychological Bulletin 120 (1996): 338–75. 21 E. Deci and R. Ryan (eds.), Handbook of Self-Determination Research (Rochester, NY: University of Rochester Press, 2002); R. Ryan and E. Deci, “Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being,” American Psychologist 55, no. 1 (2000): 68–78; and M. Gagné and E. L. Deci, “Self-Determination Theory and Work Motivation,” Journal of Orga- nizational Behavior 26, no. 4 (2005): 331–62.

22 A. Van den Broeck, D. L. Ferris, C.-H. Chang, and C. C. Rosen, “A Review of Self- Determination Theory’s Basic Psychological Needs at Work,” Journal of Management 42, no. 5 (2016): 1195–229. 23 C. P. Cerasoli, J. M. Nicklin, and M. T. Ford, “Intrinsic Motivation and Extrinsic Incen- tives Jointly Predict Performance: A 40-Year Meta-Analysis,” Psychological Bulletin 140, no. 4 (2014): 980–1008. 24 J. E. Bono and T. A. Judge, “Self-Concordance at Work: Toward Understanding the Motivational Effects of Transformational Leaders,” Academy of Management Journal 46, no. 5 (2003): 554–71. 25 K. M. Sheldon, A. J. Elliot, and R. M. Ryan, “Self-Concordance and Subjective Well-being in Four Cultures,” Journal of Cross-Cultural Psy- chology 35, no. 2 (2004): 209–23. 26 L. M. Graves, M. N. Ruderman, P. J. Ohlott, and Todd J. Webber, “Driven to Work and Enjoyment of Work: Effects on Managers’ Outcomes,” Journal of Management 38, no. 5 (2012): 1655–80. 27 K. L. Unsworth and I. M. McNeill, “Increasing Pro-Environmental Behaviors by Increasing Self-Concordance: Testing an Intervention,” Journal of Applied Psychology 102, no. 1 (2017): 88–103. 28 Van den Broeck, Ferris, Chang, and Rosen, “A Review of Self-Determination Theory’s Basic Psychological Needs at Work.” 29 E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation,” American Psychologist 57, no. 9 (2002): 705–17; and E. A. Locke and G. P. Latham, “New Directions in Goal-Setting Theory,” Current Directions in Psychological Science 15, no. 5 (2006): 265–68. 30 Ibid. 31 J. J. Dahling, S. R. Taylor, S. L. Chau, and S. A. Dwight, “Does Coaching Matter? A Multilevel Model Linking Managerial Coach- ing Skill and Frequency to Sales Goal Attain- ment,” Personnel Psychology 69, no. 4 (2016): 863–94. 32 C. Gabelica, P. Van den Bossche, M. Segers, and W. Gijselaersa, “Feedback, a Power- ful Lever in Teams: A Review,” Educational Research Review 7, no. 2 (2012): 123–44. 33 A. Kleingeld, H. van Mierlo, and L. Arends, “The Effect of Goal Setting on Group Performance: A Meta-Analysis,” Journal of Applied Psychology 96, no. 6 (2011): 1289–304. 34 J. Lee and F. Wei, “The Mediating Effect of Psychological Empowerment on the Relationship between Participative Goal Setting and Team Outcomes—A Study in China,” International Journal of Human Resource Management 22, no. 2 (2011): 279–95. 35 S. W. Anderson, H. C. Dekker, and K. L. Sedatole, “An Empirical Examination of Goals and Performance-to-Goal Following the Introduction of an Incentive Bonus Plan with Participative Goal Setting,” Management Science 56, no. 1 (2010): 90–109.

36 T. S. Bateman and B. Bruce, “Masters of the Long Haul: Pursuing Long-Term Work Goals,” Journal of Organizational Behavior 33, no. 7 (2012): 984–1006. 37 Ibid. 38 H. J. Klein, M. J. Wesson, J. R. Hollenbeck, and B. J. Alge, “Goal Commitment and the Goal-Setting Process: Conceptual Clarification and Empirical Synthesis,” Journal of Applied Psychology 84, no. 6 (1999): 885–96. 39 Kleingeld, van Mierlo, and Arends, “The Effect of Goal Setting on Group Perfor- mance”; and Locke and Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation.” 40 K. D. Vohs, J. K. Park, and B. J. Schmeichel, “Self-Affirmation Can Enable Goal Disengage- ment,” Journal of Personality and Social Psychol- ogy 104, no. 1 (2013): 14–27. 41 D. F. Crown, “The Use of Group and Groupcentric Individual Goals for Culturally Heterogeneous and Homogeneous Task Groups: An Assessment of European Work Teams,” Small Group Research 38, no. 4 (2007): 489–508; and J. Kurman, “Self- Regulation Strategies in Achievement Settings: Culture and Gender Differences,” Journal of Cross-Cultural Psychology 32, no. 4 (2001): 491–503. 42 C. Sue-Chan and M. Ong, “Goal Assignment and Performance: Assessing the Mediating Roles of Goal Commitment and Self-Efficacy and the Moderating Role of Power Distance,” Organizational Behavior and Human Decision Processes 89, no. 2 (2002): 1140–61. 43 L. D. Ordóñez, M. E. Schweitzer, A. D. Galinsky, and M. H. Bazerman, “Goals Gone Wild: The Systematic Side Effects of Overpre- scribing Goal Setting,” Academy of Management Perspectives 23, no. 1 (2009): 6–16; and E. A. Locke and G. P. Latham, “Has Goal Setting Gone Wild, or Have Its Attackers Abandoned Good Scholarship?” Academy of Management Perspectives 23, no. 1 (2009): 17–23. 44 Cerasoli, Nicklin, and Ford, “Intrinsic Moti- vation and Extrinsic Incentives Jointly Predict Performance.” 45 E. T. Higgins, “Promotion and Prevention: Regulatory Focus as a Motivational Principle,” Advances in Experimental Social Psychology 30 (1998): 1–46; and E. T. Higgins and J. F. M. Cornwell, “Securing Foundations and Advanc- ing Frontiers: Prevention and Promotion Effects on Judgment & Decision Making,” Organizational Behavior and Human Decision Processes 136 (2016): 56–67. 46 K. Lanaj, C. D. Chang, and R. E. Johnson, “Regulatory Focus and Work-Related Out- comes: A Review and Meta-Analysis,” Psycho- logical Bulletin 138, no. 5 (2012): 998–1034. 47 D. L. Ferris, R. E. Johnson, C. C. Rosen, E. Djurdjevic, C.-H. Chang, and J. A. Tan, “When Is Success Not Satisfying? Integrating Regula- tory Focus and Approach/Avoidance Motiva- tion Theories to Explain the Relation between Core Self-Evaluation and Job Satisfaction,”

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Journal of Applied Psychology 98, no. 2 (2013): 342–53. 48 M. Roskes, A. J. Elliot, and C. K. W. De Dreu, “Why Is Avoidance Motivation Problematic, and What Can Be Done about It?” Current Directions in Psychological Science 23, no. 2 (2014): 133–38. 49 “KEYGroup Survey Finds Nearly Half of All Employees Have No Set Performance Goals,” IPMA-HR Bulletin (March 10, 2006): 1; S. Hamm, “SAP Dangles a Big, Fat Carrot,” BusinessWeek (May 22, 2006): 67–68; and “P&G CEO Wields High Expectations but No Whip,” USA Today, February 19, 2007, 3B. 50 P. Drucker, The Practice of Management (New York: Harper, 1954). 51 See, for instance, H. Levinson, “Management by Whose Objectives?,” Harvard Business Review 81, no. 1 (2003): 107–16. 52 See, for example, E. Lindberg and T. L. Wilson, “Management by Objectives: The Swedish Experience in Upper Secondary Schools,” Journal of Educational Administration 49, no. 1 (2011): 62–75; R. Rodgers and J. E. Hunter, “Impact of Management by Objec- tives on Organizational Productivity,” Journal of Applied Psychology 76, no. 2 (1991): 322–36; and A. C. Spaulding, L. D. Gamm, and J. M. Griffith, “Studer Unplugged: Identifying Underlying Managerial Concepts,” Hospital Topics 88, no. 1 (2010): 1–9. 53 M. B. Kristiansen, “Management by Objec- tives and Results in the Nordic Countries: Continuity and Change, Differences and Simi- larities,” Public Performance and Management Review 38, no. 3 (2015): 542–69. 54 See, for instance, M. Tanikawa, “Fujitsu Decides to Backtrack on Performance-Based Pay,” New York Times, March 22, 2001, W1; and W. F. Roth, “Is Management by Objectives Obsolete?” Global Business and Organizational Excellence 28 (May/June 2009): 36–43. 55 F. Gino and C. Mogilner, “Time, Money, and Morality,” Psychological Science 25, no. 2 (2014): 414–21. 56 V. Lopez-Kidwell, T. J. Grosser, B. R. Dineen, and S. P. Borgatti, “What Matters When: A Multistage Model and Empirical Examination of Job Search Effort,” Academy of Management Journal 56, no. 6 (2012): 1655–78. 57 J. W. Beck and A. M. Schmidt, “State-Level Goal Orientations as Mediators of the Rela- tionship between Time Pressure and Per- formance: A Longitudinal Study,” Journal of Applied Psychology 98, no. 2 (2013): 354–63. 58 A. Bandura, Social Foundations of Thought and Action: A Social Cognitive Theory (Englewood Cliffs, NJ: Prentice Hall, 1986); A. Bandura, Self-Efficacy: The Exercise of Control (New York: W. H. Freeman, 1997); and A. Bandura, “Social Cognitive Theory: An Agentic Perspec- tive,” Annual Review of Psychology 52 (2001): 1–26. 59 A. Bandura, “Cultivate Self-Efficacy for Personal and Organizational Effectiveness,” in E. Locke (ed.), Handbook of Principles of

Organizational Behavior (Malden, MA: Blackwell, 2004): 120–36; S. D. Brown, R. W. Lent, K. Telander, and S. Tramayne, “Social Cogni- tive Career Theory, Conscientiousness, and Work Performance: A Meta-Analytic Path Analysis,” Journal of Vocational Behavior 79, no. 1 (2011): 81–90. 60 M. Salanova, S. Llorens, and W. B. Schaufeli, “Yes I Can, I Feel Good, and I Just Do It! On Gain Cycles and Spirals of Efficacy Beliefs, Affect, and Engagement,” Applied Psychology 60, no. 2 (2011): 255–85. Compare with J. B. Vancouver, C. M. Thompson, and A. A. Williams, “The Changing Signs in the Rela- tionships Among Self-Efficacy, Personal Goals, and Performance,” Journal of Applied Psychology 86, no. 4 (2001): 605–20; and J. B. Vancouver and J. D. Purl, “A Computational Model of Self-Efficacy’s Various Effects on Performance: Moving the Debate Forward,” Journal of Applied Psychology 102, no. 4 (2017): 599–616. 61 J. R. Themanson and P. J. Rosen, “Examin- ing the Relationships between Self-Efficacy, Task-Relevant Attentional Control, and Task Performance: Evidence from Event-Related Brain Potentials,” British Journal of Psychology 106, no. 2 (2015): 253–71. 62 A. P. Tolli and A. M. Schmidt, “The Role of Feedback, Causal Attributions, and Self- Efficacy in Goal Revision,” Journal of Applied Psychology 93, no. 3 (2008): 692–701. 63 P. Tierney and S. M. Farmer, “Creative Self- Efficacy Development and Creative Perfor- mance over Time,” Journal of Applied Psychology 96, no. 2 (2011): 277–93. 64 S. L. Anderson and N. E. Betz, “Sources of Social Self-Efficacy Expectations: Their Measurement and Relation to Career Devel- opment,” Journal of Vocational Behavior 58, no. 1 (2001): 98–117; M. Ben-Ami, J. Hornik, D. Eden, et al., “Boosting Consumers’ Self- Efficacy by Repositioning the Self,” European Journal of Marketing 48 (2014): 1914–38; L. De Grez and D. Van Lindt, “Students’ Gains in Entrepreneurial Self-Efficacy: A Comparison of ‘Learning-by-Doing’ versus Lecture-Based Courses,” Proceedings of the 8th European Conference on Innovation and Entrepre- neurship (2013): 198–203; and K. S. Hendricks, “Changes in Self-Efficacy Beliefs over Time: Contextual Influences of Gender, Rank-Based Placement, and Social Support in a Competi- tive Orchestra Environment,” Psychology of Music 42, no. 3 (2014): 347–65. 65 T. A. Judge, C. L. Jackson, J. C. Shaw, B. Scott, and B. L. Rich, “Self-Efficacy and Work-Related Performance: The Integral Role of Individual Differences,” Journal of Applied Psychology 92, no. 1 (2007): 107–27. 66 Ibid. 67 A. M. Paul, “How to Use the ‘Pygmalion’ Effect,” Time, April 1, 2013, http://ideas.time .com/2013/04/01/how-to-use-the-pygmalion- effect/. 68 A. Friedrich, B. Flunger, B. Nagengast, K. Jonkmann, and U. Trautwein, “Pygmalion

Effects in the Classroom: Teacher Expectancy Effects on Students’ Math Achievement,” Contemporary Educational Psychology 41 (2015): 1–12. 69 L. Karakowsky, N. DeGama, and K. McBey, “Facilitating the Pygmalion Effect: The Over- looked Role of Subordinate Perceptions of the Leader,” Journal of Occupational and Organiza- tional Psychology 85, no. 4 (2012): 579–99; and P. Whiteley, T. Sy, and S. K. Johnson, “Leaders’ Conceptions of Followers: Implications for Naturally Occurring Pygmalion Effects,” Lead- ership Quarterly 23, no. 5 (2012): 822–34. 70 G. Chen, B. Thomas, and J. C. Wallace, “A Multilevel Examination of the Relation- ships among Training Outcomes, Mediating Regulatory Processes, and Adaptive Per- formance,” Journal of Applied Psychology 90, no. 5 (2005): 827–41; A. Gegenfurtner, C. Quesada-Pallares, and M. Knogler, “Digital Simulation-Based Training: A Meta-Analysis,” British Journal of Educational Technology 45, no. 6 (2014): 1097–114; and C. L. Holladay and M. A. Quiñones, “Practice Variability and Transfer of Training: The Role of Self-Efficacy Generality,” Journal of Applied Psychology 88, no. 6 (2003): 1094–103. 71 E. C. Dierdorff, E. A. Surface, and K. G. Brown, “Frame-of-Reference Training Effec- tiveness: Effects of Goal Orientation and Self- Efficacy on Affective, Cognitive, Skill-Based, and Transfer Outcomes,” Journal of Applied Psychology 95, no. 6 (2010): 1181–91; R. Gross- man and E. Salas, “The Transfer of Training: What Really Matters,” International Journal of Training and Development 15, no. 2 (2011): 103–20; and D. S. Stanhope, S. B. Pond III, and E. A. Surface, “Core Self-Evaluations and Training Effectiveness: Prediction through Motivational Intervening Mechanisms,” Journal of Applied Psychology 98, no. 5 (2013): 820–31. 72 M. L. Ambrose and C. T. Kulik, “Old Friends, New Faces: Motivation Research in the 1990s,” Journal of Management 25, no. 3 (1999): 231–92; and B. F. Skinner, Contingen- cies of Reinforcement (New York: Appleton- Century-Crofts, 1969). 73 M. J. Goddard, “Critical Psychiatry, Critical Psychology, and the Behaviorism of B. F. Skin- ner,” Review of General Psychology 18, no. 3 (2014): 208–15. 74 A. Bandura, Social Learning Theory (New York: General Learning, 1971); and J. R. Brauer and C. R. Tittle, “Social Learning Theory and Human Reinforcement,” Sociologi- cal Spectrum 32, no. 2 (2012): 157–77. 75 W. Van Eerde and H. Thierry, “Vroom’s Expectancy Models and Work-Related Cri- teria,” Journal of Applied Psychology 81, no. 5 (1996): 575–86; and V. H. Vroom, Work and Motivation (New York: Wiley, 1964). 76 R. Kanfer, M. Frese, and R. E. Johnson, “Motivation Related to Work: A Century of Progress,” Journal of Applied Psychology 102, no. 3 (2017): 338–55; J. C. Naylor, R. D. Pritchard,

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and D. R. Ilgen, A Theory of Behavior in Orga- nizations (New York: Academic, 1980); and Van Eerde and Thierry, “Vroom’s Expectancy Models and Work-Related Criteria.” 77 J. Nocera, “The Anguish of Being an Analyst,” The New York Times, March 4, 2006, B1, B12. 78 J. S. Adams, “Inequity in Social Exchange,” in L. Berkowitz (ed.), Advances in Experimental Social Psychology, Vol. 2 (New York: Academic, 1965), 267–99. 79 Ibid. 80 M. C. Bolino and W. H. Turnley, “Old Faces, New Places: Equity Theory in Cross-Cultural Contexts,” Journal of Organizational Behavior 29, no. 1 (2008): 29–50; and R. T. Mowday and K. A. Colwell, “Employee Reactions to Unfair Outcomes in the Workplace: The Con- tributions of Equity Theory to Understanding Work Motivation,” in L. W. Porter, G. A. Bigley, and R. M. Steers (eds.), Motivation and Work Behavior (Burr Ridge, IL: McGraw-Hill, 2003), 65–113. 81 B. K. Miller, “Entitlement and Conscien- tiousness in the Prediction of Organizational Deviance,” Personality and Individual Differences 82 (2015): 114–19; and H. J. R. Woodley and N. J. Allen, “The Dark Side of Equity Sensitiv- ity,” Personality and Individual Differences 67 (2014): 103–08. 82 J. M. Jensen, P. C. Patel, and J. L. Raver, “Is It Better to Be Average? High and Low Perfor- mance as Predictors of Employee Victimiza- tion,” Journal of Applied Psychology 99, no. 2 (2014): 296–309. 83 J. A. Colquitt, J. Greenberg, and C. P. Zepata-Phelan, “What Is Organizational Jus- tice? A Historical Overview,” in J. Greenberg and J. A. Colquitt (eds.), Handbook of Organiza- tional Justice (Mahwah, NJ: Lawrence Erlbaum, 2005): 3–56; and J. Greenberg, “Organiza- tional Justice: The Dynamics of Fairness in the Workplace,” in S. Zedeck (ed.), APA Handbook of Industrial and Organizational Psychology: Maintaining, Expanding, and Contracting the Organization, Vol. 3 (Washington, D.C.: APA, 2011): 271–327. 84 Ibid. 85 C. O. Trevor, G. Reilly, and B. Gerhart, “Reconsidering Pay Dispersion’s Effect on the Performance of Interdependent Work: Recon- ciling Sorting and Pay Inequality,” Academy of Management Journal 55, no. 3 (2012): 585–610. 86 See, for example, R. Cropanzano, J. H. Stein, and T. Nadisic, Social Justice and the Expe- rience of Emotion (New York: Routledge/Taylor and Francis Group, 2011). 87 G. S. Leventhal, “What Should Be Done with Equity Theory? New Approaches to the Study of Fairness in Social Relationships,” in K. Gergen, M. Greenberg, and R. Willis (eds.), Social Exchange: Advances in Theory and Research (New York: Plenum, 1980): 27–55; E. A. Lind and T. R. Tyler, The Social Psychology of Proce- dural Justice (New York: Plenum, 1988); and J. Thibaut and L. Walker, Procedural Justice: A

Psychological Analysis (Hillsdale, NJ: Erlbaum, 1975). 88 J. Brockner, B. M. Wiesenfeld, and K. A. Diekmann, “Towards a ‘Fairer’ Conception of Process Fairness: Why, When, and How May Not Always Be Better Than Less,” Academy of Management Annals 3 (2009): 183–216. 89 R. Folger, “Distributive and Procedural Justice: Combined Impact of ‘Voice’ and Improvement on Experienced Inequity,” Journal of Personality and Social Psychology 35 (1977): 108–19; and R. Folger, D. Rosenfield, J. Grove, and L. Corkran, “Effects of ‘Voice’ and Peer Opinions on Responses to Inequity,” Journal of Personality and Social Psychology 37 (1979): 2253–71. 90 R. J. Bies and J. F. Moag, “Interactional Justice: Communication Criteria on Fairness,” in R. J. Lewicki, B. H. Sheppard, and M. H. Bazerman (eds.), Research on Negotiations in Organizations, Vol. 1, (Greenwich, CT: JAI, 1986): 43–55. 91 J. C. Shaw, E. Wild, and J. A. Colquitt, “To Justify or Excuse? A Meta-Analytic Review of the Effects of Explanations,” Journal of Applied Psychology 88, no. 3 (2003): 444–58. 92 R. J. Bies, “Are Procedural and Interactional Justice Conceptually Distinct?,” in J. Greenberg and J. A. Colquitt (eds.), Handbook of Organi- zational Justice (Mahwah, NJ: Erlbaum, 2005): 85–112; and B. A. Scott, J. A. Colquitt, and E. L. Paddock, “An Actor-Focused Model of Jus- tice Rule Adherence and Violation: The Role of Managerial Motives and Discretion,” Journal of Applied Psychology 94, no. 3 (2009): 756–69. 93 G. A. Van Kleef, A. C. Homan, B. Beersma, D. V. Knippenberg, B. V. Knippenberg, and F. Damen, “Searing Sentiment or Cold Cal- culation? The Effects of Leader Emotional Displays on Team Performance Depend on Follower Epistemic Motivation,” Academy of Management Journal 52, no. 3 (2009): 562–80. 94 “Rutgers Fires Mike Rice,” ESPN, 2013, http://espn.go.com/sportsnation/post/_/ id/9129245/rutgers-fires-mike-rice. 95 J. A. Colquitt, D. E. Conlon, M. J. Wesson, C. O. L. H. Porter, and K. Y. Ng, “Justice at the Millenium: A Meta-Analytic Review of 25 Years of Organizational Justice Research,” Journal of Applied Psychology 86, no. 3 (2001): 425–45; J. A. Colquitt, B. A. Scott, J. B. Rodell, D. M. Long, C. P. Zapata, D. E. Conlon, and M. J. Wesson, “Justice at the Millennium, A Decade Later: A Meta-Analytic Test of Social Exchange and Affect-Based Perspectives,” Journal of Applied Psychology 98, no. 2 (2013): 199–236; and N. E. Fassina, D. A. Jones, and K. L. Uggerslev, “Meta-Analytic Tests of Rela- tionships between Organizational Justice and Citizenship Behavior: Testing Agent-System and Shared-Variance Models,” Journal of Orga- nizational Behavior 29 (2008): 805–28. 96 J. M. Robbins, M. T. Ford, and L. E. Tetrick, “Perceived Unfairness and Employee Health: A Meta-Analytic Integration,” Journal of Applied Psychology 97, no. 2 (2012): 235–72.

97 J. A. Colquitt, J. A. LePine, R. F. Piccolo, C. P. Zapata, and B. L. Rich, “Explaining the Justice-Performance Relationship: Trust as Exchange Deepener or Trust as Uncertainty Reducer?,” Journal of Applied Psychology 97, no. 1 (2012): 1–15. 98 K. Leung, K. Tong, and S. S. Ho, “Effects of Interactional Justice on Egocentric Bias in Resource Allocation Decisions,” Journal of Applied Psychology 89, no. 3 (2004): 405–15; and L. Francis-Gladney, N. R. Manger, and R. B. Welker, “Does Outcome Favorability Affect Procedural Fairness as a Result of Self-Serving Attributions,” Journal of Applied Social Psychol- ogy 40, no. 1 (2010): 182–94. 99 S. Caleo, “Are Organizational Justice Rules Gendered? Reactions to Men’s and Women’s Justice Violations,” Journal of Applied Psychology 101, no. 10 (2016): 1422–35. 100 D. P. Skarlicki, J. H. Ellard, and B. R. C. Kelln, “Third-Party Perceptions of a Layoff: Procedural, Derogation, and Retributive Aspects of Justice,” Journal of Applied Psychology 83, no. 1 (1998): 119–27. 101 D. P. Skarlicki and C. T. Kulik, “Third-Party Reactions to Employee (Mis)treatment: A Justice Perspective,” Research in Organiza- tional Behavior 26 (2005): 183–229; and E. E. Umphress, A. L. Simmons, R. Folger, R. Ren, and R. Bobocel, “Observer Reactions to Inter- personal Injustice: The Roles of Perpetrator Intent and Victim Perception,” Journal of Orga- nizational Behavior 34 (2013): 327–49. 102 M. S. Mitchell, R. M. Vogel, and R. Folger, “Third Parties’ Reactions to the Abusive Supervision of Coworkers,” Journal of Applied Psychology 100, no. 4 (2015): 1040–55; and J. O’Reilly, K. Aquino, and D. Skarlicki, “The Lives of Others: Third Parties’ Responses to Others’ Injustice,” Journal of Applied Psychology 101, no. 2 (2016): 171–89. 103 B. B. Dunford, C. L. Jackson, A. D. Boss, L. Tay, and R. W. Boss, “Be Fair, Your Employ- ees Are Watching: A Relational Response Model of External Third-Party Justice,” Personnel Psychology 68 (2015): 319–52. 104 This section is based on B. A. Scott, A. S. Garza, D. E. Conlon, and Y. J. Kim, “Why Do Managers Act Fairly in the First Place? A Daily Investigation of ‘Hot’ and ‘Cold’ Motives and Discretion,” Academy of Management Journal 57, no. 6 (2014): 1571–91. 105 F. F. T. Chiang and T. Birtch, “The Trans- ferability of Management Practices: Examin- ing Cross-National Differences in Reward Preferences,” Human Relations 60, no. 9 (2007): 1293–330; and M. J. Gelfand, M. Erez, and Z. Aycan, “Cross-Cultural Organizational Behavior,” Annual Review of Psychology 58 (2007): 479–514. 106 M. C. Bolino and W. H. Turnley, “Old Faces, New Places: Equity Theory in Cross- Cultural Contexts,” Journal of Organizational Behavior 29, no. 1 (2008): 29–50. 107 R. Shao, D. E. Rupp, D. P. Skarlicki, and K. S. Jones, “Employee Justice across

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Cultures: A Meta-Analytic Review,” Journal of Management 39, no. 1 (2013): 263–301. 108 B. L. Rich, J. A. LePine, and E. R. Crawford, “Job Engagement: Antecedents and Effects on Job Performance,” Academy of Management Journal 53, no. 3 (2010): 617–35. 109 M. S. Christian, A. S. Garza, and J. E. Slaughter, “Work Engagement: A Quantitative Review and Test of Its Relations with Task and Contextual Performance,” Personnel Psychology 64, no. 1 (2011): 89–136. 110 E. R. Crawford, J. A. LePine, and B. L. Rich, “Linking Job Demands and Resources to Employee Engagement and Burnout: A

Theoretical Extension and Meta-Analytic Test,” Journal of Applied Psychology 95, no. 5 (2010): 834–48. 111 Rich, LePine, and Crawford, “Job Engagement.” 112 F. O. Walumbwa, P. Wang, H. Wang, J. Schaubroeck, and B. J. Avolio, “Psychological Processes Linking Authentic Leadership to Follower Behaviors,” Leadership Quarterly 21, no. 5 (2010): 901–14. 113 D. A. Newman and D. A. Harrison, “Been There, Bottled That: Are State and Behavioral Work Engagement New and Useful Con- struct ‘‘Wines’?,” Industrial and Organizational

Psychology 1, no. 1 (2008): 31–35; and A. J. Wefald and R. G. Downey, “Job Engagement in Organizations: Fad, Fashion, or Folderol,” Journal of Organizational Behavior 30, no. 1 (2009): 141–45. 114 J. M. George, “The Wider Context, Costs, and Benefits of Work Engagement,” European Journal of Work and Organizational Psychology 20, no. 1 (2011): 53–59; and J. R. B. Halbesleben, J. Harvey, and M. C. Bolino, “Too Engaged? A Conservation of Resources View of the Rela- tionship between Work Engagement and Work Interference with Family,” Journal of Applied Psychology 94, no. 6 (2009): 1452–65.

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Motivation: From Concepts to Applications


8-1 Describe how the job characteristics model motivates by changing the work environment.

8-2 Compare the main ways jobs can be redesigned.

8-3 Explain how specific alternative work arrangements can motivate employees.

8-4 Describe how employee involvement measures can motivate employees.

8-5 Demonstrate how the different types of variable-pay programs can increase employee motivation.

8-6 Show how flexible benefits turn benefits into motivators.

8-7 Identify the motivational benefits of intrinsic rewards.

LEARNING OBJECTIVES After studying this chapter, you should be able to:

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If you were given the chance to try something new, something other than the job in the career path you’ve selected, would you take it? What if you were encouraged to do so? This is exactly what some organizations are implementing through their job rotation programs, which enable employees to shift periodically from one task or job to another. The idea is that such assignments have myriad benefits, such as helping employees learn new skills (and gain deeper insight into those they already have), maintaining employee motivation, countering career stagnation, building a flexible and cross-trained workforce, fostering healthy competition, recognizing hidden talents, and sparking employees’ curiosity or interest for new roles they may be good at but might not have considered possible.

Intel Corporation lets their employees (such as the one shown) take on temporary assignments to get a better feel and sense of the “hardware” that contributes to Intel’s work infrastructure. What’s even more interesting is that Intel has developed an internal database (Intel’s Developmental Opportu- nity Tool [DOT]) with which employees can search for hundreds of temporary assignment listings that they can take on. The program’s overseer, Amreen Madhani, notes that DOT allows employees to “test-drive a job or make con- nections in different departments.” The success of DOT has led to thousands of successful temporary placements. Before DOT, Madhani asserts, Intel was

Employability Skills Matrix (ESM)

Myth or Science?

Career OBjectives

An Ethical Choice

Point/ Counterpoint

Experiential Exercise

Ethical Dilemma

Case Incident 1

Case Incident 2

Critical Thinking ✓ ✓ ✓ ✓ ✓ ✓ ✓

Communication ✓ ✓ ✓ ✓ ✓ Collaboration ✓ ✓ ✓ ✓ Knowledge

Application and Analysis

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Social Responsibility ✓ ✓ ✓

MyLab Management Chapter Warm Up If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the chapter warm up.

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“so siloed. Everyone had their own tools, but there was limited visibility to employees across the organization. We wanted an enterprise-wide solution.”

Taking on job rotation assignments, however, is not always smooth or easy. For example, Elizabeth Wright Korytkowski, a benefits specialist with Intel, took on a four-month, software services group position. She “felt like a deer in the headlights” given the shock, change, and difficulty of taking on such an assignment. Since then, however, she has gained familiarity with software and tools she wouldn’t have otherwise been exposed to and has since been promoted.

The advent of job rotation approaches is a welcome trend for both employ- ers and employees—in fact, employer and employee may be antiquated words decades from now. Randstad’s Workplace 2025 survey asked employers and employees to choose a new word that they thought better represented employ- ees and that they would like to see used by the year 2025. 47 percent of employers and 57 percent of employees felt that the term contributor was the most appropriate word. The survey results are striking regarding perceptions of the role of the “contributor” in the next decade: 76 percent of workers say that they’re just as committed when they are working on different types of tasks or functions; 85 percent agree that what matters is providing skills and results, not the role assigned; only 5 percent believe that job experience or seniority is critical; and over 70 percent of millennials and Generation Z employees agree that periodically changing career paths increases their potential.

Job rotation programs appear to provide a great benefit to organizations and contributors alike. As Terri Lodwick, president of Executive Women Inter- national (EWI) notes, job rotation allows employees to “get to see how they fit into the entire organization, not just their little cubicle.”

Sources: Based on D. Coker, “How Job Rotation Is Beneficial for the Organization,” The HR Digest, October 31, 2016, https://www.thehrdigest.com/job-rotation-beneficial-organization/; B. Fetherstonhaugh, “Developing a Strategy for a Life of Meaningful Labor,” Harvard Business Review, September 5, 2016, https://hbr.org/2016/09/developing-a-strategy-for-a-life-of- meaningful-labor; F. Gino, “Let Your Workers Rebel,” Harvard Business Review, October 24, 2016, https://hbr.org/cover-story/2016/10/let-your-workers-rebel; D. Parrey, “How to Create High-Profile Opportunities for High-Potential Employees,” Institute for Corporate Productivity: The Productivity Blog, May 14, 2013, https://www.i4cp.com/productivity-blog/2013/05/14/ how-to-create-high-profile-opportunities-for-high-potential-employees; Randstad, Workplace 2025: From Employee to Contributor: The Worker of the Future, October 2016, https://www .randstadusa.com/workforce360/workplace-2025/infographic/?utm_source=pr&utm_ medium=pr&utm_term=client&utm_content=rusa&utm_campaign=wp2025+infographic; and L. Weber and L. Kwoh, “Managing & Careers: Co-Workers Change Places,” The Wall Street Journal, February 21, 2012, B8.

As a result of this switch, it is clear that a number of firms are switching to job rotation methods; task characteristics, job design elements, work arrange- ments, and a sense of agency are all powerful motivators within the realm of work. These elements can be altered or changed perhaps just by letting workers

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try something new. However, the process of motivating is more complex than it may seem on the surface and requires an understanding of many job design and redesign elements, along with a consideration of the motivation concepts described in the previous chapter.

In Chapter 7, we focused on motivation theories. While it’s important to understand these underlying concepts, it’s also important to see how you can use them as a manager. In this chapter, we apply motivation concepts to prac- tices, beginning with job design.

Motivating by Job Design: The Job Characteristics Model The way work is structured has a bigger impact on an individual’s motivation than might first appear. Job design suggests that the way elements in a job are organized can influence employee effort,1 and the job characteristics model, discussed next, can serve as a framework to identify opportunities for changes to those elements.

The Job Characteristics Model The job characteristics model (JCM) describes jobs in terms of five core job dimensions:2

1. Skill variety is the degree to which a job requires different activities using specialized skills and talents. The work of a garage owner-operator who does electrical repairs, rebuilds engines, does bodywork, and interacts with customers scores high on skill variety. The job of a body shop worker who sprays paint 8 hours a day scores low on this dimension.

2. Task identity is the degree to which a job requires completion of a whole and identifiable piece of work. A cabinetmaker who designs furniture, selects the wood, builds the furniture, and finishes the pieces has a job that scores high on task identity. A job scoring low on this dimension is operat- ing a lathe solely to make table legs.

3. Task significance is the degree to which a job affects the lives or work of other people. The job of a nurse helping patients in a hospital intensive care unit scores high on task significance; sweeping floors in a hospital scores low.

4. Autonomy is the degree to which a job provides the worker freedom, inde- pendence, and discretion in scheduling work and determining the pro- cedures for carrying it out. A sales manager who schedules his own work and tailors his sales approach for each customer without supervision has a highly autonomous job. An account representative who is required to fol- low a standardized sales script with potential customers has a job low on autonomy.

5. Feedback is the degree to which carrying out work activities generates direct and clear information about your own performance. A job with high feedback is testing and inspecting iPads. Installing components of iPads as they move down an assembly line provides low feedback.

Exhibit 8-1 presents the JCM. Note how the first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the employee will view as important, valuable, and worthwhile. Jobs with high autonomy give employees a feeling of personal responsibility for results; feed- back shows them how effectively they are performing. The JCM proposes that individuals obtain internal rewards when they learn (knowledge of results in

8-1 Describe how the job char-acteristics model motivates by changing the work environment.

job design The way the elements in a job are organized.

job characteristics model (JCM) A model proposing that any job can be described in terms of five core job dimensions: skill variety, task identity, task significance, autonomy, and feedback.

skill variety The degree to which a job requires a variety of different activities.

task identity The degree to which a job requires completion of a whole and identifiable piece of work.

task significance The degree to which a job has a substantial impact on the lives or work of other people.

autonomy The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out.

feedback The degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance.

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256 PART 2 The Individual

the model) that they personally have performed well (experienced responsibil- ity) on a task they care about (experienced meaningfulness). The more these three psychological states are present, the greater will be employees’ motiva- tion, performance, and satisfaction, and the lower their absenteeism and likeli- hood of leaving. As Exhibit 8-1 indicates, individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and are more likely to respond to them more positively.

Much evidence supports the relationship between the presence of these job characteristics and higher job satisfaction and organizational commitment through increased motivation.3 In general, research concurs with the theory behind the JCM, although studies have introduced potential modifiers. One study suggested that when employees were other-oriented (concerned with the welfare of others at work), the relationship between intrinsic job characteristics and job satisfaction was weaker,4 meaning that our job satisfaction comes less from these characteristics when we care about others. Another study proposed that the degree of psychological ownership we feel toward our work enhances our motivation, particularly if the feelings of ownership are shared among a work group.5 Other research has explored the JCM in unique settings such as in virtual work situations, finding that if individuals work together online but not in person, their experience of meaningfulness, responsibility, and knowledge of results can suffer. Thankfully, managers can mitigate these negative effects for employees by consciously developing personal relationships with them and increasing their sense of task significance, autonomy, and feedback.6

We can combine the core dimensions of the JCM into a single predictive index, called the motivating potential score (MPS) and calculated as follows:

MPS = skill variety + task identity + task significance

3 * autonomy * feedback

To be high on motivating potential, jobs must be high on at least one of the three factors that lead to experienced meaningfulness and high on both autonomy and feedback. If jobs score high on motivating potential, the model

motivating potential score (MPS) A predictive index that suggests the motivating potential in a job.

The Job Characteristics ModelExhibit 8-1

Personal and work outcomes

Skill variety Task identity Task significance

Experienced meaningfulness of the work

High internal work motivation

Autonomy Experiencedresponsibility for outcomes of the work

High-quality work performance

High satisfaction with the work

Feedback Knowledge of theactual results of the work activities

Low absenteeism and turnover

Core job dimensions

Critical psychological states

Employee growth- need strength

Source: Based on J. L. Pierce, I. Jussila, and A. Cummings, “Psychological Ownership within the Job Design Context: Revision of the Job Characteristics Model,” Journal of Organizational Behavior 30, no. 4 (2009): 477–96.

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Motivation: From Concepts to Applications CHAPTER 8 257

predicts that motivation, performance, and satisfaction will improve and that absence and turnover will be reduced. Think about your job. Do you have the opportunity to work on different tasks, or is your day routine? Are you able to work independently, or do you have a supervisor or coworker looking over your shoulder constantly? Your answers indicate your job’s motivating potential.

Research has also examined the role that leadership (to be discussed fur- ther in Chapter 12) affects employee perceptions of job characteristics. For instance, one study found that ethical leaders improve employees’ effort and job performance because they bolster the task significance of their employees.7 Research in government, private, and military research and development (R&D) organizations in Taiwan reached a similar conclusion—that supportive leadership behaviors improved the job characteristics of R&D professionals.8

Job Redesign “Every day was the same thing,” Frank said. “Stand on that assembly line. Wait for an instrument panel to be moved into place. Unlock the mechanism and drop the panel into the Jeep . . . as it moved by on the line. Then I plugged in the harnessing wires. I repeated that for eight hours a day. I don’t care that they were paying me 24 dollars an hour. I was going crazy. Finally, I just said this isn’t going to be the way I’m going to spend the rest of my life. My brain was turning to JELL-O. So I quit. Now I work in a print shop and I make less than 15  dollars an hour. But let me tell you, the work I do is really interesting. The job changes all the time, I’m continually learning new things, and the work really challenges me! I look forward every morning to going to work again.”

The repetitive tasks in Frank’s job at the Jeep plant provided little variety, autonomy, or motivation. In contrast, his job in the print shop is challenging and stimulating. From an organizational perspective, the failure of Frank’s first employer to redesign his job into a more satisfying one led to increased turn- over. Redesigning jobs therefore has important practical implications—reduced turnover and increased job satisfaction among them. Let’s look at some ways to put the JCM into practice to make jobs more motivating.

Job Rotation and Job Enrichment Job Rotation If employees suffer from over-routinization of their work, one alternative is job rotation, or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training).9 Manufacturers also use job rotation as needed to respond more flexibly to the volume of incoming orders. New managers are sometimes rotated through jobs, too, to help them get a picture of a whole organization.10 For these reasons, job rotation can be applied in any setting where cross-training is feasible, from manufacturing floors to hospital wards. At Singapore Airlines, for instance, a ticket agent may temporarily take on the duties of a baggage handler, both to be cross-trained and to get exposure to dif- ferent aspects of the organization. Extensive job rotation is among the reasons that Singapore Airlines is rated one of the best airlines in the world.11

The use of job rotation has been shown to increase job satisfaction and orga- nizational commitment.12 Evidence from Italy, Britain, and Turkey shows that job rotation is associated with higher levels of organizational performance in manufacturing settings.13 It reduces boredom, increases motivation, and helps employees understand how their work contributes to the organization. It may also increase safety and reduce repetitive-based work injuries, but this is cur- rently a topic of much study and debate, with mixed findings.14

8-2 Compare the main ways jobs can be redesigned.

job rotation The periodic shifting of an employee from one task to another.

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Job rotation does have drawbacks. Training costs increase when each rota- tion necessitates a round of training. Second, moving a worker into a new position reduces overall productivity for that role. Third, job rotation creates disruptions when members of the work group must adjust to new employees. Fourth, supervisors may have to spend more time answering questions and monitoring the work of recently rotated employees.

Job Enrichment Think back to some of the motivation concepts from Chapter 7, including developing and nurturing intrinsic motivation. This major focus of self-determination theory can be put into action through the process of job enrichment. In job enrichment, high-level responsibilities are added to the job to increase a sense of purpose, direction, meaning, and intrinsic motivation.15

Enriching a job in this way is different from enlarging it, or adding more tasks and requirements. It involves adding another layer of responsibility and meaning. Job enrichment has its roots in Herzberg’s theories of providing hygiene, or motivating factors, to the job to increase motivation. Sometimes, enrichment is not rigidly controlled by management; employees, especially those in occupations experiencing high industry growth, have been known to enrich their own jobs (and become satisfied as a result).16

job enrichment Adding high-level responsibilities to a job to increase intrinsic motivation.

Myth or Science? Money Can’t Buy Happiness

Or maybe you’ve probably heard that money does buy happiness. Both may be true. Economist Richard Easterlin argued that once basic financial needs have been met, more money doesn’t really do much to make a person happy. Researchers set the limit at around $75,000, recently prompting one CEO to give away all his earnings above that amount to his employees!

This is by no means the last word, nor is it a directive to be unhappy until you make $75,000 and no happier afterward. More recent research world- wide indicates the exact opposite: The more money, the better. The authors said, “If there is a satiation point, we are yet to reach it.”

Given these mixed findings, the rela- tionship between happiness and income is probably not direct. In fact, other research suggests your level of income is less important than how you spend it. Think about why you may be motivated by money. Do you envision the number of zeroes in your bank account increas- ing? Probably not. You’re probably more

motivated by what you can buy with the money than by the money itself. From research, we know:

• Giving money away makes people hap- pier than spending it on themselves. In one study, students were given money and told to either give it away or spend it on themselves. Then the study asked people to give away their own money. Either way, people were happier giving away the money, even if the givers were relatively poor. What seems to matter is not the amount but how much impact you think your donation will have on others.

• People are happier when they spend money on experiences rather than products. Research professor Thomas Gilovich says that we think to our- selves, “I have a limited amount of money, and I can either go there, or I can have this. If I go there, it’ll be great, but it’ll be over in no time. If I buy this thing, at least I’ll always have it. That is factually true, but not psy- chologically true. We adapt to our material goods.”

• People are happier when they buy time, but only if they use it well. Outsource tasks when you can, for instance, and “think of it as ‘windfall time’ and use it to do something good,” says researcher Elizabeth Dunn.

Saying that money brings more happi- ness when spent on our experiences (and the time to do them) may seem counter- intuitive until we think about it closely. What did you think of your cell phone when you bought it compared to what you think of it now? Chances are you were interested and engaged when you bought it, but now it is an everyday object. For experiences, what did you think of your greatest vacation when you were on it, and what do you think of it now? Both the experience at the time and the recollec- tion now may bring a smile to your face.

Sources: Based on A. Blackman, “Can Money Buy Happiness?” The Wall Street Journal, November 10, 2014, R1, R2; D. Kurtzleben, “Finally: Proof That Money Buys Happiness (Sort Of ),” USNews.com, April 29, 2013; and A. Novotney, “Money Can’t Buy Happiness,” Monitor on Psychology (July/August 2012): 24–26.

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Early reviews suggest that job enrichment can be effective at reducing turnover, almost twice as effective as giving employees a “realistic preview” of the work before they join the organization.17 In a survey of over 20,000 Brit- ish employees, job enrichment practices were related to organizations’ finan- cial performance, labor productivity, absenteeism, and output quality through improvements in job satisfaction.18

Relational Job Design While redesigning jobs on the basis of job characteristics theory is likely to make work more intrinsically motivating, research is focusing on how to make jobs more prosocially motivating to people. In other words, how can manag- ers design work so employees are motivated to promote the well-being of the organization’s beneficiaries (customers, clients, patients, and employees)? This view, relational job design, shifts the spotlight from the employee to those whose lives are affected by the job that employee performs.19 It also motivates individuals toward increased job performance.20

One way to make jobs more prosocially motivating is to connect employ- ees more closely with the beneficiaries of their work by relating stories from customers who have found the company’s products or services to be helpful. For example, the medical device manufacturer Medtronic invites people to describe how its products have improved, or even saved, their lives and shares these stories with employees during annual meetings, which provides the employees a powerful reminder of the impact of their work. For another exam- ple, researchers found that when university fundraisers briefly interacted with the undergraduates who would receive the scholarship money they raised, they persisted 42 percent longer and raised nearly twice as much money as those who didn’t interact with potential recipients.21 The positive impact was apparent even when fundraisers met with just a single scholarship recipient.

Personal contact with beneficiaries may not always be necessary. Once a child’s chemotherapy comes to an end at one of the many cancer centers across the United States and he or she has successfully defeated cancer, it has

relational job design Constructing jobs so employees see the positive difference they can make in the lives of others directly through their work.

Medical device maker Stryker provides opportunities for its employees to connect with people affected by their work. Shown here are its employees with endurance athlete Daren Wendell (center, in hat), who has an implanted titanium rod in his leg that Stryker produced. Source: Diane Bondareff/InVision for Stryker/ AP Images

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260 PART 2 The Individual

become tradition for the child to ring a bell, the sound of which is often broad- cast throughout many areas of the hospital. The mere act of hearing this bell is inspiring to the staff. Dr. ZoAnn Dryer of the Texas Children’s Cancer Center notes, “Every time that bell rings, it’s like you know what, somebody else has done it. That’s what this is all about.”22

Why do these connections have such positive consequences? Meeting ben- eficiaries firsthand—or even just seeing pictures of them—allows employees to see that their actions affect a real person and have tangible consequences. It makes customers or clients more memorable and emotionally vivid, which leads employees to consider the effects of their work actions more. Connec- tions allow employees to take the perspective of beneficiaries, which fosters higher levels of commitment.

You might be wondering whether connecting employees with the benefi- ciaries of their work is already covered by the idea of task significance in job characteristics theory. However, some differences make beneficiary contact unique. For one, many jobs might be perceived as being high in significance, yet employees in those jobs never meet the individuals affected by their work. Second, beneficiary contact seems to have a distinct relationship with pro social behaviors such as helping others. For example, one study found that lifeguards who read stories about how their actions benefited swimmers were rated as more helpful by their bosses; this was not the case for lifeguards who read sto- ries about the personal benefits of their work for themselves.23 The upshot? There are many ways you can design jobs to be more motivating, and your choice should depend on the outcomes you’d like to achieve.

Relational job design, with its focus on prosocial motivation, is an especially salient topic for organizations with corporate social responsibility (CSR) initia- tives. As we discussed in earlier chapters, CSR efforts often include invitations for employees to volunteer their time and effort, sometimes using the skills they gained on the job (like Home Depot employees when they help rebuild homes) but often not (such as when bank employees help rebuild homes with groups like Habitat for Humanity). In both cases, the employees may be able to interact with the beneficiaries of their efforts, and research indicates that corporate-sponsored volunteer programs enhanced the JCM dimensions of meaningfulness and task significance and motivated employees to volunteer.24 While this motivation for prosocial behavior is noteworthy, however, it is not the same as relational job design: For one, the CSR efforts occur through volunteering (not on the job). Also, the work employees are providing is not usually the same work they do at their jobs (Home Depot workers do not build homes on the job). However, rela- tional job design holds intriguing possibilities for CSR initiatives.

Alternative Work Arrangements As you are probably aware, there are many approaches to motivating people, and we’ve discussed some of them. Another approach to motivation is to consider alternative work arrangements such as flextime, job sharing, and telecommuting. These are likely to be especially important for a diverse workforce of dual-earner couples, single parents, and employees caring for a sick or aging relative.

8-3 Explain how specific alternative work arrangements can motivate employees.

MyLab Management Personal Inventory Assessments Go to www.pearson.com/mylab/management to complete the Personal Inventory Assessment related to this chapter.

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Flextime Susan is the classic “morning person.” Every day she rises at 5:00 a.m. sharp, full of energy. However, as she puts it, “I’m usually ready for bed right after the 7:00 p.m. news.”

Susan’s work schedule as a claims processor at The Hartford Financial Ser- vices Group is flexible. Her office opens at 6:00 a.m. and closes at 7:00 p.m., and she schedules her 8-hour day within this 13-hour period. Because she is a morning person whose 7-year-old son gets out of school at 3:00 p.m. every day, Susan opts to work from 6:00 a.m. to 3:00 p.m. “My work hours are perfect. I’m at the job when I’m mentally most alert, and I can be home to take care of my son after he gets out of school.”

Susan’s schedule is an example of flextime, short for flexible work time or flexible work arrangements.25 Flextime employees must work a specific number of hours per week but may vary their hours of work, within limits. As Exhibit 8-2 shows, each day consists of a common core, usually 6 hours, with a flexibility band surrounding it. The core may be 9:00 a.m. to 3:00 p.m., and the office opens at 6:00 a.m. and closes at 6:00 p.m. Employees must be at their jobs dur- ing the common core period, but they may accumulate their other 2 hours around that. Some flextime programs allow employees to accumulate extra hours and turn them into days off.

Flextime has become extremely popular. According to recent surveys, a majority (54 to 56 percent) of U.S. organizations offer some form of flextime— and reap benefits from it as well. Thirty-three percent of organizations report an increase in participation and 23 percent indicate an increase in productivity (conversely, 5 percent or less indicated a decrease in participation and produc- tivity).26 It appears as if flextime has become an important job design element for many employees—53 percent of employees cite flexible arrangements as a very important aspect of their job satisfaction, 55 percent of employees were unlikely to seek job opportunities elsewhere within the year, and 34 percent stated that they would remain with their current employer because of flexible arrangements.27 In countries such as Germany, Belgium, the Netherlands, and France, employers are not allowed to refuse an employee’s request for either a part-time or a flexible work schedule by law as long as the request is reasonable, such as to care for an infant child.28

flextime Flexible work hours.

PricewaterhouseCoopers provides flex- ible work options that allow employees to control how and when their work gets done. PwC employees like Global Mobility Process and Quality Managers Robin Croft and Shari Alatorre, shown here, may choose flexible work plans that include flextime, job sharing, and telecommuting. Source: Eve Edelheit/Tampa Bay Times/ ZUMAPRESS.com/Alamy Stock Photo

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262 PART 2 The Individual

Most of the evidence for flextime stacks up favorably. One review of over 40 studies suggests that flextime is related to positive work outcomes in general, but only weakly—the effects are much stronger when considering reductions in absenteeism and, to a lesser degree, improvements in productivity and sched- ule satisfaction.29 Flextime tends to reduce absenteeism because employees can schedule their work hours to align with personal demands, reducing tardiness and absences, and they can work when they are most productive. Flextime can also help employees balance work and family lives; it is a popular criterion for judging how family friendly a workplace is. Much less promising, the empiri- cal evidence from over 100,000 employees suggests that, although flextime is weakly effective at reducing the extent to which work interferes with family, it does not affect situations in which family interferes with work.30 However, flex- time’s effects on work-life balance are more nuanced than they might appear. For example, two studies of German employees suggest that, although flextime leads employees to set stronger work-life boundaries (which in turn makes them happier), these boundaries are not truly “set” unless the employees com- plete their daily goals at work.31 These studies suggest that if flextime is used too much, it can undermine goal accomplishment.

Flextime’s major drawback is that it’s not applicable to every job or every worker. Managers and supervisors already have a high degree of autonomy in their jobs, so it is not as effective for them as it is for general employees.32 It also

Possible Flextime Staff SchedulesExhibit 8-2

Schedule 1

Percent Time: 100% = 40 hours per week Core Hours: 9:00 A.M.–5:00 P.M., Monday through Friday

(1 hour lunch) Work Start Time: Between 8:00 A.M. and 9:00 A.M. Work End Time: Between 5:00 P.M. and 6:00 P.M.

Schedule 2

Percent Time: 100% = 40 hours per week Work Hours: 8:00 A.M.–6:30 P.M., Monday through Thursday

(1/2 hour lunch) Friday off

Work Start Time: 8:00 A.M. Work End Time: 6:30 P.M.

Schedule 3

Percent Time: 90% = 36 hours per week Work Hours: 8:30 A.M.–5:00 P.M., Monday through Thursday

(1/2 hour lunch) 8:00 A.M.–Noon Friday (no lunch)

Work Start Time: 8:30 A.M. (Monday–Thursday); 8:00 A.M. (Friday) Work End Time: 5:00 P.M. (Monday–Thursday); Noon (Friday)

Schedule 4

Percent Time: 80% = 32 hours per week 8:00 A.M.–6:00 P.M., Monday through Wednesday (1/2 hour lunch)

Work Hours:

8:00 A.M.–11:30 A.M. Thursday (no lunch) Friday off

Work Start Time: Between 8:00 A.M. and 9:00 A.M. Work End Time: Between 5:00 P.M. and 6:00 P.M.

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appears that people who have a strong desire to separate their work and family lives are less apt to use flextime.33 Those who ask for it are often stigmatized, which may be avoided if the majority of the organization’s leaders adopt flexible hours to signal that flextime is acceptable.34 Flextime is intuitively a worthwhile business practice, so these findings suggest additional research is needed to determine individual differences in the use of various aspects of flextime.

Job Sharing Job sharing allows two or more individuals to split a traditional full-time job.35 One employee might perform the job from 8:00 a.m. to noon and the other from 1:00 p.m. to 5:00 p.m., or the two could work full but alternate days. For example, top Ford engineers Julie Levine and Julie Rocco engaged in a job- sharing program that allowed both to spend time with their families while redesigning the Explorer crossover. Typically, one of them would work late afternoons and evenings while the other worked mornings. They both agreed that the program worked well, although making it feasible required a great deal of time and preparation.36

Only 18 percent of U.S. organizations offered job sharing in 2014, a 29 per- cent decrease since 2008.37 Reasons it is not more widely adopted include the difficulty of finding compatible partners to job-share and the historically nega- tive perceptions of individuals not completely committed to their jobs and employers. However, eliminating job sharing for these reasons might be short- sighted. Job sharing allows an organization to draw on the talents of more than one individual for a given job. It opens the opportunity to acquire skilled workers—for instance, retirees and parents with young children—who might not be available on a full-time basis. From employees’ perspectives, job sharing can increase motivation and satisfaction if they can work when they wouldn’t normally be able to do so. An employer’s decision to use job sharing is often based on policy and financial reasons. Two part-time employees sharing a job can be less expensive in terms of salary and benefits than one full-timer, but this may not be the case because training, coordination, and administrative costs can be high. Ideally, employers should consider each employee and job separately, seeking to match the skills, personality, and needs of the employee with the tasks required for the job and taking into account that individual’s motivating factors.

Telecommuting Telecommuting might be close to the ideal job for many people: no rush hour traffic, flexible hours, freedom to dress as you please, and few interruptions. Telecommuting refers to working at home—or anywhere else the employee chooses that is outside the workplace—at least 2 days a week through virtual devices linked to the employer’s office.38 A sales manager working from home is telecommuting, but a sales manager working from her car on a business trip is not.

Telecommuting seems to mesh with the cultural transition to knowledge work (which often can be performed anywhere) and, as the OB Poll indicates, people with more education are more apt to work from home. However, tele- commuting has been a popular topic lately not for its potential but for its orga- nizational acceptance, or lack thereof. Despite the benefits of telecommuting, large organizations such as Yahoo! and Best Buy have eliminated it.39 Yahoo! CEO Marissa Mayer discussed how telecommuting may undermine corporate culture, noting, “People are more productive when they’re alone, but they’re more collaborative and innovative when they’re together.”40

What kinds of jobs lend themselves to telecommuting? Writers, attorneys, ana- lysts, and employees who spend most their time on computers or the telephone— including telemarketers, customer service representatives, reservation agents,

job sharing An arrangement that allows two or more individuals to split a traditional 40-hour-a-week job.

telecommuting Working from home at least 2 days a week through virtual devices that are linked to the employer’s office.

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264 PART 2 The Individual

and product support specialists—are candidates. As telecommuters, they can access information on their computers at home as easily as in the company’s office.

Telecommuting has several benefits. It is positively related to objective and supervisor rated performance and job satisfaction; to a lesser degree, it reduces role stress and turnover intentions.41 Employees who work virtually more than 2.5 days a week tend to experience the benefits of reductions in work- family conflict more intensely than those who are in the office the majority of their workweek.42 Beyond the benefits to organizations and their employees,

Career OBjectives How can I get flextime?

My job is great, but I can’t understand why management won’t allow flextime. After all, I often work on a laptop in the office! I could just as easily be work- ing on the same laptop at home with- out interruptions from my colleagues. I know I’d be more productive. How can I convince them to let me?


Dear Sophia: We can’t help but wonder two things: (1) Is the ban on working from home a company policy or your manager’s pol- icy, and (2) do you want flextime or tele- commuting? If you work for Yahoo!, for instance, you may not be able to con- vince anyone to let you work from home after CEO Marissa Mayer’s very public decree against the policy. If the ban is your manager’s policy—or even your division’s policy—in an organization open to alternative work arrangements, you just may be able to get your way.

That leads us to the second question, about flextime versus telecommuting. If you want flextime as you stated and just want to work from home during some noncore hours (say, work in the office for 6 hours a day and work another 2 hours a day from home), your employer may be more likely to grant your wish than if you want to telecommute completely (work all your hours from home).

Research indicates that employees are most likely to be granted work-from- home privileges because of a direct

sympathetic relationship with their managers (not because of a company policy). Employees are also more likely to gain acceptance for partial than for full telecommuting (either flextime or by alternating days). It helps if you have a legitimate need to be home and if you do knowledge-based work. Jared Dalton, for instance, telecommutes 2 days a week as a manager for accounting firm Ernst & Young, and his wife Christina telecommutes on 2 different days so they can oversee the care of their infant.

If it sounds like flextime depends on favoritism, you might be right. It’s also a reflection, however, of the state of telecommuting: Only 38 percent of U.S. organizations permit some of their employees to work from home regu- larly. To be one of the lucky few:

• Check your organization’s flexible options policies.

• Develop a plan for working from home to show your manager. Include how many hours per week, which days of the week, and where you will work, and explain how your manager can retain oversight of you.

• Assemble evidence on your produc- tivity. Have you worked from home before? If so, show how much you achieved. You stated you would be more productive at home: How much more?

• Outline your reasons for working from home. Do you need to help care

for an aging relative, for instance? Would working from home save you commuting time you could use for work?

• Address management’s concerns. Research indicates the biggest ones are the possibility of abuse of the system and issues of fairness.

• Consider your relationship with your manager. Has he or she been sup- portive of you in the past? Is your manager approachable?

When you’re ready, discuss your request with your manager. Remember, pitching the idea of telecommuting is the same as pitching any idea—you’ve got to think about what’s in it for your employer, not for yourself.

Sources: Based on “The 2015 Workplace Flexibility Study,” WorkplaceTrends.com, February 3, 2015, https://workplacetrends .com/the-2015-workplace-flexibility-study/; T. S. Bernard, “For Workers, Less Flexible Companies,” The New York Times, May 20, 2014, B1, B7; and C. C. Miller and L. Alderman, “The Flexibility Gap,” The New York Times, December 14, 2014, 1, 5.

The opinions provided here are of the manag- ers and authors only and do not necessar- ily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here.

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telecommuting has potential benefits to society. One study estimated that if people in the United States telecommuted half the time, carbon emissions would be reduced by approximately 51 metric tons per year. Environmental savings could come from lower office energy consumption, fewer traffic jams that emit greenhouse gases, and a reduced need for road repairs.43

Telecommuting has several downsides too. In today’s team-focused work- place, telecommuting may lead to social loafing (i.e., employees shirking responsibility in a team setting), especially when the employees have many family responsibilities but their teammates do not.44 Your manager working remotely can affect your performance negatively.45 Managers are also chal- lenged to handle the demotivation of office workers who feel they are unfairly denied the freedom of telecommuters.46 Contrary to Mayer’s conclusions for Yahoo!, research indicates that more creative tasks may actually be best suited for telecommuting, whereas dull repetitive tasks like data entry decrease motivation and thus performance for remote workers.47

From the employee’s standpoint, telecommuting can increase feelings of isolation as well as reduce job satisfaction and coworker relationship qual- ity.48 Research indicates that if you are forced to work from home, you may experience more work-family conflict, perhaps because it often increases work hours beyond the contracted workweek.49 Telecommuters are also vulnerable to the “out of sight, out of mind” effect: Employees who aren’t at their desks miss meetings and don’t share in day-to-day informal workplace interactions, which may put them at a disadvantage when it comes to raises and promotions because they’re perceived as not putting in the requisite face time.50

The success of telecommuting always depends on the quality of communica- tions to establish good, though remote, working relationships. Telecommuting certainly does appear to make sense given changes in technology, the nature of work, and preferences of younger workers. Yet as the Yahoo! experience shows, some leaders do not think those benefits outweigh the costs.

Who Works from Home?

Source: Bureau of Labor Statistics, Table 6, from Economic News Release, “American Time Use Survey Summary,” June 24, 2016, https://www.bls.gov/ news.release/atus.t06.htm.








Bachelor’s degree or



Percentage of people working from home

Some college or

associate degree


High school diploma



Less than high school



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266 PART 2 The Individual

equal footing with the interests of management and stockholders by including a small group of employees as participants in decision making. In the United Kingdom, Ireland, Australia, and New Zealand, representative participation was originally the only EIP program, formed to allow employee representatives to discuss issues outside union agreements, and the representatives were all from the union. However, representative groups are now increasingly a mix of union and nonunion, separate from the union arrangement.66

The two most common forms of representation are works councils and board representatives. Works councils are groups of nominated or elected employees who must be consulted when management makes decisions about employees. Board representatives are employees who sit on a company’s board of directors and represent employees’ interests.

The influence of representative participation on working employees seems to be mixed, but generally an employee would need to feel his or her inter- ests are well represented and make a difference to the organization for moti- vation to increase. Thus, representative participation as a motivational tool is surpassed by more direct participation methods.

In sum, EIP programs clearly have the potential to increase employees’ intrinsic motivation. The opportunity to make and implement decisions—and then see them work out—can contribute to all desirable organizational out- comes. Giving employees control over key decisions, along with ensuring that their interests are represented, can enhance feelings of procedural justice. But like any other initiatives, EIP programs must be designed carefully.

Using Rewards to Motivate Employees As we saw in Chapter 3, pay is not the only factor driving job satisfaction. How- ever, it does motivate people, and companies often underestimate its impor- tance. Although not as important as enjoyment of one’s work and the job fitting

representative participation A system in which workers participate in organizational decision making through a small group of representative employees.

8-5 Demonstrate how the different types of variable- pay programs can increase employee motivation.

Employee Involvement Employee involvement and participation (EIP)51 is a process that uses employ- ees’ input to increase their commitment to organizational success. If workers are engaged in decisions that increase their autonomy and control over their work lives, they will become more motivated, more committed to the organiza- tion, more productive, and more satisfied with their jobs. These benefits don’t stop with individuals—when teams are given more control over their work, morale and performance increase as well.52

To be successful, EIP programs should be tailored to local and national norms.53 A study of four countries, including India and the United States, confirmed the importance of modifying practices to reflect national culture.54 While U.S. employees readily accepted EIP programs, managers in India who tried to empower their employees were rated low by those employees. These reactions are consistent with India’s high power-distance culture, which accepts and expects differences in authority. The work culture in India may not be in as much transition as it is in China, in which some employees are becoming less high power-distance oriented. Chinese workers who were very accepting of tra- ditional Chinese cultural values showed few benefits from participative decision making. However, Chinese workers who were less traditional were more satis- fied and had higher performance ratings under participative management.55 Another study conducted in China showed that involvement increased employ- ees’ thoughts and feelings of job security, which enhanced their well-being.56 These differences within China may well reflect the current transitional nature of Chinese culture. For example, research in urban China indicated that some aspects of EIP programs, namely, those that favor consultation and expression but not participation in decision making, yield higher job satisfaction.57

Examples of Employee Involvement Programs Let’s look at two major forms of employee involvement—participative manage- ment and representative participation—in more detail.

Participative Management Common to all participative management programs is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors.58 This sharing can occur either formally through, say, briefings or surveys, or informally through daily consultations as a way to enhance motivation through trust and commit- ment.59 Participative management has, at times, been considered a panacea or cure-all for poor morale and low productivity—indeed, evidence suggests that participative management reduces the negative effects of job insecurity on sat- isfaction and turnover intentions.60 Participative management techniques such as quality circles have been found in one review to have a moderate effect on job performance.61 For participative management to be effective, however, fol- lowers must have trust and confidence in their leaders and be prepared for the change in management style, whereas leaders should avoid coercive tech- niques, stress the organizational consequences of decision making to their fol- lowers, and review progress periodically.62

Studies of the participation–organizational performance relationship have yielded more mixed findings.63 Organizations that institute participative man- agement may realize higher stock returns, lower turnover rates, and higher labor productivity, although these effects are typically not large.64

Representative Participation Most countries in western Europe require com- panies to practice representative participation.65 Representative participation redistributes power within an organization, putting labor’s interests on a more

8-4 Describe how employee involvement measures can motivate employees.

employee involvement and participation (EIP) A participative process that uses the input of employees to increase employee commitment to organizational success.

participative management A process in which subordinates share a significant degree of decision-making power with their immediate superiors.

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equal footing with the interests of management and stockholders by including a small group of employees as participants in decision making. In the United Kingdom, Ireland, Australia, and New Zealand, representative participation was originally the only EIP program, formed to allow employee representatives to discuss issues outside union agreements, and the representatives were all from the union. However, representative groups are now increasingly a mix of union and nonunion, separate from the union arrangement.66

The two most common forms of representation are works councils and board representatives. Works councils are groups of nominated or elected employees who must be consulted when management makes decisions about employees. Board representatives are employees who sit on a company’s board of directors and represent employees’ interests.

The influence of representative participation on working employees seems to be mixed, but generally an employee would need to feel his or her inter- ests are well represented and make a difference to the organization for moti- vation to increase. Thus, representative participation as a motivational tool is surpassed by more direct participation methods.

In sum, EIP programs clearly have the potential to increase employees’ intrinsic motivation. The opportunity to make and implement decisions—and then see them work out—can contribute to all desirable organizational out- comes. Giving employees control over key decisions, along with ensuring that their interests are represented, can enhance feelings of procedural justice. But like any other initiatives, EIP programs must be designed carefully.

Using Rewards to Motivate Employees As we saw in Chapter 3, pay is not the only factor driving job satisfaction. How- ever, it does motivate people, and companies often underestimate its impor- tance. Although not as important as enjoyment of one’s work and the job fitting

representative participation A system in which workers participate in organizational decision making through a small group of representative employees.

8-5 Demonstrate how the different types of variable- pay programs can increase employee motivation.

Bernd Osterloh, chair of Volkswagen’s works councils, speaks to production line workers at company headquarters in Wolfsburg, Germany. Volkswagen (VW) includes employees in decision making by allowing them to participate in discussions about work rules, the company’s finances and business plans, and workplace productivity and safety. Source: Fabian Bimmer/Reuters

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well with other areas of an employee’s life, approximately 60 percent of respon- dents to an American Psychological Association survey indicated that they were staying with their current employer because of the pay and benefits.67

Given that pay is so important, will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? In this section, we consider (1) what to pay employees (decided by establishing a pay structure), and (2) how to pay individual employees (decided through variable-pay plans).

What to Pay: Establishing a Pay Structure There are many ways to pay employees. The process of initially setting pay lev- els entails balancing internal equity—the worth of the job to the organization (usually established through a technical process called job evaluation), and external equity—the competitiveness of an organization’s pay relative to pay in its industry (usually established through pay surveys). Obviously, the best pay system reflects what the job is worth and also stays competitive relative to the labor market.

Some organizations prefer to pay above the market, while some may lag the market because they can’t afford to pay market rates or they are willing to bear the costs of paying below market (namely, higher turnover because people are lured to better-paying jobs). Some companies that have realized impres- sive gains in income and profit margins have done so in part by holding down employee wages.68

Pay more, and you may get better-qualified, more highly motivated employ- ees who will stay with the organization longer. A study covering 126 large orga- nizations found employees who believed they were receiving a competitive pay level experienced higher morale and were more productive, and customers were more satisfied as well.69 But pay is often the highest single operating cost for an organization, which means paying too much can make the organiza- tion’s products or services too expensive. It’s a strategic decision an organiza- tion must make, with clear trade-offs.

In the case of Walmart, it appears that its strategic decision on pay did not work. While annual growth in U.S. stores slowed to around 1 percent in 2011, one of Walmart’s larger competitors, Costco, grew around 8 percent. The average

Cary Chin works at the front desk for Gravity Payments, a credit card processing firm in Seattle, where the cost of living is extremely high. Grav- ity’s CEO Dan Price established a new pay structure for all employees of a $70,000 base salary to improve their quality of life and motivate them to work harder on achieving high customer satisfaction. Source: Ted S. Warren/AP Images

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worker at Costco made approximately $45,000 compared to approximately $17,500 for the average worker at Walmart-owned Sam’s Club. Costco’s strategy was that it will get more if it pays more—and higher wages resulted in increased employee productivity and reduced turnover. Given the recent Walmart deci- sion to increase worker wages throughout the organization, perhaps its execu- tives agree.70

How to Pay: Rewarding Individual Employees through Variable-Pay Programs “Why should I put any extra effort into this job?,” asked Anne, a fourth-grade elementary schoolteacher in Denver, Colorado. “I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do anything above the minimum to get by?” Comments like Anne’s have been voiced by school- teachers for decades because pay increases were tied to seniority. Recently, how- ever, many states have altered their compensation systems to motivate teachers by linking pay to results in the classroom, and other states are considering such  programs.71 Many organizations, public and private, are moving away from pay based on seniority or credentials.

Piece-rate, merit-based, bonus, profit-sharing, and employee stock owner- ship plans are all forms of a variable-pay program (also known as pay for perfor- mance), which bases a portion of an employee’s pay on some individual and/ or organizational measure of performance.72 The variable portion may be all or part of the paycheck, and it may be paid annually or upon attainment of bench- marks. It can also be either optional for the employee or an accepted condition of employment.73 Variable-pay plans have long been used to compensate sales- people and executives, but the scope of variable-pay jobs has broadened.

Around the world, about 84 percent of companies offer some form of variable-pay plan.74 Most organizations (70 percent) use a combination of organization-, department-, team-, and individual-level awards, whereas less than a third use only organization-wide or department-, team-, or individual- level awards exclusively.75 For 2017 exempt workers (e.g., salaried workers who are not covered under the Fair Labor Standards Act [FLSA]), organizations are projecting to reward employees 11.6 percent of their salaries, on average, with a variable-pay method.76

Unfortunately, not all employees see a strong connection between pay and performance. although it seems that the type of plan matters. As we stated, teacher pay-for-performance plans are starting to be used more frequently, par- ticularly those that are based on student test scores; recent research on thousands of teachers in the United States has shown that these programs (1) are not hav- ing a positive impact on teacher motivation or teaching practices and (2) have actually led to higher levels of stress, along with counterproductive work behav- iors, such as cheating and even bullying of students to perform better on tests.77

Empirically, the results of pay-for-performance plans are mixed; the context and receptivity of the individual to the plan plays a large role. For instance, one study of 438 Chinese and Taiwanese supervisor–subordinate dyads found that employee creativity and intrinsic motivation was bolstered by pay-for-performance plans, but only when employees trusted management and when guanxi (spe- cific, personal connections between subordinates, supervisors, and coworkers) played less of a role in human resources (HR) practices.78 Leadership (see Chapter 12) also plays a role, with pay-for-performance plans leading to per- formance more clearly when contingent reward leadership and other positive leadership behaviors are used.79 Extraverted and emotionally stable individuals tend to be more receptive to and perform better under pay for performance, whereas conscientious employees were not as receptive.80

variable-pay program A pay plan that bases a portion or all of an employee’s pay on some individual and/or organizational measure of performance.

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Secrecy plays a role in the motivational success of variable-pay plans. In some government and nonprofit agencies, pay amounts are either specifically or generally made public, but most U.S. organizations encourage or require pay secrecy.81 Is this good or bad? Unfortunately, it’s bad: Pay secrecy has a detrimental effect on job performance. Even worse, it adversely affects high performers more than other employees. It very likely increases employees’ perception that pay is subjective, which can be demotivating. Individual pay amounts may not need to be broadcast to restore the balance, but if general pay categories are made public and employees feel variable pay is linked objectively to their performance, the motivational effects of variable pay can be retained.82

The fluctuation in variable pay is what makes these programs attractive to management. It turns part of an organization’s fixed labor costs into a vari- able cost, thus reducing expenses when performance declines. For example, when the U.S. economy encountered a recession in 2001 and again in 2008, companies with variable pay could reduce their labor costs much faster than others could.83 Over time, low performers’ pay stagnates, while high perform- ers enjoy pay increases commensurate with their contributions. However, it appears that the organization’s return on pay for performance varies over time as well. One study of shareholder returns of the U.S. S&P’s 500 firms between 1998 and 2005 suggests that, although pay-for-performance plans (including stock options and bonuses) are most effective for CEOs when they start out, their relationship with shareholder returns slowly decreases over time; the relationship between traditional plans and shareholder returns increases over time.84

Let’s examine the different types of variable-pay programs in more detail.

Piece-Rate Pay The piece-rate pay plan has long been popular as a means of compensating production workers with a fixed sum for each unit of production completed, but it can be used in any organizational setting where the outputs are similar enough to be evaluated by quantity.85 A pure piece-rate plan pro- vides no base salary and pays the employee only for what he or she produces. Ballpark workers selling peanuts and soda are frequently paid piece-rate. If they sell 40 bags of peanuts at $1 each for their earnings, their take is $40. The more peanuts they sell, the more they earn. Alternatively, piece-rate plans are some- times distributed to sales teams, so a ballpark worker makes money on a por- tion of the total number of bags of peanuts sold by the group during a game.

Piece-rate plans are known to produce higher productivity and wages, so they can be attractive to organizations and motivating for workers.86 In fact, one major Chinese university increased its piece-rate pay for articles by profes- sors and realized an increase of 50 percent in research productivity.87 In the work- place, employees most likely to be motivated by piece-rate plans are managers and more tenured workers. Low-performing workers are generally not inter- ested in piece-rate pay, for obvious reasons—they won’t get paid much!

The chief concern of both individual and team piece-rate workers is finan- cial risk. A recent experiment in Germany found that 68 percent of risk-averse individuals prefer an individual piece-rate system, and that lower performers prefer team piece-rate pay. Why? The authors suggested risk-averse and high- performing individuals would rather take their chances on pay based on what they can control (their own work) because they are concerned others will slack off in a team setting.88 This is a valid concern, as we will discuss in the next chapter. Organizations, on the other hand, should verify that their piece-rate plans are indeed motivating to individuals. European research has suggested that when the pace of work is determined by uncontrollable outside factors such as customer requests rather than internal factors such as coworkers, tar- gets, and machines, a piece rate plan is not motivating.89 Either way, managers

piece-rate pay plan A pay plan in which workers are paid a fixed sum for each unit of production completed.

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must be mindful of the motivation for workers to decrease quality and thus increase their speed of output.

Thus, while piece-rate plans can be a powerful motivator in many organiza- tional settings, an obvious limitation is that they’re not feasible for many jobs. An emergency room (ER) doctor and nurse can earn significant salaries regard- less of the number of patients they see or their patients’ outcomes. Would it be better to pay them only if their patients fully recover? It seems unlikely that most would accept such a deal, and it might cause unanticipated consequences as well (such as ERs turning away patients with terminal diseases or life-threatening injuries). Although incentives are motivating and relevant for some jobs, it is unrealistic to think they work universally.

Merit-Based Pay A merit-based pay plan pays for individual performance based on performance appraisal ratings.90 A main advantage is that high performers can get bigger raises. If designed correctly, merit-based plans let individuals per- ceive a strong relationship between their performance and their rewards.91

Most large organizations have merit pay plans, especially for salaried employ- ees. Merit pay is slowly taking hold in the public sector. For example, most U.S. government employees are unionized, and the unions that represent them have usually demanded that pay raises be based solely on seniority. Claiming a new era of accountability, however, New Jersey governor Chris Christie implemented merit pay for teachers. The Newark teacher’s union approved the plan, which included funding from Facebook CEO Mark Zuckerberg.92 In another unusual move, New York City’s public hospital system pays doctors based on how well they reduce costs, increase patient satisfaction, and improve the quality of care.93

A move away from merit pay, on the other hand, is coming from some orga- nizations that don’t feel it separates high and low performers enough. “There’s a very strong belief and there’s evidence and academic research that shows that variable pay does create focus among employees,” said Ken Abosch, a com- pensation manager at human resources consulting firm Aon Hewitt. But when the annual review and raise are months away, the motivation of this reward for high performers diminishes. Even companies that have retained merit pay are rethinking the allocation.94

Although you might think a person’s average level of performance is the key factor in merit pay decisions, the projected level of future performance also plays a role. One study found that National Basketball Association (NBA) players whose performance was on an upward trend were paid more than their average performance would have predicted. Managers of all organizations may unknowingly be basing merit pay decisions on how they think employees will perform, which may result in overly optimistic (or pessimistic) pay decisions.95

Despite their intuitive appeal, merit pay plans have several limitations. One is that they are typically based on an annual performance appraisal and thus are only as valid as the performance ratings, which are often subjective. This brings up issues of discrimination, as we discussed in Chapter 2. Research indi- cates that African American employees receive lower performance ratings than white employees, women’s ratings are higher than men’s, and there are demo- graphic differences in the distribution of salary increases, even with all other factors equal.96 Another limitation is that the pay-raise pool of available funds fluctuates on economic or other conditions that have little to do with individual performance. For instance, a colleague at a top university who performed very well in teaching and research was given a pay raise of $300. Why? Because the pay-raise pool was very small. Yet that amount is more of a cost-of-living increase than a pay-for-performance one. Unions typically resist merit pay plans. Rela- tively few teachers are covered by merit pay for this reason. Instead, seniority- based pay, which gives all employees the same raises, predominates.

merit-based pay plan A pay plan based on performance appraisal ratings.

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The concept and intention of merit pay—that employees are paid for performance—is sound. For employee motivation purposes, however, merit pay should be only one part of a performance recognition program.

Bonus An annual bonus is a significant component of total compensation for many jobs.97 Once reserved for upper management, bonus plans are now routinely offered to employees in all levels of the organization. The incentive effects should be higher than those of merit pay because, rather than paying for previous performance now rolled into base pay, bonuses reward recent performance (merit pay is cumulative, but the increases are generally much smaller than bonus amounts). When times are bad, firms can cut bonuses to reduce compensation costs. Workers on Wall Street, for example, saw their average bonus drop by more than a third as their firms faced greater scrutiny.98

Bonus plans have a clear upside: They are motivating for workers. As an example, a recent study in India found that when a higher percentage of overall pay was reserved for the potential bonuses of managers and employees, produc- tivity increased.99 This example also highlights the downside of bonuses: They leave employees’ pay more vulnerable to cuts. This is problematic especially when employees depend on bonuses or take them for granted. “People have begun to live as if bonuses were not bonuses at all but part of their expected annual income,” said Jay Lorsch, a Harvard Business School professor. KeySpan Corp., a 9,700-employee utility company in New York, combined yearly bonuses with a smaller merit-pay raise. Elaine Weinstein, KeySpan’s senior vice president of human resources, credits the plan with changing the culture from “entitle- ment to meritocracy.”100

The way bonuses and rewards are categorized also affects peoples’ moti- vation. Although it is a bit manipulative, splitting rewards and bonuses into categories—even if the categories are meaningless—may increase motivation.101 Why? Because people are more likely to feel they missed out on a reward if they don’t receive one from each category, and then work harder to earn rewards from more categories. Short-term bonuses can also have an effect: In a high-tech manufacturing factory, cash, family meal vouchers, and employee recognition (see later in this chapter) all increased performance by 5 percent, and nonmoney- based bonuses were actually more effective at improving performance.102

bonus A pay plan that rewards employees for recent performance rather than historical performance.

Chinese Internet firm Tencent Holdings rewards employees with attractive incentives that include cash bonuses for lower-ranking employees. The young men shown here were among 5,000 employees who received a special bonus tucked in red envelopes and personally handed out by Tencent’s CEO and cofounder Pony Ma. Source: Keita Wen sz/ICHPL Imaginechina/AP Images

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Profit-Sharing Plan A profit-sharing plan distributes compensation based on some established formula designed around a company’s profitability.103 Compen- sation can be direct cash outlays or, particularly for top managers, allocations of stock options. When you read about executives like Mark Zuckerberg, who accepts a modest $1 salary, remember that many executives are granted generous stock options. In fact, Zuckerberg has made as much as $2.3 billion after cash- ing out some of his stock options.104 Of course, the clear majority of profit- sharing plans are not so grand in scale. For example, Jacob Luke started his own lawn-mowing business at age 13. He employed his brother Isaiah and friend Mar- cel and paid them each 25 percent of the profits he made on each yard.

Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them.105 These plans have also been linked to higher levels of employee commitment, especially in small organizations.106 Profit sharing at the organizational level appears to have positive impacts on employee attitudes; employees report a greater feeling of psychological ownership.107 Recent research in Canada indicates that profit-sharing plans motivate individuals to higher job performance when they are used in combination with other pay-for-performance plans.108 Obviously, profit sharing does not work when there is no reported profit per se, such as in nonprofit organizations, or often in the public sector. However, profit sharing may make sense for many organizations, large or small.

profit-sharing plan An organization-wide program that distributes compensation based on some established formula designed around a company’s profitability.

An Ethical Choice Sweatshops and Worker Safety

Industrialized countries have come a long way in terms of worker safety and compensation. The number of worker-related injuries has decreased substantially over generations, and many employees earn better wages than they did in the past. Unfortu- nately, the same cannot be said for all parts of the world.

To keep costs down, many Western companies and their managers turn to suppliers in developing nations, where people have little choice but to work for low pay and no benefits, in top-down management structures without par- ticipative management opportunities or unions to represent them. Unregulated and even unsafe working conditions are common, especially in the garment industry. However, three recent accidents in Bangladesh are raising questions about the ethics of tolerating and sup- porting such conditions. In November 2012, a fire at the Tazreen Fashion fac- tory that made low-cost garments for sev- eral U.S. stores, including Walmart, killed 112 workers. In April 2013, the collapse

of Rana Plaza, home to a number of gar- ment factories, killed more than 1,100. And in May 2013, a fire at the Tung Hai Sweater Company killed 8 workers. An investigation of the Rana Plaza incident revealed that the building had been con- structed without permits and from sub- standard materials. Although workers reported seeing and hearing cracks in the structure of the building, they were ordered back to work. The government has started to take action in Bangla- desh. In April 2017, over 100 leather tanneries were shut down for numerous health and safety concerns.

In response, some companies such as PVH, owner of Tommy Hilfiger and Calvin Klein, as well as Tchibo, a German retailer, have signed the legally binding “IndustriALL” proposal, which requires overseas manufacturers to conduct building and fire-safety inspections regu- larly and to make their findings public. However, many other companies have not signed, and none of the 15 compa- nies whose clothing was manufactured at the Rana Plaza plant donated to the

International Labour Organization fund for survivors.

With the rise of CSR initiatives, what is the responsibility of organizations toward the working conditions of their subcontractors, at home or abroad? Pro- fessor Cindi Fukami asks, “Should [com- panies] outsource the production of these items made under conditions that wouldn’t be approved of in the United States, but . . . are perfectly legal in the situation where they are [produced]?” There is clearly not an easy solution.

Sources: Based on B. Kennedy, “The Bangla- desh Factory Collapse One Year Later,” CBS, April 23, 2014, http://www.cbsnews.com/ news/the-bangladesh-factory-collapse- one-year-later/; J. Kenny and A. Matthews, “Bangladesh Cuts Power to Leather District After Years of Environmental Violations,” PBS Newshour: The Rundown, April 11, 2017, http://www.pbs.org/newshour/rundown/ bangladesh-cuts-power-leather-district- years-health-violations/; J. O’Donnell and C. Macleod, “Latest Bangladesh Fire Puts New Pressure on Retailers,” USA Today, May 9, 2013, www.usatoday.com; and T. Hayden, “Tom Hayden: Sweatshops Attract Western Investors,” USA Today, May 17, 2013, www .usatoday.com.

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Employee Stock Ownership Plan An employee stock ownership plan (ESOP) is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits.109 Research on ESOPs indicates they increase employee satisfaction and innovation.110 ESOPs have the poten- tial to increase job satisfaction only when employees psychologically expe- rience ownership.111 Even so, ESOPs may not inspire lower absenteeism or greater motivation,112 perhaps because the employee’s actual monetary ben- efit comes with cashing in the stock at a later date. Thus, employees need to be kept regularly informed of the status of the business and have the oppor- tunity to influence it positively to feel motivated toward higher personal performance.113

ESOPs for top management can reduce unethical behavior. For instance, CEOs are less likely to manipulate firm earnings reports to make themselves look good in the short run when they have an ownership share.114 ESOPs are also tools that can be used for community wealth building, such as the Cleve- land model of networked worker cooperatives in Ohio.115 Of course, not all com- panies want ESOPs, and they won’t work in all situations, but they can be an important part of an organization’s motivational strategy.

Evaluation of Variable Pay Do variable-pay programs increase motivation and productivity? Generally, yes, but that doesn’t mean everyone is equally moti- vated by them.116 Many organizations have more than one variable-pay element in operation, such as an ESOP and bonuses, so managers should evaluate the effectiveness of the plan in terms of the employee motivation gained from each element separately and from all elements together. Managers should monitor their employees’ performance-reward expectancy because a combination of elements that makes employees feel that their greater performance will yield them greater rewards will be the most motivating.117

employee stock ownership plan (ESOP) A company-established benefits plan in which employees acquire stock, often at below-market prices, as part of their benefits.

Using Benefits to Motivate Employees Now that we have discussed what and how to pay employees, let’s discuss two other motivating factors organizations must decide: (1) what benefits and choices to offer (such as flexible benefits), and (2) how to construct employee recognition programs. Like pay, benefits are both a provision and a motiva- tor. Whereas organizations of yesteryear issued a standard package to every employee, contemporary leaders understand that each employee values ben- efits differently. A flexible program turns the benefits package into a motiva- tional tool.

Flexible Benefits: Developing a Benefits Package Todd E. is married and has three young children; his wife is at home full- time. His Citigroup colleague Allison M. is married too, but her husband has a high-paying job with the federal government, and they have no children.

8-6 Show how flexible benefits turn benefits into motivators.

MyLab Management Watch It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the video exercise.

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Todd is concerned about having a good medical plan and enough life insur- ance to support his family in case it’s needed. In contrast, Allison’s husband already has her medical needs covered on his plan, and life insurance is a low priority. Allison is more interested in extra vacation time and long-term financial benefits such as a tax-deferred savings plan.

A standardized benefits package is unlikely to meet the needs of Todd and Allison well. Citigroup can cover both sets of needs, however, with flexible benefits.

Consistent with expectancy theory’s thesis that organizational rewards should be linked to each employee’s goals, flexible benefits individual- ize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. Flexible benefits can accommodate differences in employee needs based on age, marital status, part- ner’s benefits status, and number and age of dependents.

Benefits in general can be a motivator for a person to go to work and for a person to choose one organization over another. But are flexible benefits more motivating than traditional plans? It’s difficult to tell. Some organizations that have moved to flexible plans report increased employee retention, job satisfac- tion, and productivity. However, flexible benefits may not substitute for higher salaries when it comes to motivation, as research in China suggests.118 As more organizations worldwide adopt flexible benefits, the individual motivation they produce will likely decrease (the plans will be seen as a standard work provi- sion). The downsides of flexible benefit plans may be obvious: They may be costlier to administrate, and identifying the motivational impact of different provisions is challenging.

Given the intuitive motivational appeal of flexible benefits, it may be sur- prising that their use is not yet global. In China, only a limited percentage of companies offer flexible plans,119 as in other Asian countries.120 Almost all major corporations in the United States offer them, and a recent survey of 211 Canadian organizations found that 60 percent offer flexible bene- fits, up from 41 percent in 2005.121 A similar survey of firms in the United Kingdom found that nearly all major organizations offer flexible benefits programs, with options ranging from supplemental medical insurance to holiday trading (with coworkers), discounted bus travel, and child care assistance.122

Using Intrinsic Rewards to Motivate Employees We have discussed motivating employees through job design and by the extrin- sic rewards of pay and benefits. On an organizational level, are those the only ways to motivate employees? Not at all! We would be remiss if we overlooked the intrinsic rewards that organizations can provide, such as employee recogni- tion programs, discussed next.

Employee Recognition Programs Laura makes $8.50 per hour working at her fast-food job in Pensacola, Florida, and the job isn’t very challenging or interesting. Yet Laura talks enthusiastically about the job, her boss, and the company that employs her. “What I like is the fact that Guy [her supervisor] appreciates the effort I make. He compliments

flexible benefits A benefits plan that allows each employee to put together a benefits package tailored to his or her own needs and situation.

8-7 Identify the motivational benefits of intrinsic rewards.

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me regularly in front of the other people on my shift, and I’ve been chosen Employee of the Month twice in the past six months. Did you see my picture on that plaque on the wall?”

Organizations are increasingly realizing what Laura knows: Recognition programs and other ways of increasing an employee’s intrinsic motivation work. An employee recognition program is a plan to encourage specific behaviors by formally appreciating specific employee contributions.123 Employee recogni- tion programs range from a spontaneous and private thank-you to widely pub- licized formal programs in which the procedures for attaining recognition are clearly identified.

As companies and government organizations face tighter budgets, non- financial incentives become more attractive. Everett Clinic in Washington State uses a combination of local and centralized initiatives to encourage man- agers to recognize employees.124 Employees and managers give “Hero Grams” and “Caught in the Act” cards to colleagues for exceptional accomplishments at work. Part of the incentive is simply to receive recognition, but there are also drawings for prizes based on the number of cards a person receives. Multinational corporations like Symantec Corporation, Intuit, and Panduit have also increased their use of recognition programs. Symantec claims it increased engagement 14 percent in less than a year due to the Applause rec- ognition program administered by Globoforce, a corporation that implements employee recognition programs.125 Centralized programs across multiple offices in different countries can help ensure that all employees, regardless of where they work, can be recognized for their contribution to the work envi- ronment.126 Recognition programs are common in Canadian and Australian firms as well.127

Research suggests that financial incentives may be more motivating in the short term, but in the long run nonfinancial incentives work best.128 Surpris- ingly, there is not a lot of research on the motivational outcomes or global use of employee recognition programs. However, recent studies indicate that employee recognition programs are associated with self-esteem, self-efficacy, and job satisfaction,129 and the broader outcomes from intrinsic motivation are well documented.

An obvious advantage of recognition programs is that they are inexpensive: Praise is free!130 With or without financial rewards, they can be highly moti- vating to employees. Despite the increased popularity of such programs, though, critics argue they are highly susceptible to political manipulation by management. When applied to jobs for which performance factors are relatively objective, such as sales, recognition programs are likely to be perceived by employees as fair. In most jobs, however, performance crite- ria aren’t self-evident, which allows managers to manipulate the system and recognize their favorites. Abuse can undermine the value of recognition programs and demoralize employees. Therefore, where formal recognition programs are used, care must be taken to ensure fairness. Where they are not, it is important to motivate employees by consistently recognizing their performance efforts.

employee recognition program A plan to encourage specific employee behaviors by formally appreciating specific employee contributions.

MyLab Management Try It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the Mini Sim.

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Summary As we’ve seen in this chapter, understanding what motivates individuals is ultimately key to organizational performance. Employees whose differ- ences are recognized, who feel valued, and who can work in jobs tailored to their strengths and interests will be motivated to perform at the high- est levels. Employee participation can also increase employee productivity, commitment to work goals, motivation, and job satisfaction. However, we cannot overlook the powerful role of organizational rewards in influencing motivation. Pay, benefits, and intrinsic rewards must be designed carefully and thoughtfully to enhance employee motivation toward positive organiza- tional outcomes.

Implications for Managers ● Recognize individual differences. Spend the time necessary to under-

stand what’s important to each employee. Design jobs to align with indi- vidual needs and maximize their motivation potential.

● Use goals and feedback. You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals.

● Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits pack- ages, and solving productivity and quality problems.

● Link rewards to performance. Rewards should be contingent on perfor- mance, and employees must perceive the link between the two.

● Check the system for equity. Employees should perceive that individual effort and outcomes explain differences in pay and other rewards.

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Sources: Based on J. Surowiecki, “Face Time,” The New Yorker, March 18, 2013, www.newyorker.com; and L. Taskin and F. Bridoux, “Telework: A Challenge to Knowledge Transfer in Organizations,” International Journal of Human Resource Management 21, no. 13 (2010): 2503–20.

Face Time Matters POINT

A lthough allowing people to work from home is gaining popu-larity, telecommuting will only hurt firms and their employers. Sure, employees say they’re happier when their organization allows them the flexibility to work wherever they choose, but who wouldn’t like to hang around at home in their pajamas pretending to work? I know plenty of colleagues who say, with a wink, that they’re taking off to “work from home” the rest of the day. Who knows whether they are really contributing?

The bigger problem is the lack of face-to-face interaction between employees. Studies have shown that great ideas are born through interdependence, not independence. It’s during those informal inter- actions around the water cooler or during coffee breaks that some of the most creative ideas arise. If you take that away, you stifle the organization’s creative potential.

Trust is another problem. Ever trust someone you haven’t met? I  didn’t think so. Again, face-to-face interactions allow people to establish trusting relationships more quickly, which fosters smoother social interactions and allows the company to perform better.

But enough about employers. Employees also benefit when they are in the office. If you’re out of sight, you’re out of mind. Want that big raise or promotion? You’re not going to get it if your supervisor doesn’t even know who you are.

So think twice the next time you either want to leave the office early or not bother coming in at all to “work from home.”


So-called face time is overrated. If all managers do is reward employees who hang around the office the longest, they aren’t being very good managers. Those who brag about the 80 hours they put in at the office (being sure to point out they were there on weekends) aren’t necessarily the top performers. Being present is not the same thing as being efficient.

Besides, there are all sorts of benefits for employees and employ- ers who take advantage of telecommuting practices. For one, it’s seen as an attractive perk companies can offer. With so many dual-career earners, the flexibility to work from home on some days can go a long way toward achieving a better balance between work and family. That translates into better recruiting and better retention. In other words, you’ll get and keep better employees if you offer the ability to work from home.

Plus, studies have shown that productivity is higher, not lower, when people work from home. This result is not limited to the United States. For example, one study found that Chinese call center employ- ees who worked from home outproduced their face-time counterparts by 13 percent.

You say all these earth-shattering ideas would pour forth if people interacted. I say consider that one of the biggest workplace distrac- tions is chatty coworkers. Although I concede there are times when face time is beneficial, the benefits of telecommuting far outweigh the drawbacks.

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MyLab Management Discussion Questions Go to www.pearson.com/mylab/management to complete the problems marked with this icon .

QUESTIONS FOR REVIEW 8-1 How does the job charactieristics model motivate individuals?

8-2 What are the major ways that jobs can be redesigned?

8-3 What are the motivational benefits of the specific alternative work arrangements?

8-4 How can employee involvement measures motivate employees?

8-5 How can the different types of variable-pay programs increase employee motivation?

8-6 How can flexible benefits motivate employees? 8-7 What are the motivational benefits of intrinsic rewards?

APPLICATION AND EMPLOYABILITY Organizations and human resource departments can alter or supplement tasks, duties, and responsibilities in many ways to make them more motivating to employees. This chapter on job design and redesign, alternative work arrangements, employee involvement and participation, and rewards and benefits is directly applicable to how OB can make you more employable. Future OB and HR pro- fessionals can use this toolkit in their future work assign- ments to reduce turnover, improve employee satisfaction and retention, and reduce conflict in the workplace. In this chapter so far, you have developed your critical think- ing and knowledge and application skills by pondering

whether money can “buy” happiness, considered whether flextime would be viable for your work situation, exam- ined ethical issues underlying sweatshops and worker safety, and debated whether face time matters when con- sidering telecommuting. In this section, you will continue to develop these skills, along with your communication skills, by working with a group to design an organizational development and compensation plan for automotive sales consultants; considering the effects of illegitimate tasks; forging an action plan for when employees provide feed- back but their supervisors do not listen; and considering the value of small, frequent pay raises.


EXPERIENTIAL EXERCISE Developing an Organizational Development and Compensation Plan for Automotive Sales Consultants

Break the class into groups of three to five. You are on a team of human resource professionals for

a new boutique car dealership that specializes in luxury vehicles. You have been tasked with designing an organiza- tional development and compensation plan for the team of automotive sales consultants who have just been hired. Using what you know about the car sales consultant job (and O*NET, if available, for retail salespersons: https://www .onetonline.org/link/summary/41-2031.00), complete the following and answer each question as a group. Assume that the budget is moderate in size: not too lavish, not too meager.

Questions 8-8. As a group, consider each of the five job character-

istics (skill variety, task identity, task significance, autonomy, and feedback). Then write down the amount of each you think the automotive sales consultant position has. To address each element of the five job characteristics (by improving the low elements or maintaining the high elements), develop a plan for how each characteristic can be improved or maintained.

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8-9. Next, how important do you think employee involvement and participation will be in these posi- tions? Develop a plan for how you will reasonably plan to include involvement or participation in designing these positions. Conversely, justify your reasoning for not having such a plan.

8-10. Think about what might be important (and reason- able) in terms of compensation for the automotive sales consultants. What types of rewards would you provide to the consultants? What type of plan would you select? What type of specific benefits packages would you make available?

ETHICAL DILEMMA You Want Me to Do What? You’re a bright, female investment analyst about to give a major presentation to a group of bankers supporting a corporate acquisition. After walking in and meeting the bankers before you give the presentation, you’re asked by your boss to “be a dear and serve them coffee.” Imagine the insult and awkwardness of such a situation—what do you do? Do you carry through with the task, sacrificing your dignity or doing something wrong because you can’t afford to lose the job? Or do you speak up?

A group of Swiss occupational health researchers have recently started a program of research on illegitimate tasks, or tasks that violate “norms about what can reasonably be expected from a given person” in a job. Therefore, ille- gitimate tasks are unethical and violate or offend one’s professional and task identity. What might cause supervi- sors and managers within organizations to allocate these kinds of tasks? One study points to a variety of organiza- tional characteristics, including competition for resources among departments or units, unfair resource allocation procedures, and an unclear decisional structure.

Researchers have found that these sorts of tasks can have some nasty outcomes. For one, illegitimate tasks lead to increased stress and CWB, even after controlling for the effort-reward imbalance, organizational justice,

and personality traits. Illegitimate tasks can literally keep you up at night: One study found that, on days in which these tasks were performed, the employees took longer to fall asleep and woke up more often in the middle of the night. Another study found that these tasks lead to high negative affect and psychological detachment at the end of the workday. Other studies found that illegitimate tasks lead to lowered self-esteem and job satisfaction from day to day, along with increases in anger and depression. Ille- gitimate tasks can also cause people to want to leave their jobs, although if their leader was appreciative of them, they were less likely to want to leave.

Questions 8-11. How do you think employees should respond when

given illegitimate tasks? How can an organiza- tion monitor the tasks it assigns to employees and ensure that the tasks are legitimate? Explain your answer.

8-12. Is there ever a case in which illegitimate tasks should be tolerated or “rightfully” given? Explain your answer.

8-13. How should the criterion of “legitimacy” be deter- mined? Explain.

Sources: Based on E. Apostel, C. J. Syrek, and C. H. Antoni, “Turnover Intention as a Response to Illegitimate Tasks: The Moderating Role of Appreciative Leadership,” International Journal of Stress Management (in press); L. Björk, E. Bejerot, N. Jacobshagen, and A. Härenstam, “I Shouldn’t Have to Do This: Illegitimate Tasks as a Stressor in Relation to Organizational Control and Resource Deficits,” Work & Stress 27, no. 3 (2013): 262–77; E. M. Eatough, L. L. Meier, I. Igic, A. Elfering, P. E. Spector, and N. K. Semmer, “You Want Me to Do What? Two Daily Diary Studies of Illegitimate Tasks and Employee Well-Being,” Journal of Organizational Behavior 37 (2016): 108–27; D. Pereira, N. K. Semmer, and A. Elfering, “Illegitimate Tasks and Sleep Quality: An Ambulatory Study,” Stress and Health 30 (2014): 209–21; N. K. Semmer, F. Tschan, L. L. Meier, S. Facchin, and N. Jacobshagen, “Illegitimate Tasks and Counterproductive Work Behavior,” Applied Psychology: An International Review 59, no. 1 (2010): 70–96; S. Sonnentag and T. Lischetzke, “Illegitimate Tasks Reach into After- work Hours: A Multilevel Study,” Journal of Occupational Health Psychology (in press); and M. Valcour, “How to Know Whether You’re Giving Your Team Needless Work,” Harvard Business Review, August 26, 2016, https://hbr.org/2016/08/how-to-know-whether-youre-giving-your-team-needless-work.

CASE INCIDENT 1 We Talk, But They Don’t Listen It’s a great feeling to be sought for your opinion and participation when your organization needs to make an important decision. But what happens when the organization’s managers don’t listen? Management consul tant Liz Ryan perhaps put it best: “When you

work for a company that is not interested in your opin- ion, you can tell. They make it obvious. Once you know in your gut that your boss is not interested in your opinion, what other choice do you have than to find another job?”

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Some suggest that these bosses perhaps should be let go. Given that bad members can lower employee satisfac- tion and engagement, supervisors who exercise this form of control often emphasize politics over productivity and abuse their power, while employees complain because of the lack of support they are getting. They are “thrown under the bus” and forced out of the loop, and communi- cation is all one way.

Giving employees a chance to voice their opinions as part of the process leads to improved justice perceptions and satisfaction, and thus regularly not listening to feed- back can be an issue. For example, one study found that both employees and managers recognize that paying lip service to employees and soliciting their suggestions with- out taking their advice occurs. Employees who became aware of this feigned interest were more reluctant to offer input later, experienced more conflicts with colleagues,

bullied others, and refused to participate in meetings. Conversely, employees who had their ideas implemented spoke up more often and had better interpersonal rela- tionships with their coworkers.

Questions 8-14. Do you think sometimes managers are justified

in not taking their employee’s advice? Why or why not?

8-15. How should managers handle their employees’ dissatisfaction with not having their advice put into practice?

8-16. Which do you think is the most effective form of employee involvement and participation (EIP) program, participative management or represen- tative management? Is it possible to implement elements of both? Why or why not?

Sources: Based on G. de Vries, K. A. Jehn, and B. W. Terwel, “When Employees Stop Talking and Start Fighting: The Detrimental Effects of Pseudo Voice in Organizations,” Journal of Business Ethics 105, no. 2 (2012): 221–30; H. R. Huhman, “5 Signs It’s Time to Fire a Company Manager,” Entrepreneur, May 28, 2014, https://www.entrepreneur.com/article/234184; and L. Ryan, “The Real Reason Good Employees Quit,” Forbes, March 31, 2017, https://www.forbes.com/sites/ lizryan/2017/03/31/the-real-reason-good-employees-quit/#1fe3cfa34b4e.

CASE INCIDENT 2 Pay Raises Every Day How do you feel when you get a raise? Happy? Rewarded? Motivated to work harder for that next raise? The hope of an increase in pay, followed by a raise, can increase employee motivation. However, the effect may not last. In fact, the “warm fuzzies” from a raise last less than a month, according to a recent study. If raises are distrib- uted annually, performance motivation can dip for many months between evaluations.

Some organizations have tried to keep the motivation going by increasing the frequency of raises. Currently, only about 5 percent of organizations give raises more than annually, but some larger employers, like discount website retailer Zulily, Inc., assess pay quarterly. Zulily CEO Darrell Cavens would like to do so even more fre- quently. “If it wasn’t a big burden, you’d almost want to work on it on a weekly basis,” he said. That’s because raises increase employee focus, happiness, engagement, and retention.

CEO Jeffrey Housenbold of online photo publisher Shutterfly, Inc., also advocates frequent pay assessments but for a different reason. The company gives bonuses four times a year to supplement its biannual raise struc- ture as part of a review of employee concerns. “You can resolve problems early versus letting them fester,” he said. Another reason is to increase feedback. Phone app designer Solstice Mobile gives promotions and sal- ary increases six times a year; with this structure, Kelly O’Reagan climbed from $10/hour to $47.50/hour in

4 years. The company’s CEO, John Schwan, said that young workers are especially motivated by the near- constant feedback. O’Reagan said, “Seeing that increase was like, ‘Wow, this is quite different than what I had ever dreamed of.’”

You might be wondering how organizations can keep the dollar increases to employees flowing. Organizations are wondering, too. One tactic is to start employees at a low pay rate. Ensilon, a marketing services company, has coupled low starting salaries with twice-yearly salary reviews. Initial job candidates are skeptical, but most of the new hires earn at least 20 percent more after 2 years than they would with a typical annual raise structure.

No one is saying frequent pay raises are cheap or easy to administrate. Pay itself is a complex issue, and maintain- ing pay equity adds another level of difficulty. Frequent pay reviews are motivating, but only for the people receiv- ing them—for the others, it’s a struggle to stay engaged. If a person has a track record of raises and then pay levels off, it can feel like a loss of identity as a strong performer rather than a natural consequence of achieving a higher level of pay. The frustration can lead to lower perfor- mance and increased turnover for high performers. CEO Schwan acknowledged, “It’s definitely a risk.”

Questions 8-17. Do you think frequent small raises versus annual

larger raises are more motivating? Why or why not?

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8-18. Do you think you would personally be more motivated by more frequent raises or by performance bonuses if the annual amounts were the same?

8-19. Annual pay raises in the United States are expected to be around 3 percent in the next few years. Do you think this percentage is motivating to employ- ees? Why or why not?

Sources: Based on R. Feintzeig, “When the Annual Raise Isn’t Enough,” The Wall Street Journal, July 16, 2014, B1, B5; J. C. Marr and S. Thau, “Falling from Great (and Not-So-Great) Heights: How Initial Status Position Influences Performance after Status Loss,” Academy of Management Journal 57, no. 1 (2014): 223–48; and “Pay Equity & Discrimination,” IWPR, http://www.iwpr.org/initiatives/ pay-equity-and-discrimination.

ENDNOTES 1 A. M. Grant, Y. Fried, and T. Juillerat, “Work Matters: Job Design in Classic and Contem- porary Perspectives,” in S. Zedeck (ed.), APA Handbook of Industrial and Organizational Psychology: Building and Developing the Organi- zation, Vol. 1 (Washington DC: APA, 2011): 417–53; and S. K. Parker, F. P. Morgeson, and G. Johns, “One Hundred Years of Work Design Research: Looking Back and Looking Forward,” Journal of Applied Psychology 102, no. 3 (2017): 403–20. 2 J. R. Hackman and G. R. Oldham, “Motiva- tion through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance 16 (1976): 250–79. 3 S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson, “Integrating Motivational, Social, and Contextual Work Design Features: A Meta-Analytic Summary and Theoretical Extension of the Work Design Literature,” Journal of Applied Psychology 92, no. 5 (2007): 1332–56. 4 B. M. Meglino and A. M. Korsgaard, “The Role of Other Orientation in Reactions to Job Characteristics,” Journal of Management 33, no. 1 (2007): 57–83. 5 J. L. Pierce, I. Jussila, and A. Cummings, “Psychological Ownership within the Job Design Context: Revision of the Job Char- acteristics Model,” Journal of Organizational Behavior 30, no. 4 (2009): 477–96. 6 C. B. Gibson, J. L. Gibbs, T. L. Stanko, P. Tesluk, and S. G. Cohen, “Including the ‘I’ in Virtuality and Modern Job Design: Extending the Job Characteristics Model to

Include the Moderating Effect of Individual Experiences of Electronic Dependence and Copresence,” Organization Science 22, no. 6 (2011): 1481–99. 7 R. F. Piccolo, R. Greenbaum, D. N. Den Har- tog, and R. Folger, “The Relationship between Ethical Leadership and Core Job Character- istics,” Journal of Organizational Behavior 31 (2010): 259–78. 8 Q.-J. Yeh, “Leadership, Personal Traits and Job Characteristics in R&D Organizations: A Taiwanese Case,” Leadership & Organization Development Journal 16, no. 6 (1995): 16–26. 9 M. A. Campion, L. Cheraskin, and M. J. Stevens, “Career-Related Antecedents and Outcomes of Job Rotation,” Academy of Man- agement Journal 37, no. 6 (1994): 1518–42. 10 T. Silver, “Rotate Your Way to Higher Value,” Baseline (March/April 2010): 12; and J. J. Salopek, “Coca-Cola Division Refreshes Its Talent with Diversity Push on Campus,” Workforce Management Online, March 2011, www.workforce.com. 11 Skytrax website review of Singapore Air- lines, http://www.airlinequality.com/ratings/ singapore-airlines-star-rating/, accessed April 3, 2017. 12 Campion, Cheraskin, and Stevens, “Career- Related Antecedents and Outcomes of Job Rotation”; and S.-Y. Chen, W.-C. Wu, C.-S. Chang, and C.-T. Lin, “Job Rotation and Inter- nal Marketing for Increased Job Satisfaction and Organisational Commitment in Hospital Nursing Staff,” Journal of Nursing Management 23, no. 3 (2015): 297–306.

13 A. Christini and D. Pozzoli, “Workplace Practices and Firm Performance in Manufac- turing: A Comparative Study of Italy and Brit- ain,” International Journal of Manpower 31, no. 7 (2010): 818–42; and K. Kaymaz, “The Effects of Job Rotation Practices on Motivation: A Research on Managers in the Automotive Organizations,” Business and Economics Research Journal 1, no. 3 (2010): 69–86. 14 S.-H. Huang and Y.-C. Pan, “Ergonomic Job Rotation Strategy Based on an Auto- mated RGB-D Anthropometric Measuring System,” Journal of Manufacturing Systems 33, no. 4 (2014): 699–710; and P. C. Leider, J. S. Boschman, M. H. W. Frings-Dresen, et al., “Effects of Job Rotation on Musculoskeletal Complaints and Related Work Exposures: A Systematic Literature Review,” Ergonomics 58, no. 1 (2015): 18–32. 15 Grant, Fried, and Juillerat, “Work Matters.” 16 M. T. Ford and J. D. Wooldridge, “Industry Growth, Work Role Characteristics, and Job Satisfaction: A Cross-Level Mediation Model,” Journal of Occupational Health Psychology 17, no. 4 (2012): 493–504. 17 G. M. McEvoy and W. F. Cascio, “Strategies for Reducing Employee Turnover: A Meta- Analysis,” Journal of Applied Psychology 70, no. 2 (1985): 342–53. 18 S. Wood, M. Van Veldhoven, M. Croon, and L. M. de Menezes, “Enriched Job Design, High Involvement Management and Organi- zational Performance: The Mediating Roles of Job Satisfaction and Well-Being,” Human Rela- tions 65, no. 4 (2012): 419–46.

MyLab Management Writing Assignments If your instructor has assigned this activity, go to www.pearson.com/mylab/management for auto-graded writing assignments as well as the following assisted-graded writing assignments:

8-20. Refer again to Ethical Dilemma 1. Do you think there is a way to design or redesign a job (or reward structures) so that the allocation of illegitimate tasks can be minimized? Why or why not?

8-21. How would you design a bonus/reward program to avoid the problems mentioned in Case Incident 2? 8-22. MyLab Management only—additional assisted-graded writing assignment.

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19 A. M. Grant, “Leading with Meaning: Ben- eficiary Contact, Prosocial Impact, and the Performance Effects of Transformational Leadership,” Academy of Management Journal 55 (2012): 458–76; and A. M. Grant and S. K. Parker, “Redesigning Work Design Theories: The Rise of Relational and Proactive Perspec- tives,” Annals of the Academy of Management 3, no. 1 (2009): 317–75. 20 J. Devaro, “A Theoretical Analysis of Rela- tional Job Design and Compensation,” Journal of Organizational Behavior 31 (2010): 279–301. 21 A. M. Grant, E. M. Campbell, G. Chen, K. Cottone, D. Lapedis, and K. Lee, “Impact and the Art of Motivation Maintenance: The Effects of Contact with Beneficiaries on Per- sistence Behavior,” Organizational Behavior and Human Decision Processes 103, no. 1 (2007): 53–67. 22 E. Francis and S. Schwartz, “The Sound of ‘Success’: Young Patients Ring Bell to Mark End of Cancer Treatment,” ABC News, November 18, 2016, http:// abcnews.go.com/Health/sound-success- young-patients-ring-bell-mark-end/ story?id=43645402. 23 A. M. Grant, “The Significance of Task Significance: Job Performance Effects, Rela- tional Mechanisms, and Boundary Condi- tions,” Journal of Applied Psychology 93, no. 1 (2008): 108–24. 24 K. Pajo and L. Lee, “Corporate-Sponsored Volunteering: A Work Design Perspective,” Jour- nal of Business Ethics 99, no. 3 (2011): 467–82. 25 See, for instance, T. D. Allen, R. C. Johnson, K. M. Kiburz, and K. M. Shockley, “Work-Family Conflict and Flexible Work Arrangements: Deconstructing Flexibility,” Personnel Psychol- ogy 66 (2013): 345–76; and B. B. Baltes, T. E. Briggs, J. W. Huff, J. A. Wright, and G. A. Neu- man, “Flexible and Compressed Workweek Schedules: A Meta-Analysis of Their Effects on Work-Related Criteria,” Journal of Applied Psychology 84, no. 4 (1999): 496–513. 26 Society for Human Resource Management (SHRM), 2016 Employee Benefits: Looking Back at 20 Years of Employee Benefits Offerings in the U.S. (Alexandria, VA: SHRM, 2016); and Society for Human Resource Management (SHRM), 2016 Strategic Benefits—Flexible Work Arrangements (Alexandria, VA: SHRM, 2016). 27 Society for Human Resource Manage- ment (SHRM), Employee Job Satisfaction and Engagement: Revitalizing a Changing Workforce ( Alexandria, VA: SHRM, 2016). 28 R. Waring, “Sunday Dialogue: Flexible Work Hours,” The New York Times, January 19, 2013, www.nytimes.com. 29 Baltes, Briggs, Huff, Wright, and Neu- man, “Flexible and Compressed Workweek Schedules.” 30 Allen, Johnson, Kiburz, and Shockley, “Work-Family Conflict and Flexible Work Arrangements.” 31 I. Spieler, S. Scheibe, C. Stamov-Robnagel, and A. Kappas, “Help or Hindrance?

Day-Level Relationships between Flextime Use, Work-Nonwork Boundaries, and Affective Well-Being,” Journal of Applied Psychology 102, no. 1 (2017): 67–87. 32 Baltes, Briggs, Huff, Wright, and Neu- man, “Flexible and Compressed Workweek Schedules.” 33 K. M. Shockley and T. D. Allen, “Inves- tigating the Missing Link in Flexible Work Arrangement Utilization: An Individual Differ- ence Perspective,” Journal of Vocational Behavior 76, no. 1 (2010): 131–42. 34 C. L. Munsch, C. L. Ridgeway, and J. C. Williams, “Pluralistic Ignorance and the Flex- ibility Bias: Understanding and Mitigating Flextime and Flexplace Bias at Work,” Work and Occupations 41, no. 1 (2014): 40–62. 35 See, for instance, B. J. Freeman and K. M. Coll, “Solutions to Faculty Work Overload: A Study of Job Sharing,” The Career Development Quarterly 58 (2009): 65–70. 36 J. LaReau, “Ford’s 2 Julies Share Devo- tion—and Job,” Automotive News (October 25, 2010): 4. 37 S. Adams, “Workers Have More Flextime, Less Real Flexibility, Study Shows,” Forbes, May 2, 2014, http://www.forbes.com/sites/ susanadams/2014/05/02/workers-have-more- flextime-less-real-flexibility-study-shows/. 38 F. Bélanger and R. W. Collins, “Distributed Work Arrangements: A Research Framework,” Information Society 14 (1998): 137–52; R. S. Gajendran and D. A. Harrison, “The Good, the Bad, and the Unknown about Telecom- muting: Meta-Analysis of Psychological Media- tors and Individual Consequences,” Journal of Applied Psychology 92, no. 6 (2007): 1524–41; and B. A. Lautsch and E. E. Kossek, “Manag- ing a Blended Workforce: Telecommuters and Non-Telecommuters,” Organizational Dynamics 40, no. 1 (2010): 10–17. 39 B. Belton, “Best Buy Copies Yahoo, Reins in Telecommuting,” USA Today, March 6, 2013, www.usatoday.com. 40 C. Tkaczyk, “Marissa Mayer Breaks Her Silence on Yahoo’s Telecommuting Policy,” Fortune, April 13, 2013, http://fortune.com/ 2013/04/19/marissa-mayer-breaks-her-silence- on-yahoos-telecommuting-policy/. 41 Gajendran and Harrison, “The Good, the Bad, and the Unknown about Telecommuting.” 42 Ibid. 43 J. Kotkin, “Marissa Mayer’s Misstep and the Unstoppable Rise of Telecommuting,” Forbes, March 26, 2013. 44 S. J. Perry, N. M. Lorinkova, E. M. Hunter, A. Hubbard, and J. T. McMahon, “When Does Virtuality Really ‘Work’? Examining the Role of Work-Family and Virtuality in Social Loaf- ing,” Journal of Management 42, no. 2 (2016): 449–79. 45 T. D. Golden and A. Fromen, “Does It Matter Where Your Manager Works? Com- paring Managerial Work Mode (Traditional, Telework, Virtual) across Subordinate Work

Experiences and Outcomes,” Human Relations 64, no. 11 (2011): 1451–75. 46 C. A. Bartel, A. Wrzesniewski, and B. M. Wiesenfeld, “Knowing Where You Stand: Physical Isolation, Perceived Respect, and Organizational Identification among Virtual Employees,” Organization Science 23, no. 3 (2011): 743–57; and S. M. B. Thatcher and J. Bagger, “Working in Pajamas: Telecommuting, Unfairness Sources, and Unfairness Percep- tions,” Negotiation and Conflict Management Research 4, no. 3 (2011): 248–76. 47 E. G. Dutcher, “The Effects of Telecommut- ing on Productivity: An Experimental Exami- nation; the Role of Dull and Creative Tasks,” Journal of Economic Behavior & Organization 84, no. 1 (2014): 355–63. 48 See, for example, Bartel, Wrzesniewski, and Wiesenfeld, “Knowing Where You Stand”; Gajendran and Harrison, “The Good, the Bad, and the Unknown about Telecom- muting”; and M. Virick, N. DaSilva, and K. Arrington, “Moderators of the Curvilinear Relation between Extent of Telecommut- ing and Job and Life Satisfaction: The Role of Performance Outcome Orientation and Worker Type,” Human Relations 63, no. 1 (2010): 137–54. 49 L. M. Lapierre, E. F. Van Steenbergen, M. C. W. Peeters, and E. S. Kluwer, “Juggling Work and Family Responsibilities When Involun- tarily Working More from Home: A Multiwave Study of Financial Sales Professionals,” Journal of Organizational Behavior 37, no. 6 (2016): 804–22; and M. C. Noonan and J. L. Glass, “The Hard Truth about Telecommuting,” Monthly Labor Review (2012): 1459–78. 50 J. Welch and S. Welch, “The Importance of Being There,” BusinessWeek, April 16, 2007, 92; Z. I. Barsness, K. A. Diekmann, and M. L. Seidel, “Motivation and Opportunity: The Role of Remote Work, Demographic Dis- similarity, and Social Network Centrality in Impression Management,” Academy of Manage- ment Journal 48, no. 3 (2005): 401–19. 51 J. Cotton, Employee Involvement: Methods for Improving Performance and Work Attitudes (Newbury Park, CA: Sage, 1993); and A. Cox, S. Zagelmeyer, and M. Marchington, “Embed- ding Employee Involvement and Participation at Work,” Human Resource Management Journal 16, no. 3 (2006): 250–67. 52 See, for example, the literature on empow- erment, such as S. E. Seibert, S. R. Silver, and W. A. Randolph, “Taking Empowerment to the Next Level: A Multiple-Level Model of Empowerment, Performance, and Satisfac- tion,” Academy of Management Journal 47, no. 3 (2004): 332–49; M. M. Butts, R. J. Vandenberg, D. M. DeJoy, B. S. Schaffer, and M. G. Wilson, “Individual Reactions to High Involvement Work Processes: Investigating the Role of Empowerment and Perceived Organizational Support,” Journal of Occupational Health Psy- chology 14, no. 2 (2009): 122–36; and M. T. Maynard, L. L. Gilson, and J. E. Mathieu,

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“Empowerment—Fad or Fab? A Multilevel Review of the Past Two Decades of Research,” Journal of Management 38, no. 4 (2012): 1231–81. 53 See, for instance, A. Sagie and Z. Aycan, “A Cross-Cultural Analysis of Participative Decision-Making in Organizations,” Human Relations 56, no. 4 (2003): 453–73; and J. Brockner, “Unpacking Country Effects: On the Need to Operationalize the Psychologi- cal Determinants of Cross-National Differ- ences,” in R. M. Kramer and B. M. Staw (eds.), Research in Organizational Behavior 25 (Oxford, UK: Elsevier, 2003), 336–40. 54 C. Robert, T. M. Probst, J. J. Martocchio, R. Drasgow, and J. J. Lawler, “Empowerment and Continuous Improvement in the United States, Mexico, Poland, and India: Predicting Fit on the Basis of the Dimensions of Power Distance and Individualism,” Journal of Applied Psychology 85, no. 5 (2000): 643–58. 55 Z. X. Chen and S. Aryee, “Delegation and Employee Work Outcomes: An Examination of the Cultural Context of Mediating Pro- cesses in China,” Academy of Management Jour- nal 50, no. 1 (2007): 226–38. 56 G. Huang, X. Niu, C. Lee, and S. J. Ashford, “Differentiating Cognitive and Affective Job Insecurity: Antecedents and Outcomes,” Jour- nal of Organizational Behavior 33, no. 6 (2012): 752–69. 57 Z. Cheng, “The Effects of Employee Involve- ment and Participation on Subjective Well- being: Evidence from Urban China,” Social Indicators Research 118, no. 2 (2014): 457–83. 58 A. Bar-Haim, Participation Programs in Work Organizations: Past, Present, and Scenarios for the Future (Westport, CT: Quorum, 2002); and J. S. Black and H. B. Gregersen, “Participative Decision-Making: An Integration of Multiple Dimensions,” Human Relations 50, no. 7 (1997): 859–78. 59 Black and Gregersen, “Participative Decision-Making.” 60 D. Collins, “The Ethical Superiority and Inevitability of Participatory Management as an Organizational System,” Organization Science 8, no. 5 (1997): 489–507; and T. M. Probst, “Countering the Negative Effects of Job Insecurity through Participative Decision Making: Lessons from the Demand-Control Model,” Journal of Occupational Health Psychol- ogy 10, no. 4 (2005): 320–9. 61 G. M. Pereira and H. G. Osburn, “Effects of Participation in Decision Making on Per- formance and Employee Attitudes: A Quality Circle Meta-Analysis,” Journal of Business and Psychology 22 (2007): 145–53. 62 C. M. Linski, “Transitioning to Participative Management,” Organization Development Jour- nal 32, no. 3 (2014): 17–26. 63 See, for instance, A. Pendleton and A. Rob- inson, “Employee Stock Ownership, Involve- ment, and Productivity: An Interaction-Based Approach,” Industrial and Labor Relations Review 64, no. 1 (2010): 3–29.

64 D. K. Datta, J. P. Guthrie, and P. M. Wright, “Human Resource Management and Labor Productivity: Does Industry Matter?,” Acad- emy of Management Journal 48, no. 1 (2005): 135–45; C. M. Riordan, R. J. Vandenberg, and H. A. Richardson, “Employee Involvement Climate and Organizational Effectiveness,” Human Resource Management 44, no. 4 (2005): 471–88; and J. Kim, J. P. MacDuffie, and F. K. Pil, “Employee Voice and Organizational Performance: Team versus Representative Influence,” Human Relations 63, no. 3 (2010): 371–94. 65 C. J. Travers, Managing the Team: A Guide to Successful Employee Involvement (Oxford, UK: Wiley-Blackwell, 1994). 66 Office of the Secretary, United States Department of Labor, “Inspecting Nonunion Models for Employee Voice,” Futurework: Trends and Challenges for Work in the 21st C entury, accessed April 4, 2017, https://www .dol.gov/oasam/programs/history/herman/ reports/futurework/conference/relations/ nonunion.htm. 67 American Psychological Association and Harris Interactive, Workforce Retention Survey, August 2012, http://www.apaexcellence.org/ assets/general/2012-retention-survey-final .pdf. 68 D. A. McIntyre and S. Weigley, “8 Compa- nies That Most Owe Workers a Raise,” USA Today, May 13, 2013, www.usatoday.com/story/ money/business/2013/05/12/8-companies- that-most-owe-workers-a-raise/2144013/. 69 M. Sabramony, N. Krause, J. Norton, and G. N. Burns, “The Relationship between Human Resource Investments and Organiza- tional Performance: A Firm-Level Examina- tion of Equilibrium Theory,” Journal of Applied Psychology 93, no. 4 (2008): 778–88. 70 C. Isidore, “Walmart Ups Pay Well above Minimum Wage,” CNN Money, February 19, 2015, http://money.cnn.com/2015/02/19/ news/companies/walmart-wages/. 71 See, for example, B. Martinez, “Teacher Bonuses Emerge in Newark,” The Wall Street Journal, April 21, 2011, A15; K. Taylor, “Dif- fering Results When Teacher Evaluations Are Tied to Test Scores,” The New York Times, March 23, 2015, A16; and D. Weber, “Semi- nole Teachers to Get Bonuses Instead of Raises,” Orlando Sentinel, January 19, 2011, www.orlandosentinel.com. 72 G. T. Milkovich, J. M. Newman, and B. Ger- hart, Compensation (11th ed., New York: McGraw-Hill, 2013). 73 See, for example, M. Damiani and A. Ricci, “Managers’ Education and the Choice of Dif- ferent Variable Pay Schemes: Evidence from Italian Firms,” European Management Journal 32, no. 6 (2014): 891–902. 74 S. Miller, “Bonus Binge: Variable Pay Out- paces Salary,” Society for Human Resource Manage- ment, August 11, 2016, https://www.shrm.org/ resourcesandtools/hr-topics/compensation/ pages/variable-pay-outpaces-raises.aspx.

75 Ibid. 76 U.S. Companies Holding the Line on Pay Raises for 2017, Willis Towers Watson Survey Finds, Willis Towers Watson Press Release, August 24, 2016, http://www.globenewswire.com/ news-release/2016/08/24/866587/0/en/U-S- companies-holding-the-line-on-pay-raises-for- 2017-Willis-Towers-Watson-survey-finds.html. 77 A. M. Paul, “Atlanta Teachers Were Offered Bonuses for High Test Scores. Of Course They Cheated,” The Washington Post, April 16, 2015, https://www.washingtonpost.com/ posteverything/wp/2015/04/16/atlanta- teachers-were-offered-bonuses-for-high-test- scores-of-course-they-cheated/?utm_term= .e4df48aeb80b; N P. von der Embse, A. M. Schoemann, S. P. Kilgus, M. Wicoff, and M. Bowler, “The Influence of Test-Based Accountability Policies on Teacher Stress and Instructional Practices: A Moderated Media- tion Model,” Educational Psychology 37, no. 3 (2017): 312–31; and K. Yuan, V.-N. Le, D. F. McCaffrey, J. A. Marsh, L. S. Hamilton, B. M. Stecher, and M. G. Springer, “Incentive Pay Programs Do Not Affect Teacher Motivation or Reported Practices: Results from Three Randomized Studies,” Educational Evaluation and Policy Analysis 35, no. 1 (2013): 3–22. 78 Y. Zhang, L. Long, T.-Y. Wu, and X. Huang, “When Is Pay for Performance Related to Employee Creativity in the Chinese Context? The Role of Guanxi HRM Practice, Trust in Management, and Intrinsic Motivation,” Jour- nal of Organizational Behavior 36, no. 5 (2015): 698–719. 79 J. H. Han, K. M. Bartol, and S. Kim, “Tight- ening Up the Performance-Pay Linkage: Roles of Contingent Reward Leadership and Profit- Sharing in the Cross-Level Influence of Indi- vidual Pay-for-Performance,” Journal of Applied Psychology 100, no. 2 (2015): 417–430; and D. Pohler and J. A. Schmidt, “Does Pay-for- Performance Strain the Employment Relation- ship? The Effect of Manager Bonus Eligibility on Nonmanagement Employee Turnover,” Personnel Psychology 69, no. 2 (2016): 395–429. 80 I. S. Fulmer and W. J. Walker, “More Bang for the Buck? Personality Traits As Moderators of Responsiveness to Pay-for-Performance,” Human Performance 28 (2015): 40–65. 81 E. Belogolovsky and P. A. Bamberger, “Sig- naling in Secret: Pay for Performance and the Incentive and Sorting Effects of Pay Secrecy,” Academy of Management Journal 57, no. 6 (2014): 1706–33. 82 Ibid. 83 B. Wysocki Jr., “Chilling Reality Awaits Even the Employed,” The Wall Street Journal, Novem- ber 5, 2001, A1; and J. C. Kovac, “Sour Econ- omy Presents Compensation Challenges,” Employee Benefit News, July 1, 2008, 18. 84 W. Hou, R. L. Priem, and M. Goranova, “Does One Size Fit All? Investigating Pay– Future Performance Relationships over the ‘Seasons’ of CEO Tenure,” Journal of Manage- ment 43, no. 3 (2017): 864–91.

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85 See, for instance, M. K. Judiesch and F. L. Schmidt, “Between-Worker Variability in Output under Piece-Rate versus Hourly Pay Systems,” Journal of Business and Psychology 14, no. 4 (2000): 529–52. 86 P. M. Wright, “An Examination of the Rela- tionships among Monetary Incentives, Goal Level, Goal Commitment, and Performance,” Journal of Management 18, no. 4 (1992): 677–93. 87 J. S. Heywood, X. Wei, and G. Ye, “Piece Rates for Professors,” Economics Letters 113, no. 3 (2011): 285–87. 88 A. Baker and V. Mertins, “Risk-Sorting and Preference for Team Piece Rates,” Journal of Economic Psychology 34 (2013): 285–300. 89 A. Clemens, “Pace of Work and Piece Rates,” Economics Letters 115, no. 3 (2012): 477–79. 90 S. L. Rynes, B. Gerhart, and L. Parks, “Per- sonnel Psychology: Performance Evaluation and Pay for Performance,” Annual Review of Psychology 56, no. 1 (2005): 571–600. 91 Ibid. 92 K. Zernike, “Newark Teachers Approve a Contract with Merit Pay,” The New York Times, November 14, 2012, www.nytimes.com/. 93 “Paying Doctors for Performance,” The New York Times, January 27, 2013, A16. 94 S. Halzack, “Companies Look to Bonuses Instead of Salary Increases in an Uncertain Economy,” Washington Post, November 6, 2012, http://articles.washingtonpost.com/. 95 C. M. Barnes, J. Reb, and D. Ang, “More Than Just the Mean: Moving to a Dynamic View of Performance-Based Compensation,” Journal of Applied Psychology 97, no. 3 (2012): 711–18. 96 E. J. Castillo, “Gender, Race, and the New (Merit-Based) Employment Relationship,” Industrial Relations 51, no. S1 (2012): 528–62. 97 Rynes, Gerhart, and Parks, “Personnel Psychology.” 98 P. Furman, “Ouch! Top Honchos on Wall Street See Biggest Cuts to Bonuses,” New York Daily News, February 18, 2013, www.nydailynews .com. 99 N. Chun and S. Lee, “Bonus Compensation and Productivity: Evidence from Indian Manu- facturing Plant-Level Data,” Journal of Produc- tivity Analysis 43, no. 1 (2015): 47–58. 100 E. White, “Employers Increasingly Favor Bonuses to Raises,” The Wall Street Journal, August 28, 2006, B3; and J. S. Lublin, “Boards Tie CEO Pay More Tightly to Performance,” The Wall Street Journal, February 21, 2006, A1, A14. 101 S. S. Wiltermuth and F. Gino, “‘I’ll Have One of Each’: How Separating Rewards into (Meaningless) Categories Increases Motiva- tion,” Journal of Personality and Social Psychology (January 2013): 1–13. 102 L. Bareket-Bojmel, G. Hochman, and D. Ari- ely, “It’s (Not) All about the Jacksons: Testing

Different Types of Short-Term Bonuses in the Field,” Journal of Management 43, no. 2 (2017): 534–54. 103 M. J. Roomkin, Profit Sharing and Gain Sharing (Metuchen, NJ: Rutgers University Press, 1990). 104 “Mark Zuckerberg Reaped $2.3 Billion on Facebook Stock Options,” Huffington Post, April 26, 2013, www.huffingtonpost.com. 105 D. D’Art and T. Turner, “Profit Sharing, Firm Performance, and Union Influence in Selected European Countries,” Personnel Review 33, no. 3 (2004): 335–50; and D. Kruse, R. Freeman, and J. Blasi, Shared Capitalism at Work: Employee Ownership, Profit and Gain Shar- ing, and Broad-Based Stock Options (Chicago: University of Chicago Press, 2010). 106 A. Bayo-Moriones and M. Larraza-Kintana, “Profit-Sharing Plans and Affective Commit- ment: Does the Context Matter?” Human Resource Management 48, no. 2 (2009): 207–26; and G. W. Florkowski and M. H. Schuster, “Support for Profit Sharing and Organiza- tional Commitment,” Human Relations 45, no. 5 (1992): 507–23. 107 N. Chi and T. Han, “Exploring the Link- ages between Formal Ownership and Psycho- logical Ownership for the Organization: The Mediating Role of Organizational Justice,” Journal of Occupational and Organizational Psychology 81, no. 4 (2008): 691–711. 108 Han, Barol, and Kim, “Tightening Up the Performance-Pay Linkage.” 109 ESOP Association, ESOP Association’s Posi- tion on President’s Panel on Federal Tax Reform Recommendation on Retirement Savings. Washing- ton, DC: Author. 110 R. P. Garrett, “Does Employee Ownership Increase Innovation?,” New England Journal of Entrepreneurship 13, no. 2, (2010): 37–46. 111 D. McCarthy, E. Reeves, and T. Turner, “Can Employee Share-Ownership Improve Employee Attitudes and Behaviour?,” Employee Relations 32, no. 4 (2010): 382–95. 112 A. Pendleton, “Shared Capitalism at Work: Employee Ownership, Profit and Gain Shar- ing, and Broad-Based Stock Options,” Indus- trial & Labor Relations Review 64, no. 3 (2011): 621–22. 113 A. Pendleton and A. Robinson, “Employee Stock Ownership, Involvement, and Productiv- ity: An Interaction-Based Approach,” Industrial and Labor Relations Review 64, no. 1 (2010): 3–29. 114 X. Zhang, K. M. Bartol, K. G. Smith, M. D. Pfarrer, and D. M. Khanin, “CEOs on the Edge: Earnings Manipulation and Stock-Based Incentive Misalignment,” Academy of Manage- ment Journal 51, no. 2 (2008): 241–58. 115 S. Dubb, “Community Wealth Building Forms: What They Are and How to Use Them at the Local Level,” Academy of Management Perspectives 30, no. 2 (2016): 141–52.

116 C. B. Cadsby, F. Song, and F. Tapon, “Sorting and Incentive Effects of Pay for Performance: An Experimental Investiga- tion,” Academy of Management Journal 50, no. 2 (2007): 387–405. 117 Han, Barol, and Kim, “Tightening Up the Performance-Pay Linkage.” 118 Z. Lin, J. Kelly, and L. Trenberth, “Anteced- ents and Consequences of the Introduction of Flexible Benefit Plans in China,” The Interna- tional Journal of Human Resource Management, 22, no. 5 (2011): 1128–45. 119 Ibid. 120 R. C. Koo, “Global Added Value of Flexible Benefits,” Benefits Quarterly 27, no. 4 (2011): 17–20. 121 P. Stephens, “Flex Plans Gain in Popu- larity,” CA Magazine, January/February 2010, 10. 122 D. Lovewell, “Flexible Benefits: Benefits on Offer,” Employee Benefits, March 2010, S15. 123 L. E. Tetrick and C. R. Haimann, “Employee Recognition,” in A. Day, E. K. Kelloway, and J. J. Hurrell Jr. (eds.), Workplace Well-Being: How to Build Psychologically Healthy Workplaces (Hoboken, NJ: Wiley, 2014), 161–74. 124 L. Shepherd, “Special Report on Rewards and Recognition: Getting Personal,” Workforce Management, September 2010: 24–29. 125 www.globoforce.come/our-clients, accessed June 4, 2015. 126 L. Shepherd, “On Recognition, Multina- tionals Think Globally,” Workforce Management, September 2010, 26. 127 R. J. Long and J. L. Shields, “From Pay to Praise? Non-Case Employee Recognition in Canadian and Australian Firms,” International Journal of Human Resource Management 21, no. 8 (2010): 1145–72. 128 S. E. Markham, K. D. Scott, and G. H. McKee, “Recognizing Good Attendance: A Longitudinal, Quasi-Experimental Field Study,” Personnel Psychology 55, no. 3 (2002): 641; and S. J. Peterson and F. Luthans, “The Impact of Financial and Nonfinancial Incen- tives on Business Unit Outcomes over Time,” Journal of Applied Psychology 91, no. 1 (2006): 156–65. 129 C. Xu and C. Liang, “The Mechanisms Underlying an Employee Recognition Pro- gram,” in L. Hale and J. Zhang (eds.), Proceed- ings of the International Conference on Public Human Resource Management and Innovation (2013): 28–35. 130 A. D. Stajkovic and F. Luthans, “Differen- tial Effects of Incentive Motivators on Work Performance,” Academy of Management Jour- nal 4, no. 3 (2001): 587. See also F. Luthans and A. D. Stajkovic, “Provide Recognition for Performance Improvement,” in E. A. Locke (ed.), Handbook of Principles of Orga- nizational Behavior (Malden, MA: Blackwell, 2004): 166–80.

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Foundations of Group Behavior9

9-1 Distinguish between the different types of groups.

9-2 Describe the punctuated-equilibrium model of group development.

9-3 Show how role requirements change in different situations.

9-4 Demonstrate how norms exert influence on an individual’s behavior.

9-5 Show how status and size differences affect group performance.

9-6 Describe how issues of cohesiveness and diversity can be integrated for group effectiveness.

9-7 Contrast the strengths and weak- nesses of group decision making.

LEARNING OBJECTIVES After studying this chapter, you should be able to:

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Employability Skills Matrix (ESM)

Myth or Science?

Career OBjectives

An Ethical Choice

Point/ Counterpoint

Experiential Exercise

Ethical Dilemma

Case Incident 1

Case Incident 2

Critical Thinking ✓ ✓ ✓ ✓ ✓ ✓ ✓

Communication ✓ ✓ ✓ ✓ ✓ ✓ ✓ Collaboration ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Knowledge

Application and Analysis

✓ ✓ ✓ ✓ ✓ ✓

Social Responsibility ✓ ✓ ✓ ✓ ✓ ✓


Imagine listening to a recording of a 911 phone call in which the caller describes two police officers drawing their weapons during a traffic stop, followed by the sound of a window shattering. If you asked two people to listen to this 911 call, would both people agree whether the officer should have drawn a gun during the phone call? The answer is maybe.

Lisa Mahon was driving with her friend, Jamal, and two children when she was pulled over by Officer Fucari for not wearing her seat belt. Lisa became uneasy when the officer, rather than running her driver’s license and plates, put her license and registration in his pocket and asked for her friend Jamal’s license. Jamal did not have his license with him, so he knelt down to grab his bag and retrieve another form of identification. Officer Fuc- ari, along with another police officer on the scene, pulled their weapons and pointed them at the car. At this point, Lisa grew concerned and called 911.

There is much debate over what happened next. After the officers drew their weapons, Officer Fucari asked both Lisa and Jamal to step out of the vehicle, but, as Lisa told the dispatcher on the 911 call, she and Jamal were scared to step out of the car. When they refused to step out of their vehicle, the officers broke the passenger side window, used a Taser on Jamal, then forcibly removed Jamal from the car. Jamal was arrested for failure to aid an officer and resisting law enforcement, while Lisa was issued a ticket for not wearing a seat belt.

MyLab Management Chapter Warm Up If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the chapter warm up.

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A video of the incident was also released to the public. After viewing the video and listening to the 911 call, many people have different interpreta- tions of what happened that day. Some individuals believe that the officers could reasonably have suspected that Jamal was reaching for a weapon and that drawing their guns was thus justified. These viewers may also believe that the officers used an acceptable amount of force in the situa- tion, given that Jamal refused to follow orders. Many other viewers, however, believe that the officers treated Lisa and Jamal differently because of their race (Lisa and Jamal are African American). They suggest that the officers were unusually suspicious of them and point out that Jamal was asked to identify himself even though he was not driving the car. In addition, many viewers believe that it was reasonable for Lisa and Jamal not to step out of the vehicle when guns were pointing at them.

Source: Based on I. Glass and B. Reed, “Cops See It Differently, Part One,” This American Life, February 6, 2015, https://www.thisamericanlife.org/radio-archives/episode/547/ transcript.

As individuals, we all belong to groups based on our occupations, race, gen-der, and many other categories. When we are part of a group, it changes our perception of the situation. In the chapter-opening vignette above, identi- fication with a racial group may make us more likely to identify with Lisa and Jamal, who were frightened by the officers’ actions and by the weapons drawn on them. If we work in law enforcement, however, we may be more likely to side with the police officers, believing that they were serving their roles as police officers by using force when a citizen did not respond to orders.

These disagreements are very common, especially in cases where a police officer used force on an African American. When speaking of relations with the African American community, Chief Ed Flynn of the Milwaukee Police Depart- ment noted that many African Americans in high-crime areas have strong antipathy toward law enforcement, partly because “the police have often been in the middle of great conflict and not infrequently been agents of social con- trol to preserve a status quo.”

Tensions between African American communities and law enforcement officers highlight one of the pitfalls of group identification. Some groups can exert a powerful positive influence, and others can create bias. The objectives of this chapter and Chapter 10 are to familiarize you with group and team concepts, provide you with a foundation for understanding how groups and teams work, and show you how to create effective working units. Let’s begin by defining a group.

Defining and Classifying Groups In organizational behavior, a group is two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. Groups can be either formal or informal. A formal group is defined by the organization’s structure, with designated work assignments and established tasks. In formal groups, the behaviors that team members should engage in are stipulated by and directed toward organizational goals. The six members of

9-1 Distinguish between the different types of groups. group Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives.

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an airline flight crew are a formal group, for example. In contrast, an informal group is neither formally structured nor organizationally determined. Infor- mal groups in the work environment meet the need for social contact. Three employees from different departments who regularly have lunch or coffee together are an informal group. These types of interactions among individuals, though informal, deeply affect their behavior and performance.

Social Identity People often feel strongly about their groups, partly because, as research indi- cates, shared experiences amplify our perception of events.1 Also, according to research in Australia, sharing painful experiences, in particular, increases our felt bond and trust with others.2 Why do people form groups, and why do they feel so strongly about them? Consider the celebrations that follow when a sports team wins a national championship. The winner’s supporters are elated, and sales of team-related shirts, jackets, and hats skyrocket. Fans of the losing team feel dejected, even embarrassed. Why? Even though fans have little to do with the actual performance of the sports team, their self-image can be wrapped up in their identification with the group. Our tendency to personally invest in the accomplishments of a group is the territory of social identity theory.

Social identity theory proposes that people have emotional reactions to the failure or success of their group because their self-esteem gets tied to whatever happens to the group.3 When your group does well, you bask in reflected glory, and your own self-esteem rises. When your group does poorly, you might feel bad about yourself, or you might reject that part of your identity, similar to fair-weather fans. If your group is devalued and disrespected, your social iden- tity might feel threatened, and you might endorse deviant behaviors to restore your group’s standing.4 Social identities can even lead people to experience pleasure as a result of seeing another group suffer. We often see these feelings of schadenfreude in the joy fans experience when a hated team loses.5

People develop many identities through the course of their lives. You might define yourself in terms of the organization you work for, the city you live in, your profession, your religious background, your ethnicity, and/or your gen- der. Over time, some groups you belong to may become more significant to you than others, A U.S. expatriate working in Rome might be very aware of being from the United States, for instance, but doesn’t give national identity a sec- ond thought when transferring from Tulsa to Tucson.6 We may thus pick and

informal group A group that is neither formally structured nor organizationally deter- mined; such a group appears in response to the need for social contact.

formal group A designated work group defined by an organization’s structure.

social identity theory Perspective that considers when and why individuals consider themselves members of groups.

Jeffrey Webster, director of human resources at a Nissan plant in Missis- sippi, also serves as the director of the plant’s gospel choir. Choir mem- bers are a diverse group of employees who identify with each other because they all share a love of singing and performing for fellow workers, com- pany executives, state officials, and community events. Source: Rogelio V. Solis/AP Images

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290 PART 3 The Group

choose which of our social identities are salient to the situation, or we may find that our social identities are in conflict, such as the identities of business leader and parent.7

Our social identities help us understand who we are and where we fit in with other people, and research indicates they bring us better health and lower lev- els of depression because we become less likely to attribute negative situations to internal or insurmountable reasons.8 To experience these good outcomes, however, we need to feel that our social identities are positive.9

Until now, we’ve discussed social identities primarily in a cultural con- text. However, the identity we may feel with respect to our organization is only one aspect of our work-related identities (see OB Poll). Within our organizations and work groups, we can develop many identities through (1) relational identification, when we connect with others because of our roles, and (2) collective identification, when we connect with the aggregate characteristics of our groups. We can identify with groups within our team, our work group, and our organizations. Often, our identification with our work groups is stronger than with our organizations, but both are important to positive outcomes in attitudes and behaviors. The strength of our iden- tification may vary, depending on how unique a group is within an organi- zation.10 Low identification to the group may lead to problems. If we have low identification with our organizations, we may experience decreased sat- isfaction and engage in fewer organizational citizenship behaviors (OCBs).11 Similarly, we are less likely to apply to organizations that do not correspond to our collective identities.12

Ingroups and Outgroups Ingroup favoritism occurs when we see members of our group as better than other people, and people not in our group as all the same. Recent research suggests that people with low openness and/or low agreeableness are more sus- ceptible to ingroup favoritism.13

ingroup favoritism Perspective in which we see members of our ingroup as better than other people, and people not in our group as all the same.

Most People Report Drinking with Coworkers Is Acceptable

Note: Society for Human Resources Management (SHRM) survey of 501 individuals and how drinking is viewed in their organization at a range of work- related activities. Source: Based on S. M. Heathfield, “To Drink or Not to Drink: Does Alcohol Drinking Mix Safely with Work Events?,” About.com Guide, 2013, http://humanresources.about.com/od/networking/qt/drink_i3.htm.

At a holiday party

At a meal with a client or customer

At a meal during a job interview

At a meal with coworkers

At the celebration of a company milestone

At a retirement party


40% 32%


22% 4% 14%



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Whenever there is an ingroup, there is by necessity an outgroup, which is sometimes everyone else but is usually an identified group known by the ingroup’s members. For example, if my ingroup is the Republican Party in U.S. politics, my outgroup might be anyone in the world who is not a Repub- lican, but it’s more likely to be the other U.S. political parties, or perhaps just Democrats.

When there are ingroups and outgroups, there is often animosity between them. One of the most powerful sources of ingroup–outgroup feelings is the practice of religion, even in the workplace. One global study, for instance, found that when groups became heavily steeped in religious rituals and discus- sions, they became especially discriminatory toward outgroups and aggressive if the outgroups had more resources.14 Consider an example from another study of a U.K. Muslim organization that supported Al-Qaeda and identified moder- ate U.K. Muslims as its outgroup. The Al-Qaeda ingroup was not neutral toward the moderate outgroup; instead, the ingroup denounced the moderates, deni- grating them as deviant and threatening outward aggression.15

Social Identity Threat Ingroups and outgroups pave the way for social identity threat, which is akin to stereotype threat (see Chapter 6). With social identity threat, individuals believe they will be personally negatively evaluated due to their association with a devalued group, and they may lose confidence and performance effec- tiveness. One study found, for example, that when subjects from high and low socioeconomic backgrounds took a high-pressure math test, the low-status subjects who felt social identity threat could be as confident as the high- status subjects only when they were first deliberately encouraged about their abilities.16

Stages of Group Development

outgroup The inverse of an ingroup, which can mean everyone outside the group but is more usually an identified other group.

9-2 Describe the punctuated-equilibrium model of group development.

Temporary groups with finite deadlines pass through a unique sequencing of actions (or inaction) called the punctuated-equilibrium model, shown in Exhibit 9-1. The stages in this model include the following: (1) The first meet- ing sets the group’s direction, (2) the first phase of group activity is one of iner- tia and thus slower progress, (3) a transition takes place exactly when the group has used up half its allotted time, (4) this transition initiates major changes, (5) a second phase of inertia follows the transition, and (6) the group’s last meeting is characterized by markedly accelerated activity.17 Alternative models suggest that teams progress through a formation stage, a conflict resolution or “storming” stage, a “norming” stage where members agree on roles and make decisions, and a “performing” stage where members begin to work collabora- tively. The forming, storming, norming, and performing stages may occur at phase one of the punctuated equilibrium model, while a second performing and conforming stage may occur in the second phase, following a short period of reforming group norms and expectations.18

punctuated-equilibrium model A set of phases that temporary groups go through that involves transitions between inertia and activity.

MyLab Management Watch It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the video exercise.

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diverse roles, both on and off our jobs. As we’ll see, one of the tasks in under- standing behavior is grasping the role a person is currently playing.

Bill is a plant manager with EMM Industries, a large electrical equipment manufacturer in Phoenix. He fulfills a number of roles—employee, member of middle management, and electrical engineer. Off the job, Bill holds more roles: husband, father, Catholic, tennis player, member of the Thunderbird Country Club, and president of his homeowners’ association. Many of these roles are compatible; some create conflicts. How does Bill’s religious commit- ment influence his managerial decisions regarding layoffs, expense padding, and provision of accurate information to government agencies? A recent offer of promotion requires Bill to relocate, yet his family wants to stay in Phoenix. Can the role demands of his job be reconciled with the demands of his hus- band and father roles?

Different groups impose different role requirements on individuals. Like Bill, we all play a number of roles, and our behavior varies with each. But how do we know each role’s requirements? We draw on our role perceptions to frame our ideas of appropriate behaviors and to learn the expectations of our groups.

Role Perception Our view of how we’re supposed to act in a given situation is a role perception. We get role perceptions from stimuli all around us—for example, friends, books, films, and television, as when we form an impression of politicians from House of Cards. Apprenticeship programs allow beginners to watch an expert so they can learn to act as they should.

Role Expectations Role expectations are the way others believe you should act in a given context. A U.S. federal judge is viewed as having propriety and dignity, while a football coach may be seen as aggressive, dynamic, and inspiring to the players.

In the workplace, we look at role expectations through the perspective of the psychological contract: an unwritten agreement that exists between employees and employers. This agreement sets out mutual expectations.20 Management is expected to treat employees justly, provide acceptable working conditions,

role A set of expected behavior patterns attributed to someone occupying a given position in a social unit.

role perception An individual’s view of how he or she is supposed to act in a given situation.

role expectations How others believe a person should act in a given situation.

Let’s discuss each stage of the punctuated-equilibrium model. At the first meeting, the group’s general purpose and direction is established and then a framework of behavioral patterns and assumptions through which the group will approach its project emerges, sometimes in the first few seconds of the group’s existence. Once set, the group’s direction is solidified and is unlikely to be reexamined throughout the first half of its life. This is a period of inertia— the group tends to stand still or become locked into a fixed course of action, even if it gains new insights that challenge initial patterns and assumptions.

One of the most interesting discoveries in studies was that groups experi- enced a transition precisely halfway between the first meeting and the official deadline—whether members spent an hour on their project or 6 months. The midpoint appears to work like an alarm clock, heightening members’ aware- ness that their time is limited and they need to get moving. This transition ends phase 1 and is characterized by a concentrated burst of changes, dropping of old patterns, and adoption of new perspectives. The transition sets a revised direction for phase 2, a new equilibrium or period of inertia in which the group executes plans created during the transition period.

The group’s last meeting is characterized by a final burst of activity to finish its work. In summary, the punctuated-equilibrium model characterizes groups as exhibiting long periods of inertia interspersed with brief revolutionary changes triggered primarily by members’ awareness of time and deadlines. This is not the only model of group stages by far, but it is a dominant theory with strong support. Keep in mind, however, that this model doesn’t apply to all groups but is suited to the finite quality of temporary task groups working under a time deadline.19

Group Property 1: Roles Work groups shape members’ behavior, and they also help explain individual behavior as well as the performance of the group itself. Some defining group properties are roles, norms, status, size, cohesiveness, and diversity. We’ll discuss each in the sections that follow. Let’s begin with the first group property, roles.

Shakespeare said, “All the world’s a stage, and all the men and women merely players.”* Using the same metaphor, all group members are actors, each playing a role, a set of expected behavior patterns attributed to someone occu- pying a given position in a social unit. We are required to play a number of

9-3 Show how role require-ments change in different situations.

The Punctuated-Equilibrium ModelExhibit 9-1


First Meeting

Phase 1

CompletionPhase 2



(Low) (A+B)/2 Time

Pe rfo

rm an



*William Shakespeare, As You Like It, D. C. Heath & Company, 1904.

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diverse roles, both on and off our jobs. As we’ll see, one of the tasks in under- standing behavior is grasping the role a person is currently playing.

Bill is a plant manager with EMM Industries, a large electrical equipment manufacturer in Phoenix. He fulfills a number of roles—employee, member of middle management, and electrical engineer. Off the job, Bill holds more roles: husband, father, Catholic, tennis player, member of the Thunderbird Country Club, and president of his homeowners’ association. Many of these roles are compatible; some create conflicts. How does Bill’s religious commit- ment influence his managerial decisions regarding layoffs, expense padding, and provision of accurate information to government agencies? A recent offer of promotion requires Bill to relocate, yet his family wants to stay in Phoenix. Can the role demands of his job be reconciled with the demands of his hus- band and father roles?

Different groups impose different role requirements on individuals. Like Bill, we all play a number of roles, and our behavior varies with each. But how do we know each role’s requirements? We draw on our role perceptions to frame our ideas of appropriate behaviors and to learn the expectations of our groups.

Role Perception Our view of how we’re supposed to act in a given situation is a role perception. We get role perceptions from stimuli all around us—for example, friends, books, films, and television, as when we form an impression of politicians from House of Cards. Apprenticeship programs allow beginners to watch an expert so they can learn to act as they should.

Role Expectations Role expectations are the way others believe you should act in a given context. A U.S. federal judge is viewed as having propriety and dignity, while a football coach may be seen as aggressive, dynamic, and inspiring to the players.

In the workplace, we look at role expectations through the perspective of the psychological contract: an unwritten agreement that exists between employees and employers. This agreement sets out mutual expectations.20 Management is expected to treat employees justly, provide acceptable working conditions,

role A set of expected behavior patterns attributed to someone occupying a given position in a social unit.

role perception An individual’s view of how he or she is supposed to act in a given situation.

role expectations How others believe a person should act in a given situation.

psychological contract An unwritten agree- ment that sets out what a manager expects from an employee, and vice versa.

Les Hatton, manager of a Recreational Equipment, Inc. (REI), store in Man- hattan, pumps up employees before the store’s grand opening. Part of the psychological contract between REI and its employees is the expectation that salespeople will display enthusi- asm and generate excitement while welcoming and serving customers. Source: Matt Payton/AP Images

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clearly communicate what is a fair day’s work, and give feedback on how well employees are doing. Employees are expected to demonstrate a good attitude, follow directions, and show loyalty to the organization. When a psychological contract also focuses on relationships between employers (or supervisors) and employees, employees may also be more likely to engage in organizational citi- zenship behaviors (OCBs).21

What happens if management is derelict in its part of the bargain? We can expect negative effects on employee performance and satisfaction. One study among restaurant managers found that violations of the psychological contract were related to greater intentions to quit, while another study of a variety of different industries found psychological contracts were associated with lower levels of productivity, higher levels of theft, and greater work withdrawal.22

There is evidence that perceptions of psychological contracts vary across cultures. In France, where people are individualistic and power is more asym- metric, contracts are perceived as self-interested yet favoring the more pow- erful party. In Canada, where people are individualistic but power is more symmetric, contracts are perceived as self-interested yet focused on balanced reciprocity. In China, where people are collectivistic and power is more asymmetric, contracts are perceived as going beyond the work context into employees’ lives. And in Norway, where people are collectivistic but power is more symmetric, contracts are perceived as more relational and based on trust.23

Role Conflict When compliance with one role requirement may make it difficult to comply with another, the result is role conflict.24 At the extreme, two or more role expectations may be contradictory. For example, if you, as a manager, were to provide a performance evaluation of a person you mentored, your roles as eval- uator and mentor may conflict. Similarly, we can experience interrole conflict25 when the expectations of our different, separate groups are in opposition. An example can be found in work–family conflict, which Bill experiences when expectations placed on him as a husband and father differ from those placed on him as an executive with EMM Industries. Bill’s wife and children want to remain in Phoenix, while EMM expects its employees to be responsive to the company’s needs and requirements. Although it might be in Bill’s financial and career interests to accept a relocation, the conflict centers on choosing between family and work role expectations. Indeed, a great deal of research demonstrates that work–family conflict is one of the most significant sources of stress for most employees.26

Within organizations, most employees are simultaneously in occupations, work groups, divisions, and demographic groups, and these identities can con- flict when the expectations of one clash with the expectations of another.27 Dur- ing mergers and acquisitions, employees can be torn between their identities as members of their original organization and of the new parent company.28 Multi- national organizations have also been shown to lead to dual identification— with the local division and with the international organization.29

Role Play and Assimilation The degree to which we comply with our role perceptions and expectations— even when we don’t agree with them initially—can be surprising. One of the most illuminating role and identity experiments was done a number of years ago by psychologist Philip Zimbardo and his associates.30 They created a “prison” in the basement of the Stanford psychology building; hired emotion- ally stable, physically healthy, law-abiding students who scored “normal average”

interrole conflict A situation in which the expectations of an individual’s different, separate groups are in opposition.

role conflict A situation in which an individual is confronted by divergent role expectations.

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on personality tests; randomly assigned them the role of either “guard” or “prisoner”; and established some basic rules.

It took little time for the prisoners to accept the authority positions of the guards and for the mock guards to adjust to their new authority roles. Con- sistent with social identity theory, the guards came to see the prisoners as a negative outgroup, and they developed stereotypes about the “typical” prisoner personality type. After the guards crushed a rebellion attempt on the second day, the prisoners became increasingly passive. Whatever the guards dished out, the prisoners took. The prisoners actually began to believe and act like they were inferior and powerless. Every guard, at some time during the simula- tion, engaged in abusive, authoritative behavior. One said, “I was surprised at myself. . . . I made them call each other names and clean the toilets out with their bare hands. I practically considered the prisoners cattle, and I kept think- ing: ‘I have to watch out for them in case they try something.’ ” Surprisingly, during the entire experiment—even after days of abuse—not one prisoner said, “Stop this. I’m a student like you. This is just an experiment!” The researchers had to end the study after only 6 days because of the participants’ pathological reactions.

What can we conclude from this study? Like the rest of us, the partici- pants had learned stereotyped conceptions of guard and prisoner roles from the mass media and their own personal experiences in power and powerless

Myth or Science? Gossip and Exclusion Are Toxic for Groups

The statement above is not neces-sarily true, but it is counterintuitive. Let’s explore the conditions. What is gossip? Most of us might

say gossip is talking about oth- ers, sharing rumors, and speculat- ing about others’ behaviors; gossip affects a person’s reputation. We might also say gossip is malicious, but according to researchers, it can serve positive social functions, too. Prosocial gossip can expose behavior that exploits other people, which can lead to positive changes. For exam- ple, if Julie tells Chris that Alex is bul- lying Summer, then Chris has learned about Alex’s poor behavior through gossiping. Chris might refuse to part- ner with Alex on a work project, which might limit Alex’s opportunities with the organization, preventing him from bullying more people. Alternatively, as the gossip spreads, Alex might feel exposed for his behavior and con- form to group expectations against

bullying behavior. In fact, according to research, Alex is likely to cooperate with the group in response to the gos- sip, and others hearing and spreading the gossip are likely also to cooperate by not acting on their impulses toward bad behavior.

What about excluding Alex? There are two types of exclusion in the work- place: leaving someone out of a group and ostracizing an individual. Both lead to the same end—the person isn’t part of the group. While simply leaving someone out of a group might not send a message of exclusion, ostracism cer- tainly does. Ostracism is more of a felt punishment than gossip because it is more direct. Research indicates that ostracized individuals cooperate to a greater degree when they are around the group to show a willingness to con- form, hoping to be invited back into the group.

Can gossip and ostracism work together? Yes, according to a recent

study. When subjects were given an opportunity to gossip about the work of another subject, that subject coop- erated more than before; when the opportunity to gossip was paired with the ability to ostracize, that subject cooperated to a much greater degree.

Thus, gossip and exclusion may pro- vide groups with benefits, at least when the gossip is confined to truthful work- related discussion, when the opportu- nity still exists to rejoin the group with full standing, and when the group norms are positive.

Sources: Based on M. Cikara and J. J. Van Bavel, “The Neuroscience of Intergroup Relations: An Integrative Review,” Perspec- tives on Psychological Science 9, no. 3 (2014): 245–74; M. Feinberg, R. Willer, and M. Schultz, “Gossip and Ostracism Pro- mote Cooperation in Groups,” Psychologi- cal Science 25, no. 3 (2014): 656–64; and I. H. Smith, K. Aquino, S. Koleva, and J. Gra- ham, “The Moral Ties That Bind . . . Even to Out-Groups: The Interactive Effect of Moral Identity and the Binding Moral Foundations,” Psychological Science (2014): 1554–62.

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relationships gained at home (parent–child), in school (teacher–student), and in other situations. This background allowed them to assume roles easily and rapidly and, with a vague notion of the social identity of their roles and no prior personality pathology or training for the parts they were playing, to exe- cute extreme forms of behavior consistent with those roles.

A reality television show that was a follow-up to the Stanford experiment was conducted by the BBC.31 The BBC results were dramatically different from those of the Stanford experiment, partially because the show used a less intense simulated prison setting. The “guards” were far more careful in their behav- ior, limiting their aggressive treatment of “prisoners” and expressing concerns about how their actions might be perceived. In short, they did not fully take on their authority roles, possibly because they knew their behavior was being observed by millions of viewers. These results suggest that less intense situations evoke less extreme behavior, and abuse of roles can be limited when people are made conscious of their behavior.

Group Property 2: Norms Did you ever notice that golfers don’t speak while their partners are putting? Why not? The answer is norms.

All groups have established norms—acceptable standards of behavior shared by members that express what they ought to do and ought not to do under certain circumstances. It’s not enough for group leaders to share their opinions—even if members adopt the leaders’ views, the effect may last only 3 days!32 When agreed to by the group, norms influence behavior with a mini- mum of external controls. Different groups, communities, and societies have different norms, but they all have them.33 Let’s discuss the levels of influence that norms can exert over us, starting with our emotions.

Norms and Emotions Have you ever noticed how the emotions of one member of your family, espe- cially strong emotions, can influence the emotions of the other members? A family can be a highly normative group. So can a task group whose members work together on a daily basis, because frequent communication can increase the power of norms. A recent study found that, in a task group, individuals’ emotions influenced the group’s emotions, and vice versa. This may not be sur- prising, but researchers also found that norms dictated the experience of emo- tions for the individuals and for the groups—in other words, people grew to interpret their shared emotions in the same way.34 As we discovered in Chap- ters 5 and 6, our emotions and moods can shape our perspective, so the nor- mative effect of groups can have a powerful influence on group attitudes and outcomes.

Norms and Conformity As a member of a group, you desire acceptance by the group. Thus, you are sus- ceptible to conforming to group norms. Considerable evidence suggests that groups can place strong pressures on individual members to change their atti- tudes and behaviors to match the group’s standard.35 The impact that group pressures for conformity can have on an individual member’s judgment was demonstrated in studies by Solomon Asch and others.36 Asch made up groups of seven or eight people who were asked to compare two cards. One card had one line, and the other had three lines of varying length, one of which was

9-4 Demonstrate how norms exert influence on an individual’s behavior.

norms Acceptable standards of behavior within a group that are shared by the group’s members.

conformity The adjustment of one’s behavior to align with the norms of the group.

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Foundations of Group Behavior CHAPTER 9 297

identical to the line on the one-line card, as Exhibit 9-2 shows. The difference in line length was obvious; in fact, under ordinary conditions, subjects were incorrect less than 1 percent of the time in announcing which of the three lines matched the single line.

The experiment began with sets of matching exercises. Everyone gave the right answers. On the third set, however, the first subject, who was part of the research team, gave an obviously wrong answer—for example, saying “C” in Exhibit 9-2 was the same as “X.” The next subject, also on the research team, gave the same wrong answer, and so forth. Now the dilemma confronting the subject, who didn’t know any of the subjects were on the research team, was this: Should he or she publicly state a perception that differed from the announced position of the others or give an incorrect answer that agreed with the others?

The results over many experiments showed 75 percent of subjects gave at least one answer that conformed—that they knew was wrong but was consis- tent with the replies of other group members—and the average conformer gave wrong answers 37 percent of the time. This suggests that we feel the pressure toward conformity with group norms. Other recent research with moral decision making indicated an even stronger effect of conformity when subjects found the nonconforming ideas not just incorrect but objection- able.37 Does that mean we are mere robots? Certainly not. The flip side of the 37 percent of conforming responses is the 63 percent of independent responses, and 95 percent gave the correct (nonconforming) response at least once. Therefore, we feel the pressure to conform, but it is not a perfect predictor of what we will do. Furthermore, we don’t tend to like the pressure we feel to conform. Asch wrote, “Those who participated in this challenging experiment agreed nearly without exception that independence was prefer- able to conformity.”38

Do individuals conform to the pressures of all groups to which they belong? Obviously not, because people belong to many groups whose norms vary and sometimes are contradictory. People conform to their reference groups, in which a person is aware of other members, defines him- or herself as a member or would like to be a member, and feels group members are significant to him or her. The implication, then, is that all groups do not impose equal confor- mity pressures on their members.

Norms and Behavior Norms can cover any aspect of group behavior.39 As we’ve mentioned, norms in the workplace significantly influence employee behavior. This may seem intui- tive, but full appreciation of the influence of norms on worker behavior did not occur until the Hawthorne Studies conducted between 1924 and 1932 at the Western Electric Company’s Hawthorne Works in Chicago.40

reference groups Important groups to which individuals belong or hope to belong and with whose norms individuals are likely to conform.

Examples of Cards Used in Asch’s StudyExhibit 9-2


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An Ethical Choice Using Peer Pressure as an Influence Tactic

W e’ve all experienced peer pressure, and it can be hard to behave differently from your friends and coworkers. As more work in organizations is performed in groups and teams, the possibilities and pitfalls of such pressure have become an increasingly important ethi- cal issue for managers.

Peer pressure can be a positive force in some ways. In groups where high effort and performance are the norms, peer pressure from coworkers, whether direct or indirect, can encour- age high performance from those not meeting expectations. A group with a norm toward behaving ethically could also use peer pressure to minimize negative behavior. Thus, peer pressure can promote all sorts of good behav- iors, from donating to charity to volun- teering at the local soup kitchen.

However, peer pressure can also be destructive. It can create a feeling of exclusion in those who do not go along with group norms and can be very stressful and hurtful for those who don’t see eye-to-eye with the rest of the group. Peer pressure itself can be an unethical practice that unduly influ- ences workers’ behavior and thoughts. And while groups might pressure oth- ers into good behavior, they can just as easily sway them to bad behavior.

Should you use group peer pres- sure? As a leader, you may need to. One survey found that only 6 percent of leaders reported being able to suc- cessfully influence their employees on their own. Peer pressure hastens a group toward consensus, and levels of peer pressure predict how much the leader can control the group. If you use peer pressure to encourage individuals

to work toward team goals and behave consistently with organizational values, it can enhance ethical performance. But your behavior should emphasize acceptance and rewarding of posi- tive behavior, rather than rejection and exclusion, as a means of getting everyone to behave consistently in the group.

Sources: Based on E. Estrada and E. Vargas- Estrada, “How Peer Pressure Shapes Con- sensus, Leadership, and Innovations in Social Groups,” Scientific Reports 3 (2013), article number 2905; A. Verghese, “The Healing Power of Peer Pressure,” Newsweek, March 14, 2011, www.newsweek.com; J. Meer, “Brother, Can You Spare a Dime? Peer Pres- sure in Charitable Solicitation,” Journal of Public Economics 95, no. 7–8 (2011): 926– 41; and L. Potter, “Lack Influence at Work? Why Most Leaders Struggle to Lead Posi- tive Change,” Yahoo, May 14, 2013, http:// finance.yahoo.com/news/lack-influence-why- most-leaders-121500672.html.

In the studies, the researchers first examined the relationship between the physical environment and productivity. As they increased the light level for the experimental group of workers, output rose for that unit and the control group. But as they dropped the light level, productivity continued to increase. In fact, productivity in the experimental group decreased only when the light intensity had been reduced to that of moonlight, leading researchers to believe that group dynamics, rather than the environment, influenced behavior.

The researchers next isolated a small group of women assembling tele- phones so their behavior could be observed more carefully. Over the next several years, this small group’s output increased steadily, and the number of personal and sick absences was approximately one-third of that in the regular production department. It became evident that this group’s performance was significantly influenced by its “special” status. The members thought they were in an elite group, and that management showed concern about their interests by engaging in experimentation. In essence, workers in both the illumination and assembly experiments were really reacting to the increased attention they received.

A wage incentive plan was then introduced in the bank wiring observation room. The most important finding was that employees did not individually maximize their output. Rather, their role performance became controlled by a group norm. Members were afraid that if they significantly increased their output, the unit incentive rate might be cut, the expected daily output might be increased, layoffs might occur, or slower workers might be reprimanded. So the group established its idea of a fair output—neither too much nor too little. Members helped each other ensure their reports were nearly level, and the

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norms that the group established included a number of behavioral “don’ts.” Don’t be a rate-buster, turning out too much work. Don’t be a chiseler, turning out too little work. Don’t squeal on any of your peers. The group enforced its norms with name calling, ridicule, and even punches to the upper arms of vio- lators. It thus operated well below its capability, using norms that were tightly established and strongly enforced.

Positive Norms and Group Outcomes One goal of every organization with corporate social responsibility (CSR) initia- tives is for the organization’s values (or the values of the CEO and executives) to hold normative sway over employees.41. After all, if employees aligned their thinking with the organization’s positive norms, these norms would become stronger and the probability of positive impact would grow exponentially. We might expect the same outcomes from political correctness (PC) norms. But what is the effect of strong positive norms on group outcomes? The popular thinking is that, to increase creativity in groups, for instance, norms should be loosened. However, research on gender-diverse groups indicates that strong PC norms increase group creativity. Why? Clear expectations about male-female interactions reduce uncertainty about group expectations,42 which allows the members to express their creative ideas more easily, without combating stereo- type norms.

Positive group norms may well beget positive outcomes, but only if other factors are present, too. For instance, in a recent study a high level of group extraversion predicted helping behaviors more strongly when there were posi- tive cooperation norms.43 As powerful as norms can be, though, not everyone is equally susceptible to positive group norms. Individual personalities factor in, too, as well as the level of a person’s social identity with the group. Also, a recent study in Germany indicated that the more satisfied people were with their groups, the more closely they followed group norms.44

From studies of employees at the Western Electric Company’s Haw- thorne Works in Chicago, researchers gained valuable insights into how indi- vidual behavior is influenced by group norms. They also learned that money was less of a factor in determining worker output than were group stan- dards, sentiments, and security. Source: Hawthorne Museum of Morton College

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Negative Norms and Group Outcomes LeBron is frustrated by a coworker who constantly spreads malicious and unsub- stantiated rumors about him. Lindsay is tired of a member of her work group who, when confronted with a problem, takes out his frustration by yelling and screaming at her and other members. And Mi-Cha recently quit her job as a dental hygienist after being sexually harassed by her employer.

What do these illustrations have in common? They represent employees exposed to acts of deviant workplace behavior.45 As we discussed in Chapter 3, counterproductive work behavior (CWB) or deviant workplace behavior (also called antisocial behavior or workplace incivility) is voluntary behavior that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members. Exhibit 9-3 provides a typology of deviant workplace behaviors, with examples of each.

Few organizations will admit to creating or condoning conditions that encourage and maintain deviant behaviors. Yet they exist. As we discussed before, a work group can become characterized by positive or negative attri- butes. When those attributes are negative, such as when a work group is high in psychopathy and aggression, the characteristics of deceit, amorality, and intent to harm others are pronounced.46 Second, employees have been report- ing an increase in rudeness and disregard toward others by bosses and cowork- ers in recent years. Workplace incivility, like many other deviant behaviors, has many negative outcomes for the victims.47 Nearly half of employees who have suffered this incivility say that it has led them to think about changing jobs; 12 percent actually quit because of it.48 Also, a study of nearly 1,500 respon- dents found that, in addition to increasing turnover intentions, incivility at work increased reports of psychological stress and physical illness.49 Employees that are repeatedly subjected to incivility feel a sense of injustice and may lash out at the organization by engaging in deviant behaviors.50 Research sug- gests that a lack of sleep, which is often caused by heightened work demands and which hinders a person’s ability to regulate emotions and behaviors, can also lead to deviant behavior. As organizations have tried to do more with less, pushing their employees to work extra hours, they may be indirectly facili- tating deviant behavior.51

deviant workplace behavior Voluntary behavior that violates significant organiza- tional norms and, in so doing, threatens the well-being of the organization or its members. Also called antisocial behavior or workplace incivility.

Typology of Deviant Workplace BehaviorExhibit 9-3

Category Examples

Production Leaving early Intentionally working slowly Wasting resources

Property Sabotage Lying about hours worked Stealing from the organization

Political Showing favoritism Gossiping and spreading rumors Blaming coworkers

Personal aggression Sexual harassment Verbal abuse Stealing from coworkers

Sources: Based on S. H. Appelbaum, G. D. Iaconi, and A. Matousek, “Positive and Negative Deviant Workplace Behaviors: Causes, Impacts, and Solutions,” Corporate Governance 7, no. 5 (2007): 586–98; and R. W. Griffin and A. O’Leary-Kelly, The Dark Side of Organizational Behavior (New York: Wiley, 2004).

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Like norms in general, employees’ antisocial actions are shaped by the group context within which they work. Evidence demonstrates deviant work- place behavior is likely to flourish where it’s supported by group norms.52 For example, workers who socialize either at or outside work with people who are frequently absent from work are more likely to be absent themselves.53 Thus when deviant workplace norms surface, employee cooperation, commitment, and motivation are likely to suffer.

What are the consequences of workplace deviance for groups? Some research suggests a chain reaction occurs in groups with high levels of dysfunc- tional behavior.54 The process begins with negative behaviors like shirking, undermining coworkers, or being generally uncooperative. As a result of these behaviors, the group collectively starts to have negative moods. These nega- tive moods then result in poor coordination of effort and lower levels of group performance.

Norms and Culture Do people in collectivist cultures have different norms than people in individu- alist cultures? Of course they do.55 But did you know that our orientation may be changed, even after years of living in one society? In a recent experiment, an organizational role-playing exercise was given to a neutral group of subjects; the exercise stressed either collectivist or individualist norms. Subjects were then given a task of their personal choice or were assigned one by an ingroup or outgroup person. When the individualist-primed subjects were allowed per- sonal choice of the task, or the collectivist-primed subjects were assigned the task by an ingroup person, they became more highly motivated.56

Group Property 3: Status, and Group Property 4: Size and Dynamics We’ve discussed how the roles we play and the norms we internalize tend to dictate our behavior in groups. However, those are not the only two factors that influence who we are in a group and how the group functions. Have you ever noticed how groups tend to stratify into higher- and lower-status members? Sometimes the status of members reflects their status outside the group setting, but not always. Also, status often varies between groups of different sizes. Let’s examine how these factors affect a work group’s efficacy.

Group Property 3: Status Status—a socially defined position or rank given to groups or group members by others—permeates every society. Even the smallest group shows differences in member status over time. Status is a significant motivator and has major behavioral consequences when individuals perceive a disparity between what they believe their status is and what others perceive it to be.

What Determines Status? According to status characteristics theory, status tends to derive from one of three sources:57

1. The power a person wields over others. Because they likely control the group’s resources, people who control group outcomes tend to be per- ceived as high status.

2. A person’s ability to contribute to a group’s goals. People whose contribu- tions are critical to the group’s success tend to have high status.

9-5 Show how status and size differences affect group performance.

status A socially defined position or rank given to groups or group members by others.

status characteristics theory A theory stating that differences in status characteris- tics create status hierarchies within groups.

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3. An individual’s personal characteristics. Someone whose personal char- acteristics are positively valued by the group (good looks, intelligence, money, or a friendly personality) typically has higher status than someone with fewer valued attributes.

Status and Norms Status has some interesting effects on the power of norms and pressures to conform. High-status individuals may be more likely to devi- ate from norms when they have low identification (social identity) with the group.58 They also eschew pressure from lower-ranking members of other groups. For instance, physicians actively resist administrative decisions made by lower-ranking medical insurance company employees.59 High-status people are also better able to resist conformity pressures than their lower-status peers. An individual who is highly valued by a group but doesn’t need or care about the group’s social rewards is particularly able to disregard conformity norms.60 In general, bringing high-status members into a group may improve perfor- mance, but only up to a point, perhaps because these members may introduce counterproductive norms.61

Status and Group Interaction People tend to become more assertive when they seek to attain higher status in a group.62 They speak out more often, criticize more, state more commands, and interrupt others more often. Lower-status members tend to participate less actively in group discussions; when they pos- sess expertise and insights that could aid the group, failure to fully utilize these members reduces the group’s overall performance. But that doesn’t mean a group of only high-status individuals would be preferable. Adding some high-sta- tus individuals to a group of mid-status individuals may be advantageous because group performance suffers when too many high-status people are in the mix.63

Status Inequity It is important for group members to believe the status hier- archy is equitable. Perceived inequity creates disequilibrium, which inspires

Aaron Rodgers has high status as the quarterback of the Green Bay Packers football team. His status derives from his ability to contribute to his team’s success in winning games. Rodgers’s teammates and coaches value his character, leadership skills, expertise in calling plays, and ability to throw touchdown passes accurately while on the move. Source: Matt Ludtke/FR155580/AP Images

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various types of corrective behaviors. Hierarchical groups can lead to resent- ment among those at the lower end of the status continuum. Large differences in status within groups are also associated with poorer individual performance, lower health, and more pronounced intentions for the lower-status members to leave the group.64

Groups generally agree within themselves on status criteria; hence, there is usually high concurrence on group rankings of individuals. Business execu- tives may use personal income or the growth rate of their companies as deter- minants of status. Government bureaucrats may use the size of their budgets, and blue-collar workers may use their years of seniority. Managers who occupy central positions in their social networks are typically seen as higher in status by their subordinates, and this position actually translates into greater influence over the group’s functioning.65

Groups generally form an informal status order based on ranking and com- mand of needed resources.66 Individuals can find themselves in conflicts when they move between groups whose status criteria are different, or when they join groups whose members have heterogeneous backgrounds. Cultures also differ in their criteria for conferring status upon individuals. When groups are het- erogeneous, status differences may initiate conflict as the group attempts to reconcile the separate hierarchies. As we’ll see in Chapter 10, this can be a problem when management creates teams of employees from varied functions.

Status and Stigmatization Although it’s clear that your own status affects the way people perceive you, the status of people with whom you are affiliated can also affect others’ views of you. Studies have shown that people who are stigma- tized can “infect” others with their stigma. This “stigma by association” effect can result in negative opinions and evaluations of the person affiliated with the stigmatized individual, even if the association is brief and purely coinciden- tal. Of course, many of the foundations of cultural status differences have no merit in the first place. For example, men interviewing for a job were viewed as less qualified when they were sitting next to an obese woman in a waiting room. Another study looking at the effects of being associated with an over- weight person found that even when onlookers were told the target person and the overweight person were unrelated, the target person was still devalued. Similarly, leaders of predominantly African American work groups also suffer from stigma by association, resulting in lower performance appraisals by their peers.67

Group Status Early in life, we acquire an “us and them” mentality.68 You may have correctly surmised that if you are in an outgroup, your group is of lower status in the eyes of the associated ingroup’s members. Culturally, sometimes ingroups represent the dominant forces in a society and are given high status, which can create discrimination against their outgroups. Low-status groups, perhaps in response to this discrimination, are likely to leverage ingroup favor- itism to compete for higher status.69 When high-status groups then feel the discrimination from low-status groups, they may increase their bias against the outgroups.70 With each cycle, the groups become more polarized.

Group Property 4: Size and Dynamics Does the size of a group affect the group’s overall behavior? Yes, but the effect depends on what dependent variables we examine.71 Groups with a dozen or more members are good for gaining diverse input.72 If the goal is fact-finding or idea-generating, then larger groups should be more effective.73 Smaller groups of about seven members are better at doing something productive.74

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One of the most important findings about the size of a group concerns social loafing, the tendency for individuals to expend less effort when working collectively than when alone.75 Social loafing directly challenges the assump- tion that the productivity of the group as a whole should at least equal the sum of the productivity of the individuals in it, no matter what the group size.

What causes social loafing? It may be a belief that others in the group are not carrying their fair share. If you see others as lazy or inept, you can reestab- lish equity by reducing your effort. But simply failing to contribute may not be enough for someone to be labeled a free rider. Instead, the group must believe the social loafer is acting in an exploitive manner (benefitting at the expense of other team members).76 Another explanation for social loafing is the diffu- sion of responsibility. Because group results cannot be attributed to any single person, the relationship between an individual’s input and the group’s output is clouded. Individuals may then be tempted to become free riders and coast on the group’s efforts.77

The implications for Organizational Behavior (OB) are significant. When managers use collective work situations, they must also be able to identify indi- vidual efforts. Greater performance diversity creates greater social loafing the lon- ger a group is together, which decreases satisfaction and performance.78

Social loafing appears to have a Western bias.79 It’s consistent with individu- alist cultures, such as the United States and Canada, that are dominated by self- interest. It is not consistent with collectivist societies, in which individuals are motivated by group goals. When research is compared across cultures, groups from Eastern cultures had significantly lower rates of social loafing.

Research indicates that the stronger an individual’s work ethic is, the less likely that person is to engage in social loafing.80 Also, the greater the level of conscientiousness and agreeableness in a group, the more likely that perfor- mance will remain high whether there is social loafing or not.81 There are ways to prevent social loafing: (1) set group goals, so the group has a common pur- pose to strive toward; (2) increase intergroup competition, which focuses on the shared group outcome; (3) engage in peer evaluations; (4) select members who have high motivation and prefer to work in groups; and (5) base group

social loafing The tendency for individuals to expend less effort when working collectively than when working individually.

Young employees of Alibaba’s Tmall online shopping site celebrate their group’s achievement of increasing the volume of sales orders during China’s “Singles Day” shopping event. Although social loafing is consistent with individualistic cultures, in collec- tivist societies such as China, employ- ees are motivated by group goals and perform better in groups than they do when they are working individually. Source: Han Chuanhao Xinhua News Agency/Newscom

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rewards in part on each member’s unique contributions.82 Recent research indicates that social loafing can be counteracted by publicly posting individual performance ratings for group members, too.83 Although no magic bullet will prevent social loafing, these steps should help minimize its effect.

Group Property 5: Cohesiveness, and Group Property 6: Diversity For a group to be highly functioning, it must act cohesively as a unit, but not because all the group members think and act alike. In some ways, the proper- ties of cohesiveness and diversity need to be valued way back at the tacit estab- lishment of roles and norms—will the group be inclusive of all its members, regardless of differences in backgrounds? Let’s discuss the importance of group cohesiveness first.

Group Property 5: Cohesiveness Groups differ in their cohesiveness—the degree to which members are attracted to each other and motivated to stay in the group. Some work groups are cohesive because the members have spent a great deal of time together, the group’s small size or purpose facilitates high interaction, or external threats have brought members close together.

Cohesiveness affects group productivity. Studies consistently show that the relationship between cohesiveness and productivity depends on the group’s performance-related norms.84 If norms for quality, output, and cooperation with outsiders are high, a cohesive group will be more productive than a less cohesive group. But if cohesiveness is high and performance norms are low, productivity will be low. If cohesiveness is low and performance norms are high, productivity increases, but less than in the high-cohesiveness/high-norms situation. When cohesiveness and performance-related norms are both low, productivity tends to fall into the low-to-moderate range. These conclusions are summarized in Exhibit 9-4.

What can you do to encourage group cohesiveness? Here are some ideas: (1) Make the group smaller, (2) encourage agreement with group goals, (3) increase the time members spend together, (4) increase the group’s status and the perceived difficulty of attaining membership, (5) stimulate competi- tion with other groups, (6) give rewards to the group rather than to individ- ual members, and (7) physically isolate the group.85

9-6 Describe how issues of cohesiveness and diversity can be integrated for group effectiveness.

cohesiveness The degree to which group members are attracted to each other and are motivated to stay in the group.

Relationship among Group Cohesiveness, Performance Norms, and Productivity

Exhibit 9-4

High productivity





Pe rf

or m

an ce

N or

m s

Low productivity


Moderate productivity

Moderate to low productivity

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306 PART 3 The Group

Group Property 6: Diversity The final property of groups that we consider is diversity in the group’s mem- bership, or the degree to which members of the group are similar to, or differ- ent from, one another. Overall, studies identify both costs and benefits from group diversity.

Diversity appears to increase group conflict, especially in the early stages of a group’s tenure; this often lowers group morale and raises dropout rates. One study compared groups that were culturally diverse and homogeneous (composed of people from the same country). On a wilderness survival test, the groups performed equally well, but the members from the diverse groups were less satisfied with their groups, were less cohesive, and had more conflict.86 Another study examined the effect of differences in tenure on the performance of 67 engineering research and development groups.87 When most people had roughly the same level of tenure, performance was high, but as tenure diversity increased, performance dropped off. There was an important qualifier: Higher levels of tenure diversity were not related to lower performance for groups when there were effective team-oriented human resources (HR) practices. More spe- cifically, groups in which members’ values or opinions differ tend to experience more conflict, but leaders who can get the group to focus on the task at hand and encourage group learning are able to reduce these conflicts and enhance discussion of group issues.88 Gender diversity can also be a challenge to a group, but if inclusiveness is stressed, group conflict and dissatisfaction are lowered.89

You may have correctly surmised that the type of group diversity matters. Surface-level diversity—in observable characteristics such as national origin, race, and gender—alerts people to possible deep-level diversity—in underlying attitudes, values, and opinions. One researcher argues, “The mere presence of diversity you can see, such as a person’s race or gender, actually cues a team that there’s likely to be differences of opinion.”90 Surface-level diversity may subconsciously cue team members to be more open-minded in their views.91 For example, two studies of MBA student groups found surface-level diversity led to greater openness. The effects of deep-level diversity are less understood. Research in Korea indicates that putting people with a high need for power with those with a low need for power can reduce unproductive group competition, whereas putting individuals with a similar need for achievement may increase task performance.92

Although differences can lead to conflict, they also provide an opportunity to solve problems in unique ways. One study of jury behavior found diverse juries were more likely to deliberate longer, share more information, and make fewer factual errors when discussing evidence. Altogether, the impact of diversity on groups is mixed. It is difficult to be in a diverse group in the short term. However, if members can weather their differences, over time diversity may help them be more open-minded and creative and to perform better. For example, gender diversity has been found to improve group performance in Chinese work groups.93 On the other hand, even positive effects are unlikely to be especially strong. As one review stated, “The business case (in terms of demonstrable financial results) for diversity remains hard to support based on the extant research.”94 Yet other researchers argue that we shouldn’t overlook the effects of homogeneity, many of which can be detrimental.95

diversity The extent to which members of a group are similar to, or different from, one another.

MyLab Management Personal Inventory Assessments Go to www.pearson.com/mylab/management to complete the Personal Inventory Assessment related to this chapter.

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One possible side effect in diverse teams—especially those that are diverse in terms of surface-level characteristics—is faultlines, or perceived divisions that split groups into two or more subgroups based on individual differences such as sex, race, age, work experience, and education.

For example, let’s say that group A is composed of three men and three women. The three men have approximately the same amount of work experi- ence and background in marketing. The three women have about the same amount of work experience and background in finance. Group B has three men and three women, but they all differ in terms of their experience and backgrounds. Two of the men are experienced, while the other is new. One of the women has worked at the company for several years, while the other two are new. In addition, two of the men and one woman in group B have backgrounds in marketing, while the other man and the remaining two women have back- grounds in finance. It is thus likely that a faultline will result in subgroups of males and females in group A but not in group B, based on the differentiating characteristics.

Research on faultlines has shown that splits are generally detrimental to group functioning and performance. Subgroups may compete with each other, which takes time away from core tasks and harms group performance. Groups that have subgroups learn more slowly, make more risky decisions, are less cre- ative, and experience higher levels of conflict. Subgroups may not trust each other. Satisfaction with subgroups is generally high, but the overall group’s sat- isfaction is lower when faultlines are present.96

Are faultlines ever a good thing? One study suggested that faultlines based on differences in skill, knowledge, and expertise could be beneficial when the groups were in organizational cultures that strongly emphasized results. Why? A results-driven culture focuses people’s attention on what’s important to the company rather than on problems arising from subgroups.97 Another study showed that problems stemming from strong faultlines based on gender and educational major were counteracted when their roles were crosscut and the group as a whole was given a common goal to strive for. Together, these strate- gies force collaboration between members of subgroups and focus their efforts on accomplishing a goal that transcends the boundary imposed by the fault- line.98 Faultlines that are split along task-relevant characteristics may boost per- formance in certain organizations by promoting division of labor.99

Overall, although research on faultlines suggests that diversity in groups is potentially a double-edged sword, recent work indicates they can be strategi- cally employed to improve performance.

Group Decision Making The belief—characterized by juries—that two heads are better than one has long been accepted as a basic component of the U.S. legal system and those of many other countries. Many decisions in organizations are made by groups, teams, or committees. We’ll discuss the advantages of group decision making, along with the unique challenges that group dynamics bring to the decision- making process. Finally, we’ll offer some techniques for maximizing the group decision-making opportunity.

Groups versus the Individual Decision-making groups may be widely used in organizations, but are group decisions preferable to those made by an individual alone? The answer depends on a number of factors. Let’s begin by looking at the strengths and weaknesses of group decision making.

faultlines The perceived divisions that split groups into two or more subgroups based on individual differences such as sex, race, age, work experience, and education.

9-7 Contrast the strengths and weaknesses of group decision making.

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308 PART 3 The Group

Strengths of Group Decision Making Groups generate more complete informa- tion and knowledge. By aggregating the resources of several individuals, groups bring more input as well as heterogeneity into the decision process. They offer increased diversity of views. This opens up the opportunity to consider more approaches and alternatives. Finally, groups lead to increased acceptance of a solution. Group members who participate in making a decision are more likely to support it enthusiastically and to encourage others to accept it later.

Weaknesses of Group Decision Making Group decisions are time-consuming because groups typically take more time to reach a solution. There are confor- mity pressures. The desire by group members to be accepted and considered an asset to the group can squash any overt disagreement. Group discussion can be dominated by one or a few members. If they’re low- and medium-ability mem- bers, the group’s overall effectiveness will suffer. Finally, group decisions suffer from ambiguous responsibility. In an individual decision, it’s clear who is account- able for the final outcome. In a group decision, the responsibility of any single member is diluted.

Effectiveness and Efficiency Whether groups are more effective than individ- uals depends on how you define effectiveness. Group decisions are generally more accurate than the decisions of the average individual in a group, but they are less accurate than the judgments of the most accurate person.100 In terms of speed, individuals are superior. If creativity is important, groups tend to be more effective. And if effectiveness means the degree of acceptance of achiev- able solutions, the nod again goes to the group.101

But we cannot consider effectiveness without also assessing efficiency. With few exceptions, group decision making consumes more work hours than hav- ing an individual tackle the same problem. The exceptions tend to be instances in which, to achieve comparable quantities of diverse input, the single decision maker must spend a great deal of time reviewing files and talking to other peo- ple. In deciding whether to use groups, then, managers must assess whether increases in effectiveness are more than enough to offset the reductions in efficiency.

In summary, groups are an excellent vehicle for performing many steps in the decision-making process and offer both breadth and depth of input for information gathering. If group members have diverse backgrounds, the alter- natives generated should be more extensive and the analysis more critical. When the final solution is agreed on, there are more people in a group deci- sion to support and implement it. These pluses, however, may be more than offset by the time consumed by group decisions, the internal conflicts they create, and the pressures they generate toward conformity. We must be care- ful to define the types of conflicts, however. Research in Korea indicates that group conflicts about tasks may increase group performance, while conflicts in relationships may decrease performance.102 In some cases, therefore, we can expect individuals to make better decisions than groups.

Groupthink and Groupshift Two by-products of group decision making, groupthink and groupshift, can affect a group’s ability to appraise alternatives objectively and achieve high- quality solutions.

Groupthink relates to norms and describes situations in which group pres- sures for conformity deter the group from critically appraising unusual, minor- ity, or unpopular views. Groupthink attacks many groups and can dramatically

groupthink A phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action.

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Career OBjectives Can I fudge the numbers and not take the blame?

I’ve got a great work group, except for one thing: The others make me omit negative information about our group’s success that I’m in charge of as the treasurer. They gang up on me, insult me, and threaten me, so in the end I report what they want. They say omit- ting the negative information is not really wrong, and it doesn’t violate our organization’s rules, but on my own I would report everything. I need to stay in the group or I’ll lose my job. If we are called out on the numbers, can I just put the blame on the whole group?

— Jean-Claude Dear Jean-Claude: The short answer is that, because you are in a leadership role in the group, you may not have the option of blam- ing the others. Further, you may be held individually accountable as a leader for the outcomes of this situation.

Your dilemma is not unusual. Once we think of ourselves as part of a col- lective, we want to stay in the group and

can become vulnerable to pressures to conform. The pressure you’re get- ting from multiple members can make you aware that you’re in the minority in the group, and taunting can make you feel like an outsider or lesser member; therefore threats to harm your group standing may feel powerful.

So you have a choice: Submit to the pressure and continue misrepresenting your group’s success, or adhere to the responsibility you have as the treasurer and come clean. From an ethical stand- point, we hope you don’t consider the first option an acceptable choice. To make a change, you may be able to use social identification to your advantage. Rather than challenging the group as a whole, try meeting with individual group members to build trust, talking to each as fellow members of a worthy group that can succeed without any ethical quandaries. Don’t try to build a coali- tion; instead, build trust with individu- als and change the climate of the group

to value ethical behavior. Then the next time you need to report the numbers, you can call upon the group’s increased ethical awareness to gain support for your leadership decisions.

Sources: Based on M. Cikara and J. J. Van Bavel, “The Neuroscience of Intergroup Rela- tions: An Integrative Review,” Perspectives on Psychological Science 9, no. 3 (2014): 245–74; M. A. Korsgaard, H. H. Brower, and S. W. Lester, “It Isn’t Always Mutual: A Critical Review of Dyadic Trust,” Journal of Management 41, no. 1 (2015): 47–70; and R. L. Priem and P. C. Nystrom, “Exploring the Dynamics of Workgroup Fracture: Com- mon Ground, Trust-with-Trepidation, and Warranted Distrust,” Journal of Management 40, no. 3 (2014): 674–795.

The opinions provided here are of the manag- ers and authors only and do not necessar- ily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here.

hinder their performance.103 Groupshift describes the way group members tend to exaggerate their initial positions when discussing a given set of alterna- tives to arrive at a solution. In some situations, caution dominates and there is a conservative shift, while in other situations groups tend toward a risky shift.104 Let’s look at each phenomenon in detail.

groupshift A change between a group’s decision and an individual decision that a member within the group would make; the shift can be toward either conservatism or greater risk but it generally is toward a more extreme version of the group’s original position.

Groupthink Groupthink appears closely aligned with the conclusions Solo- mon Asch drew in his experiments with a lone dissenter. Individuals who hold a position different from that of the dominant majority are under pressure to suppress, withhold, or modify their true feelings and beliefs. As members of a group, we find it more pleasant to be in agreement—to be a positive part of the group—than to be a disruptive force, even if disruption would improve effec- tiveness. Groups that are more focused on performance than learning are espe- cially likely to fall victim to groupthink and to suppress the opinions of those who do not agree with the majority.105

MyLab Management Try It If your instructor has assigned this activity, go to www.pearson.com/ mylab/management to complete the Mini Sim.

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310 PART 3 The Group

Does groupthink attack all groups? No. It seems to occur most often when there is a clear group identity, when members hold a positive image of their group that they want to protect, and when the group perceives a collective threat to its positive image.106 One study showed that those influenced by groupthink were more confident about their course of action early on;107 how- ever, groups that believe too strongly in the correctness of their course of action are more likely to suppress dissent and encourage conformity than groups that are more skeptical about their course of action.

What can managers do to minimize groupthink?108 First, they can monitor group size. People grow more intimidated and hesitant as group size increases, and although there is no magic number that will eliminate groupthink, indi- viduals are likely to feel less personal responsibility when groups are larger than about 10 members. Managers should also encourage group leaders to play an impartial role. Leaders should actively seek input from all members and avoid expressing their own opinions, especially in the early stages of deliberation. In addition, managers should appoint one group member to play the role of dev- il’s advocate, overtly challenging the majority position and offering divergent perspectives. Yet another suggestion is to use exercises that stimulate active dis- cussion of diverse alternatives without threatening the group or intensifying identity protection. Have group members delay discussion of possible gains so they can first talk about the dangers or risks inherent in a decision. Requir- ing members to focus initially on the negatives of an alternative makes the group less likely to stifle dissenting views and more likely to gain an objective evaluation.

Groupshift or Group Polarization There are differences between group deci- sions and the individual decisions of group members.109 In groups, discussion leads members toward a more extreme view of the position they already held. Conservatives become more cautious, and more aggressive types take on more risk. We can view this group polarization as a special case of groupthink. The group’s decision reflects the dominant decision-making norm—toward greater caution or more risk—that develops during discussion.

The shift toward polarization has several explanations.110 It’s been argued, for instance, that discussion makes the members more comfortable with each other and thus more willing to express extreme versions of their original posi- tions. Another argument is that the group diffuses responsibility. Group deci- sions free any single member from accountability for the group’s final choice, so a more extreme position can be taken. It’s also likely that people take extreme positions because they want to demonstrate how different they are from the outgroup.111 People on the fringes of political or social movements take on ever-more-extreme positions just to prove they are really committed to the cause, whereas those who are more cautious tend to take moderate posi- tions to demonstrate how reasonable they are.

So how should you use the findings on groupshift? Recognize that group decisions exaggerate the initial position of individual members, the shift has been shown more often to be toward greater risk, and which way a group will shift is a function of the members’ prediscussion inclinations.

We now turn to the techniques by which groups make decisions. These reduce some of the dysfunctional aspects of group decision making.

Group Decision-Making Techniques The most common form of group decision making takes place in interacting groups. Members meet face-to-face and rely on both verbal and nonverbal inter- action to communicate. But as our discussion of groupthink demonstrated,

interacting groups Typical groups in which members interact with each other face-to- face.

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interacting groups often censor themselves and pressure individual members toward conformity of opinion. Brainstorming and the nominal group tech- nique can reduce problems inherent in the traditional interacting group.

Brainstorming Brainstorming can overcome the pressures for conformity that dampen creativity112 by encouraging any and all alternatives while withholding criticism. In a typical brainstorming session, a half-dozen to a dozen people sit around a table. The group leader states the problem in a clear manner so all participants understand. Members then freewheel as many alternatives as they can in a given length of time. To encourage members to “think the unusual,” no criticism is allowed, even of the most bizarre suggestions, and all ideas are recorded for later discussion and analysis.

Brainstorming may indeed generate ideas—but not very efficiently. Research consistently shows individuals working alone generate more ideas than a group in a brainstorming session. One reason for this is “production blocking.” When people are generating ideas in a group, many are talking at once, which blocks individuals’ thought process and eventually impedes the sharing of ideas.113

Nominal Group Technique The nominal group technique may be more effective. This technique restricts discussion and interpersonal communication during the decision-making process. Group members are all physically present, as in a traditional meeting, but they operate independently. Specifically, a problem is presented and then the group takes the following steps:

1. Before any discussion takes place, each member independently writes down ideas about the problem.

2. After this silent period, each member presents one idea to the group. No discussion takes place until all ideas have been presented and recorded.

3. The group discusses the ideas for clarity and evaluates them. 4. Each group member silently and independently rank-orders the ideas. The

idea with the highest aggregate ranking determines the final decision.

The chief advantage of the nominal group technique is that it permits a group to meet formally but does not restrict independent thinking. Research generally shows nominal groups outperform brainstorming groups.114

Each of the group decision techniques has its own set of strengths and weak- nesses. The choice depends on the criteria you want to emphasize and the cost–benefit trade-off. As Exhibit 9-5 indicates, an interacting group is good for achieving commitment to a solution, brainstorming develops group cohesive- ness, and the nominal group technique is an efficient means for generating a large number of ideas.

brainstorming An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives.

nominal group technique A group decision- making method in which individual members meet face-to-face to pool their judgments in a systematic but independent fashion.

Evaluating Group EffectivenessExhibit 9-5

Type of Group

Effectiveness Criteria Interacting Brainstorming Nominal

Number and quality of ideas Low Moderate High Social pressure High Low Moderate Money costs Low Low Low Speed Moderate Moderate Moderate Task orientation Low High High Potential for interpersonal conflict High Low Moderate Commitment to solution High Not applicable Moderate Development of group cohesiveness High High Moderate

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312 PART 3 The Group

Summary We can draw several implications from our discussion of groups. First, norms control behavior by establishing standards of right and wrong. Second, status inequities create frustration and can adversely influence productivity and will- ingness to remain with an organization. Third, the impact of size on a group’s performance depends on the type of task. Fourth, cohesiveness may influence a group’s level of productivity, depending on the group’s performance-related norms. Fifth, diversity appears to have a mixed impact on group performance, with some studies suggesting that diversity can help performance and others suggesting the opposite. Sixth, role conflict is associated with job-induced ten- sion and job dissatisfaction.115 Groups can be carefully managed toward posi- tive organizational outcomes and optimal decision making. The next chapter will explore several of these conclusions in greater depth.

Implications for Managers ● Recognize that groups can have a dramatic impact on individual behavior

in organizations, to either positive or negative effect. Therefore, pay spe- cial attention to roles, norms, and cohesion—to understand how these are operating within a group is to understand how the group is likely to behave.

● To decrease the possibility of deviant workplace activities, ensure that group norms do not support antisocial behavior.

● Pay attention to the status aspect of groups. Because lower-status people tend to participate less in group discussions, groups with high status dif- ferences are likely to inhibit input from lower-status members and reduce their potential.

● Use larger groups for fact-finding activities and smaller groups for action-taking tasks. With larger groups, provide measures of individual performance.

● To increase employee satisfaction, make certain people perceive their job roles accurately.

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Foundations of Group Behavior CHAPTER 9 313

Diverse Work Groups Are Smarter and More Innovative POINT

B irds of a feather flock together, but when it comes to busi-ness, it may be better for pigeons to flock with crows. Employ-ees may feel more comfortable working with people who are similar to them, but this comfort may come at the cost of success.

Time after time, research demonstrates that more diverse com- panies have the most success. A global analysis of 2,400 compa- nies demonstrated that the presence of at least one female employee on an executive board leads to higher net income growth and return on equity. Diversity at lower levels of the organization may also be helpful: Companies with more diverse work groups have higher finan- cial returns than companies with fewer minority or female employees.

Diverse groups think smarter. When people are asked to work with people who are different from them, they are forced out of their com- fort zone, leading to more critical thinking and innovation. In mock juries, for example, more ethnically heterogenous juries made more accurate decisions and supported their decisions with more facts from the case. Teams of heterogenous financial professionals also performed better on tasks where they were asked to price stocks in a stock market simulation. In addition, a recent analysis of research and design teams in Spain found that teams with greater gender diversity created more innovative products. Other types of diversity may also be beneficial. In a murder mystery task, groups with a mix of organizational tenure were more likely to guess the correct suspect. When cultural diversity of businesses in the United Kingdom were analyzed, more culturally diverse leadership teams created more new products.

So the next time you’re worried about working with someone you don’t have a lot in common with, remember the words of Maya Angelou: “In diversity there is beauty and there is strength.”


T here is some evidence that having diverse leadership may benefit companies. What about the research showing that diversity is linked to lower employee morale and well-being, slower decision making, and increased conflict? Organizations with more diverse work groups are also more likely to be sued for discrimination.

Sometimes more diverse tasks can boost innovation and critical thinking skills, but those advantages may not be worth forcing employees to work with people they feel uncomfortable with. When employees are forced to participate in diversity initiatives, it can lead to more stress. Over half feel that they have to modify their behavior significantly to feel like they fit in. If employees try to act like their peers rather than acknowledging their differences, it doesn’t just lead to stress. Research has shown that any advantages on task creativity disappear when team members don’t openly discuss and acknowl- edge their differing backgrounds.

Even if employees feel comfortable enough to express themselves, that’s no guarantee that they will actually get along. Group members with diverse racial, gender, and educational backgrounds might have a slight advantage over homogenous groups in some tasks. Yet they can be less effective when group members have different values. When group members have different values because, for example, they have different cultural backgrounds, it may be difficult for the group to overcome these differences.

It may be tempting to think that a diverse team is better, but remember, there’s a reason like attracts like.

Sources: Based on S. Bailey, “Why Diversity Is Bad for Business (and Inclusion Is the Answer),” Forbes, May 20, 2014, https://www.forbes.com/sites/sebastianbailey/2014/05/20/why-we-should-prioritize-the-i-in-d-and-i/#2c6b0e54600d; D. Rock, H. Grant, and J. Grey, “Diverse Teams Feel Less Comfortable—and That’s Why They Perform Better,” Harvard Business Review, September 22, 2016, https://hbr.org/2016/09/diverse-teams-feel-less-comfortable-and-thats-why-they-perform- better; and D. Rock and H. Grant, “Why Diverse Teams Are Smarter,” Harvard Business Review, November 4, 2016, https:// hbr.org/2016/11/why-diverse-teams-are-smarter.

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