Chapter 2

INDIVIDUAL DIFFERENCES, MENTAL ABILITY,

AND PERSONALITY

The purpose of this chapter is to explain some foundation ideas on several key topics about individual
behavior in organizations. The chapter begins with an explanation of the nature and consequences of
individual differences. Attention is then focused on three major topics closely linked to individual
differences: demographic diversity, mental ability, and personality.

Learning Objectives

1. Explain how individual differences influence the behavior of people in organizations.

2. Describe the key factors contributing to demographic diversity.

3. Explain how mental ability relates to job performance.

4. Identify major personality variables that influence job performance.

5. Explain how emotional intelligence is an important part of organizational behavior.

Chapter Outline and Lecture Notes

I. INDIVIDUAL DIFFERENCES
People show substantial individual differences, or variations in how they respond to the same
situation based on personal characteristics. Behavior is a function of the person interacting with is
or her environment . Behavior is therefore determined by the effects of the individual and the
environment on each other. Also, individual differences moderate how people respond to
situations. Seven consequences of individual differences that have a major impact on managing
people are as follows:

1. People differ in productivity.

2. Quality of work varies because people vary in their propensity for achieving high-quality
results.
3. Empowerment is effective with some workers, but not with all.
4. A given leadership style does not work with all people.
5. People differ in their need for contact with other people.
6. Company management will find that commitment to the firm varies considerably.
7. Workers vary in their level of self-esteem that in turn influences their productivity and
capacity to take on additional responsibility.

The individual differences is usually attributed to a combination of heredity and

environment. The manager should therefore create a positive environment for workers.
II. DEMOGRAPHIC DIVERSITY
Demographic diversity refers to differences in background factors about the work force that
help shape worker attitudes and behavior. The U.S. workforce has become increasingly diverse.

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 A. Sex and Gender Differences
There are few differences between men and women in such factors as
ability and motivation that will affect their job performance. Gender
differences in communication patterns have been noted. Men typically
communicate to convey information or establish status. Women are more
likely to communicate to establish rapport and solve problems. A
researcher has noted that men are more likely to value equity, whereas
women opt for equality. Shibley Hyde observes that overinflated claims
of gender differences can harm in the workplace, such as denying people
opportunities.

B. Generational and Age-Based Differences

People may behave differently on the job based somewhat on the
behaviors and attitudes of many of their generation. The four
generations currently in the workforce are traditionalists, baby
boomers,

Baby Boomers (1946–1964) Core values: Strong work ethic, job

security, and loyalty.

Generation X, and Generation Y. Constance Patterson says that
every generation is influenced by major economic, political,
and social events of its era, such as the Great Depression, the
women’s movement, and advances in information technology.

Generational differences can sometimes cause clashes,

especially among members of the same workgroup. For
example, baby boomers may believe that Generation Xers are
too impatient and willing to reject reliable work procedures.
Generation Xers may perceive baby boomers as always trying
to please people and being inflexible to change.
 Age differences in the workforce include a focus on mental and
physical capabilities.

Labor shortages may also contribute to more seniors working

longer. Many older people will be working longer because of
the decline in the value of many pension funds. A study of
24,000 government workers found that age and experience
predicted performance better for jobs requiring higher levels of
complexity to master.

Advances in technology help workers compensate for mental

losses, such as less acute memory, associated with age.

Older workers have lower absenteeism, illness, and accident rates,

higher job satisfaction, and more positive work values.

What is Gen Z vs Gen Y vs gen alpha?

Generation Y, Gen Z, and Gen Alpha are three distinct

modern age groups defined by their birth years, technology
use, and worldview.
 Generation Y (Millennials): Born roughly 1981 to 1996;
experienced the shift to digital. Millennials currently hold
the highest recorded average IQ scores, marking a peak
before a newly observed downward trend
Generation Z: Born roughly 1997 to 2012; grew up as true
digital natives with social media. Generation Z is currently
identified as the unhappiest generation, breaking historical
patterns where youth was the happiest life stage. Recent global
studies show that young adults report higher rates of despair
and anxiety than middle-aged or older populations.
 Generation Alpha: Born roughly 2010 to 2025; growing up
completely immersed in AI. Generation
Alpha (born from 2010 to the mid-2025s) is defined by being digital
natives, highly adaptable, and deeply influenced by artificial
intelligence. As children of Millennials, they are the first generation to
grow up entirely in the 21st century alongside ubiquitous streaming,
smart devices, and pandemic-shaped learning environments. AI
familiarity, and independent learning.

As they approach the workforce, experts predict they will be

tech-reliant, entrepreneurial, and collaborative.
Key Characteristics
 Digital and AI Native: Grew up with tablets, virtual reality,
and artificial intelligence as normal daily tools.
 Self-Driven Learners: Prefer finding answers online
through video and interactive platforms rather than asking
adults.
 Gen Alpha may be the most digitally native generation to date,
but that doesn't mean they're oversharing. In fact, quite the
opposite. They're quietly reshaping how social media is used,
stepping back from performance and leaning into observation.
They scroll, they save, they browse.

C. Ethnic, Racial, and Cultural Differences

Ethnic and racial differences in job performance and behavior
are usually attributable to culture rather than ethnicity itself. For
example, some ethnic groups take long lunch breaks because of
their culture, not the fact of being a particular nationality.
 Demographic diversity will often give an organization a
competitive advantage. A study with insurance workers found
that an individual’s demographic similarity to the work group
positively influenced the individual’s perception of group
productivity and commitment to the work group. Job
satisfaction tends to higher for employees when others of
similar demographic characteristics are present in the
workplace.

III. MENTAL ABILITY (COGNITIVE INTELLIGENCE)

Mental ability is a major source of individual differences that
affects job performance and behavior. Intelligence is the capacity
to acquire and apply knowledge, including solving problems.
Mental ability tends to predict job performance. Some researchers
believe that a large component of mental ability is inheritable,
based on such evidence as identical twins who are reared apart
having similar intelligence. The argument that environment is the
major contributor to intelligence centers around evidence that an
enriched environment often helps people increase their
intelligence test scores. Also, IQs have been on the rise. Based on
hundreds of studies, it appears that heredity and environment
contribute about equally to traditional intelligence.
 A. Components of Intelligence
A standard theory of intelligence explains that intelligence consist of a g (general) factor
along with s (special) factors that contribute to problem-solving ability. The g factor helps
explain why some people perform so well in so many different mental tasks (the have the
right stuff). As shown in Exhibit 2-1, seven components of intelligence have been
consistently noted.

B. The Triarchic Theory of Intelligence (Emphasis on Practical Intelligence) To overcome the

limited idea that intelligence involves mostly the ability to solve abstract problems, the
triarchic theory of intelligence has been proposed, presented in Exhibit 2-2. The theory
holds that intelligence is composed of three different subtypes: analytical, creative, and
practical. The practical subtype is the type of intelligence required for adapting to your
environment to suit your needs. Practical intelligence incorporates the ideas of common
sense, wisdom, and street smarts. Analytical intelligence (also called fluid intelligence) may
decline from early to late adulthood. However, the ability to solve problems of a practical
nature (crystallized intelligence) is maintained or increased through late adulthood. So being
older makes you wiser.

C. Multiple Intelligences
According to the theory of multiple intelligences, people know and understand the world in
distinctly different ways, or look at it through different lenses. The eight intelligences or
faculties are: linguistic, logical-mathematical, musical, spatial, body/kinesthetic, intra-
personal, interpersonal, and naturalist. Your profile of intelligences influences how you will
best learn, and to which types of jobs you are best suited.

IV. PERSONALITY DIFFERENCES

Personality characteristics contribute to success in many jobs, and many job failures are caused
by personality problems. Personality refers to the persistent and enduring behavior patterns of
an individual that are expressed in a wide variety of situations.

A. Eight Major Personality Factors and Traits

All eight factors to be mentioned have a substantial impact on job behavior and performance.
1. Neuroticism (reflects emotional instability versus emotional stability)
2. Extraversion (notice the British spelling)
3. Openness (well-developed intellect)
4. Agreeableness (friendly and cooperative)
5. Conscientiousness (dependability and thoroughness)
6. Self-monitoring of behavior (adjusting how we appear to others)
7. Risk taking and thrill seeking (craving constant excitement)
8. Optimism (a tendency to experience positive states)

Research with 132,000 subjects that people generally become more responsible, organized,
and focused with age.

1. Research Evidence about Personality and Job Behavior

Based on a cross-cultural study, it was concluded that personality structure is universal.
Any of the above eight factors can be important for good job performance, with
conscientiousness having the best research support. Four studies showed that good social
skills are needed to for conscientiousness to be related to aspects of job performance
linked to interpersonal effectiveness. The combination of intelligence (“can do”) with
conscientiousness (“will do”) is especially important for job performance, such as
 extraversion most frequently associated with effective leadership. Personality factors are
also important for performance as a team member.

Another study showed that high self-monitors tend to receive better performance ratings
and more promotions than do low self-monitors, and are also more likely to merge as
leaders.

2. The NEO Personality Inventory for Measuring the Big Five Factors
The NEO Personality Inventory measures the five factors, and six more specific traits or
factors with each domain. Exhibit 2-3 lists the factors and associated facets of the
Inventory. The exhibit can be used for self-reflection, by the student thinking through his
or her standing on each of the Big Five factor and its related facets.

B. Emotional Intelligence
How effectively people use their emotions has a major impact on their success. The topmost
layers of the brain govern analytical intelligence. The innermost areas of the brain govern
emotion, such as dealing with rage. Emotional intelligence refers to qualities such as
understanding one’s feelings, empathy for others, and the regulation of emotion to enhance
living. Four key factors recently included in emotional intelligence are as follows: (Note
that the components of EI keep changing.)

1. Self-awareness (understanding own feelings)

2. Self-management (such as controlling impulsiveness and being honest)
3. Social awareness (such as having empathy for people, and intuition about organizational
problems)
4. Relationship management (includes a variety of interpersonal skills)

High emotional intelligence is associated with the ability to cope with job setbacks.
Emotional intelligence underscores the importance of being practical minded and having
effective interpersonal skills to succeed in organizational life.

V. IMPLICATIONS FOR MANAGERIAL PRACTICE

Individual differences in mental ability and personality have a major impact on selection,
placement, job assignment, training, and the development of employees. For example,
intelligence could be a big factor in job success. Many employees perform below standard, not
because of low motivation but because their abilities and personality traits are not suited to the
job.