CHAPTER ONE

NATURE AND SCOPE OF ORGANIZATION BEHAVIOR

What Managers Do
Let’s begin by briefly defining the terms manager and the place where
managers work -the organization. Then let’s look at the manager’s job;
specifically, what do managers do?
Managers get things done through other people. They make decisions,
allocate resources, and direct the activities of others to attain goals.
Managers do their work in an organization. This is a consciously
coordinated social unit, composed of two or more people that functions on a
relatively continuous basis to achieve a common goal or set of goals. On the
basis of this definition, manufacturing and service firms are organizations
and so are schools, hospitals, churches, military units, retail stores, police
departments, and local, state, and federal government agencies. The people
who oversee the activities of others and who are responsible for attaining
goals in these organizations are managers (although they’re sometimes
called administrators, especially in not-for-profit organizations).

Management Functions
In the early part of this century, a French industrialist by the name of Henri
Fayol wrote that all managers perform five management functions: They
plan, organize, command, coordinate, and control. Today, we have
condensed those down to four: planning, organizing, leading, and con-
trolling. If you don’t know where you’re going, any road will get you there.
Since organizations exist to achieve goals, someone has to define those
goals and the means by which they can be achieved.
Management is that someone. The planning function encompasses defining
an organization’s goals, establishing an overall strategy for achieving those
goals, and developing a comprehensive hierarchy of plans to integrate and
coordinate activities. Managers are also responsible for designing an
organization’s structure. We call this function organizing. It includes the
determination of what tasks are to be done, who is to do them, how the tasks
are to be grouped, who reports to whom, and where decisions are to be
made.

Every organization contains people, and it is management’s job to direct and

coordinate those people. This is the leading function. When managers
motivate subordinates, direct the activities of others, select the most
effective communication channels, or resolve conflicts among members,
they are engaging in leading.
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The final function managers perform is controlling. After the goals are set,
the plans formulated, the structural arrangements delineated, and the
people hired, trained, and motivated, there is still the possibility that
something may go amiss. To ensure that things are going as they should,
management must monitor the Organization’s performance. Actual
performance must be compared with the previously set goals. If there are
any significant deviations, it is management’s job to get the organization
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back on track. This monitoring, comparing, and potential correcting is what is
meant by the controlling function. So, using the functional approach, the
answer to the question, what do managers do? Is that they plan, organize,
lead, and control.

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Management Roles
In the late 1960s, a graduate student at MIT, Henry Mintzberg, undertook a
careful study of five executives to determine what these managers did on
their jobs. On the basis of his observations of these managers, Mintzberg
concluded that managers perform ten different, highly interrelated roles, or
sets of behaviors attributable to their jobs.8 As shown in Exhibit 1-1, these
ten roles can be grouped as being primarily concerned with interpersonal
relation-ships, the transfer of information, and decision making.

Interpersonal Roles: All managers are required to perform duties that are
ceremonial and symbolic in nature. When the president of a college hands
out diplomas at commencement or a factory supervisor gives a group of high
school students a tour of the plant, he or she is acting in a figurehead role.
All managers also have a leadership role. This role includes hiring, training,
motivating, and disciplining employees. The third role within the
interpersonal grouping is the liaison role. Mintzberg described this activity as
contacting outsiders who provide the manager with information. These may
be individuals or groups inside or outside the organization.

The sales manager who obtains information from the personnel manager in
his or her own company has an internal liaison relationship. When that sales
manager has contacts with other sales executives through a marketing trade
association, he or she has an outside liaison relationship.

Information Roles: All managers, to some degree, collect information from

organizations and institutions outside their own. Typically, they get
information by reading magazines and talking with other people to learn of
changes in the public’s tastes, what competitors may be planning, and the
like. Mintzberg called this the monitor role. Managers also act as a conduit to
transmit information to organizational members. This is the disseminator
role. Managers additionally perform a spokesperson role when they
represent the organization to outsiders.

Decisional Roles: Finally, Mintzberg identified four roles that revolve

around the making of choices. In the entrepreneur role, managers initiate
and oversee new projects that will improve their organizations performance.
As disturbance handlers, managers take corrective action in response to
unforeseen problems. As resource allocators, managers are responsible for
allocating human, physical, and monetary resources. Last, managers
perform a negotiator role, in which they discuss issues and bargain with
other units to gain advantages for their own unit.

Management Skills
Still another way of considering what managers do is to look at the skills or
competencies they need to successfully achieve their goals. Robert Katz has
identified three essential management skills: technical, human, and
conceptual.

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Technical Skills- Technical skills encompass the ability to apply specialized
knowledge or expertise. When you think of the skills held by professionals
such as civil engineers, tax accountants, or oral surgeons, you typically focus
on their technical skills. Through extensive formal education, they have
learned the special knowledge and practices of their field. Of course,
professionals don’t have a monopoly on technical skills, and not all technical
skills have to be learned in schools or formal training programs. All jobs
require some specialized expertise, and many people develop their technical
skills on the job.

Human Skills- the ability to work with understand and motivate other
people, both individually and in groups, describes human skills. Many
people are technically proficient but inter-personally incompetent. They
might, for example, be poor listeners, unable to understand the needs of
others, or have difficulty managing conflicts. Since managers get things done
through other people, they must have good human skills to communicate,
motivate, and delegate.

Conceptual skills: Managers must have the mental ability to analyze and
diagnose complex situations. These tasks require conceptual skills.
Decision making, for instance, requires managers.

People the key to managerial and organizational success

Given the high degree of complexity and rapid change managers face today,
personal and organizational success can be elusive. Unforeseen economic,
political, social, or technological changes can render even the best laid plans
useless. More often than not, the success of individual managers and
organizations pivots on such human factors as commitment, motivation,
communication, leadership, and trust. Those who fail to appreciate the vital
role people play in managerial and organizational success are destined to
finish behind those who do.

People and managerial success

Why do some managers steadily move up through the ranks while others,
who are similarly qualified, prematurely derail? Research has been
conducted to relate stories about two types of managers: (1) those that
made it to top management positions and (2) those that did not. Stories
about 20 successful managers were then compared with stories about 21
derailed managers.
All 41 managers possessed significant strengths. However, “insensitivity to
others was cited as a reason for derailment more often than any other flaw.

People and organizational success

In recent years, many executives have said something along the lines of,
“we are a good company because we have good people”. Critics generally
view this type of statement as a hollow cliché’ or a public relations ploy. But
there is mounting evidence that successful organizations treat all their

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employees with care and respect. Evidence of this connection between a
“people orientation” and organization success was uncovered by Peters and
Waterman. They identified eight attributes of excellence. Important among
those attributes is “productivity through people.” Regarding this key
contributor to corporate excellence, Peters and Waterman concluded that
truly excellent organizations:

Treat people as adults. Treat them as partners; treat them with

dignity; treat them with respect. Treat them –not capital spending
and automation-as the primary source of productivity gains. In
other words, if you want productivity and the financial reward that
goes with it, you must treat your workers as your most important
asset.

Organizational Behavior
We have made the case for the importance of people skills. However, the
discipline upon which it is based is not called People Skills. The term that is
widely used to describe the discipline is Organizational Behavior.

Definitions:
Organization Behavior (frequently abbreviated as OB) may be defined as
follows:
 It is the study of human behavior, attitudes, and performance with in the
organizational setting; drawing on theory, methods, and principles from
such disciplines as psychology, sociology, and cultural anthropology to
learn about individual perceptions, values, learning capacities, and
actions while working in groups and with in the total organization;
analyzing the external environment’s effect on the organization and its
human resources, missions, objectives, and strategies.
 Organizational behavior is a field of study that investigates the impact
that individuals, groups, and structure have on behavior within
organizations for the purpose of applying such knowledge toward
improving an organization’s effectiveness.
 OB is an interdisciplinary field dedicated to better understanding and
managing people at work.
The above definition illustrates many points:
 Organizational behavior is a field of study. That statement means that
it is a distinct area of expertise with a common body of knowledge. What
does it study? It studies three determinants of behavior in organizations:
individuals, groups, and structure.
 OB is a way of thinking. Behavior is viewed as operating at individual,
group, and organizational levels. This approach suggests that when
studying OB, we must identify clearly the level of analysis being used-
individual, group, and/ or organizational.
 OB is multidisciplinary. This means that it utilizes principles, models,
theories, and methods from other disciplines.

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  There is a distinctly humanistic orientation with in organizational
behavior. People and their attitudes, perceptions, learning capacities,
feelings and goals are of major importance to the organization.
 The field of OB is performance oriented. Why is performance low or
high? How can performance be improved? Can training enhance on the
job performance? These are important issues facing practicing
managers.
 The external environment is seen as having significant impact on
organizational behavior.
 In addition, OB applies the knowledge gained about individuals, groups,
and the effect of structure on behavior in order to make organizations
work more effectively. Start Contents * * Quit Video Web
To sum up our definitions, OB is concerned with the study of what people do
in an organization and how that behavior affects the performance of the
organization. And because OB is specifically concerned with employment-
related situations, you should not be surprised to find that it emphasizes
behavior as related to jobs, work, absenteeism, employee turnover,
productivity, human performance, and management. There is increasing
agreement as to the components or topics that constitute the subject area of
OB. Although there is still considerable debate as to the relative importance
of each, there appears to be general agreement that OB includes the core
topics of motivation, leader behavior and power, interpersonal
communication, group structure and processes, learning, attitude
development and perception, change processes, conflict, work design, and
work stress.

Historical Background of Organizational Behavior

Certainly large numbers of people have been doing work for a long time.
Pyramids and many other huge monuments and structures were built,
armies and governments were organized, and civilizations spread over vast
territories. Some writings from antiquity suggest that systematic approaches
to management and organization did evolve and were transmitted to others.

However, the primary influences in organizations and management today

stem from more recent events and management theories. These events and
management theories contributed for the development of organization
behavior are described below:

The Protestant Reformation and the Protestant Ethic

Some would claim that to begin to understand our organizations today we

need to look at the Protestant Reformation and the Protestant Ethic. A new
ethic began to evolve, an ethic that shifted the orientation of one's life from
the "next world" to this world. This ethic is best embodied in quotes from
Luther ("All men possess a calling in the world and the fulfillment of its
obligation is a divinely imposed duty") and Calvin ("Disciplined work raises a
person above the calling into which he was born and is the only sign of his
election by God to salvation"... "The soul is naked before God without Church
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or communion-religion is a personal matter; worldly success and prosperity
are construed as signs of God's approval").

Over time, the Protestant Reformation provided an ideological foundation for

the modern industrial society by suggesting that work is now a profound
moral obligation, a path to eternal salvation. The focus is this world and
materialism, not next world. The individual's obligation is self-discipline, and
systematic work. It should be clear that the factory system, which began to
evolve late in the 18th Century, could never have flourished without the
ideological underpinnings of this profound shift in philosophy as exemplified
by the Protestant Ethic.

Scientific management (1910s) described management as a science with

employers having specific but different responsibilities; encouraged the
scientific selection, training, and development of workers and the equal
division of work between workers and management
The Industrial Revolution that started with the development of steam power
and the creation of large factories in the late Eighteenth Century lead to
great changes in the production of textiles and other products. The factories
that evolved created tremendous challenges to organization and
management that had not been confronted before. Managing these new
factories and later new entities like railroads with the requirement of
managing large flows of material, people, and information over large
distances created the need for some methods for dealing with the new
management issues.

The most important of those who began to create a science of management

was Frederic Winslow Taylor, (1856-1915). Taylor was one of the first to
attempt to systematically analyze human behavior at work. His model was
the machine with its cheap, interchangeable parts, each of which does one
specific function. Taylor attempted to do to complex organizations what
engineers had done to machines and this involved making individuals into
the equivalent of machine parts. Just as machine parts were easily
interchangeable, cheap, and passive, so too should the human parts be the
same in the Machine model of organizations.

This involved breaking down each task to its smallest unit and to figure out
the one best way to do each job. Then the engineer, after analyzing the job
should teach it to the worker and make sure the worker does only those
motions essential to the task.. Taylor attempted to make a science for each
element of work and restrict behavioral alternatives facing worker. Taylor
looked at interaction of human characteristics, social environment, task, and
physical environment, capacity, speed, durability, and cost. The overall goal
was to remove human variability.

The results were profound. Productivity under Taylorism went up

dramatically. New departments arose such as industrial engineering,
personnel, and quality control. There was also growth in middle management
as there evolved a separation of planning from operations. Rational rules

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replaced trial and error; management became formalized and efficiency
increased. Of course, this did not come about without resistance. First the
old line managers resisted the notion that management was a science to be
studied not something one was born with (or inherited). Then of course,
many workers resisted what some considered the "dehumanization of work."
To be fair, Taylor also studied issues such as fatigue and safety and urged
management to study the relationship between work breaks, and the length
of the workday and productivity and convinced many companies that the
careful introduction of breaks and a shorter day could increase productivity.
Nevertheless, the industrial engineer with his stop watch and clip-board,
standing over you measuring each little part of the job and one's movements
became a hated figure and lead to much sabotage and group resistance.

The core elements of scientific management remain popular today. While a

picture of a factory around 1900 might look like something out of Dickens,
one should not think the core concepts of scientific management have been
abandoned. They haven't. They have merely been modified and updated.

Bureaucracy- emphasized order, system, rationality, uniformity, and

consistency in management; lead to equitable treatment for all employees
by management.

 Authority is rational and legal; authority should be based on position, not

on the person in the position.
 Authority stems from the office and this authority has limits as defined by
the office.
 Positions are organized in a hierarchy of authority.
 Organizations are governed by rules and regulations.

While many people think of bureaucracy in negative terms, this model in its
pure form was a dramatic improvement over the previous model of
organization, which was a feudal model, based on fixed status and position
by birth, not merit and unquestioned authority.

The Human Relations Movement

Human relations (1920s) focused on the importance of the attitudes and

feelings of workers; informal roles and norms influenced performance.

Despite the economic progress brought about in part by Scientific

Management, critics were calling attention to the "seamy side of progress,"
which included severe labor/management conflict, apathy, boredom, and
wasted human resources. These concerns lead a number of researchers to
examine the discrepancy between how an organization was supposed to
work versus how the workers actually behaved. In addition, factors like World
War I, developments in psychology (eg. Freud) and later the depression, all
brought into question some of the basic assumptions of the Scientific
Management School. One of the primary critics of the time, Elton Mayo,
claimed that this "alienation" stemmed from the breakdown of the social

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structures caused by industrialization, the factory system, and its related
outcomes like growing urbanization.

The Western Electric (Hawthorne Works) Studies (1923-1933) Cicero, , ILL.

The most famous of these studies was the Hawthorne Studies which showed
how work groups provide mutual support and effective resistance to
management schemes to increase output. This study found that workers
didn't respond to classical motivational approaches as suggested in the
Scientific Management and Taylor approaches, but rather workers were also
interested in the rewards and punishments of their own work group. These
studies, conducted in the 1920's started as a straightforward attempt to
determine the relationship between work environment and productivity. The
results of the research led researchers to feel that they were dealing with
socio-psychological factors that were not explained by classic theory, which
stressed the formal organization and formal leadership. The Hawthorne
Studies helped us to see that an organization is more than a formal
arrangement of functions but is also a social system. In the following chart,
we can see a comparison of traditional assumptions vs. a newer "human
relations" view.

Human relations Assumptions

 organizations are social systems, not just

technical economic systems
 we are motivated by many needs
 we are not always logical
 we are interdependent; our behaviour is
often shaped by the social context
 informal work group is a major factor in
Traditional Assumptions determining attitudes and performance of
individual workers
 people try to satisfy one  management is only one factor affecting
class of need at work: behaviour; the informal group often has a
economic need stronger impact
 no conflict exists between  job roles are more complex than job
individual and descriptions would suggest; people act in
organizational objectives many ways not covered by job descriptions
 people act rationally to  there is no automatic correlation between
maximize rewards individual and organizational needs
 we act individually to  communication channels cover both
satisfy individual needs logical/economic aspects of an organization
and feelings of people
 teamwork is essential for cooperation and
sound technical decisions
 leadership should be modified to include
concepts of human relations
 job satisfaciton will lead to higher job
productivity
 management requires effective social skills,
not just technical skills

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Results of the Hawthorne Studies and the related research
These studies added much to our knowledge of human behavior in
organizations and created pressure for management to change the
traditional ways of managing human resources. The Human Relations
Movement pushed managers toward gaining participative support of lower
levels of the organization in solving organization problems. The Movement
also fostered a more open and trusting environment and a greater emphasis
on groups rather than just individuals
Group dynamics (1940s) encouraged individual participation in decision-
making; noted the impact of work group on performance
Leadership (1950s) stressed the importance of groups having both social
task leaders; differentiated between Theory X and Y management.

Douglas McGregor's Theory X and Theory Y

Douglas McGregor was one of the great popularizers of Human Relations
approach with his Theory X and Theory Y. In his research he found that
although many managers spouted the right ideas, their actual managers
indicated a series of assumptions that McGregor called Theory X. However,
research seemed to clearly suggest that these assumptions were not valid
but rather a different series of notions about human behavior seemed more
valid. He called these Theory Y and urged managers to manage based on
these more valid Theory Y notions.

 Work is inherently distasteful

to most people
 Most people are not ambitious,  Work is as natural as play if the
have little desire for conditions are favorable
responsibility, and prefer to be  Self-control is often indispensible
directed in achieving organizational goals
 Most people have little  The capacity for creativity is
capacity for creativity in spread throughout organizations
solving organizational  Motivation occurs at affiliation,
problems esteem, and self-actualization
 Motivation occurs only at the levels, not just security,
physiiological and security physiological levels
levels  People can be self-directed and
 Most people must be closely creative at work if properly
controlled and often coerced motivated
to achieve organizational
objectives

Systems theory-(1970s): Represented organizations as open systems with

inputs, transformations, outputs, and feedback; systems strive for
equilibrium and experience equifinality.
Contingency theory (1980s): Emphasized the fit between organization
processes and characteristics of the situation; called for fitting the
organization's structure to various contingencies.
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A model for managing OB: Elements of Organizational
Behavior
A model is an abstraction of reality, a simplified representation of some real-
world phenomenon.

Organizational behavior is a misnomer. It is not the study of how

organizations behave, but rather the study of individual behavior in an
organizational setting. This includes the study of how individuals behave
alone, as well as how individuals behave in groups.

The purpose of organizational behavior is to gain a greater understanding of

those factors that influence individual and group dynamics in an
organizational setting so that individuals and the groups and organizations to
which they belong may become more efficient and effective. The field also
includes the analysis of organizational factors that may have an influence
upon individual and group behavior. Much of organizational behavior
research is ultimately aimed at providing human resource management
professionals with the information and tools they need to select, train, and
retain employees in a fashion that yields maximum benefit for the individual
employee as well as for the organization.

Organizational behavior is a relatively new, interdisciplinary field of study.

Although it draws most heavily from the psychological and sociological
sciences, it also looks to other scientific fields of study for insights. One of
the main reasons for this interdisciplinary approach is because the field of
organizational behavior involves multiple levels of analysis, which are
necessary to understand behavior within organizations because people do
not act in isolation. That is, workers influence their environment and are also
influenced by their environment. The model proposes that there are three
levels of analysis in OB and that, as we move from the individual level to the
organization systems level, we add systematically to our understanding of
behavior in organizations. The three basic levels are analogous to building
blocks; each level is constructed upon the previous level. These are
individual behavior, group behavior and organizational level behaviors.

 Individual Level of Analysis

At the individual level of analysis, organizational behavior involves the study

of learning, perception, creativity, motivation, personality, turnover, task
performance, cooperative behavior, deviant behavior, ethics, and cognition.
At this level of analysis, organizational behavior draws heavily upon
psychology, engineering, and medicine.

 Group Level of Analysis

At the group level of analysis, organizational behavior involves the study of

group dynamics, intra- and inter-group conflict and cohesion, leadership,

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power, norms, interpersonal communication, networks, and roles. At this
level of analysis, organizational behavior draws upon the sociological and
socio-psychological sciences.

 Organization Level of Analysis

At the organization level of analysis, organizational behavior involves the

study of topics such as organizational culture, organizational structure,
cultural diversity, inter-organizational cooperation and conflict, change,
technology, and external environmental forces. At this level of analysis,
organizational behavior draws upon anthropology and political science.

Contributing Disciplines to the OB Field

Organizational behavior is an applied behavioral science that is built upon
contributions from a number of behavioral disciplines. The predominant
areas are psychology, sociology, social psychology, anthropology, and
political science. As we shall learn, psychology’s contributions have been
mainly at the individual or micro level of analysis; the other four disciplines
have contributed to our understanding of macro concepts such as group
processes and organization.

Psychology
Psychology is the science that seeks to measure, explain, and sometimes
change the behavior of humans and other animals. Psychologists concern
themselves with studying and attempting to understand individual behavior.
Those who have contributed and continue to add to the knowledge of OB are
learning theorists, personality theorists, counseling psychologists, and, most
important, industrial and organizational psychologists. Early industrial and
organizational psychologists concerned themselves with problems of fatigue,
boredom, and other factors relevant to working conditions that could impede
efficient work performance. More recently, their contributions have been
expanded to include learning, perception, personality, training, leadership
effectiveness, needs and motivational forces, job satisfaction, decision-
making processes, performance appraisals, attitude measurement, employee
selection techniques, work design, and job stress.

Sociology
Whereas psychologists focus on the individual, sociologists study the social
system in which individuals fill their roles; that is, sociology studies people
in relation to their fellow human beings. Specifically, sociologists have made
their greatest contribution to OB through their study of group behavior in
organizations, particularly in formal and complex organizations. Some of the
areas within OB that have received valuable input from sociologists are
group dynamics, design of work teams, organizational culture, formal
organization theory and structure, organizational technology,
communications, power, conflict, and inter group behavior.

Social Psychology

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Social psychology is an area within psychology, but it blends concepts
from psychology and sociology. It focuses on the influence of people on one
another. One of the major areas receiving considerable investigation from
social psychologists has been change —how to implement it and how to
reduce barriers to its acceptance. In addition, social psychologists are
making significant contributions in the areas of measuring, understanding,
and changing attitudes; communication patterns; the ways in which group
activities can satisfy individual needs; and group decision-making processes.

Anthropology
Anthropology is the study of societies to learn about human beings and their
activities. Anthropologists’ work on cultures and environments, for instance,
has helped us understand differences in fundamental values, attitudes, and
behavior between people in different countries and within different
organizations. Much of our current understanding of organizational culture,
organizational environments, and differences between national cultures is
the result of the work of anthropologists or researchers using their
methodologies.

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Political Science
Although frequently overlooked, the contributions of political scientists are
significant to the understanding of behavior in organizations.
Political science studies the behavior of individuals and groups within a
political environment. Specific topics of concern include structuring of
conflict, allocation of power, and how people manipulate power for individual
self-interest. Thirty years ago, little of what political scientists were studying
was of interest to students of organizational behavior. But times have
changed. We have become increasingly aware that organizations are
political entities; if we are to be able to accurately explain, and predict the
behavior of people in organizations, we need to bring a political perspective
to our analysis.

The Dependent and Independent Variables in OB

The Dependent Variables
Dependent variables are the key factors that you want to explain or
predict and that are affected by some other factor. What are the primary
dependent variables in OB? Scholars tend to emphasize productivity,
absenteeism, turnover, and job satisfaction. Because of their wide
acceptance, we shall use those four as the critical dependent variables in an
organization’s human resources effectiveness.
However, there is nothing magical about these dependent variables. They
merely show that OB research has strongly reflected managerial interests
over those of individuals or of society as a whole. Let’s review those terms to
ensure that we understand what they mean and why they have achieved the
distinction of being OB’s primary dependent variables.

 Productivity
An organization is productive if it achieves its goals and does so by
transferring inputs to outputs at the lowest cost. As such, productivity
implies a concern for both effectiveness and efficiency.
A hospital, for example, is effective when it successfully meets the needs of
its clients. It is efficient when it can do so at a low cost. If a hospital manages
to achieve higher output from its present staff by reducing the average
number of days a patient is confined to a bed or by increasing the number of
staff-patient contacts per day, we say that the hospital has gained
productive efficiency. A business firm is effective when it attains its sales or
market share goals, but its productivity also depends on achieving those
goals efficiently. Measures of such efficiency may include return on
investment, profit per dollar of sales, and output per hour of labor. We can
also look at productivity from the perspective of the individual employee.
Take the cases of Lema and Ali, who are both long-distance truckers. If Lema
is supposed to haul his fully loaded rig from Gondar to its destination in Addis
in 75 hours or less, he is effective if he makes the 3,000- mile trip within that
time period. But measures of productivity must take into account the costs
incurred in reaching the goal. That’s where efficiency comes in. Let’s assume
that Lema made the Gondar to Addis run in 68 hours and averaged 7 miles
per gallon. Ali, on the other hand, made the trip in 68 hours also but
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averaged 9 miles per gallon (rigs and loads are identical). Both Lema and Ali
were effective - they accomplished their goal - but Ali was more efficient
than Lema because his rig consumed less gas and, therefore, he achieved
his goal at a lower cost. In summary, one of OB’s major concerns is
productivity. We want to know what factors will influence the effectiveness
and efficiency of individuals, of groups, and of the overall organization.

 Absenteeism
It is obviously difficult for an organization to operate smoothly and to attain
its objectives if employees fail to report to their jobs. The workflow is
disrupted, and often, important decisions must be delayed. In organizations
that rely heavily upon assembly-line production, absenteeism can be
considerably more than a disruption; it can result in a drastic reduction in
quality of output, and, in some cases, it can bring about a complete
shutdown of the production facility. But levels of absenteeism beyond the
normal range in any organization have a direct impact on that organization’s
effectiveness and efficiency.
Are all absences bad? Probably not! Although most absences have a
negative impact on the organization, we can conceive of situations in which
the organization may benefit by an employee’s voluntarily choosing not to
come to work. For instance, illness, fatigue, or excess stress can significantly
decrease an employee’s productivity. In jobs in which an employee needs to
be alert - surgeons and airline pilots are obvious examples - it may well be
better for the organization if the employee does not report to work rather
than show up and perform poorly. The cost of an accident in such jobs could
be prohibitive. Even in managerial jobs, where mistakes are less spectacular,
performance may be improved when managers absent themselves from
work rather than make a poor decision under stress. But these examples are
clearly atypical. For the most part, we can assume that organizations benefit
when employee absenteeism is low.

 Turnover
A high rate of turnover in an organization results in high recruiting,
selection, and training costs. A high rate of turnover can also disrupt the
efficient running of an organization when knowledgeable and experienced
personnel leave and replacements must be found and prepared to assume
positions of responsibility. All organizations, of course, have some turnover.
If the “right” people are leaving the organization—the marginal and sub
marginal employees —turnover can be positive. It may create the
opportunity to replace an underperforming individual with someone who has
higher skills or motivation, open up increased opportunities for promotions,
and add new and fresh ideas to the organization. And in today’s changing
world of work, reasonable levels of employee-initiated turnover facilitate
organizational flexibility and employee independence, and they can lessen
the need for management- initiated layoffs.
But turnover often involves the loss of people the organization doesn’t want
to lose. So when turnover is excessive, or when it involves valuable
performers, it can be a disruptive factor, hindering the organization’s
effectiveness.

15
 Job Satisfaction
The final dependent variable we will look at is job satisfaction, which we
define simply, at this point, as the difference between the amount of rewards
workers receive and the amount they believe they should receive. Unlike the
previous three variables, job satisfaction represents an attitude rather than a
behavior. Why, then, has it become a primary dependent variable? For two
reasons: its demonstrated relationship to performance factors and the value
preferences held by many OB researchers.
The belief that satisfied employees are more productive than dissatisfied
employees has been a basic tenet among managers for years. Although
much evidence questions that assumed causal relationship, it can be argued
that advanced societies should be concerned not only with the quantity of
life —that is, concerns such as higher productivity and material acquisitions
—but also with its quality. Those researchers with strong humanistic values
argue that satisfaction is a legitimate objective of an organization. Not only is
satisfaction negatively related to absenteeism and turnover, but, they argue,
organizations have a responsibility to provide employees with jobs that are
challenging and intrinsically rewarding. Therefore, although job satisfaction
represents an attitude rather than a behavior, OB researchers typically
consider it as an important dependent variable.

The Independent Variables

What are the major determinants of productivity, absenteeism, turnover, and
job satisfaction? Our answer to that question brings us to the independent
variables. Consistent with our belief that organizational behavior can best
be understood when viewed essentially as a set of increasingly complex
building blocks, the base, or first level, of our model lies in understanding
individual behavior.

 Individual-level variables
It has been said that “managers, unlike parents, must work with used, not
new, human beings — human beings whom others have gotten to first.”
When individuals enter an organization, they are a bit like used cars. Each is
different.
Some are “low-mileage” —they have been treated carefully and have had
only limited exposure to the realities of the elements. Others are “well-
worn,” having been driven over some rough roads. This metaphor indicates
that people enter organizations with certain characteristics that will influence
their behavior at work.
The more obvious of individual-level variables are:
 Personal or biographical characteristics such as age, gender, and
marital status; personality characteristics; values and attitudes;
and basic ability levels.
 perception
 individual decision making,
 learning
 Individual motivation.

16
 Group-level variables
The behavior of people in groups is more than the sum total of all the
individuals acting in their own way. The complexity of our model is increased
when we acknowledge that people’s behavior when they are in groups is
different from their behavior when they are alone. Group level variables
include:
 Group dynamics
 Intra- and inter-group conflict and cohesion
 Leadership
 Power and politics
 Norms
 Interpersonal communication, networks, and roles.
 Organization level variables
Organizational level variables that will affect the dependent variables in an
organization include:
 Organizational structure and design - Viewing an organization chart on a
piece of paper or framed on a wall, one sees only a configuration of
positions, job duties, and lines of authority among the parts of an
organization. An organization’s structure is the formal patterns of activities
and interrelationships among the various subunits of the organization.
Structure of the organization refers the components of the organization and
how these components fit together.
Job design refers to the process by which managers specify the contents,
methods, and relationships of jobs and specific task assignments to satisfy
both organizational and individual needs and requirements.

 organizational culture and cultural diversity

 Inter-organizational cooperation and conflict
 Technology
 External environmental forces.
 Organizational change and development processes- managers must
consider the possibility that effective organizational functioning can be
improved by making significant changes in the total organization.
Organizational change and development represent planned attempts to
improve overall individual, group, and organizational performance
 Organizational processes-certain behavioral processes give life to an
organization. When these processes do not function well, unfortunate
problems can arise.

o Communication process
Organizational survival is related to the ability of management to receive,
transmit, and act on information. The communication process links the
organization to its environment as well as to its parts. Information flows to
and from the organization and with in the organization. Information
integrates the activities of the organization.
o Decision making process
The quality of decision making in an organization depends on selecting
proper goals and identifying means of achieving them. With good integration
17
of behavioral and structural factors, management can increase the
probability that high quality decisions will be made. Organizations rely on
individual decisions as well as group decisions, and effective management
requires knowledge of both types of decisions. Video Web

18
Organizational culture, values and ethics

Culture
Culture defined
Cultures exist in social units of all sizes (from countries to ethnic groups and
organizations to work groups).
Culture is defined as the values commonly held among a group of people. It
is a set of norms, customs, values, and assumptions that guides the behavior
of a particular group of people. Culture gives each group its uniqueness and
differentiates it from other groups. We are strongly influenced by our culture.
It determines what we consider right and wrong, it influences what and who
we value, what we pay attention to, and how we behave. Culture not only
affects values and beliefs but also influences management and interpersonal
styles; it also affects simple things such as clothing styles and food
preferences.

We learn about culture formally through various teachings and informally

through observation. The family, educational, social and religious institutions
are the major teachers of culture.

Levels of Culture
Culture exists at three levels: national, ethnic or group culture, and
organizational culture.
 National culture is a set of values and beliefs shared by people with in a
nation. Because national culture addresses many different aspects of life,
it has a strong and pervasive influence on people’s behavior, both in
every day activities and in organizations.
 Ethnic or group cultures (the second level of culture). Some nations
and cultures have many such subcultures; others don’t. National cultures
that have many different subcultures are heterogeneous. Homogeneous
cultures have only one or few subcultures.
 Organizational culture (the third level of culture) - is the set of values,
norms, and beliefs shared by members of an organization. Given time, all
organizations develop a unique culture or character. Employees share
common values and beliefs about work related issues. These shared
elements make them unique and set them apart from employees in other
organizations.
Every organization has an unwritten culture that defines standards of
acceptable and unacceptable behavior for employees. After a few months,
most employees understand their organization’s culture. They know things
like how to dress for work, whether or not rules are rigidly enforced, what
kinds of questionable behaviors are sure to get them into trouble and which
are likely to be overlooked, the importance of honesty and integrity, and the
like. While many organizations have subcultures —often created around work
groups —with an additional or modified set of standards, they still have a
dominant culture that conveys to all employees those values the
organization holds dearest. Members of work groups have to accept the

19
standards implied in the organization’s dominant culture if they are to
remain in good standing.
What is Organizational Culture?
This section proposes a specific definition and review several peripheral
issues that revolve around this definition.
A Definition
There seems to be wide agreement that organizational culture refers to a
system of shared meaning held by members that distinguishes the
organization from other organizations. This system of shared meaning is, on
closer examination, a set of key characteristics that the organization values.
The most recent research suggests that there are seven primary
characteristics that, in aggregate, capture the essence of an organization’s
culture.
1. Innovation and risk taking- the degree to which employees are
encouraged to be innovative and take risks.
2. Attention to detail -the degree to which employees are expected to
exhibit precision, analysis, and attention to detail.
3. Outcome orientation- the degree to which management focuses on
results or outcomes rather than on the techniques and processes used to
achieve these outcomes.
4. People orientation - the degree to which management decisions take
into consideration the effect of outcomes on people within the organization.
5. Team orientation - the degree to which work activities are organized
around teams rather than individuals.
6. Aggressiveness - the degree to which people is aggressive and
competitive rather than easygoing.
7. Stability - the degree to which organizational activities emphasize
maintaining the status quo in contrast to growth.

Culture Is a Descriptive Term

Organizational culture is concerned with how employees perceive the
characteristics of an organization’s culture, not with whether or not they like
them. That is, it is a descriptive term. This is important because it
differentiates this concept from that of job satisfaction. Research on
organizational culture has sought to measure how employees see their
organization: Does it encourage teamwork?
Does it reward innovation? Does it stifle initiative?
In contrast, job satisfaction seeks to measure affective responses to the work
environment. It is concerned with how employees feel about the
organization’s expectations, reward practices, and the like. Although the two
terms undoubtedly have overlapping characteristics, keep in mind that the
term organizational culture is descriptive, while job satisfaction is evaluative.

Do Organizations Have Uniform Cultures?

Organizational culture represents a common perception held by the
organization’s members. This was made explicit when we defined culture as
a system of shared meaning. We should expect, therefore, that individuals
with different backgrounds or at different levels in the organization will tend
to describe the organization’s culture in similar terms. Acknowledgment that
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organizational culture has common properties does not mean, however, that
there cannot be subcultures within any given culture. Most large
organizations have a dominant culture and numerous sets of subcultures.

A dominant culture expresses the core values that are shared by a

majority of the organization’s members. When we talk about an
organization’s culture, we are referring to its dominant culture. It is this
macro view of culture that gives an organization its distinct personality.

Subcultures tend to develop in large organizations to reflect common

problems, situations, or experiences that members face. These subcultures
are likely to be defined by department designations and geographical
separation. The purchasing department, for example, can have a subculture
that is uniquely shared by members of that department. It will include the
core values of the dominant culture plus additional values unique to
members of the purchasing department. Similarly, an office or unit of the
organization that is physically separated from the organization’s main
operations may take on a different personality. Again, the core values are
essentially retained but modified to reflect the separated unit’s distinct
situation.
If organizations had no dominant culture and were composed only of
numerous subcultures, the value of organizational culture as an independent
variable would be significantly lessened because there would be no uniform
interpretation of what represented appropriate and inappropriate behavior. It
is the “shared meaning” aspect of culture that makes it such a potent device
for guiding and shaping behavior. But we cannot ignore the reality that many
organizations also have subcultures that can influence the behavior of
members.

What Does Culture Do? Functions of Culture

Culture performs a number of functions within an organization:

 It has a boundary-defining role; that is, it creates distinctions between one
organization and others.
 It conveys a sense of identity for organization members.
 Culture facilitates the generation of commitment to something larger than
one’s individual self-interest.
 It enhances social system stability. Culture is the social glue that helps
hold the organization together by providing appropriate standards for
what employees should say and do.
 Culture serves as a sense making and control mechanism that guides and
shapes the attitudes and behavior of employees. It is this last function
that is of particular interest to us. As the following quote makes clear,
culture defines the rules of the game: Culture by definition is elusive,
intangible, implicit, and taken for granted.
But every organization develops a core set of assumptions, understandings,
and implicit rules that govern day-to-day behavior in the workplace. . . . Until
newcomers learn the rules, they are not accepted as full-fledged members of
the organization.

21
Transgressions of the rules on the part of high-level executives or front-line
employees result in universal disapproval and powerful penalties. Conformity
to the rules becomes the primary basis for reward and upward mobility. The
role of culture in influencing employee behavior appears to be increasingly
important in the 1990s. As organizations have widened spans of control,
flattened structures, introduced teams, reduced formalization, and
empowered employees, the shared meaning provided by a strong culture
ensures that everyone is pointed in the same direction.
As we show later in this chapter, who receives a job offer to join the
organization, who is appraised as a high performer, and who gets the
promotion are strongly influenced by the individual – organization “fit” —that
is, whether the applicant or employee’s attitudes and behavior are
compatible with the culture.
Video Web Video Web
Values and Ethics
A value may be defined as “enduring belief that a specific mode of conduct
or end-state of existence is personally or socially preferable to an opposite or
converse mode of conduct or end-state existence.” In other words, a value
represents a judgment by an individual that certain things are “good”, or
“bad”, “important” or “unimportant” and so forth. In short, values are
person’s stable, long lasting beliefs and preferences about what is
worthwhile and desirable. As such values serve a useful function in providing
guidelines or standards for choosing one’s own behavior and for evaluating
the behavior of others.

The values people have tend to be relatively stable overtime. The reason for
this lies in the manner which values are acquired in the first place. That is,
when we first learn a value (usually at a young age), we are taught that
such-and-such behavior is always good or always bad. For instance, we may
be taught that lying or stealing is always unacceptable. Few people are
taught that such behavior is acceptable in some circumstances but not in
others.
Rokeach has identified two fundamental types of values: instrumental and
terminal.
Terminal values, refers to desirable end-states. These are the goals that a
person would like to achieve during his or her life time. Instrumental refers to
preferable modes of behavior, or means of achieving the terminal values.

Role of value and ethics in organization

Personal values represent an important force in organizational behavior for
several reasons. In fact, at least three purposes are served by the existence
of personal values in organizations.
1. values serve as standards of behavior for determining a correct
course of action
2. values serve as guidelines for decision making and conflict
resolution
3. values serve as an influence on employee motivation
Values affect employee motivation by determining what rewards or
outcomes are sought. Employees are often offered overtime work and the
22
opportunity to make more money at the expense of free time with their
families. Which would you choose?
Work ethic: - refers to the strength of one’s commitment and dedication to
hard work, both as an end in it-self and as a means to future rewards.

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 CHAPTER II
INDIVIDUAL BEHAVIOR IN ORGANIZATIONS
R 6
In this chapter, we will look at individual-level variables - biographical
characteristics, ability, personality, perception, attitudes and
learning and consider their effect on employee performance and
satisfaction.

Managers everywhere face the challenge of understanding and managing

individual differences. Hard working employees who do their job well are
essential to an organization’s success. An organization cannot succeed in the
long term without them. Effective managers need to analyze individual
behavior in the context of the business setting to understand organizational
behavior fully.

We are each unique in our views, reactions, and behaviors. You may be out
going and seek the company of others whereas your brother or sister may be
reserved and prefer quiet evenings at home. Some of us are intense and
engage in a whirl wind of activities; others are relaxed and focus on a few
specific tasks. The challenge of a new job that inspires one person may
dishearten another. The skills that are easy for one employee to learn pose a
challenge for another.

What makes us different from one another? In this chapter, we try to answer
that question by investigating differences in individual characteristics in
personality traits, values, and attitudes.

Every person is unique because of combination of many factors, including

demographics, physical, psychological, and behavioral differences. These are
at the core of who we are. In this chapter, we focus on understanding
individual differences, personality traits, values, and attitudes that make
each of us unique and affect our work related behaviors.

Any attempt to learn why people behave as they do in organizations requires

some understanding of individual differences. Managers spend considerable
time making judgments about the fit between individuals, job tasks, and
effectiveness. Such judgments are influenced typically by both the
manager’s and the subordinate’s characteristics. Making decisions about
who will perform what tasks in a particular manner- with out some
understanding of behavior- can lead to irreversible long-run problems.

Each employee is different in many respects. A manager needs to ask how

such differences influence the behavior and performance of subordinates.
This chapter highlights some of the individual differences that can explain
why one person is a significantly better performer than another person.
Differences among people require forms of adjustment for both the individual
and those for whom he or she will work. Managers who ignore such

24
differences often become involved in practices which hinder achieving
organizational and personlal goals.

2.2.1 The basis for understanding behavior

A manager’s observation and analysis of individual behavior and

performance require the consideration of three sets of variables which
directly influences individual behavior or what an employee does (e.g.,
produces output, sells automobiles, and services machines). The three sets
of variables are classified as being individual, psychological, and
organizational.
To understand individual differences a manager must
1. observe and recognize the difference
2. study the relationship between variables that influences individual
behavior, and
3. discover relationships
For example, a manager is in a better position to make optimal decisions if
he or she knows what the attitudes, perception, and mental abilities of
employees are as well as how these and other variables are related. It also is
important to know how each variable influences performance. Being able to
observe differences, understand relationships, and predict linkages can
facilitate managerial attempts to improve performance. Talking to a
manager, listening to a coworker, filing a report, typing a memo, and placing
a completed unit in inventory are behaviors.
The individual- level variables are described below:

2.2.2. Biographical Characteristics

This chapter is essentially concerned with finding and analyzing the variables
that have an impact on employee productivity, absence, turnover, and
satisfaction. Many of the concepts motivation, say, or power and politics or
organizational cultures are hard to assess. It might be valuable, then, to
begin by looking at factors that are easily definable and readily available;
data that can be obtained, for the most part, simply from information
available in an employee’s personnel file. What factors would these be?
Obvious characteristics would be an employee’s age, gender, marital status,
and length of service with an organization. Fortunately, there is a sizable
amount of research that has specifically analyzed many of these
biographical characteristics.

i. Age
The relationship between age and job performance is likely to be an issue of
increasing importance during the next decade. Why? There are at least three
reasons. First, there is a widespread belief that job performance declines
with increasing age. Regardless of whether it’s true or not, a lot of people
believe it and act on it. Second is the reality that the workforce is aging.
What is the perception of older workers? Evidence indicates that employers
hold mixed feelings. They see a number of positive qualities that older
workers bring to their jobs: specifically, experience, judgment, a strong

25
work ethic, and commitment to quality. But older workers are also
perceived as lacking flexibility and as being resistant to new technology. And
in a time when organizations strongly seek individuals who are adaptable
and open to change, the negatives associated with age clearly hinder the
initial hiring of older workers and increase the likelihood that they will be let
go during downsizing. Now let’s take a look at the evidence. What effect
does age actually have on turnover, absenteeism, productivity, and
satisfaction?
The older you get, the less likely you are to quit your job. That
conclusion is based on studies of the age-turnover relationship. Of course, it
should not be too uprising. As workers get older, they have fewer alternative
job opportunities. In addition, older workers are less likely to resign than are
younger workers because their long tenure tends to provide them with
higher wage rates, longer paid vacations, and more-attractive pension
benefits. It’s tempting to assume that age is also inversely related to
absenteeism. After all, if older workers are less likely to quit, won’t they also
demonstrate higher stability by coming to work more regularly?
Not necessarily! Most studies do show an inverse relation-ship, but close
examination finds that the age-absence relationship is partially a function of
whether the absence is avoidable or unavoidable. In general, older
employees have lower rates of avoidable absence than do younger
employees. However, they have higher rates of unavoidable absence,
probably due to the poorer health associated with aging and the longer
recovery period that older workers need when injured.
How does age affect productivity? There is a widespread belief that
productivity declines with age. It is often assumed that an individual’s skills
—particularly speed, agility, strength, and coordination—decay over time
and that prolonged job boredom and lack of intellectual stimulation all
contribute to reduced productivity. The evidence, however, contradicts that
belief and those assumptions. One comprehensive review of the research
found that age and job performance were unrelated. Moreover, that finding
seems to be true for almost all types of jobs, professional and
nonprofessional. The natural conclusion is that the demands of most jobs,
even those with heavy manual labor requirements, are not extreme enough
for any declines in physical skills due to age to have an impact on
productivity; or, if there is some decay due to age, it is offset by gains due to
experience. Our final concern is the relationship between age and job
satisfaction.
On this issue, the evidence is mixed. Most studies indicate a positive
association between age and satisfaction, at least up to age 60. Other
studies, however, have found a U-shaped relation-ship. Several explanations
could clear up these results, the most plausible being that these studies are
intermixing professional and nonprofessional employees. When the two
types are separated, satisfaction tends to continually increase among
professionals as they age, whereas it falls among nonprofessionals during
middle age and then rises again in the later years.
ii. Gender

26
Few issues initiate more debates, misconceptions, and unsupported opinions
than whether women perform as well on jobs as men do. In this section, we
review the research on that issue. The evidence suggests that the best place
to begin is with the recognition that there are few, if any, important
differences between men and women that will affect their job performance.
There are, for instance, no consistent male-female differences in problem-
solving ability, analytical skills, competitive drive, motivation, sociability, or
learning ability. Psychological studies have found that women are more
willing to conform to authority and those men are more aggressive and more
likely than women to have expectations of success, but those differences are
minor. Given the significant changes that have taken place in the last 25
years in terms of increasing female participation rates in the workforce and
rethinking what constitutes male and female roles, you should operate on
the assumption that there is no significant difference in job productivity
between men and women. Similarly, there is no evidence indicating that an
employee’s gender affects job satisfaction. One issue that does seem to
differ between genders, especially where the employee has preschool
children, is preference for work schedules. Working mothers are more likely
to prefer part-time work, flexible work schedules, and telecommuting in
order to accommodate their family responsibilities. But what about absence
and turnover rates? Are women less stable employees than men? First, on
the question of turnover, the evidence is mixed. Some studies have found
that women have higher turnover rates; others have found no difference.
There doesn’t appear to be enough information from which to draw
meaningful conclusions. The research on absence, however, is a different
story. The evidence consistently indicates that women have higher rates of
absenteeism than men do. The most logical explanation for this finding is
that culture has historically placed home and family responsibilities on the
woman. When a child is ill or someone needs to stay home to wait for the
plumber, it has been the woman who has traditionally taken time off from
work. However, this research is undoubtedly time-bound. The historical role
of the woman in caring for children and as secondary breadwinner has
definitely changed recently and a large proportion of men nowadays are as
interested in day care and the problems associated with child care in general
as are women.

iii. Marital Status

There are not enough studies to draw any conclusions about the effect of
marital status on productivity. But research consistently indicates that
married employees have fewer absences, undergo less turnover, and are
more satisfied with their jobs than are their unmarried coworkers. Marriage
imposes increased responsibilities that may make a steady job more
valuable and important. But the question of causation is not clear. It may
very well be that conscientious and satisfied employees are more likely to be
married. Another offshoot of this issue is that research has not pursued other
statuses besides single or married. Does being divorced or widowed have an
impact on an employee’s performance and satisfaction? What about couples

27
who live together without being married? These are questions in need of
investigation.

iv. Tenure
The last biographical characteristic we’ll look at is tenure. With the exception
of the issue of male-female differences, probably no issue is more subject to
misconceptions and speculations than the impact of seniority on job
performance.
Extensive reviews of the seniority-productivity relationship have been
conducted. If we define seniority as time on a particular job, we can say that
the most recent evidence demonstrates a positive relationship between
seniority and job productivity. So tenure, expressed as work experience,
appears to be a good predictor of employee productivity. The research
relating tenure to absence is quite straightforward. Studies consistently
demonstrate seniority to be negatively related to absenteeism. In fact, in
terms of both frequencies of absence and total days lost at work, tenure is
the single most important explanatory variable.
Tenure is also a potent variable in explaining turnover. “Tenure has
consistently been found to be negatively related to turnover and has been
suggested as one of the single best predictors of turnover. Moreover,
consistent with research that suggests that past behavior is the best
predictor of future behavior evidence indicates that tenure on an employee’s
previous job is a powerful predictor of that employee’s future turnover. The
evidence indicates that tenure and satisfaction are positively related. In fact,
when age and tenure are treated separately, tenure appears to be a more
consistent and stable predictor of job satisfaction than is chronological age.

Ability

Contrary to what we were taught in grade school, we weren’t all created

equal. Most of us are to the left of the median on some normally distributed
ability curve. Regardless of how motivated you are, it is unlikely that you can
run as fast as Haile Gebreselassie, write horror stories as well as Stephen
King, or sing as well as Whitney Houston. Of course, just because we aren’t
all equal in abilities does not imply that some individuals are inherently
inferior to others. What we are acknowledging is that everyone has strengths
and weaknesses in terms of ability that make him or her relatively superior
or inferior to others in performing certain tasks or activities. From
management’s standpoint, the issue is not whether people differ in terms of
their abilities. They do! The issue is knowing how people differ in abilities and
using that knowledge to increase the likelihood that an employee will
perform his or her job well.
What does ability mean? As we will use the term, ability refers to an
individual’s capacity to perform the various tasks in a job. It is a current
assessment of what one can do. An individual’s overall abilities are
essentially made up of two sets of factors: intellectual and physical abilities.

Intellectual Abilities

28
Intellectual abilities are those needed to perform mental activities.
Intelligence quotient (IQ) tests, for example, are designed to ascertain one’s
general intellectual abilities. So, too, are popular college admission tests
such as the SAT and ACT and graduate admission tests in business (GMAT),
law (LSAT), and medicine (MCAT). The seven most frequently cited
dimensions making up intellectual abilities are number aptitude, verbal
comprehension, perceptual speed, inductive reasoning, deductive reasoning,
spatial visualization, and memory.

Dimension Description Job Example

Number aptitude Ability to do speedy and accurate arithmetic

Perceptual speed Ability to identify visual similarities and differences
quickly and accurately. Video Web
Inductive reasoning- Ability to identify a logical sequence in a problem and
then solve the problem.
Deductive reasoning- Ability to use logic and assess the implications of an
argument.
Spatial visualization Ability to imagine how an object would look if its
position in space were changed
Memory Ability to retain and recall past experience

Jobs differ in the demands they place on incumbents to use their intellectual
abilities. Generally speaking, the more information processing demands that
exist in a job, the more general intelligence and verbal abilities will be
necessary to perform the job successfully. Of course, a high IQ is not a
prerequisite for all jobs. In fact, for many jobs —in which employee behavior
is highly routine and there are little or no opportunities to exercise discretion
—a high IQ may be unrelated to performance. On the other hand, a careful
review of the evidence demonstrates verbal, numerical, spatial and
perceptual abilities are valid predictors of job proficiency at all levels of jobs.
So tests that measure specific dimensions of intelligence have been found to
be strong predictors of job performance. The major dilemma faced by
employers who use mental ability tests for selection, promotion, training,
and similar personnel decisions is that they may have a negative impact on
racial and ethnic groups. The evidence indicates that some minority groups
score, on the average, as much as one standard deviation lower than whites
on verbal, numerical, and spatial ability tests.

Physical Abilities

To the same degree that intellectual abilities play a larger role in complex
jobs with demanding information-processing requirements, specific physical
abilities gain importance for successfully doing less-skilled and more-
standardized jobs. For example, jobs in which success demands stamina,
manual dexterity, leg strength, or similar talents require management to
identify an employee’s physical capabilities. Research on the requirements
needed in hundreds of jobs has identified nine basic abilities involved in the
performance of physical tasks. Individuals differ in the extent to which they

29
have each of these abilities. Not surprisingly, there is also little relationship
between them: A high score on one is no assurance of a high score on
others. High employee performance is likely to be achieved when
management has ascertained the extent to which a job requires each of the
nine abilities and then ensures that employees in that job have those
abilities.
E Chapter Start Contents * * Quit Video Web Site
 Strength Factors
1. Dynamic strength-ability to exert muscular force repeatedly or
continuously over time
2. Trunk strength-ability to exert muscular strength using the trunk
(particularly abdominal) muscles
3. Static strength -ability to exert force against external objects
4. Explosive strength- ability to expend a maximum of energy in one
or a series of explosive acts
 Flexibility Factors
5. Extent flexibility- ability to move the trunk and back muscles as far as
possible
6. Dynamic flexibility- ability to make rapid, repeated flexing
movements

30
 Other Factors
7. Body coordination- ability to coordinate the simultaneous actions
of different parts of the body
8. Balance-ability to maintain equilibrium despite forces pulling off
balance
9. Stamina- ability to continue maximum effort requiring prolonged
effort over time

The Ability-Job Fit

Our concern is with explaining and predicting the behavior of people at work.
In this section, we have demonstrated that jobs make differing demands on
people and that people differ in the abilities they possess. Employee
performance, therefore, is enhanced when there is a high ability-job fit. The
specific intellectual or physical abilities required for adequate job
performance depend on the ability requirements of the job. So, for example,
airline pilots need strong spatial-visualization abilities; beach lifeguards need
both strong spatial-visualization abilities and body coordination; senior
executives need verbal abilities; high-rise construction workers need
balance; and journalists with weak reasoning abilities would likely have
difficulty meeting minimum job-performance standards.
Directing attention at only the employee’s abilities or only the ability
requirements of the job ignores the fact that employee performance depends
on the interaction of the two.
What predictions can we make when the fit is poor? As alluded to previously,
if employees lack the required abilities, they are likely to fail. If you are hired
as a word processor and you cannot meet the job’s basic keyboard typing
requirements, your performance is going to be poor irrespective of your
positive attitude or your high level of motivation. When the ability-job fit is
out of sync because the employee has abilities that far exceed the
requirements of the job, our predictions would be very different. Job
performance is likely to be adequate, but there will be organizational
inefficiencies and possible declines in employee satisfaction. Given that pay
tends to reflect the highest skill level that employees possess, if an
employee’s abilities far exceed those necessary to do the job, management
will be paying more than it needs to. Abilities significantly above those
required can also reduce the employee’s job satisfaction when the
employee’s desire to use his or her abilities is particularly strong and is
frustrated by the limitations of the job.

2.2.3 PERSONALITY
Why are some people quiet and passive, while others are loud and
aggressive? Are certain personality types better adapted for certain job
types?

What is Personality?
When we talk of personality, we don’t mean that a person has charm, a
positive attitude toward life, a smiling face.

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When psychologists talk of personality, they mean a dynamic concept
describing the growth and development of a person’s whole psychological
system. Rather than looking at parts of the person, personality looks at some
aggregate whole that is greater than the sum of the parts. The most
frequently used definition of personality was produced by Gordon Allport
more than sixty years ago. He said personality is “the dynamic
organization within the individual of those psychophysical systems
that determine his unique adjustments to his environment.” For our
purposes, you should think of personality as the sum total of ways in which
an individual reacts to and interacts with others. It is most often described in
terms of measurable traits that a person exhibits.

Personality is a stable set of physical and psychological characteristics that

makes each person unique. Personality is made up of a number of
personality traits and is the product of interacting biological and
environmental factors. It is the primary factor in individual differences.

Let’s examine the definition of personality closely. First, personality is stable.

It tends to stay the same over time and across situations. It is not completely
rigid, however, as personality can evolve gradually over the long run.
Second, personality consists of a set of characteristics rather than one or two
traits. This set develops over time and makes the individual unique.

Consider the example of a shy and reserved person. His behavior will be
stable across different situations and he is likely to timid and retie cent in
most, although not all, social sittings. The person may avoid large social
gatherings where he does not know many people. He is likely to prefer
working alone or in small groups and may avoid situations that require public
speaking or being in the spotlight. Although this person’s shyness may be
strong characteristics, it is not his only personality trait. He may also be
conscientious, caring, concerned for others, creative, and artistic. The
combination of these traits forms the personality; shyness is only one
dominant trait.

Personality Determinants
An early argument in personality research was whether an individual’s
personality was the result of heredity or of environment. Was the personality
predetermined at birth, or was it the result of the individual’s interaction with
his or her environment? Clearly, there is no simple black-and-white answer.
Personality appears to be a result of both influences. In addition, today we
recognize a third
factor —the situation. Thus, an adult’s personality is now generally
considered to be made up of both hereditary and environmental factors,
moderated by situational conditions.

i. Heredity- heredity refers to those factors that were determined at

conception. Physical stature, facial attractiveness, gender, temperament,
muscle composition and reflexes, energy level, and biological rhythms are
characteristics that are generally considered to be either completely or

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substantially influenced by who your parents were: that is, by their
biological, physiological, and inherent psychological makeup. The heredity
approach argues that the ultimate explanation of an individual’s personality
is the molecular structure of the genes, located in the chromosomes.

Three different streams of research lend some credibility to the argument

that heredity plays an important part in determining an individual’s
personality. The first looks at the genetic underpinnings of human behavior
and temperament among young children.
The second addresses the study of twins who were separated at birth. The
third examines the consistency in job satisfaction over time and across
situations.
Recent studies of young children lend strong support to the power of
heredity. Evidence demonstrates that traits such as shy-ness, fear, and
distress are most likely caused by inherited genetic characteristics. This
finding suggests that some personality traits determined by something
inherent in the person rather than by external environmental factors.
If personality characteristics were completely dictated by heredity, they
would be fixed at birth and no amount of experience could alter them. If you
were relaxed and easygoing as a child, for example, that would be the result
of your genes, and it would not be possible for you to change those
characteristics. But personality characteristics are not completely dictated by
heredity.

ii. Environment- Among the factors that exert pressures on our

personality formation are the culture in which we are raised, our early
conditioning, the norms among our family, friends, and social groups, and
other influences that we experience. The environment we are exposed to
plays a substantial role in shaping our personalities.
For example, culture establishes the norms, attitudes, and values that are
passed along from one generation to the next and create consistencies over
time. An ideology that is intensely fostered in one culture may have only
moderate influence in another. For instance, North Americans have had the
themes of industriousness, success, competition, independence, and the
Protestant work ethic constantly instilled in them through books, the school
system, family, and friends.

iii. Situation - A third factor, the situation, influences the effects of

heredity and environment on personality. An individual’s personality,
although generally stable and consistent, does change in different situations.
The different demands of different situations call forth different aspects of
one’s personality. We should not, there-fore, look at personality patterns in
isolation.
It seems only logical to suppose that situations will influence an individual’s
personality, but a neat classification scheme that would tell us the impact of
various types of situations has so far eluded us.
“Apparently we are not yet close to developing a system for clarifying
situations so that they might be systematically studied.”

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 However, we do know that certain situations are more relevant than others
in influencing personality.
What is of interest taxonomically is that situations seem to differ
substantially in the constraints they impose on behavior. Some situations —
e.g., church, an employment interview—constrain many behaviors; other
situations —e.g., a picnic in a public park— constrain relatively few.
Furthermore, although certain generalizations can be made about
personality, there are significant individual differences. As we shall see, the
study of individual differences has come to receive greater emphasis in
personality research, which originally sought out more general, universal
patterns.

Personality Traits

The early work in the structure of personality revolved around attempts to

identify and label enduring characteristics that describe an individual’s
behavior. Popular characteristics include shy, aggressive, submissive, lazy,
ambitious, loyal, and timid. Those characteristics, when they are exhibited in
a large number of situations, are called personality traits. The more
consistent the characteristic and the more frequently it occurs in diverse
situations, the more important that trait is in describing the individual. * *
Quit Video Web
1. Reserved vs. Outgoing
2. Less intelligent vs. More intelligent
3. Affected by feelings vs. emotionally stable
4. Submissive vs. Dominant
5. Serious vs. Happy-go-lucky
6. Expedient vs. Conscientious
7. Timid vs. Venturesome
8. Tough-minded vs. Sensitive
9. Trusting vs. Suspicious
10. Practical vs. Imaginative
11. Forthright vs. Shrewd
12. Self-assured vs. Apprehensive
13. Conservative vs. Experimenting
14. Group-dependent vs. Self-sufficient
15. Uncontrolled vs. Controlled
16. Relaxed vs. Tense

THE BIG FIVE PERSONALITY DIMENSIONS

Over time, psychologists and human resource management researchers

have condensed countless personality traits into a list of five major
personality dimensions, known as the Big Five. Researchers have found
these five dimensions to be consistent components of personality. The Big
Five factors are:

i. Extraversion/introversion This dimension captures one’s comfort level

with relationships. Being an extrovert means that you are sociable and that

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 you seek and enjoy the company of others. Extraverts (high in extraversion)
tend to be friendly and outgoing and to spend much of their time
maintaining and enjoying a large number of relationships. Introverts tend to
be reserved and to have fewer relationships, and they are more comfortable
with solitude than most people are.

ii. Agreeableness it describes a person’s general friendliness and courtesy

as well as the degree to which she or he is trusting and liked by others.
Agreeableness further includes flexibility and willingness to cooperate with
others. Someone who is agreeable is sociable and friendly, generally easy to
get long with, and willing to cooperate with others. This dimension refers to
an individual’s propensity to defer to others. High agreeable people value
harmony more than they value having their say or their way. They are
cooperative and trusting of others. People who score low on agreeableness
focus more on their own needs than on the needs of others.

iii. Conscientiousness This dimension refers to the number of goals on which

a person focuses. It is defined as being hardworking, persevering, and
achievement oriented. A high conscientious person pursues fewer goals, in a
purposeful way, and tends to be responsible, persistent, dependable, and
achievement-oriented. Those who score low on this dimension tend to be
more easily distracted, pursuing many goals, and more hedonistic.

iv. Emotional stability This dimension taps a person’s ability to withstand

stress. People with positive emotional stability tend to be characterized as
calm, enthusiastic, and secure. Those with high negative scores tend to be
nervous, depressed, and insecure.

v. Openness to experience The final dimension addresses one’s range of

interests. Extremely open people are fascinated by novelty and innovation.
They tend to be imaginative, artistically sensitive, and intellectual. Those at
the other end of the openness category appear more conventional and find
comfort in the familiar.
In addition to providing a unifying personality framework, research on the
Big Five also has found important relationships between these personality
dimensions and job performance. Broad spectrums of occupations were
looked at: professionals (including engineers, architects, accountants, and
attorneys), police, managers, salespeople, and semiskilled and skilled
employees. Job performance was defined in terms of performance ratings,
training proficiency (performance during training programs), and personnel
data such as salary level. The results showed that conscientiousness
predicted job performance for all occupational groups. “The preponderance
of evidence shows that individuals who are depend-able, reliable, careful,
thorough, able to plan, organized, hardworking, persistent, and achievement-
oriented tend to have higher job performance in most if not all occupations.”
For the other personality dimensions, predictability depended upon both the
performance criterion and the occupational group. For instance, extraversion
predicted performance in managerial and sales positions.

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This finding makes sense since those occupations involve high social
interaction. Similarly, openness to experience was found to be important in
predicting training proficiency, which, too, seems logical. What wasn’t so
clear was why positive emotional stability wasn’t related to job performance.
Intuitively, it would seem that people who are calm and secure would do
better on almost all jobs than people who are anxious and insecure. The
researchers suggested that the answer might be that only people who score
fairly high on emotional stability retain their jobs. So the range among those
people studied, all of whom were employed, would tend to be quite small.

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IMPLICATION FOR MANAGEMENT

Several of the big five dimensions of personality have links to work related
behaviors, although none is a strong predictor of performance. Of the five
dimensions, conscientiousness is the most strongly correlated to job
performance. This makes sense: individuals who are dependable, organized,
and hard- working tend to perform better in their jobs. Most managers agree
that a good employee is dependable, shows up on time, finishes work by
deadlines, and is willing to work hard.

Extroversion is the big five dimensions with the second highest correlation to
job- related behaviors. Extroversion is particularly important in jobs that rely
on social interaction, such as management or sales person. Unlike
conscientiousness, which can apply to all jobs levels or occupations,
extroversion is not an essential trait for all jobs and individuals can succeed
without being extroverted.

Openness to experience can help performance in some instances but not

others. For example, being open to new experiences can help employees or
managers perform well in new training because they would be motivated to
explore new ideas and to learn.

As one would expect, emotional stability relates to job behaviors and

performance. At the extreme, individuals who are neurotic are not likely to
be able to function in organizations.

The most important managerial implication of the big five dimensions is that
except for conscientiousness, no single trait is strongly linked to how well an
employee will perform in all types and levels of jobs. Instead, managers need
to consider many factors, especially the person-job fit.

2.2.4 PERCEPTION

Perception is the cognitive process by which an individual gives meaning to

the environment. Because each person gives his or her own meaning to
stimuli, different individuals will “see” the same thing in different ways.

Since perception refers to the acquisition of specific knowledge about objects

or events at any particular moment, it occurs whenever stimuli activate the
sense. Perception involves cognition (knowledge). Thus, perception includes
the interpretation of objects, symbols, and people in the light of pertinent
experiences. In other words, perception involves receiving stimuli, organizing
the stimuli, and translating or interpreting the organized stimuli so as to
influence behavior and form attitudes.

Each person selects various cues that influence his or her perceptions of
people, objects, and symbols. Because of these factors and their potential for
imbalance, people often misperceive another person, group, or object. To a

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considerable extent, people interpret the behavior of others in the context of
the setting in which they find themselves.

The following are some organizational examples that point out how
perception influences behavior:
 A subordinate’s response to a supervisor’s re quest is based on what she
thought she heard the supervisor say, not on what was actually
requested.
 The manager considers the product sold to be of high quality, but the
customer making a complaint feels that it is poorly made.
 An employee is viewed by one colleague as hard worker who gives good
effort and by another colleague as a poor worker who expends no effort.
 The salesperson regards her pay increase as totally inequitable, while the
sales manager considers it is very fair raise.
 A supervisor who regards an employee as an outstanding performer
assigns her additional responsibilities as a reward, but she feels the
supervisor is simply dumping more work in her lap.
 A manager considers consulting a psychic an important part of making an
impending decision. Another manager scoffs at the idea.

Factors Influencing Perception

How do we explain that individuals may look at the same thing, yet perceive
it differently? A number of factors operate to shape and sometimes distort
perception. These factors can reside in the perceiver, in the object or target
being perceived, or in the context of the situation in which the perception is
made.

i. The Perceiver

When an individual looks at a target and attempts to interpret what he or

she sees, that interpretation is heavily influenced by personal characteristics
of the individual perceiver. Have you ever bought a new car and then
suddenly noticed a large number of cars like yours on the road? It’s unlikely
that the number of such cars suddenly expanded. Rather, your own purchase
has influenced your perception so that you are now more likely to notice
them. This is an example of how factors related to the perceiver influence
what he or she perceives. Among the more relevant personal characteristics
affecting perception are attitudes, motives, interests, past experiences, and
expectations. Teri likes small classes because she enjoys asking a lot of
questions of her teachers. Scott, on the other hand, prefers large lectures.
He rarely asks questions and likes the anonymity that goes with being lost in
a sea of bodies. On the first day of classes this term, Teri and Scott find
themselves walking into the university auditorium for their introductory
course in psychology. They both recognize that they will be among some
students in this class. But given the different attitudes held by Teri and Scott,
it shouldn’t surprise you to find that they interpret what they see differently.
Teri sulks, while Scott’s smile does little to hide his relief in being able to
blend unnoticed into the large crowd. They both see the same thing, but they

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interpret it differently. A major reason is that they hold divergent attitudes
concerning large classes.
Unsatisfied needs or motives stimulate individuals and may exert a strong
influence on their perceptions. This fact was dramatically demonstrated in
research on hunger. Individuals in the study had not eaten for varying
numbers of hours. Some had eaten an hour earlier; others had gone as long
as 16 hours without food.

These subjects were shown blurred pictures, and the results indicated that
the extent of hunger influenced the interpretation of the blurred pictures.
Those who had not eaten for 16 hours perceived the blurred images as
pictures of food far more frequently than did those subjects who had eaten
only a short time earlier.
This same phenomenon has application in an organizational context as well.
It would not be surprising, for example, to find that a boss who is insecure
perceives a subordinate’s efforts to do an outstanding job as a threat to his
or her own position. Personal insecurity can be transferred into the
perception that others are out to “get my job,” regardless of the intention of
the subordinates. Likewise, people who are devious are prone to see others
as also devious. It should not surprise you that a plastic surgeon is more
likely to notice an imperfect nose than a plumber is. The supervisor who has
just been reprimanded by her boss for the high level of lateness among her
staff is more likely to notice lateness by an employee tomorrow than she was
last week. If you are preoccupied with a personal problem, you may find it
hard to be attentive in class. These examples illustrate that the focus of our
attention appears to be influenced by our interests. Because our individual
interests differ considerably, what one person notices in a situation can differ
from what others perceive.
Just as interests narrow one’s focus, so do one’s past experiences.
You perceive those things to which you can relate. However, in many
instances, your past experiences will act to nullify an object’s interest.
Objects or events that have never been experienced before are more
noticeable than those that have been experienced in the past. You are more
likely to notice a machine that you have never seen before than a standard
filing cabinet that is exactly like a hundred others you have previously seen.
Similarly, you are more likely to notice the operations along an assembly line
if this is the first time you have seen an assembly line.

ii. The Target

Characteristics of the target that is being observed can affect what is
perceived. Loud people are more likely to be noticed in a group than are
quiet ones. So, too, are extremely attractive or unattractive individuals.
Motion, sounds, size, and other attributes of a target shape the way we see
it. Because targets are not looked at in isolation, the relationship of a target
to its background influences perception, as does our tendency to group close
things and similar things together.
What we see is dependent on how we separate a figure from its general
background. For instance, what you see as you read this sentence is black
letters on a white page. You do not see funny-shaped patches of black and

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white because you recognize these shapes and organize the black shapes
against the white background. The object on the left may at first look like a
yellow vase. However, if yellow is taken as the background, we see two
purple profiles. At first observation, the group of objects on the right appears
to be some purple modular figures against a yellow background. Closer
inspection will reveal the word FLY once the background is defined as purple.
Objects that are close to each other will tend to be perceived together rather
than separately. As a result of physical or time proximity, we often put
together objects or events that are unrelated.
Employees in a particular department are seen as a group. If two people in a
four-member department suddenly resign, we tend to assume that their
departures were related when, in fact, they may be totally unrelated. Timing
may also imply dependence when, for example, a new sales manager is
assigned to a territory and, soon after, sales in that territory skyrocket. The
assignment of the new sales manager and the increase in sales may not be
related—the increase may be due to the introduction of a new product line or
to one of many other reasons —but there is a tendency to perceive the two
occurrences as related. Persons, objects, or events that are similar to each
other also tend to be grouped together. The greater the similarity, the
greater the probability that we will tend to perceive them as a common
group. Women, blacks, or members of any other group that has clearly
distinguishable characteristics in terms of features or color will tend to be
perceived as alike in other, unrelated characteristics as well.

iii. The Situation

The context in which we see objects or events is important.
Elements in the surrounding environment influence our perceptions. You
may not notice a 25-year-old female in an evening gown and heavy makeup
at a nightclub on Sunday night. Yet that same woman so attired for your
Monday management class would certainly catch your attention (and that of
the rest of the class). Neither the perceiver nor the target changed between
Sunday night and Monday, but the situation is different. Similarly, you are
more likely to notice your subordinates goofing off if your boss from the head
office happens to be in town. Again, the situation affects your perception.
The time at which an object or event is seen can influence attention, as can
location, light, heat, or any number of situational factors.

Person Perception: Making Judgments about Others

Now we turn to the most relevant application of perception concepts to OB.

This is the issue of person perception.

Attribution Theory

Our perceptions of people differ from our perceptions of inanimate objects

such as desks, machines, or buildings because we make inferences about the
actions of people that we don’t make about inanimate objects. Nonliving
objects are subject to the laws of nature, but they have no beliefs, motives,
or intentions. People do. The result is that when we observe people, we

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attempt to develop explanations of why they behave in certain ways. Our
perception and judgment of a person’s actions, therefore, will be significantly
influenced by the assumptions we make about the person’s internal state.

Attribution theory has been proposed to develop explanations of the ways

in which we judge people differently, depending on what meaning we
attribute to a given behavior. Basically, the theory suggests that when we
observe an individual’s behavior, we attempt to determine whether it was
internally or externally caused.

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That determination, however, depends largely on three factors:
(1) Distinctiveness
(2) Consensus
(3) Consistency
First, let’s clarify the differences between internal and external causation
and then we will elaborate on each of the three determining factors.
Internally caused behaviors are those that are believed to be under the
personal control of the individual.
Externally caused behavior is seen as resulting from outside causes; that is,
the person is seen as having been forced into the behavior by the situation.
If one of your employees is late for work, you might attribute his lateness to
his partying into the wee hours of the morning and then oversleeping. This
would be an internal attribution. But if you attribute his arriving late to a
major automobile accident that tied up traffic on the road that this employee
regularly uses, then you would be making an external attribution.
Distinctiveness refers to whether an individual displays different behaviors
in different situations. Is the employee who arrives late today also the source
of complaints by co-workers for being a “goof-off”? What we want to know is
whether this behavior is unusual. If it is, the observer is likely to give the
behavior an external attribution.
If this action is not unusual, it will probably be judged as internal. If everyone
who is faced with a similar situation responds in the same way, we can say
the behavior shows consensus. Our late employee’s behavior would meet
this criterion if all employees who took the same route to work were also
late. From an attribution perspective, if consensus is high, you would be
expected to give an external attribution to the employee’s delay, whereas if
other employees who took the same route made it to work on time, your
conclusion as to causation would be internal.
Finally, an observer looks for consistency in a person’s actions. Does the
person respond the same way over time? Coming in ten minutes late for
work is not perceived in the same way for the employee for whom it is an
unusual case (she hasn’t been late for several months) as it is for the
employee for whom it is part of a routine pattern (she is regularly late two or
three times a week). The more consistent the behavior, the more the
observer is inclined to attribute it to internal causes.
It would tell us, for instance, that if your employee — Hilina—generally
performs at about the same level on other related tasks as she does on her
current task (low distinctiveness), if other employees frequently perform
differently —better or worse —than Hilina does on that current task (low
consensus), and if Kim’s performance on this current task is consistent over
time (high consistency), you or anyone else who is judging Hilina’s work is
likely to hold her primarily responsible for her task performance (internal
attribution).
One of the more interesting findings from attribution theory is that there are
errors or biases that distort attributions. For instance, there is substantial
evidence that when we make judgments about the behavior of other people,
we have a tendency to underestimate the influence of external factors and
overestimate the influence of internal or personal factors. This is called the
fundamental attribution error and can explain why a sales manager is
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prone to attribute the poor performance of her sales agents to laziness
rather than to the innovative product line introduced by a competitor.
There is also a tendency for individuals to attribute their own successes to
internal factors such as ability or effort while putting the blame for failure on
external factors such as luck. This is called the self-serving bias and
suggests that feedback provided to employees in performance reviews will
be predictably distorted by recipients depending on whether it is positive or
negative. Are these errors or biases that distort attributions universal across
different cultures? We can’t answer that question definitively, but there is
some preliminary evidence that indicates cultural differences.
For instance, a study of Korean managers found that, contrary to the self-
serving bias, they tended to accept responsibility for group failure “because I
was not a capable leader” instead of attributing it to group members.
Attribution theory was developed largely in the United States on the basis of
experiments with Americans. But the Korean study suggests caution in
making attribution theory predictions outside the United States, especially in
countries with strong collectivist traditions.

Frequently Used Shortcuts in Judging Others

We use a number of shortcuts when we judge others. Perceiving and
interpreting what others do is burdensome. As a result, individuals develop
techniques for making the task more manageable. These techniques are
frequently valuable —they allow us to make accurate perceptions rapidly and
provide valid data for making predictions.

However, they are not foolproof. They can and do get us into trouble.
An understanding of these shortcuts can be helpful toward recognizing when
they can result in significant distortions.

i. Selective Perception- Any characteristic that makes a person, object,

or event stand out will increase the probability that it will be perceived. Why?
Because it is impossible for us to assimilate every-thing we see —only
certain stimuli can be taken in. This tendency explains why, as we noted
earlier, you are more likely to notice cars like your own or why some people
may be reprimanded by their boss for doing something that, when done by
another employee, goes unnoticed. Since we can’t observe everything going
on about us, we engage in selective perception. A classic example shows
how vested interests can significantly influence which problems we see.
Dearborn and Simon performed a perceptual study in which business
executives read a comprehensive case describing the organization and
activities of a steel company. Six of the 23 executives were in the sales
function, five in production, four in accounting, and eight in miscellaneous
functions. Each manager was asked to write down the most important
problem he found in the case.
Eighty-three percent of the sales executives rated sales important; only 29
percent of the others did so. This, along with other results of the study, led
the researchers to conclude that the participants perceived aspects of a
situation that were specifically related to the activities and goals of the unit
to which they were attached. A group’s perception of organizational activities
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 is selectively altered to align with the vested interests they represent. In
other words, when the stimuli are ambiguous, as in the steel company case,
perception tends to be influenced more by an individual’s base of
interpretation (that is, attitudes, interests, and background) than by the
stimulus itself. But how does selectivity work as a shortcut in judging other
people? Since we cannot assimilate all that we observe, we take in bits and
pieces. But those bits and pieces are not chosen randomly; rather, they are
selectively chosen according to our interests, back-ground, experience, and
attitudes. Selective perception allows us to “speed-read” others, but not
without the risk of drawing an inaccurate picture. Because we see what we
want to see, we can draw unwarranted conclusions from an ambiguous
situation. If there is a rumor going around the office that your company’s
sales are down and that large layoffs may be coming, a routine visit by a
senior executive from headquarters might be interpreted as the first step in
management’s identification of people to be fired, when in reality such an
action may be the furthest thing from the mind of the senior executive.

ii. Halo Effect: When we draw a general impression about an individual on

the basis of a single characteristic, such as intelligence, sociability, or
appearance, a halo effect is operating. This phenomenon frequently occurs
when students appraise their classroom instructor. Students may give
prominence to a single trait such as enthusiasm and allow their entire
evaluation to be tainted by how they judge the instructor on that one trait.
Thus, an instructor may be quiet, assured, knowledgeable, and highly
qualified, but if his style lacks zeal, those students would probably give him a
low rating. The reality of the halo effect was confirmed in a classic study, in
which subjects were given a list of traits such as intelligent, skillful, practical,
industrious, determined, and warm and were asked to evaluate the person to
whom those traits applied. When those traits were used, the person was
judged to be wise, humorous, popular, and imaginative. When the same list
was modified—cold was substituted for warm—a completely different set of
perceptions was obtained. Clearly, the subjects were allowing a single trait to
influence their overall impression of the person being judged. The propensity
for the halo effect to operate is not random.
Research suggests that it is likely to be most extreme when the traits to be
perceived are ambiguous in behavioral terms, when the traits have moral
overtones, and when the perceiver is judging traits with which he or she has
had limited experience.

iii. Contrast Effects: there’s an old adage among entertainers who perform
in variety shows: Never follow an act that has kids or animals in it. Why? The
common belief is that audience’ love children and animals so much that you
will look bad in comparison. In a similar vein, I remember when I was a
college freshman and had to give a presentation in a speech class. I was
scheduled to speak third that morning. After of the first two speakers
stammered, stumbled, and forgot their lines, I suddenly got a rush of
confidence because I figured that even though my talk might not go too well,
I’d probably get a pretty good grade. I was counting on the instructor’s

44
 raising my evaluation after contrasting my speech to those that immediately
preceded it.
These two examples demonstrate how contrast effects can distort
perceptions. We don’t evaluate a person in isolation. Our reaction to one
person is often influenced by other persons we have recently encountered.
An illustration of how contrast effects operate is an interview situation in
which one sees a pool of job applicants. Distortions in any given candidate’s
evaluation can occur as a result of his or her place in the interview schedule.
The candidate is likely to receive a more favorable evaluation if preceded by
mediocre applicants and a less favorable evaluation if preceded by strong
applicants.
iv. Projection: It is easy to judge others if we assume that they are similar
to us. For instance, if you want challenge and responsibility in your job, you
assume that others want the same. Or, you are honest and trustworthy, so
you take it for granted that other people are equally honest and trustworthy.
This tendency to attribute one’s own characteristics to other people —which
is called projection— can distort perceptions made about others. People
who engage in projection tend to perceive others according to what they
themselves are like rather than according to what the person being observed
is really like. When observing others who actually are like them, these
observers are quite accurate —not because they are perceptive but because
they always judge people as being similar to themselves. So when they
finally do find someone who is like them, they are naturally correct. When
managers engage in projection, they compromise their ability to respond to
individual differences. They tend to see people as more homogeneous than
they really are.

v. Stereotyping: When we judge someone on the basis of our

perception of the group to which he or she belongs, we are using the
shortcut called stereotyping. F. Scott Fitzgerald engaged in stereotyping in
his reported conversation with Ernest Hemingway when he said, “The very
rich are different from you and me.” Hemingway’s reply, “Yes, they have
more money,” indicated that he refused to generalize characteristics about
people on the basis of their wealth. Generalization, of course, is not without
advantages. It is a means of simplifying a complex world, and it permits us to
maintain consistency. It is less difficult to deal with an unmanageable
number of stimuli if we use stereotypes. As an example, assume you are a
sales manager looking to fill a sales position in your territory. You want to
hire someone who is ambitious and hardworking and who can deal well with
adversity. You’ve had good success in the past by hiring individuals who
participated in athletics during college. So you focus your search by looking
for candidates who participated in collegiate athletics. In so doing, you have
cut down considerably on your search time. Furthermore, to the extent those
athletes are ambitious, hardworking, and able to deal with adversity, the use
of this stereotype can improve your decision making. The problem, of course,
is when we inaccurately stereotype. All college athletes are not necessarily
ambitious, hardworking, or good at dealing with adversity; just as all
accountants are not necessarily quiet and introspective.

45
In organizations, we frequently hear comments that represent stereotypes
based on gender, age, race, ethnicity, and even weight: “Women won’t
relocate for a promotion”; “men aren’t interested in child care”; “older
workers can’t learn new skills”; “Asian immigrants are hardworking and
conscientious”; “overweight people lack discipline.” From a perceptual
standpoint, if people expect to see these stereotypes, that are what they will
perceive, whether they are accurate or not. Obviously, one of the problems
of stereotypes is that they are widespread, despite the fact that they may
not contain a shred of truth or that they may be irrelevant. Their being
widespread may only mean that many people are making the same
inaccurate perception on the basis of a false premise about a group.

46
Specific Applications in Organizations
People in organizations are always judging each other. Managers must
appraise their subordinates’ performances. We evaluate how much effort our
co-workers are putting into their jobs. When a new person joins a work team,
he or she is immediately “sized up” by the other team members. In many
cases, these judgments have important consequences for the organization.
Let’s briefly look at a few of the more obvious applications.
 Employment Interview
A major input into who is hired and who is rejected in any organization is the
employment interview. It’s fair to say that few people are hired without an
interview. But the evidence indicates that interviewers make perceptual
judgments that are often inaccurate. In addition, agreement among
interviewers is often poor; that is, different interviewers see different things
in the same candidate and thus arrive at different conclusions about the
applicant.
Interviewers generally draw early impressions that become very quickly
entrenched. If negative information is exposed early in the interview, it tends
to be more heavily weighted than if that same information comes out later.
Studies indicate that most inter-viewers’ decisions change very little after
the first four or five minutes of the interview. As a result, information elicited
early in the interview carries greater weight than does information elicited
later, and a “good applicant” is probably characterized more by the absence
of unfavorable characteristics than by the presence of favorable
characteristics.
Importantly, who you think is a good candidate and who I think is one may
differ markedly. Because interviews usually have so little consistent structure
and interviewers vary in terms of what they are looking for in a candidate,
judgments of the same candidate can vary widely. If the employment
interview is an important input into the hiring decision—and it usually is —
you should recognize that perceptual factors influence who is hired and
eventually the quality of an organization’s labor force.
 Performance Expectations
There is an impressive amount of evidence that demonstrates that people
will attempt to validate their perceptions of reality, even when those
perceptions are faulty. This characteristic is particularly relevant when we
consider performance expectations on the job.
The terms self-fulfilling prophecy, or Pygmalion effect, have evolved to
characterize the fact that people’s expectations determine their behavior. In
other words, if a manager expects big things from his people, they’re not
likely to let him down. Similarly, if a manager expects people to perform
minimally, they’ll tend to behave so as to meet those low expectations. The
result then is that the expectations become reality. An interesting illustration
of the self-fulfilling prophecy is a study undertaken with 105 soldiers in the
Israeli Defense Forces who were taking a 15-week combat command course.
The four course instructors were told that one-third of the specific incoming
trainees had high potential, one-third had normal potential, and the potential
of the rest was unknown. In reality, the trainees were randomly placed into
those categories by the researchers. The results confirmed the existence of a
47
self-fulfilling prophecy. Those trainees whom instructors were told had high
potential scored significantly higher on objective achievement tests,
exhibited more positive attitudes, and held their leaders in higher regard
than did the other two groups. The instructors of the supposedly high-
potential trainees got better results from them because the instructors
expected it!
 Performance Evaluation
An employee’s performance appraisal is very much dependent on the
perceptual process. An employee’s future is closely tied to his or her
appraisal —promotions, pay raises, and continuation of employment are
among the most obvious outcomes. The performance appraisal represents
an assessment of an employee’s work. Although the appraisal can be
objective (for example, a salesperson is appraised on how many dollars of
sales she generates in her territory), many jobs are evaluated in subjective
terms. Subjective measures are easier to implement, they provide managers
with greater discretion, and many jobs do not readily lend themselves to
objective measures. Subjective measures are, by definition, judgmental. The
evaluator forms a general impression of an employee’s work. To the degree
that managers use subjective measures in appraising employees, what the
evaluator perceives to be good or bad employee characteristics or behaviors
will significantly influence the outcome of the appraisal.
 Employee Effort
An individual’s future in an organization is usually not dependent on
performance alone. In many organizations, the level of an employee’s effort
is given high importance. Just as teachers frequently consider how hard you
try in a course as well as how you perform on examinations, so often do
managers. An assessment of an individual’s effort is a subjective judgment
susceptible to perceptual distortions and bias. If it is true, as some claim,
that “more workers are fired for poor attitudes and lack of discipline than for
lack of ability,” then appraisal of an employee’s effort may be a primary
influence on his or her future in the organization.
 Employee Loyalty
Another important judgment that managers make about employees is
whether or not they are loyal to the organization. Despite the general decline
in employee loyalty, few organizations appreciate it when employees,
especially those in the managerial ranks, openly disparage the firm.
Furthermore, in some organizations, if the word gets around that an
employee is looking at other employment opportunities outside the firm, that
employee may be labeled as disloyal and so may be cut off from all future
advancement opportunities. The issue is not whether organizations are right
in demanding loyalty. The issue is that many do and that assessment of an
employee’s loyalty or commitment is highly judgmental. What is perceived
as loyalty by one decision maker may be seen as excessive conformity by
another. An employee who questions a top-management decision may be
seen as disloyal by some, yet caring and concerned by others. As a case in
point, whistleblowers —individuals who report unethical practices by their
employer to outsiders —typically act out of loyalty to their organization but
are perceived by management as troublemakers.
48
49
 2.2.5 ATTITUDES
Attitudes are evaluative statements —either favorable or unfavorable —
concerning objects, people, or events. They reflect how one feels about
something. When you say “I like my job,” you are expressing your attitude
about work.
Attitudes are not the same as values, but the two are interrelated. You can
see this by looking at the three components of an attitude: cognition, affect,
and behavior.
The belief that “discrimination is wrong” is a value statement.
Such an opinion is the cognitive component of an attitude. It sets the
stage for the more critical part of an attitude —its affective component.
Affect is the emotional or feeling segment of an attitude and is reflected in
the statement “I don’t like Jon because he discriminates against minorities.”
Finally, and we’ll discuss this issue at considerable length later in this
section, affect can lead to behavioral outcomes. The behavioral
component of an attitude refers to an intention to behave in a certain way
toward someone or something. So, to continue our example, I might choose
to avoid Jon because of my feeling about him. Viewing attitudes as made up
of three components —cognition, affect, and behavior —is helpful toward
understanding their complexity and the potential relationship between
attitudes and behavior. But for clarity’s sake, keep in mind that the term
attitude essentially refers to the affect part of the three components.

Sources of Attitudes
Attitudes, like values, are acquired from parents, teachers, and peer group
members. We are born with certain genetic predispositions. Then, in our
early years, we begin modeling our attitudes after those we admire, respect,
or maybe even fear. We observe the way family and friends behave, and we
shape our attitudes and behavior to align with theirs. People also imitate the
attitudes of popular individuals and those they admire and respect. In
contrast to values, your attitudes are less stable. Advertising messages, for
example, attempt to alter your attitudes toward a certain product or service:
If the people at Ford can get you to hold a favorable feeling toward their
cars, that attitude may lead to a desirable behavior (for them) —your
purchase of a Ford product. In organizations, attitudes are important
because they affect job behavior. If workers believe, for example, that
supervisors, auditors, bosses, and time-and-motion engineers are all in
conspiracy to make employees work harder for the same or less money, and
then it makes sense to try to understand how these attitudes were formed,
their relationship to actual job behavior, and how they might be changed.
Types of Attitudes
A person can have thousands of attitudes, but OB focuses our attention on a
very limited number of job-related attitudes. These job-related attitudes tap
positive or negative evaluations that employees hold about aspects of their
work environment.
Most of the research in OB has been concerned with three attitudes: job
satisfaction, job involvement, and organizational commitment.
i. Job Satisfaction
50
 The term job satisfaction refers to an individual’s general attitude toward his
or her job. A person with a high level of job satisfaction holds positive
attitudes toward the job, while a person who is dissatisfied with his or her job
holds negative attitudes about the job. When people speak of employee
attitudes, more often than not they mean job satisfaction. In fact, the two are
frequently used interchangeably.
ii. Job Involvement
The term job involvement is a more recent addition to the OB literature.
While there isn’t complete agreement over what the term means, a workable
definition states that job involvement measures the degree to which a
person identifies psychologically with his or her job and considers his or her
perceived performance level important to self-worth. Employees with a high
level of job involvement strongly identify with and really care about the kind
of work they do.

High levels of job involvement have been found to be related to fewer

absences and lower resignation rates. However, it seems to more
consistently predict turnover than absenteeism, accounting for as much as
16 percent of the variance in the former.

iii. Organizational Commitment

The third job attitude we shall discuss is organizational commitment,
which is defined as a state in which an employee identifies with a particular
organization and its goals, and wishes to maintain membership in the
organization.
So, high job involvement means identifying with one’s specific job, while high
organizational commitment means identifying with one’s employing
organization.
As with job involvement, the research evidence demonstrates negative
relationships between organizational commitment and both absenteeism and
turnover. In fact, studies demonstrate that an individual’s level of
organizational commitment is a better indicator of turnover than the far
more frequently used job satisfaction predictor, explaining as much as 34
percent of the variance. Organizational commitment is probably a better
predictor because it is a more global and enduring response to the
organization as a whole than is job satisfaction. An employee may be
dissatisfied with his or her particular job and consider it a temporary
condition, yet not be dissatisfied with the organization as a whole. But when
dissatisfaction spreads to the organization itself, individuals are more likely
to consider resigning.

Attitudes and Consistency

Did you ever notice how people change what they say so it doesn’t
contradict what they do? Perhaps a friend of yours has consistently argued
that the quality of Ethiopian shoes isn’t up to that of the imports and that
he’d never own any-thing but a foreign import. But his father gives him a
fashionable- Ethiopian made shoes, and suddenly they’re not so bad. Or,
when going through sorority rush, a new freshman believes that sororities

51
are good and that pledging a sorority is important. If she fails to make a
sorority, however, she may say, “I recognized that sorority life isn’t all it’s
cracked up to be, anyway!” Research has generally concluded that people
seek consistency among their attitudes and between their attitudes and their
behavior. This means that individuals seek to reconcile divergent attitudes
and align their attitudes and behavior so they appear rational and consistent.
When there is an inconsistency, forces are initiated to return the individual to
an equilibrium state where attitudes and behavior are again consistent. This
can be done by altering either the attitudes or the behavior, or by developing
a rationalization for the discrepancy.

52
An Application: Attitude Surveys

The preceding review should not discourage us from using attitudes to

predict behavior. In an organizational context, most of the attitudes
management would seek to inquire about would be ones with which
employees have some experience. If the attitudes in question are specifically
stated, management should obtain information that can be valuable in
guiding their decisions relative to these employees.
But how does management get information about employee attitudes? The
most popular method is through the use of attitude surveys.

Typically, attitude surveys present the employee with a set of statements or

questions. Ideally, the items are tailored to obtain the specific information
that management desires. An attitude score is achieved by summing up
responses to individual questionnaire items. These scores can then be
averaged for job groups, departments, divisions, or the organization as a
whole.
Chapter Start Contents * * Quit Video Web Site
Please answer each of the following statements using the following
rating scale:
5 = strongly agree
4 = Agree
3 = Undecided
2 = Disagree
1 = strongly disagree

Statement Rating
1. This company is a pretty good place to work.
2. I can get ahead in this company if I make the effort.
3. This company’s wage rates are competitive with those of other
companies.
4. Employee promotion decisions are handled fairly.
5. I understand the various fringe benefits the company offers.
6. My job makes the best use of my abilities.
7. My workload is challenging but not burdensome.
8. I have trust and confidence in my boss.
9. I feel free to tell my boss what I think.
10. I know what my boss expects of me.

Results from attitude surveys can frequently surprise management.

For instance, Michael Gilliland owns and operates a chain of 12 food markets.
He and his management team developed a ten-item job-satisfaction
questionnaire, which they administer to all employees twice a year. Recently
Gilliland was surprised to find the worst complaints coming from employees
at the store with the best working conditions and the most benefits. Careful
analysis of the results uncovered that, although the manager at this store
was well liked, employees were frustrated because he was behind on their
performance reviews and had failed to fire a particularly unproductive
employee. As one of Gilliland’s associates put it, “We’d assumed it would be

53
the happiest store, but it wasn’t.” A corporate wide attitude survey at BP
Exploration revealed that employees were unhappy with the way their direct
superiors managed them. In response, management introduced a formal
upward-appraisal system, which allows the company’s 12,000 employees to
evaluate their boss’s managerial performance. Now managers pay a lot more
attention to the needs of their employees because their employees’ opinions
play an important part in determining the manager’s future in the
organization.
Using attitude surveys on a regular basis provides managers with valuable
feedback on how employees perceive their working conditions. Consistent
with our discussion of perceptions in the previous chapter, the policies and
practices that management views as objective and fair may be seen as
inequitable by employees in general or by certain groups of employees. That
these distorted perceptions have led to negative attitudes about the job and
organization should be important to management. This is because employee
behaviors are based on perceptions, not reality. Remember, the employee
who quits because she believes she is underpaid—when, In fact,
management has objective data to support that her salary is highly
competitive —is just as gone as if she had actually been underpaid. The use
of regular attitude surveys can alert management to potential problems and
employees’ intentions early so that action can be taken to prevent
repercussions.

Job Satisfaction
We have already discussed job satisfaction briefly—earlier in this chapter. In
this section, we want to dissect the concept more carefully. How do we
measure job satisfaction? What determines job satisfaction? What is its effect
on employee productivity, absenteeism, and turnover rates? We answer each
of these questions in this section.

Measuring Job Satisfaction

We’ve previously defined job satisfaction as an individual’s general attitude
toward his or her job. This definition is clearly a very broad one. Yet this is
inherent in the concept. Remember, a person’s job is more than just the
obvious activities of shuffling papers, waiting on customers, or driving a
truck. Jobs require interaction with co-workers and bosses, following
organizational rules and policies, meeting performance standards, living with
working conditions that are often less than ideal, and the like. This means
that an employee’s assessment of how satisfied or dissatisfied he or she is
with his or her job is a complex summation of a number of discrete job
elements. How, then, do we measure the concept? The two most widely used
approaches are a single global rating and a summation score made up of a
number of job facets. The single global rating method is nothing more than
asking individuals to respond to one question, such as “All things considered,
how satisfied are you with your job?” Respondents then reply by circling a
number between one and five that corresponds to answers from “highly
satisfied” to “highly dissatisfied.” The other approach—a summation of job
facets —is more sophisticated. It identifies key elements in a job and asks for

54
the employee’s feelings about each. Typical factors that would be included
are the nature of the work, supervision, present pay, promotion
opportunities, and relations with co-workers. These factors are rated on a
standardized scale and then added up to create an overall job satisfaction
score.
Is one of the foregoing approaches superior to the other?
Intuitively, it would seem that summing up responses to a number of job
factors would achieve a more accurate evaluation of job satisfaction.
The research, however, doesn’t support this intuition. This is one of those
rare instances in which simplicity wins out over complexity. Comparisons of
one-question global ratings with the more lengthy summation-of-job-factors
method indicate that the former is more valid. The best explanation for this
outcome is that the concept of job satisfaction is inherently so broad that the
single question actually becomes a more inclusive measure.

What Determines Job Satisfaction?

We now turn to the question: What work-related variables determine job

satisfaction? An extensive review of the literature indicates that the more
important factors conducive to job satisfaction are mentally challenging
work, equitable rewards, supportive working conditions, and supportive
colleagues. To this list, we’d also add the importance of a good personality–
job fit and an individual’s genetic disposition (some people are just
inherently upbeat and positive about all things, including their job).

i. Mentally Challenging Work

Employees tend to prefer jobs that give them opportunities to use their skills
and abilities and offer a variety of tasks, freedom, and feedback on how well
they are doing. These characteristics make work mentally challenging. Jobs
that have too little challenge create boredom, but too much challenge
creates frustration and feelings of failure. Under conditions of moderate
challenge, most employees will experience pleasure and satisfaction.

ii. Equitable Rewards

Employees want pay systems and promotion policies that they perceive as
being just, unambiguous, and in line with their expectations. When pay is
seen as fair based on job demands, individual skill level, and community pay
standards, satisfaction is likely to result. Of course, not everyone seeks
money. Many people willingly accept less money to work in a preferred
location or in a less demanding job or to have greater discretion in the work
they do and the hours they work. But the key in linking pay to satisfaction is
not the absolute amount one is paid; rather, it is the perception of fairness.
Similarly, employees seek fair promotion policies and practices. Promotions
provide opportunities for personal growth, more responsibilities, and
increased social status. Individuals who perceive that promotion decisions
are made in a fair and just manner, therefore, are likely to experience
satisfaction from their jobs.

iii. Supportive Working Conditions

55
Employees are concerned with their work environment for both personal
comfort and facilitating doing a good job. Studies demonstrate that
employees prefer physical surroundings that are not dangerous or
uncomfortable. Temperature, light, noise, and other environmental factors
should not be at either extreme —for example, having too much heat or too
little light. Additionally, most employees prefer working relatively close to
home, in clean and relatively modern facilities, and with adequate tools and
equipment.

iv. Supportive Colleagues

People get more out of work than merely money or tangible achievements.
For most employees, work also fills the need for social interaction. Not
surprisingly, therefore, having friendly and supportive co-workers leads to
increased job satisfaction. The behavior of one’s boss also is a major
determinant of satisfaction. Studies generally find that employee satisfaction
is increased when the immediate supervisor is understanding.

The Effect of Job Satisfaction on Employee Performance

Managers’ interest in job satisfaction tends to center on its effect on
employee performance. Researchers have recognized this interest, so we
find a large number of studies that have been designed to assess the impact
of job satisfaction on employee productivity, absenteeism, and turnover.
Let’s look at the current state of our knowledge.

 Satisfaction And Productivity

A number of reviews were done in the 1950s and 1960s, covering dozens of
studies that sought to establish the relationship between satisfaction and
productivity. These reviews could find no consistent relationship. In the
1990s, though the studies are far from unambiguous, we can make some
sense out of the evidence. The early views on the satisfaction– performance
relationship can be essentially summarized in the statement “a happy
worker is a productive worker.” Much of the paternalism shown by managers
in the 1930s, 1940s, and 1950s —forming company bowling teams and
credit unions, having company picnics, providing counseling services for
employees, training supervisors to be sensitive to the concerns of
subordinates —was done to make workers happy. But belief in the happy
worker thesis was based more on wishful thinking than hard evidence. A
careful review of the research indicated that if there is a positive relationship
between satisfaction and productivity, the correlations are consistently low.
However, introduction of moderating variables has improved the relation-
ship. For example, the relationship is stronger when the employee’s behavior
is not constrained or controlled by outside factors. An employee’s
productivity on machine-paced jobs, for instance, is going to be much more
influenced by the speed of the machine than his or her level of satisfaction.
Similarly, a stockbroker’s productivity is largely constrained by the general
movement of the stock market.
 Satisfaction And Absenteeism

56
We find a consistent negative relationship between satisfaction and
absenteeism, but the correlation is moderate —usually less while it certainly
makes sense that dissatisfied employees are more likely to miss work, other
factors have an impact on the relationship and reduce the correlation
coefficient. Organizations that provide liberal sick leave benefits are
encouraging all their employees — including those who are highly satisfied—
to take days off. Assuming that you have a reasonable number of varied
interests, you can find work satisfying and yet still take off work to enjoy a
three-day weekend, tan yourself on a warm summer day, or watch the World
Series on television if those days come free with no penalties. Also, as with
productivity, outside factors can act to reduce the correlation.

 Satisfaction And Turnover

Satisfaction is also negatively related to turnover, but the correlation is
stronger than what we found for absenteeism. Yet, again, other factors such
as labor market conditions, expectations about alternative job opportunities,
and length of tenure with the organization are important constraints on the
actual decision to leave one’s current job. Evidence indicates that an
important moderator of the satisfaction– turnover relationship is the
employee’s level of performance.
Specifically, level of satisfaction is less important in predicting turnover for
superior performers. Why? The organization typically makes considerable
efforts to keep these people. They get pay raises, praise, recognition,
increased promotional opportunities, and so forth. Just the opposite tends to
apply to poor performers. Few attempts are made by the organization to
retain them. There may even be subtle pressures to encourage them to quit.
We would expect, therefore, that job satisfaction is more important in
influencing poor performers to stay than superior performers. Regardless of
level of satisfaction, the latter are more likely to remain with the organization
because the receipt of recognition, praise, and other rewards gives them
more reasons for staying.
Consistent with our previous discussion, we shouldn’t be surprised to find
that a person’s general disposition toward life also moderates the
satisfaction– turnover relationship. Specifically, some individuals generally
gripe more than others and such individuals, when dissatisfied with their
jobs, are less likely to quit than those who are more positively disposed
toward life. So if two workers report the same level of job dissatisfaction, the
one most likely to quit is the one with the highest predisposition to be happy
or satisfied in general.

MOTIVATION
8
Unfortunately, many managers still fail to understand the importance of
motivation and creating a motivating work environment. The next topics
explain the basics of motivation and show you how to design effective
motivation programs.

What Is Motivation?

57
Maybe the place to begin is to say what motivation isn’t. Many people
incorrectly view motivation as a personal trait —that is, some have it and
others don’t. In practice, some managers label employees who seem to lack
motivation as lazy. Such a label assumes that an individual is always lazy or
is lacking in motivation. But this isn’t true. Motivation is the result of the
interaction of the individual and the situation. Certainly, individuals differ in
their basic motivational drive. You may read a complete novel at one sitting,
yet find it difficult to stay with a textbook for more than 20 minutes. It’s not
necessarily you—it’s the situation. So as you analyze the concept of
motivation, keep in mind that level of motivation varies both between
individuals and within individuals at different times.

Motivation defined as the willingness to exert high levels of effort toward

organizational goals, conditioned by the effort’s ability to satisfy some
individual need. While general motivation is concerned with effort toward
any goal, we’ll narrow the focus to organizational goals in order to reflect our
singular interest in work-related behavior. The three key elements in our
definition are effort, organizational goals, and needs. The effort element is a
measure of intensity. When someone is motivated, he or she tries hard. But
high levels of effort are unlikely to lead to favorable job-performance
outcomes unless the effort is channeled in a direction that benefits the
organization. Therefore, we must consider the quality of the effort as well as
its intensity. Effort that is directed toward, and consistent with, the
organization’s goals is the kind of effort that we should be seeking. Finally,
we will treat motivation as a need-satisfying process.

A need, in our terminology, means some internal state that makes certain
outcomes appear attractive. An unsatisfied need creates tension that
stimulates drives within the individual. These drives generate a search
behavior to find particular goals that, if attained, will satisfy the need and
lead to the reduction of tension.

So we can say that motivated employees are in a state of tension.

To relieve this tension, they exert effort. The greater the tension, the higher
the effort level. If this effort successfully leads to the satisfaction of the need,
tension is reduced. But since we are interested in work behavior, this
tension-reduction effort must also be directed toward organizational goals.
Therefore, inherent in our definition of motivation is the requirement that the
individual’s needs be compatible and consistent with the organization’s
goals.

Where this does not occur, we can have individuals exerting high levels of
effort that actually run counter to the interests of the organization.
This, incidentally, is not so unusual. For example, some employees regularly
spend a lot of time talking with friends at work in order to satisfy their social
needs. There is a high level of effort, only it’s being unproductively directed.

Early Theories of Motivation

58
The 1950s were a fruitful period in the development of motivation concepts.
Three specific theories were formulated during this period, which although
heavily attacked and now questionable in terms of validity, are probably still
the best-known explanations for employee motivation. These are the
hierarchy of needs theory, Theories X and Y, and the motivation-hygiene
theory. We should know these early theories for at least two reasons: (1)
they represent a foundation from which contemporary theories have grown,
and
(2) Practicing managers regularly use these theories and their terminology in
explaining employee motivation.

 Hierarchy of Needs Theory (Abraham Maslow)

It’s probably safe to say that the most well-known theory of motivation is
Abraham Maslow’s hierarchy of needs. He hypothesized that within every
human being there exist a hierarchy of five needs. These needs are:
1. Physiological: Includes hunger, thirst, shelter, sex, and other bodily needs
2. Safety: Includes security and protection from physical and emotional harm
3. Social: Includes affection, belongingness, acceptance, and friendship
4. Esteem: Includes internal esteem factors such as self-respect, autonomy,
and achievement; and external esteem factors such as status, recognition,
and attention
5. Self-actualization: The drive to become what one is capable of
becoming; includes growth, achieving one’s potential, and self-fulfillment

As each of these needs becomes substantially satisfied, the next need

becomes dominant. The individual moves up the steps of the hierarchy. From
the standpoint of motivation, the theory would say that although no need is
ever fully gratified, a substantially satisfied need no longer motivates. So if
you want to motivate someone, according to Maslow, you need to
understand what level of the hierarchy that person is currently on and focus
on satisfying those needs at or above that level. Maslow separated the five
needs into higher and lower orders. Physiological and safety needs were
described as lower-order and social, esteem, and self-actualization as
higher-order needs. The differentiation between the two orders was made
on the premise that higher-order needs are satisfied internally (within the
person), whereas lower-order needs are predominantly satisfied externally
(by such things as pay, union contracts, and tenure). In fact, the natural
conclusion to be drawn from Maslow’s classification is that in times of
economic plenty, almost all permanently employed workers have their lower-
order needs substantially met. Maslow’s need theory has received wide
recognition, particularly among practicing managers. This can be attributed
to the theory’s intuitive logic and ease of understanding. Unfortunately,
however, research does not generally validate the theory. Maslow provided
no empirical substantiation and several studies that sought to validate the
theory found no support for it.
Old theories, especially ones that are intuitively logical, apparently die hard.
One researcher reviewed the evidence and concluded that “although of
great societal popularity, need hierarchy as a theory continues to receive

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little empirical support.” Further-more, the researcher stated that the
“available research should certainly generate a reluctance to accept
unconditionally the implication of Maslow’s hierarchy.” Another review came
to the same conclusion. Little support was found for the prediction that need
structures are organized along the dimensions proposed by Maslow, that
unsatisfied needs motivate, or that a satisfied need activates movement to a
new need level.

 Theory X and Theory Y (Douglas McGregor)

Douglas McGregor proposed two distinct views of human beings: one

basically negative, labeled Theory X, and the other basically positive,
labeled Theory Y. After viewing the way in which managers dealt with
employees, McGregor concluded that a manager’s view of the nature of
human beings is based on a certain grouping of assumptions and that he or
she tends to mold his or her behavior toward subordinates according to
these assumptions. Under Theory X, the four assumptions held by managers
are:
1. Employees inherently dislike work and, whenever possible, will attempt to
avoid it.
2. Since employees dislike work, they must be coerced, controlled, or
threatened with punishment to achieve goals.
3. Employees will avoid responsibilities and seek formal direction whenever
possible.
4. Most workers place security above all other factors associated with work
and will display little ambition.
In contrast to these negative views about the nature of human beings,
McGregor listed the four positive assumptions that he called Theory Y:

1. Employees can view work as being as natural as rest or play.

2. People will exercise self-direction and self-control if they are committed to
the objectives.
3. The average person can learn to accept, even seek, responsibility.

4. The ability to make innovative decisions is widely dispersed throughout

the population and is not necessarily the sole province of those in
management positions.

What are the motivational implications if you accept McGregor’s analysis?

The answer is best expressed in the framework presented by Maslow. Theory
X assumes that lower-order needs dominate individuals.

Theory Y assumes that higher-order needs dominate individuals. McGregor

himself held to the belief that Theory Y assumptions were more valid than
Theory X. Therefore, he proposed such ideas as participative decision
making, responsible and challenging jobs, and good group relations as
approaches that would maximize an employee’s job motivation.

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Unfortunately, there is no evidence to confirm that either set of assumptions
is valid or that accepting Theory Y assumptions and altering one’s actions
accordingly will lead to more motivated workers.

As will become evident later in this chapter, either Theory X or

Theory Y assumptions may be appropriate in a particular situation.

 Motivation-Hygiene Theory (Frederick Herzberg)

The motivation-hygiene theory was proposed by psychologist Frederick
Herzberg. In the belief that an individual’s relation to his or her work is a
basic one and that his or her attitude toward this work can very well
determine the individual’s success or failure, Herzberg investigated the
question, “What do people want from their jobs?” He asked people to
describe, in detail, situations when they felt exceptionally good and bad
about their jobs. These responses were tabulated and categorized.
From the categorized responses, Herzberg concluded that the replies people
gave when they felt good about their jobs were significantly different from
the replies given when they felt bad. Certain characteristics tend to be
consistently related to job satisfaction (factors on the right side of the
figure), and others to job dissatisfaction (the left side of the figure).
Intrinsic factors, such as achievement, recognition, the work itself,
responsibility, advancement, and growth, seem to be related to job
satisfaction. When those questioned felt good about their work, they tended
to attribute these characteristics to themselves. On the other hand, when
they were dissatisfied, they tended to cite extrinsic factors, such as company
policy and administration, supervision, interpersonal relations, and working
conditions. The data suggest, says Herzberg, that the opposite of satisfaction
is not dissatisfaction, as was traditionally believed. Removing dissatisfying
characteristics from a job does not necessarily make the job satisfying.
Herzberg proposes that his findings indicate the existence of a dual
continuum: The opposite of “Satisfaction” is “No Satisfaction,” and the
opposite of “Dissatisfaction” is “No Dissatisfaction.”
According to Herzberg, the factors leading to job satisfaction are separate
and distinct from those that lead to job dissatisfaction. Therefore, managers
who seek to eliminate factors that create job dissatisfaction can bring about
peace, but not necessarily motivation. They will be placating their work force
rather than motivating them. As a result, such characteristics as company
policy and administration, supervision, interpersonal relations, working
conditions, and salary have been characterized by Herzberg as hygiene
factors. When they are adequate, people will not be dissatisfied; however,
neither will they be satisfied. If we want to motivate people on their jobs,
Herzberg suggests emphasizing achievement, recognition, the work itself,
responsibility, and growth. These are the characteristics that people find
intrinsically rewarding. The motivation-hygiene theory is not without its
detractors. The criticisms of the theory include the following:

1. The procedure that Herzberg used is limited by its methodology.

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 When things are going well, people tend to take credit themselves.
Contrarily, they blame failure on the external environment.
2. The reliability of Herzberg’s methodology is questioned. Since raters have
to make interpretations, it is possible that they may contaminate the
findings by interpreting one response in one manner while treating
another similar response differently.
3. The theory, to the degree that it is valid, provides an explanation of job
satisfaction. It is not really a theory of motivation.
4. No overall measure of satisfaction was utilized. In other words, a person
may dislike part of his or her job, yet still think the job is acceptable.
5. The theory is inconsistent with previous research. The motivation-
hygiene theory ignores situational variables.
6. Herzberg assumes that there is a relationship between satisfaction and
productivity. But the research methodology he used looked only at
satisfaction, not at productivity. To make such research relevant, one
must assume a high relationship between satisfaction and productivity.
Regardless of criticisms, Herzberg’s theory has been widely read and few
managers are unfamiliar with his recommendations. The popularity over the
past 30 years of vertically expanding jobs to allow workers greater
responsibility in planning and controlling their work can probably be largely
attributed to Herzberg’s findings and recommendations.

Contemporary Theories of Motivation

The previous theories are well known but, unfortunately, have not held up
well under close examination. However, all is not lost. There are a number of
contemporary theories that have one thing in common—each has a
reasonable degree of valid supporting documentation. Of course, this doesn’t
mean that the theories we are about to introduce are unquestionably right.
We call them “contemporary theories” not because they necessarily were
developed recently, but because they represent the current state of the art
in explaining employee motivation.

 ERG Theory (Clayton Alderfer)

Clayton Alderfer of Yale University has reworked Maslow’s need hierarchy to
align it more closely with the empirical research. His revised need hierarchy
is labeled ERG theory.
Alderfer argues that there are three groups of core need —existence,
relatedness, and growth—hence, the label: ERG theory. The existence group
is concerned with providing our basic material existence requirements. They
include the items that Maslow considered to be physiological and safety
needs. The second group of needs are those of relatedness — the desire we
have for maintaining important interpersonal relationships. These social and
status desires require interaction with others if they are to be satisfied, and
they align with Maslow’s social need and the external component of
Maslow’s esteem classification. Finally, Alderfer isolates growth needs —an
intrinsic desire for personal development. These include the intrinsic
component from Maslow’s esteem category and the characteristics included
under self-actualization.

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Besides substituting three needs for five, how does Alderfer’s ERG theory
differ from Maslow’s? In contrast to the hierarchy of needs theory, the ERG
theory demonstrates that (1) more than one need may be operative at the
same time, and (2) if the gratification of a higher-level need is stifled, the
desire to satisfy a lower-level need increases.
Maslow’s need hierarchy follows a rigid, step like progression.
ERG theory does not assume that there exists a rigid hierarchy where a
lower need must be substantially gratified before one can move on. A person
can, for instance, be working on growth even though existence or
relatedness needs are unsatisfied; or all three need categories could be
operating at the same time.
ERG theory also contains a frustration-regression dimension. Maslow, you’ll
remember, argued that an individual would stay at a certain need level until
that need was satisfied. ERG theory counters by noting that when a higher-
order need level is frustrated, the individual’s desire to increase a lower-level
need takes place. Inability to satisfy a need for social interaction, for
instance, might increase the desire for more money or better working
conditions. So frustration can lead to a regression to a lower need.
In summary, ERG theory argues, like Maslow that satisfied lower-order needs
lead to the desire to satisfy higher-order needs; but multiple needs can be
operating as motivators at the same time, and frustration in attempting to
satisfy a higher-level need can result in regression to a lower-level need.
ERG theory is more consistent with our knowledge of individual differences
among people. Variables such as education, family background, and cultural
environment can alter the importance or driving force that a group of needs
holds for a particular individual. The evidence demonstrating that people in
other cultures rank the need categories differently —for instance, natives of
Spain and Japan place social needs before their physiological requirements
—would be consistent with ERG theory. Several studies have supported ERG
theory, but there is also evidence that it doesn’t work in some organizations.

 McClelland’s Theory of Needs

You’ve got one beanbag and there are five targets set up in front of you.
Each one is progressively farther away and, hence, more difficult to hit.
Target A is a cinch. It sits almost within arm’s reach of you. If you hit it, you
get $2. Target B is a bit farther out, but about 80 percent of the people who
try can hit it. It pays $4. 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 if you do.
Finally, Target E pays $32, but it’s almost impossible to achieve. Which
target would you try for? If you selected C, you’re likely to be a high
achiever.
Why? Read on.
McClelland’s theory of needs was developed by David McClelland and his
associates. The theory focuses on three needs: achievement, power, and
affiliation. They are defined as follows:
 Need for achievement(nAch): The drive to excel, to achieve in relation
to a set of standards, to strive to succeed

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  Need for power(nPow): The need to make others behave in a way that
they would not have behaved otherwise
 Need for affiliation(nAf f): The desire for friendly and close
interpersonal relationships
Some people have a compelling drive to succeed. They’re striving for
personal achievement rather than the rewards of success per se. They have
a desire to do something better or more efficiently than it has been done
before. This drive is the achievement need (nAch). From research into the
achievement need, McClelland found that high achievers differentiate
themselves from others by their desire to do things better. They seek
situations where they can attain personal responsibility for finding solutions
to problems, where they can receive rapid feedback on their performance so
they can tell easily whether they are improving or not, and where they can
set moderately challenging goals. High achievers are not gamblers; they
dislike succeeding by chance. They prefer the challenge of working at a
problem and accepting the personal responsibility for success or failure
rather than leaving the out-come to chance or the actions of others.
Importantly, they avoid what they perceive to be very easy or very difficult
tasks. They want to overcome obstacles, but they want to feel that their
success (or failure) is due to their own actions. This means they like tasks of
intermediate difficulty.
High achievers perform best when they perceive their probability of success
as being 0.5, that is, where they estimate that they have a 50-50 chance of
success. They dislike gambling with high odds because they get no
achievement satisfaction from happen-stance success. 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.
When there is an approximately equal chance of success or failure, there is
the optimum opportunity to experience feelings of accomplishment and
satisfaction from their efforts.

The need for power (nPow) is the desire to have impact, to be influential, and
to control others. Individuals high in nPow enjoy being “in charge,” strive for
influence over others, prefer to be placed into competitive and status-
oriented situations, and tend to be more concerned with prestige and gaining
influence over others than with effective performance.

The third need isolated by McClelland is affiliation (nAf f). This need has
received the least attention from researchers. Affiliation can be likened to
Dale Carnegie’s goals —the desire to be liked and accepted by others.
Individuals with a high affiliation motive strive for friendship; prefer
cooperative situations rather than competitive ones, and desire relationships
involving a high degree of mutual understanding. How do you find out if
someone is, for instance, a high achiever? There are questionnaires that tap
this motive, but most research uses a projective test in which subjects
respond to pictures.

Each picture is briefly shown to the subject and then he or she writes a story
based on the picture. As an example, the picture may show a male sitting at

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a desk in a pensive position, looking at a photograph of a woman and two
children that sits at the corner of the desk. The subject will then be asked to
write a story describing what is going on, what preceded this situation, what
will happen in the future, and the like. The stories become, in effect,
projective tests that measure unconscious motives. Each story is scored and
a subject’s ratings on each of the three motives are obtained. Relying on an
extensive amount of research, some reasonably well-supported predictions
can be made based on the relationship between achievement need and job
performance. Although less research has been done on power and affiliation
needs, there are consistent findings here, too.
First, individuals with a high need to achieve prefer job situations with
personal responsibility, feed-back, and an intermediate degree of risk. When
these characteristics are prevalent, high achievers will be strongly
motivated. The evidence consistently demonstrates, for instance, that high
achievers are successful in entrepreneurial activities such as running their
own businesses and managing a self-contained unit within a large
organization.

Second, a high need to achieve does not necessarily lead to being a good
manager, especially in large organizations. People with a high achievement
need are interested in how well they do personally and not in influencing
others to do well. High-nAch sales-people do not necessarily make good
sales managers, and the good general manager in a large organization does
not typically have a high need to achieve.
Third, the needs for affiliation and power tend to be closely related to
managerial success. The best managers are high in their need for power and
low in their need for affiliation. In fact, a high power motive may be a
requirement for managerial effectiveness. Of course, what the cause is and
what the effect is are arguable. It has been suggested that a high power
need may occur simply as a function of one’s level in a hierarchical
organization. The latter argument proposes that the higher the level an
individual rises to in the organization, the greater is the incumbent’s power
motive. As a result, powerful positions would be the stimulus to a high power
motive.

Finally, employees have been successfully trained to stimulate their

achievement need. Trainers have been effective in teaching individuals to
think in terms of accomplishments, winning, and success, and then helping
them to learn how to act in a high achievement way by preferring situations
where they have personal responsibility, feedback, and moderate risks. So if
the job calls for a high achiever, management can select a person with a
high nAch or develop its own candidate through achievement training.

 Cognitive Evaluation Theory

In the late 1960s, one researcher proposed that the introduction of extrinsic
rewards, such as pay, for work effort that had been previously intrinsically
rewarding due to the pleasure associated with the content of the work itself
would tend to decrease the overall level of motivation. This proposal —which

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has come to be called the cognitive evaluation theory—has been
extensively researched, and a large number of studies have been supportive.
As we’ll show, the major implications for this theory relate to the way in
which people are paid in organizations.

Historically, motivation theorists have generally assumed that intrinsic

motivations such as achievement, responsibility, and competence are
independent of extrinsic motivators like high pay, promotions, good
supervisor relations, and pleasant working conditions.

That is, the stimulation of one would not affect the other. But the cognitive
evaluation theory suggests otherwise. It argues that when extrinsic rewards
are used by organizations as payoffs for superior performance, the intrinsic
rewards, which are derived from individuals doing what they like, are
reduced. In other words, when extrinsic rewards are given to someone for
performing an interesting task, it causes intrinsic interest in the task itself to
decline. Why would such an outcome occur? The popular explanation is that
the individual experiences a loss of control over his or her own behavior so
that the previous intrinsic motivation diminishes.

Furthermore, the elimination of extrinsic rewards can produce a shift —from

an external to an internal explanation—in an individual’s perception of
causation of why he or she works on a task. If you’re reading a novel a week
because your English literature instructor requires you to, you can attribute
your reading behavior to an external source. However, after the course is
over, if you find yourself continuing to read a novel a week, your natural
inclination is to say, “I must enjoy reading novels because I’m still reading
one a week!”
If the cognitive evaluation theory is valid, it should have major implications
for managerial practices. It has been a truism among compensation
specialists for years that if pay or other extrinsic rewards are to be effective
motivators, they should be made contingent on an individual’s performance.
But, cognitive evaluation theorists would argue, this will only tend to
decrease the internal satisfaction that the individual receives from doing the
job. We have substituted an external stimulus for an internal stimulus. In
fact, if cognitive evaluation theory is correct, it would make sense to make
an individual’s pay non contingent on performance in order to avoid
decreasing intrinsic motivation.
We noted earlier that the cognitive evaluation theory has been supported in
a number of studies. Yet it has also met with attacks, specifically on the
methodology used in these studies and in the interpretation of the findings.
But where does this theory stand today? Can we say that when organizations
use extrinsic motivators like pay and promotions to stimulate workers’
performance they do so at the expense of reducing intrinsic interest and
motivation in the work being done? The answer is not a simple “Yes” or “No.”

Although further research is needed to clarify some of the current ambiguity,

the evidence does lead us to conclude that the interdependence of extrinsic
and intrinsic rewards is a real phenomenon. However, its impact on

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employee motivation at work, in contrast to motivation in general, may be
considerably less than originally thought. First, many of the studies testing
the theory were done with students, not paid organizational employees. The
researchers would observe what happens to a student’s behavior when a
reward that had been allocated is stopped. This is interesting, but it does not
represent the typical work situation. In the real world, when extrinsic rewards
are stopped, it usually means the individual is no longer part of the
organization. Second, evidence indicates that very high intrinsic motivation
levels are strongly resistant to the detrimental impacts of extrinsic rewards.
Even when a job is inherently interesting; there still exists a powerful norm
for extrinsic payment. At the other extreme, on dull tasks extrinsic rewards
appear to increase intrinsic motivation. Therefore, the theory may have
limited applicability to work organizations because most low-level jobs are
not inherently satisfying enough to foster high intrinsic interest and many
managerial and professional positions offer intrinsic rewards. Cognitive
evaluation theory may be relevant to that set of organizational jobs that falls
in between—those that are neither extremely dull nor extremely interesting.

 Goal-Setting Theory
Gene Broadwater, coach of the Hamilton High School cross-country team,
gave his squad these last words before they approached the line for the
league championship race: “Each one of you is physically ready. Now, get
out there and do your best. No one can ever ask more of you than that.”
You’ve heard the phrase a number of times yourself: “Just do your best.
That’s all anyone can ask for.” But what does “do your best” mean? Do we
ever know if we’ve achieved that vague goal? Would the cross-country
runners have recorded faster times if Coach Broadwater had given each a
specific goal to shoot for? Might you have done better in your high school
English class if your parents had said, “You should strive for 85 percent or
higher on all your work in English” rather than telling you to “do your best”?
The research on goal-setting theory addresses these issues, and the
findings, as you will see, are impressive in terms of the effect that goal
specificity, challenge, and feedback have on performance. In the late 1960s,
Edwin Locke proposed that intentions to work toward a goal are a major
source of work motivation. That is, goals tell an employee what needs to be
done and how much effort will need to be expended. The evidence strongly
supports the value of goals. More to the point, we can say 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 non feedback.

Specific hard goals produce a higher level of output than does the
generalized goal of “do your best.” The specificity of the goal itself acts as an
internal stimulus.

If factors like ability and acceptance of the goals are held constant, we can
also state that the more difficult the goal, the higher the level of
performance. However, it’s logical to assume that easier goals are more
likely to be accepted. But once an employee accepts a hard task, he or she
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will exert a high level of effort until it is achieved, lowered, or abandoned.
People will do better when they get feedback on how well they are
progressing toward their goals because feedback helps to identify
discrepancies between what they have done and what they want to do; that
is, feedback acts to guide behavior. But all feedback is not equally potent.
Self-generated feedback—where the employee is able to monitor his or her
own progress —has been shown to be a more powerful motivator than
externally generated feedback. If employees have the opportunity to
participate in the setting of their own goals, will they try harder? The
evidence is mixed regarding the superiority of participative over assigned
goals. In some cases, participative set goals elicited superior performance,
while in other cases, individuals performed best when assigned goals by their
boss. But a major advantage of participation may be in increasing
acceptance of the goal itself as a desirable one to work toward. As we noted,
resistance is greater when goals are difficult.
If people participate in goal setting, they are more likely to accept even a
difficult goal than if they are arbitrarily assigned it by their boss. The reason
is that individuals are more committed to choices in which they have a part.
Thus, although participative goals may have no superiority over assigned
goals when acceptance is taken as a given, participation does increase the
probability that more difficult goals will be agreed to and acted upon.
Are there any contingencies in goal-setting theory or can we take it as a
universal truth that difficult and specific goals will always lead to higher
performance? In addition to feedback, three other factors have been found to
influence the goals – performance relationship. These are goal commitment,
adequate self-efficacy, and national culture. Goal-setting theory presupposes
that an individual is committed to the goal, that is, is determined not to
lower or abandon the goal. This is most likely to occur when goals are made
public, when the individual has an internal locus of control, and when the
goals are self-set rather than assigned. Self-efficacy refers to an
individual’s belief that he or she is capable of performing a task. The higher
your self-efficacy, the more confidence you have in your ability to succeed in
a task.

So, in difficult situations, we find that 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. In addition; individuals high
in self-efficacy seem to respond to negative feedback with increased effort
and motivation, whereas those low in self-efficacy are likely to lessen their
effort when given negative feedback. Finally, goal-setting theory is culture
bound. It assumes that subordinates will be reasonably independent (not too
high a score on power distance), that managers and subordinates will seek
challenging goals (low in uncertainty avoidance), and that performance is
considered important by both (high in quantity of life). So don’t expect goal
setting to necessarily lead to higher employee performance. Our overall
conclusion is that intentions —as articulated in terms of hard and specific
goals —are a potent motivating force. Under the proper conditions, they can
lead to higher performance. However, there is no evidence that such goals
are associated with increased job satisfaction.

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 Reinforcement Theory

A counterpoint to goal-setting theory is reinforcement theory. The former

is a cognitive approach, proposing that an individual’s r purposes direct his
or her action. In reinforcement theory, we have a behaviorist approach,
which argues that reinforcement conditions behavior. The two are clearly at
odds philosophically. Reinforcement theorists see behavior as being
environmentally caused. You need not be concerned, they would argue, with
internal cognitive events; what controls behavior are rein forcers —any con-
sequence that, when immediately following a response, increases the
probability that the behavior will be repeated. Reinforcement theory ignores
the inner state of the individual and concentrates solely on what happens to
a person when he or she takes some action. Because it does not concern
itself with what initiates behavior, it is not, strictly speaking, a theory of
motivation. But it does provide a powerful means of analysis of what controls
behavior, and it is for this reason that it is typically considered in discussions
of motivation.

We saw how using rein forcers to condition behavior give us considerable

insight into how people learn. Yet we cannot ignore the fact that
reinforcement has a wide following as a motivational device. In its pure form,
however, reinforcement theory ignores feelings, attitudes, expectations, and
other cognitive variables that are known to impact behavior. In fact, some
researchers look at the same experiments that reinforcement theorists use
to support their position and interpret the findings in a cognitive framework.
Reinforcement is undoubtedly an important influence on behavior, but few
scholars are prepared to argue that it is the only influence. The behaviors
you engage in at work and the amount of effort you allocate to each task are
affected by the consequences that follow from your behavior. If you are
consistently reprimanded for out producing your colleagues, you will likely
reduce your productivity. But your lower productivity may also be explained
in terms of goals, inequity, or expectancies.

 Equity Theory

Jane Pearson graduated last year from the State University with a degree in
accounting. After interviews with a number of organizations on campus, she
accepted a position with one of the nation’s largest public accounting firms
and was assigned to their Boston office. Jane was very pleased with the offer
she received: challenging work with a prestigious firm, an excellent
opportunity to gain important experience, and the highest salary any
accounting major at State was offered last year —$2,950 a month. But Jane
was the top student in her class; she was ambitious and articulate and fully
expected to receive a commensurate salary.
Twelve months have passed since Jane joined her employer. The work has
proved to be as challenging and satisfying as she had hoped. Her employer
is extremely pleased with her performance; in fact, she recently received a
$200-a-month raise. However, Jane’s motivational level has dropped

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dramatically in the past few weeks. Why? Her employer has just hired a fresh
college graduate out of
State University, who lacks the one-year experience Jane has gained, for
$3,200 a month—$50 more than Jane now makes! It would be an
understatement to describe Jane in any other terms than irate.
Jane is even talking about looking for another job.
Jane’s situation illustrates the role that equity plays in motivation.
Employees make comparisons of their job inputs and out-come relative to
those of others. We perceive what we get from a job situation (outcomes) in
relation to what we put into it (inputs), and then we compare our outcome–
input ratio with the out-come –input ratio of relevant others. If we perceive
our ratio to be equal to that of the relevant others with whom we compare
ourselves, a state of equity is said to exist. We perceive our situation as fair
—that justice prevails. When we see the ratio as unequal, we experience
equity tension. J. Stacy Adams has proposed that this negative tension state
provides the motivation to do something to correct it. The referent that an
employee selects adds to the complexity of equity theory. Evidence
indicates that the referent chosen is an important variable in equity theory.
There are four referent comparisons that an employee can use:

1. Self-inside: An employee’s experiences in a different position inside his or

her current organization
2. Self-outside: An employee’s experiences in a situation or position outside
his or her current organization
3. Other-inside: Another individual or group of individuals inside the
employee’s organization
4. Other-outside: Another individual or group of individuals outside the
employee’s organization

Employees might compare themselves to friends, neighbors, co-workers,

colleagues in other organizations, or past jobs they them-selves have had.
Which referent an employee chooses will be influenced by the information
the employee holds about referents as well as by the attractiveness of the
referent. This has led to focusing on four moderating variables —gender,
length of tenure, level in the organization, and amount of education or
professionalism.
Research shows that both men and women prefer same-sex comparisons.
The research also demonstrates that women are typically paid less than men
in comparable jobs and have lower pay expectations than men for the same
work. So a female that uses another female as a referent tends to result in a
lower comparative standard.
This leads us to conclude that employees in jobs that are not sex segregated
will make more cross-sex comparisons than those in jobs that are either
male or female dominated. This also suggests that if women are tolerant of
lower pay, it may be due to the comparative standard they use. Employees
with short tenure in their current organizations tend to have little information
about others inside the organization, so they rely on their own personal
experiences. On the other hand, employees with long tenure rely more
heavily on co-workers for comparison. Upper-level employees, those in the

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professional ranks, and those with higher amounts of education tend to be
more cosmopolitan and have better information about people in other
organizations. Therefore, these types of employees will make more other-
outside comparisons.
Based on equity theory, when employees perceive an inequity, they can be
predicted to make one of six choices:
1. Change their inputs (for example, don’t exert as much effort)
2. Change their outcomes (for example, 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 (for example, “I used to think I worked at a
moderate pace but now I realize that I work a lot harder than everyone
else.”)
4. Distort perceptions of others (for example, “Mike’s job isn’t as desirable as
I previously thought it was.”)
5. Choose a different referent (for example, “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 (for example, quit the job) Equity theory recognizes that
individuals are concerned not only with the absolute amount of rewards they
receive for their efforts, but also with the relationship of this amount to what
others receive. They make judgments as to the relationship between their
inputs and outcomes and the inputs and out-comes of others. Based on one’s
inputs, such as effort, experience, education, and competence, one
compares out-comes such as salary levels, raises, recognition, and other
factors. When people perceive an imbalance in their out-come – input ratio
relative to others, tension is created. This tension provides the basis for
motivation, as people strive for what they perceive as equity and fairness.
Specifically, the theory establishes four propositions relating to inequitable
pay:

1. Given payment by time, over rewarded employees will produce more than
will equitably paid employees. Hourly and salaried employees will generate
high quantity or quality of production in order to increase the input side of
the ratio and bring about equity.
2. Given payment by quantity of production, over rewarded employees will
produce fewer, but higher-quality, units than will equitably paid employees.
Individuals paid on a piece-rate basis will increase their effort to achieve
equity, which can result in greater quality or quantity. However, increases in
quantity will only increase inequity, since every unit produced results in
further overpayment. Therefore, effort is directed toward increasing quality
rather than increasing quantity.
3. Given payment by time, under rewarded employees will produce less or
poorer quality of output. Effort will be decreased, which will bring about
lower productivity or poorer-quality output than equitably paid subjects.
4. Given payment by quantity of production, under rewarded employees will
produce a large number of low-quality units in comparison with equitably
paid employees. Employees on piece-rate pay plans can bring about equity

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because trading off quality of output for quantity will result in an increase in
rewards with little or no increase in contributions.
These propositions have generally been supported, with a few minor
qualifications.51 First; inequities created by overpayment do not seem to
have a very significant impact on behavior in most work situations.
Apparently, people have a great deal more tolerance of overpayment
inequities than of underpayment inequities, or are better able to rationalize
them. Second, not all people are equity sensitive. For example, there is a
small part of the working population who actually prefer that their outcome –
input ratio be less than the referent comparison. Predictions from equity
theory are not likely to be very accurate with these “benevolent types.”

It’s also important to note that while most research on equity theory has
focused on pay, employees seem to look for equity in the distribution of
other organizational rewards. For instance, it’s been shown that the use of
high-status job titles as well as large and lavishly furnished offices may
function as outcomes for some employees in their equity equation.
Finally, recent research has been directed at expanding what is meant by
equity or fairness. historically, equity theory focused on distributive justice
or the perceived fairness of the amount and allocation of rewards among
individuals. But equity should also consider procedural justice —the
perceived fairness of the process used to determine the distribution of
rewards. The evidence indicates that distributive justice has a greater
influence on employee satisfaction than procedural justice, while procedural
justice tends to affect an employee’s organizational commitment, trust in his
or her boss, and intention to quit.54 So managers should consider openly
sharing information on how allocation decisions are made, following
consistent and unbiased procedures, and engaging in similar practices to
increase the perception of procedural justice. By increasing the perception of
procedural fairness, employees are likely to view their bosses and the
organization as positive even if they’re dissatisfied with pay, promotions, and
other personal outcomes.

In conclusion, equity theory demonstrates that, for most employees,

motivation is influenced significantly by relative rewards as well as by
absolute rewards, but some key issues are still unclear. For instance, how do
employees handle conflicting equity signals, such as when unions point to
other employee groups who are substantially better off, while management
argues how much things have improved? How do employees define inputs
and outcomes? How do they combine and weigh their inputs and out-comes
to arrive at totals? When and how do the factors change over time? Yet,
regardless of these problems, equity theory continues to offer us some
important insights into employee motivation.

 Expectancy Theory

Currently, one of the most widely accepted explanations of motivation is

Victor Vroom’s expectancy theory. Although it has its critics, most of the
research evidence is supportive of the theory.

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Expectancy theory argues that the strength of a tendency to act in a certain
way depends on the strength of an expectation that the act will be followed
by a given outcome and on the attractiveness of that outcome to the
individual. In more practical terms, expectancy theory says that an employee
will be motivated to exert a high level of effort when he or she believes that
effort will lead to a good performance appraisal; that a good appraisal will
lead to organizational rewards like a bonus, a salary increase, or a
promotion; and that the rewards will satisfy the employee’s personal goals.
The theory, there-fore, focuses on three relationships:

1. Effort – performance relationship. The probability perceived by the

individual that exerting a given amount of effort will lead to performance.
2. Performance – reward relationship. The degree to which the individual
believes that performing at a particular level will lead to the attainment of a
desired outcome.
3. 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 merely do the minimum necessary to get by. This is evident
when we look at the theory’s three relation-ships in a little more detail. We
present them as questions employees need to answer in the affirmative if
their motivation is to be maximized.
First, if I give a maximum effort, will it be recognized in my performance
appraisal? For a lot of employees, the answer is “No.” Why? Their skill level
may be deficient, which means that no matter how hard they try, they’re not
likely to be a high performer. The organization’s performance appraisal
system may be designed to assess nonperformance factors like loyalty,
initiative, or courage, which means more effort won’t necessarily result in a
higher evaluation. Still another possibility is that the employee, rightly or
wrongly, perceives that her boss doesn’t like her. As a result, she expects to
get a poor appraisal regardless of her level of effort. These examples suggest
that one possible source of low employee motivation is the belief, by the
employee, that no matter how hard she works, the likelihood of getting a
good performance appraisal is low.
Second, if I get a good performance appraisal, will it lead to organizational
rewards? Many employees see the performance – reward relationship in their
job as weak. The reason is that organizations reward a lot of things besides
just performance. For example, when pay is allocated to employees based on
factors such as seniority, being cooperative, or for “kissing up” to the boss,
employees are likely to see the performance – reward relationship as being
weak and demotivating.
Finally, if I’m rewarded, are the rewards ones that I find personally
attractive? The employee works hard in 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.

Or the employee puts in extra effort to be relocated to the company’s

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Paris office but instead is transferred to Singapore. These examples illustrate
the importance of the rewards being tailored to individual employee needs.
Unfortunately, many managers are limited in the rewards they can
distribute, which make it difficult to individualize rewards. Moreover, some
managers incorrectly assume that all employees want the same thing, thus
overlooking the motivational effects of differentiating rewards. In either case,
employee motivation is sub maximized.

In summary, the key to expectancy theory is the understanding of an

individual’s goals and the linkage between effort and performance, between
performance and rewards, and, finally, between the rewards and individual
goal satisfaction. As a contingency model, expectancy theory recognizes that
there is no universal principle for explaining everyone’s motivations.
Additionally, just because we understand what needs a person seeks to
satisfy does not ensure that the individual perceives high performance as
necessarily leading to the satisfaction of these needs.

Does expectancy theory work? Attempts to validate the theory have been
complicated by methodological, criterion, and measurement problems. As a
result, many published studies that purport to support or negate the theory
must be viewed with caution.
Importantly, most studies have failed to replicate the methodology as it was
originally proposed. For example, the theory proposes to explain different
levels of effort from the same person under different circumstances, but
almost all replication studies have looked at different people. Correcting for
this flaw has greatly improved sup port for the validity of expectancy theory.
Some critics suggest that the theory has only limited use, arguing that it
tends to be more valid for predicting in situations where effort – performance
and performance – reward linkages are clearly perceived by the individual.
61 Since few individuals perceive a high correlation between performance
and rewards in their jobs, the theory tends to be idealistic. If organizations
actually rewarded individuals for performance rather than according to such
criteria as seniority, effort, skill level, and job difficulty, then the theory’s
validity might be considerably greater. However, rather than invalidating
expectancy theory, this criticism can be used in support of the theory, for it
explains why a large segment of the work force exerts low levels of effort in
carrying out job responsibilities.

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