Organizational behavior

48 PART 1 Introduction organizational behavior (OB) A field of managers. This finding challenges the historical assumption that promotions study that investigates the impact individuals, are based on performance, and it illustrates the importance of networking and political skills in getting ahead in organizations. groups, and structure have on behavior within Now that we’ve established what managers do, we need to study how best to organizations, for the purpose of applying do these things. Organizational behavior (OB) is a field of study that investigates the impact individuals, groups, and structure have on behavior within organiza- such knowledge toward improving an organi- tions, for the purpose of applying such knowledge toward improving an organi- zation’s effectiveness. That’s a mouthful, so let’s break it down. zation’s effectiveness. OB is a field of study, meaning 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. In addition, OB applies the knowledge gained about individuals, groups, and the effect of struc- ture on behavior in order to make organizations work more effectively. To sum up our definition, OB is the study of what people do in an organiza- tion and the way their behavior affects the organization’s performance. Because OB is concerned specifically with employment-related situations, it examines behavior in the context of job satisfaction, absenteeism, employment turnover, productivity, human performance, and management. Although debate exists about the relative importance of each, OB includes these core topics: • Motivation • Leader behavior and power • Interpersonal communication • Group structure and processes • Attitude development and perception • Change processes • Conflict and negotiation • Work design18 WaTch IT! If your professor has assigned this, go to the Assignments section of mymanagementlab.com to complete the video exercise titled Herman Miller: Organizational Behavior. Internet retailer Zappos.com under- stands how organizational behavior affects an organization’s performance. The firm maintains good employee relationships by offering generous ben- efits, extensive training, and a positive work environment in which employees are encouraged “to create fun and a little weirdness.” Source: Ronda churchill/Bloomberg/Getty Images

What Is Organizational Behavior? CHAPTER 1 49 1-3 Show the value to OB Complementing Intuition with of systematic study. Systematic Study systematic study Looking at relation- Whether you’ve explicitly thought about it before or not, you’ve been “reading” ships, attempting to attribute causes and people almost all your life by watching their actions and interpreting what you effects, and drawing conclusions based on see, or by trying to predict what people might do under different conditions. scientific evidence. The casual approach to reading others can often lead to erroneous predictions, evidence-based management but using a systematic approach can improve your accuracy. (EBM) The basing of managerial decisions on the best available scientific evidence. Underlying the systematic approach in this text is the belief that behavior is not random. Rather, we can identify fundamental consistencies underlying the intuition An instinctive feeling not behavior of all individuals and modify them to reflect individual differences. necessarily supported by research. These fundamental consistencies are very important. Why? Because they allow predictability. Behavior is generally predictable, and the systematic study of behavior is a means to making reasonably accurate predictions. When we use the term systematic study, we mean looking at relationships, attempting to attri- bute causes and effects, and basing our conclusions on scientific evidence—that is, on data gathered under controlled conditions and measured and interpreted in a rigorous manner. Evidence-based management (EBM) complements systematic study by basing managerial decisions on the best available scientific evidence. For example, we want doctors to make decisions about patient care based on the latest available evidence, and EBM argues that managers should do the same, thinking more scientifically about management problems. A manager might pose a question, search for the best available evidence, and apply the relevant information to the question or case at hand. You might wonder what manager would not base decisions on evidence, but the vast majority of management decisions are still made “on the fly,” with little to no systematic study of avail- able evidence.19 Systematic study and EBM add to intuition, or those “gut feelings” about what makes others (and ourselves) “tick.” Of course, the things you have come to believe in an unsystematic way are not necessarily incorrect. Jack Welch (for- mer CEO of General Electric) noted, “The trick, of course, is to know when to go with your gut.” But if we make all decisions with intuition or gut instinct, we’re likely working with incomplete information—like making an investment decision with only half the data about the potential for risk and reward. Relying on intuition is made worse because we tend to overestimate the accu- racy of what we think we know. Surveys of human resource managers have also shown that many managers hold “commonsense” opinions regarding effective management that have been flatly refuted by empirical evidence. We find a similar problem in chasing the business and popular media for management wisdom. The business press tends to be dominated by fads. As a writer for The New Yorker put it, “Every few years, new companies succeed, and they are scrutinized for the underlying truths they might reveal. But often there is no underlying truth; the companies just happened to be in the right place at the right time.”20 Although we try to avoid it, we might also fall into this trap. It’s not that the business press stories are all wrong; it’s that without a systematic approach, it’s hard to separate the wheat from the chaff. Big data Data has been used to evaluate behavior since at least 1749, when the word “statistic” was coined to mean a “description of the state.”21 Statistics back then were used for purposes of governance, but since the data collection methods

50 PART 1 Introduction Management by Walking around is the Most effective myth or science? Management T his is mostly a myth, but with a management. Limitations include avail- always lead us to act on only that infor- caveat. Management by walking able hours, focus, and application. mation because our internal decision around (MBWA) is an organization- making is subjective. We need objec- al principle made famous with the 1982 1. Available hours. Managers are tive data to make the most effective publication of In Search of Excellence charged with planning, organizing, management decisions. and based upon a 1970s initiative by coordinating, and controlling, yet Hewlett-packard—in other words, it’s even cEOs—the managers who Based on the need for managers to a dinosaur. Years of research indicate should be the most in control of their dedicate their efforts to administering that effective management practices time—report spending 53 percent and growing businesses, and given the are not built around MBWA. But the idea of their average 55-hour workweek proven effectiveness of objective per- of requiring managers at all levels of the in time-wasting meetings. formance measures, it seems the time organization to wander around their de- for MBWA is gone. Yet there is that one partments to observe, converse, and 2. Focus. MBWA turns management’s caveat: managers should know their hear from employees continues as a focus toward the concerns of employ- employees well. As Rick Russell, cEO common business practice. ees. This is good, but only to a de- of Greer Laboratories, says, “Foster- gree. As noted by Jeff Weiner, cEO of ing close ties with your lieutenants is Many companies expecting man- LinkedIn, “part of the key to time man- the stuff that gets results. You have to agers and executives to do regular agement is carving out time to think, rally the troops. You can’t do it from a “floor time” have claimed benefits as opposed to constantly reacting. memo.” Management should therefore from increased employee engage- And during that thinking time, you’re not substitute walking around for true ment to deeper management under- not only thinking strategically, thinking management. standing of company issues. A recent proactively, thinking longer-term, but three-year study also suggested that you’re literally thinking about what is Sources: G. Luria and I. Morag, “Safety Man- a modified form of MBWA may signifi- urgent versus important.” Weiner and agement by Walking Around (SMBWA): A cantly improve safety in organizations other cEOs argue that meetings dis- Safety Intervention program Based on Both as employees become more mindful of tract them from their purpose. peer and Manager participation,” Accident following regulatory procedures when Analysis and Prevention (March 2012): 248– supervisors observe and monitor them 3. Application. The principle behind 57; J. S. Lublin, “Managers Need to Make frequently. MBWA is that the more managers Time for Face Time,” The Wall Street Journal know their employees, the more ef- (March 17, 2015), http://www.wsj.com/ While MBWA sounds helpful, its fective those managers will be. This is articles/managers-need-to-make-time- limitations suggest that modern prac- not always (or even often) true. As we’ll for-face-time-1426624214; and R. E. Silver- tices focused on building trust and learn in chapter 6, knowing something man, “Where’s the Boss? Trapped in a Meet- relationships are more effective for (or thinking we know it) should not ing,” The Wall Street Journal (February 14, 2012), B1, B9. were clumsy and simplistic, so were the conclusions. “Big data”—the extensive use of statistical compilation and analysis—didn’t become possible until com- puters were sophisticated enough to both store and manipulate large amounts of information. Let’s look at the roots of the application of big data for business, which originated in the marketing department of online retailers. Background It’s difficult to believe now, but not long ago companies treat- ed online shopping as a virtual point-of-sale experience: shoppers browsed websites anonymously, and sellers tracked sales data only on what customers bought. Gradually, though, online retailers began to track and act upon infor- mation about customer preferences that was uniquely available through the Internet shopping experience, information that was far superior to data gath- ered in simple store transactions. This enabled them to create more targeted

What Is Organizational Behavior? CHAPTER 1 51 marketing strategies than ever before. The bookselling industry is a case in point: Before online selling, brick-and-mortar bookstores could collect data about book sales only to create projections about consumer interests and trends. With the advent of Amazon, suddenly a vast array of information about consumer preferences became available for tracking: what customers bought, what they looked at, how they navigated the site, and what they were influenced by (such as promotions, reviews, and page presentation). The challenge for Amazon then was to identify which statistics were persistent, giving relatively constant outcomes over time, and predictive, showing steady causality between certain inputs and outcomes. The company used these statistics to develop al- gorithms to forecast which books customers would like to read next. Amazon then could base its wholesale purchase decisions on the feedback customers provided, both through these passive collection methods and through solicited recommendations for upcoming titles. Current usage No matter how many terabytes of data firms can collect or from how many sources, the reasons for data analytics include: predicting any event, from a book purchase to a spacesuit malfunction; detecting how much risk is incurred at any time, from the risk of a fire to that of a loan default; and preventing catastrophes large and small, from a plane crash to an overstock of product.22 With big data, U.S. defense contractor BAE Systems protects it- self from cyber-attacks, San Francisco’s Bank of the West uses customer data to create tiered pricing systems, and London’s Graze.com analyzes customers’ preferences to select snack samples to send with their orders.23 Naturally, big data has been used by technology companies like Google and Facebook, who rely on advertising dollars for revenue and thus need to predict user behavior. Companies like Netflix and Uber similarly use big data to pre- dict where and when customers may want to use their virtual services, although their revenue comes from subscribers to their services. Insurance firms pre- dict behavior to assess risks, such as the chance of traffic accidents, in order to set customer premiums. Even museums like the Solomon R. Guggenheim Museum in New York, the Dallas Museum of Art, and the Minneapolis Institute of Arts analyze data from transmitters, kiosks, and surveys to cater to their pay- ing guests.24 Online retailers like eBay and Amazon that market tangible products through online platforms also rely on big data to predict what will sell. For orga- nizations like Nielson Holdings, which tracks television and radio watching, the results of data analyses are the product they sell. Still other organizations collect big data but do not directly use it. These are often organizations whose primary business is not online. Kroger, a U.S. grocery store chain, electronically collects information from 55 million customers who have loyalty cards and sells the data to vendors who stock Kroger’s shelves.25 Sometimes even technology companies simply sell their data; Twitter sells 500 million tweets a day to four data assimila- tion companies.26 new trends While accessibility to data increases organizations’ ability to pre- dict human behavioral trends, the use of big data for understanding, helping, and managing people is relatively new but holds promise. In fact, research on 10,000 workers in China, Germany, India, the United Kingdom, and the Unit- ed States indicated that employees expect the next transformation in the way people work will rely more on technological advancements than on any other factor, such as demographic changes.27 It is good news for the future of business that researchers, the media, and company leaders have identified the potential of data-driven management and

52 PART 1 Introduction decision making. A manager who uses data to define objectives, develop theo- ries of causality, and test those theories can determine which employee activities are relevant to the objectives.28 Big data has implications for correcting man- agement assumptions and increasing positive performance outcomes. Increas- ingly, it is applied toward making effective decisions (Chapter 6) and managing human resources (HR; Chapter 17). It is quite possible that the best use of big data in managing people will come from organizational behavior and psychol- ogy research, where it might even help employees with mental illnesses monitor and change their behavior.29 Limitations As technological capabilities for handling big data have increased, so have issues of privacy. This is particularly true when data collection includes surveillance instruments. For instance, an experiment in Brooklyn, New York, has been designed to improve the quality of life for residents, but the research- ers will collect intensive data from infrared cameras, sensors, and smartphone Wi-Fi signals.30 Through similar methods of surveillance monitoring, a bank call center and a pharmaceutical company found that employees were more productive with more social interaction, so they changed their break time poli- cies so more people took breaks together. They then saw sales increase and turnover decrease. Bread Winners Café in Dallas, Texas, constantly monitors all employees in the restaurant through surveillance and uses the data to promote or discipline its servers.31 These big data tactics and others might yield results—and research indi- cates that, in fact, electronic performance monitoring does increase task per- formance and citizenship behavior (helping behaviors towards others), at least in the short term.32 But critics point out that after Frederick Taylor introduced surveillance analytics in 1911 to increase productivity through monitoring and feedback controls, his management control techniques were surpassed by Alfred Sloan’s greater success with management outcomes, achieved by provid- ing meaningful work to employees.33 This brings up a larger concern: What do people think about big data when they are the source of the data? Organiza- tions using big data run the risk of offending the very people they are trying to influence: employees and customers. As Alderman Bob Fioretti said about the 65 sensors installed on Chicago’s streets, “This type of invasion is a very slippery slope.”34 We must keep in mind that big data will always be limited in predicting behavior, curtailing risk, and preventing catastrophes. In contrast to the repli- cable results we can obtain in the sciences through big data analytics, human behavior is often capricious and predicated on innumerable variables. Other- wise, our decision making would have been taken over by artificial intelligence by now! But that will never be a worthy goal.35 Management is more than the sum of data. Therefore, we are not advising you to throw intuition out the window. In dealing with people, leaders often rely on hunches, and sometimes the out- comes are excellent. At other times, human tendencies get in the way. Alex Pentland, a celebrated MIT data scientist, proposes a new science termed social physics, which is based on improving the way ideas and behaviors travel. Stud- ies on social physics would lead to subtler forms of data collection and analysis than some of the more intrusive surveillance methods mentioned previously, while still intending to inform managers on how to help employees focus their energies.36 The prudent use of big data, along with an understanding of human behavioral tendencies, can contribute to sound decision making and ease natu- ral biases. What we are advising is to use evidence as much as possible to inform your intuition and experience. That is the promise of OB.

What Is Organizational Behavior? CHAPTER 1 53 1-4 Identify the major Disciplines That Contribute to the OB Field behavioral science disciplines that contribute OB is an applied behavioral science built on contributions from a number of to OB. behavioral disciplines, mainly psychology and social psychology, sociology, and anthropology. Psychology’s contributions have been principally at the individu- psychology The science that seeks to al or micro level of analysis, while the other disciplines have contributed to our measure, explain, and sometimes change the understanding of macro concepts such as group processes and organization. Exhibit 1-3 is an overview of the major contributions to the study of organiza- behavior of humans and other animals. tional behavior. Psychology Psychology seeks to measure, explain, and sometimes change the behavior of humans and other animals. Contributors to the knowledge of OB are learning theorists, personality theorists, counseling psychologists and, most important, industrial and organizational psychologists. Exhibit 1-3 toward an oB discipline Behavioral Contribution Unit of Output science analysis Learning Psychology Motivation Individual Personality Social psychology Emotions Group Study of Perception organizational Sociology Training Leadership effectiveness behavior Anthropology Job satisfaction Individual decision making Organization Performance appraisal system Attitude measurement Employee selection Work design Work stress Behavioral change Attitude change Communication Group processes Group decision making Communication Power Conflict Intergroup behavior Formal organization theory Organizational technology Organizational change Organizational culture Comparative values Comparative attitudes Cross-cultural analysis Organizational culture Organizational environment Power

54 PART 1 Introduction social psychology An area of psychology Early industrial/organizational psychologists studied the problems of fatigue, that blends concepts from psychology and boredom, and other working conditions that could impede efficient work per- sociology to focus on the influence of people formance. More recently, their contributions have expanded to include learn- on one another. ing, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision-making processes, perfor- sociology The study of people in relation mance appraisals, attitude measurement, employee-selection techniques, work to their social environment or culture. design, and job stress. anthropology The study of societies to social Psychology learn about human beings and their activities. Social psychology, generally considered a branch of psychology, blends concepts from both psychology and sociology to focus on people’s influence on one another. One major study area is change—how to implement it and how to reduce barriers to its acceptance. Social psychologists also contribute to measuring, understanding, and changing attitudes; identifying communication patterns; and building trust. Finally, they have made important contributions to our study of group behavior, power, and conflict. sociology While psychology focuses on the individual, sociology studies people in rela- tion to their social environment or culture. Sociologists have contributed to OB through their study of group behaviors in organizations, particularly formal and complex organizations. Perhaps most important, sociologists have studied organizational culture, formal organization theory and structure, organization- al technology, communications, power, and conflict. anthropology Anthropology is the study of societies to learn about human beings and their activities. Anthropologists’ work on cultures and environments has helped us understand differences in fundamental values, attitudes, and behavior among people in different countries and within different organizations. Much of our current understanding of organizational culture, organizational climate, and differences among national cultures is a result of the work of anthropologists or those using their methods. 1-5 Demonstrate why few There Are Few Absolutes in OB absolutes apply to OB. Laws in the physical sciences—chemistry, astronomy, physics—are consistent contingency variables Situational and apply in a wide range of situations. They allow scientists to generalize about factors: variables that moderate the the pull of gravity or to be confident about sending astronauts into space to relationship between two or more variables. repair satellites. Human beings are complex, and few, if any, simple and uni- versal principles explain organizational behavior. Because we are not alike, our ability to make simple, accurate, and sweeping generalizations about ourselves is limited. Two people often act very differently in the same situation, and the same person’s behavior changes in different situations. For example, not every- one is motivated by money, and people may behave differently at a religious service than they do at a party. That doesn’t mean, of course, that we can’t offer reasonably accurate expla- nations of human behavior or make valid predictions. It does mean that OB concepts must reflect situational, or contingency, conditions. We can say x leads to y, but only under conditions specified in z—the contingency variables. The science of OB was developed by applying general concepts to a particu- lar situation, person, or group. For example, OB scholars would avoid stating

What Is Organizational Behavior? CHAPTER 1 55 1-6 Identify managers’ that everyone likes complex and challenging work (a general concept). Why? challenges and Because not everyone wants a challenging job. Some people prefer routine over opportunities in applying varied work, or simple over complex tasks. A job attractive to one person may OB concepts. not be to another; its appeal is contingent on the person who holds it. Often, we’ll find both general effects (money does have some ability to motivate most of us) and contingencies (some of us are more motivated by money than others, and some situations are more about money than others). We’ll best understand OB when we realize how both (general effects, and the contingencies that affect them) often guide behavior. Challenges and Opportunities for OB Understanding organizational behavior has never been more important for managers. Take a quick look at the dramatic changes in organizations. The typi- cal employee is getting older; the workforce is becoming increasingly diverse; and global competition requires employees to become more flexible and cope with rapid change. As a result of these changes and others, employment options have adapted to include new opportunities for workers. Exhibit 1-4 details some of the types of options individuals may find offered to them by organizations or for which they would like to negotiate. Under each heading in the exhibit, you will find a grouping of options from which to choose—or combine. For instance, at one point in your career you may find yourself employed full time in an office in a localized, nonunion setting with a salary and bonus compensation pack- age, while at another point you may wish to negotiate for a flextime, virtual Exhibit 1-4 employment options Categories of Types of Places of Conditions of Compensation Employment Employment Employment Employment for Employment Employed Full-time Anchored Local Salary Underemployed/ (office/cubicle) Hourly underutilized Part-time Floating (shared Expatriate Overtime Re-employed Flextime space) Short-term assignee Bonus Unemployed/jobless Job share Virtual Flexpatriate Contract International Time off Entrepreneur Contingent Flexible business traveler Benefits Independent Visa employee Retired contractor Work from home Union/nonunion Temporary employee Job seeking Reduced hours Furloughed Intern Laid off Sources: J. R. Anderson Jr., et al., “Action Items: 42 Trends Affecting Benefits, compensation, Training, Staffing and Technology,” HR Magazine (January 2013) p. 33; M. Dewhurst, B. Hancock, and D. Ellsworth, “Redesigning Knowledge Work,” Harvard Business Review (January–February 2013), pp. 58–64; E. Frauenheim, “creating a New contingent culture,” Workforce Management (August 2012), pp. 34–39; N. Koeppen, “State Job Aid Takes pressure off Germany,” The Wall Street Journal (February 1, 2013), p. A8; and M. A. Shaffer, M. L. Kraimer, Y.-p. chen, and M. c. Bolino, “choices, chal- lenges, and career consequences of Global Work Experiences: A Review and Future Agenda,” Journal of Management (July 2012), pp. 1282–1327.

56 PART 1 Introduction position and choose to work from overseas for a combination of salary and extra paid time off. In short, today’s challenges bring opportunities for managers to use OB con- cepts. In this section, we review some of the most critical issues confronting managers for which OB offers solutions—or at least meaningful insights toward solutions. economic Pressures When the U.S. economy plunged into a deep and prolonged recession in 2008, virtually all other large economies around the world followed suit. Layoffs and job losses were widespread, and those who survived the ax were often asked to accept pay cuts. When times are bad, as they were during the recession, manag- ers are on the front lines with employees who are asked to make do with less, who worry about their futures, and who sometimes must be fired. The differ- ence between good and bad management can be the difference between profit and loss or, ultimately, between business survival and failure. Managing employees well when times are tough is just as hard as when times are good, if not harder. In good times, understanding how to reward, satisfy, and retain employees is at a premium. In bad times, issues like stress, decision making, and coping come to the forefront. Continuing Globalization Organizations are no longer constrained by national borders. Samsung, the largest South Korean business conglomerate, sells most of its products to organizations in other countries, Burger King is owned by a Brazilian firm, and McDonald’s sells hamburgers in more than 118 countries on six continents. Even what is arguably the U.S. company with the strongest U.S. identity—Apple— employs twice as many workers outside the United States as it does inside the country. And all major automobile makers now manufacture cars outside their borders; Honda builds cars in Ohio, Ford in Brazil, Volkswagen in Mexico, and both Mercedes and BMW in the United States and South Africa. The world has become a global village. In the process, the manager’s job has changed. Effective managers will anticipate and adapt their approaches to the global issues we discuss next. increased Foreign assignments You are increasingly likely to find yourself in a foreign assignment—transferred to your employer’s operating division or sub- sidiary in another country. Once there, you’ll have to manage a workforce very different in needs, aspirations, and attitudes from those you are used to back home. To be effective, you will need to understand everything you can about your new location’s culture and workforce—and demonstrate your cultural sen- sitivity—before introducing alternate practices. Working with People from different Cultures Even in your own country, you’ll find yourself working with bosses, peers, and other employees born and raised in different cultures. What motivates you may not motivate them. Or your communication style may be straightforward and open, which others may find uncomfortable and threatening. To work effectively with people from differ- ent cultures, you need to understand how their culture and background have shaped them and how to adapt your management style to fit any differences. overseeing movement of Jobs to Countries with Low-Cost Labor It is increas- ingly difficult for managers in advanced nations, where the minimum wage

What Is Organizational Behavior? CHAPTER 1 57 Guy Woolaert, senior vice president and chief technical and innovation officer of the coca-cola company, has worked effectively with people from many cultures. He learned from his 20 years of assignments abroad in Europe, the pacific, and other geographic regions how to adapt his management style to reflect the values of different countries. Source: Robin Nelson/ZUMA press/Newscom can be as high as $16.88 an hour, to compete against firms that rely on workers from developing nations where labor is available for as little as nine cents an hour.37 In a global economy, jobs tend to flow where lower costs give busi- nesses a comparative advantage, though labor groups, politicians, and local community leaders see the exporting of jobs as undermining the job market at home. Managers face the difficult task of balancing the interests of their organizations with their responsibilities to the communities in which they operate. adapting to differing Cultural and regulatory norms To be effective, managers need to know the cultural norms of the workforce in each country where they do business. For instance, in some countries a large percentage of the workforce enjoys long holidays. There will be country and local regulations to consider, too. Managers of subsidiaries abroad need to be aware of the unique finan- cial and legal regulations applying to “guest companies” or else risk violating them. Violations can have implications for their operations in that country and also for political relations between countries. Managers also need to be cogni- zant of differences in regulations for competitors in that country; many times, understanding the laws can lead to success or failure. For example, knowing lo- cal banking laws allowed one multinational firm—the Bank of China—to seize control of a storied (and very valuable) London building, Grosvenor House, from under the nose of the owner, the Indian hotel group Sahara. Management at Sahara contends that the loan default that led to the seizure was a misunder- standing regarding one of their other properties in New York.38 Globalization can get complicated. Workforce demographics The workforce has always adapted to variations in economies, longevity and birth rates, socioeconomic conditions, and other changes that have widespread impact. People adapt to survive, and OB studies the way those adaptations

58 PART 1 Introduction Ob POLL Percentage of Men and Women Working 100% Men 2022 (Projected) 67.6% 90% Women 64.4% 56.0% 53.2% 80% 76.2% 70% 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 60% 50% 40% 40.8% 30% 1970 Sources: U.S. Bureau of Labor Statistics, “Women in the Labor Force: A Datebook” (2014), www.bls.gov/opub/reports/cps/women-in-the-labor-force- a-databook-2014.pdf; and U.S. Bureau of Labor Statistics, “Economic News Release,” (2013), http://www.bls.gov/news.release/ecopro.t02.htm. affect individuals’ behavior. For instance, even though the 2008 global reces- sion ended years ago, some trends from those years are continuing: some people who have been long unemployed have left the workforce,39 while others have cobbled together several part-time jobs40 or settled for on-demand work.41 Further options that have been particularly popular for younger educated workers have included obtaining specialized industry training after  college,42 accepting full-time jobs that are lower-level,43 and starting their own companies.44 As students of OB, we can investigate what factors lead employees to make various choices and how their experiences affect their perceptions of their workplaces. In turn, this can help us predict organiza- tional outcomes. Longevity and birth rates have also changed the dynamics in organiza- tions; global longevity rates have increased six years in a very short time (since 1990),45 while birth rates are decreasing for many developed countries, trends that together indicate a lasting shift toward an older workforce. OB research will help explain what this means for attitudes, organizational culture, leader- ship, structure, and communication. Finally, socioeconomic shifts have a pro- found effect on workforce demographics. The days when women stayed home because it was expected are just a memory in some cultures, while in others, women face significant barriers to entry into the workforce (see OB Poll). We are interested in how these women fare in the workplace, and how their condi- tions can be improved. This is just one illustration of how cultural and socio- economic changes affect the workplace, but it is one of many. We will discuss how OB can provide understanding and insight on workforce issues through- out this text. PerSOnAL InvenTOry ASSeSSMenTS P I A PERSONAL INVENTORY Multicultural awareness Scale ASSESSMENT Any study of organizational behavior (OB) starts with knowledge of yourself. As one step, take this PIA to determine your multicultural awareness.

What Is Organizational Behavior? CHAPTER 1 59 A Whole Foods Market customer learns how to grind flour with the help of the store’s cooking coach, whose job is to provide information about cooking ingredients, methods, and techniques. cooking coaches embody the best of the retailer’s customer- responsive culture of serving people with competency, efficiency, knowl- edge, and flair. Source: Evy Mages/The Washington post/Getty Images workforce diversity The concept that Workforce diversity organizations are becoming more heteroge- One of the most important challenges for organizations is workforce diversity, neous in terms of gender, age, race, ethnicity, a trend by which organizations are becoming more heterogeneous in terms of employees’ gender, age, race, ethnicity, sexual orientation, and other character- sexual orientation, and other characteristics. istics. Managing this diversity is a global concern. Though we have more to say about it in the next chapter, suffice it to say here that diversity presents great opportunities and poses challenging questions for managers and employees. How can we leverage differences within groups for competitive advantage? Should we treat all employees alike? Should we recognize individual and cultural differences? What are the legal requirements in each country? Does increasing diversity even matter? Customer service Service employees include technical support representatives, fast-food workers, sales clerks, nurses, automobile repair technicians, consultants, financial plan- ners, and flight attendants. The shared characteristic of their jobs is substantial interaction with an organization’s customers. OB can help managers increase the success of these interactions by showing how employee attitudes and behav- ior influence customer satisfaction. Many an organization has failed because its employees failed to please cus- tomers. Management needs to create a customer-responsive culture. OB can provide considerable guidance in helping managers create such cultures—in which employees establish rapport with customers, put customers at ease, show genuine interest, and are sensitive to a customer’s individual situation.46 People skills As you proceed through the chapters of this text, we’ll present relevant con- cepts and theories that can help you explain and predict the behavior of people at work. You’ll also gain insights into specific people skills you can use on the job. For instance, you’ll learn ways to design motivating jobs, techniques for improving your management skills, and how to create more effective teams.

60 PART 1 Introduction networked organizations Networked organizations allow people to communicate and work together even though they may be thousands of miles apart. Independent contractors can telecommute via computer and change employers as the demand for their services changes. Software programmers, graphic designers, systems analysts, technical writers, photo researchers, book and media editors, and medical tran- scribers are just a few examples of people who can work from home or other non-office locations. The manager’s job is different in a networked organization. Motivat- ing and leading people and making collaborative decisions online require different techniques than when individuals are physically present in a single location. As more employees do their jobs by linking to others through net- works, managers must develop new skills. OB can provide valuable insights to help hone those skills. social media As we will discuss in Chapter 11, social media in the business world is here to stay. Despite its pervasiveness, many organizations continue to struggle with em- ployees’ use of social media in the workplace. In February 2015, a Texas pizzeria fired an employee before she showed up for her first day of work after she tweet- ed unflattering comments about her future job. In December 2014, Nordstrom fired an Oregon employee who had posted a personal Facebook comment seeming to advocate violence against white police officers.47 These examples show that social media is a difficult issue for today’s manager, presenting both a challenge and an opportunity for OB. For instance, how much should HR look into a candidate’s social media presence? Should a hiring manager read the candidate’s Twitter feeds, or just do a quick perusal of her Facebook profile? We will discuss this issue later in the text. Once employees are on the job, many organizations have policies about accessing social media at work—when, where, and for what purposes. But what about the impact of social media on employee well-being? One recent study found that subjects who woke up in a positive mood and then accessed Facebook frequently found their mood decreased during the day. Moreover, subjects who checked Facebook frequently over a two-week period reported a decreased level of satisfaction with their lives.48 Managers—and OB—are trying to increase employee satisfaction, and therefore improve and enhance positive organizational outcomes. We will discuss these issues further in Chapters 3 and 4. employee Well-Being at Work The typical employee in the 1960s or 1970s showed up at a specified workplace Monday through Friday and worked for clearly defined 8- or 9-hour chunks of time. That’s no longer true for a large segment of today’s workforce, since the definition of the workplace has expanded to include anywhere a laptop or smartphone can go. However, even if employees work flexible hours at home or from half a continent away, managers need to consider their well- being at work. One of the biggest challenges to maintaining employee well-being is the new reality that many workers never get away from the virtual workplace. And while communication technology allows many technical and profes- sional employees to do their work at home, in their cars, or on the beach in Tahiti, it also means many feel like they’re not part of a team. “The sense of

What Is Organizational Behavior? CHAPTER 1 61 belonging is very challenging for virtual workers, who seem to be all alone out in cyberland,” said Ellen Raineri of Kaplan University.49 Another challenge is that organizations are asking employees to put in longer hours. According to one study, one in four employees shows signs of burnout, and two in three report high stress levels and fatigue.50 This may actually be an underestimate because workers report maintaining “always on” access for their managers through e-mail and texting. Finally, employee well-being is challenged by heavy outside commitments. Millions of single-parent employees and employees with dependent parents face significant challenges in balancing work and family responsibilities, for instance. As a result of their increased responsibilities in and out of the workplace, employees want jobs that give them flexibility in their work schedules so they can better manage work–life conflicts.51 In fact, 56 percent of men and women in a recent study reported that work–life balance was their definition of career success, more than money, recognition, and autonomy.52 Most college and uni- versity students say attaining balance between personal life and work is a pri- mary career goal; they want a life as well as a job. Organizations that don’t help their people achieve work–life balance will find it increasingly difficult to attract and retain the most capable and motivated individuals. As you’ll see in later chapters, the field of OB offers a number of suggestions to guide managers in designing workplaces and jobs that can help employees deal with work–life conflicts. positive organizational scholarship Positive Work environment An area of OB research that concerns how A real growth area in OB research is positive organizational scholarship (also organizations develop human strengths, foster called positive organizational behavior), which studies how organizations develop human strengths, foster vitality and resilience, and unlock potential. Research- vitality and resilience, and unlock potential. ers in this area say too much of OB research and management practice has been targeted toward identifying what’s wrong with organizations and their employees. In response, they try to study what’s good about them.53 Some key Twitter employees rave about their company’s culture, which creates a positive work environment where smart and friendly colleagues learn; share values, ideas, and information; and work together to help the com- pany grow and succeed. At Twitter’s San Francisco headquarters, employees like Jenna Sampson, community relations manager, enjoy free meals, yoga classes, and a rooftop garden. Source: Noah Berger/Reuters

62 PART 1 Introduction ethical dilemmas and ethical subjects in positive OB research are engagement, hope, optimism, and resil- choices Situations in which individuals are ience in the face of strain. Researchers hope to help practitioners create positive required to define right and wrong conduct. work environments for employees. Positive organizational scholars have studied a concept called “reflected best-self”—asking employees to think about when they were at their “per- sonal best” in order to understand how to exploit their strengths. The idea is that we all have things at which we are unusually good, yet we too often focus on addressing our limitations and too rarely think about how to exploit our strengths.54 Although positive organizational scholarship does not deny the value of the negative (such as critical feedback), it does challenge researchers to look at OB through a new lens and pushes organizations to exploit employees’ strengths rather than dwell on their limitations. One aspect of a positive work environment is the organization’s culture, the topic of Chapter 16. Organizational culture influences employee behavior so strongly that orga- nizations have begun to employ a culture officer to shape and preserve the company’s personality.55 ethical Behavior In an organizational world characterized by cutbacks, expectations of increas- ing productivity, and tough competition, it’s not surprising many employees feel pressured to cut corners, break rules, and engage in other questionable practices. Increasingly they face ethical dilemmas and ethical choices, in which they are required to identify right and wrong conduct. Should they “blow the whis- tle” if they uncover illegal activities in their company? Do they follow orders with which they don’t personally agree? Do they “play politics” to advance their career? What constitutes good ethical behavior has never been clearly defined and, in recent years, the line differentiating right from wrong has blurred. We see people all around us engaging in unethical practices—elected officials pad expense accounts or take bribes; corporate executives inflate profits to cash in lucrative stock options; and university administrators look the other way when winning coaches encourage scholarship athletes to take easy courses or even, in the recent case of the University of North Carolina-Chapel Hill, sham courses with fake grades.56 When caught, people give excuses such as “Everyone does it” or “You have to seize every advantage.” Determining the ethically correct way to behave is especially difficult for both managers and employees in a global economy because different cultures have different perspectives on certain ethical issues.57 The definition of fair treatment of employees in an economic downturn varies considerably across cultures, for instance. As we’ll see in Chapter 2, perceptions of religious, ethnic, and gender diversity also differ across countries. Today’s manager must create an ethically healthy climate for employees in which they can do their work productively with minimal ambiguity about right and wrong behaviors. Companies that promote a strong ethical mission, encour- age employees to behave with integrity, and provide strong leadership can influ- ence employee decisions to behave ethically.58 Classroom training sessions in ethics have also proven helpful in maintaining a higher level of awareness of the implications of employee choices as long as the training sessions are given on an ongoing basis.59 In upcoming chapters, we’ll discuss the actions managers can take to create an ethically healthy climate and help employees sort through ambiguous situations.

What Is Organizational Behavior? CHAPTER 1 63 vacation Deficit Disorder an ethical Choice Do you work to live, or live to find you are absent more often, con- 5. Take brief breaks throughout your work? Those of us who think it’s template leaving your job, and grow day. For office employees, the cur- a choice might be wrong. Almost less likely to want to help anyone (in- rent expert suggestion is to spend a third of 1,000 respondents in a study cluding your managers). Even though at least 1 to 2 minutes of every hour by Kelton Research cited workload as a these are negative consequences for standing up to combat the effects reason for not using allotted vacation your employer as well as for you per- of all-day sitting. Donohoe also sug- days. consider Ken Waltz, a director for sonally, often the employee must take gests snack breaks, walks, or short Alexian Brothers Health System. He has charge of the situation. Here are some naps to recharge. 500 hours (approximately 3 months) in ways you can maintain your well-being banked time off and no plans to spend and productivity: 6. Take your vacation! Studies suggest it. “You’re on call 24/7 and these days, that recovery from stress can hap- you’d better step up or step out,” he says, 1. Recognize your feelings. We solve pen only if employees are (a) physi- referring to today’s leaner workforce. “It’s few problems without first recog- cally away from work and (b) not oc- not just me—it’s upper management.... nizing them. According to a recent cupied by work-related duties. That It’s everybody.” study by compsych involving 2,000 means telling your manager that you employees, two in three identified will log off your e-mail accounts and Many people feel pressure, spo- high levels of stress, out-of-control shut off your phone for the duration ken or unspoken, to work through feelings, and extreme fatigue. of the vacation. their vacation days. Employers ex- pect workers to do more with less, 2. Identify your tendency for burnout. It is not always easy to look beyond putting pressure on workers to use Research on 2,089 employees the next deadline. But to maximize your all available resources—chiefly their found that burnout is especially long-term productivity and avoid stress, time—to meet manager expectations. acute for newcomers and job chang- burnout, and illness—all of which are In today’s economy there is always a ers. Burnout symptoms should level ultimately harmful to employer aims ready line of replacement workers, off after 2 years, but each individual and employee careers alike—you and many employees will do everything experiences stress differently. should not succumb to vacation deficit possible to stay in their manager’s disorder. Educate your managers. Your good graces. 3. Talk about your stressors. Thomas employer should thank you for it. Donohoe, a researcher on work–life The issue of vacation time is an balance, recommends talking with Sources: B. B. Dunford, A. J. Shipp, R. W. ethical choice for the employer and, trusted friends or family. On the job, Boss, I. Angermeier, and A. D. Boss, “Is moreover, for the employee. Many or- appropriately discussing your stress Burnout Static or Dynamic? A career Tran- ganizations have “use it or lose it” factors can help you reduce job sition perspective of Employee Burnout policies whereby employees forfeit overload. Trajectories,” Journal of Applied Psychology the paid time off they’ve accrued for 97, no. 3 (2012): 637–50; E. J. Hirst, “Burn- the year if they haven’t used it. When 4. Build in high physical activity. out on the Rise,” Chicago Tribune, October employees forfeit vacation, the risk of Research found an increase in job 29, 2012, 3-1, 3-4; B. M. Rubin, “Rough burnout increases. Skipping vacation burnout (and depression) was stron- Economy Means No Vacation,” Chicago Tri- time can wear you down emotionally, gest for employees who did not bune, September 3, 2012, 4; and S. Toker leading to exhaustion, negative feel- engage in regular physical activity, and M. Biron, “Job Burnout and Depres- ings about your work, and a reduced while it was almost negligible for sion: Unraveling Their Temporal Relationship feeling of accomplishment. You may employees who did engage in and considering the Role of physical Activ- regular high physical activity. ity,” Journal of Applied Psychology 97, no. 3 (2012): 699–710.

64 PART 1 Introduction 7 Compare the three levels of Coming Attractions: Developing analysis in this text’s OB model. an OB Model model An abstraction of reality, a We conclude this chapter by presenting a general model that defines the field simplified representation of some real-world of OB and stakes out its parameters, concepts, and relationships. By studying phenomenon. the model, you will have a good picture of how the topics in this text can inform your approach to management issues and opportunities. input variables that lead to processes. an overview A model is an abstraction of reality, a simplified representation of some real- world phenomenon. Exhibit 1-5 presents the skeleton of our OB model. It pro- poses three types of variables (inputs, processes, and outcomes) at three levels of analysis (individual, group, and organizational). In the chapters to follow, we will proceed from the individual level (Chapters 2 through 8) to group behav- ior (Chapters 9 through 14) to the organizational system (Chapters 15 through 18). The model illustrates that inputs lead to processes, which lead to outcomes; we will discuss interrelationships at each level of analysis. Notice that the model also shows that outcomes can influence inputs in the future, which highlights the broad-reaching effect OB initiatives can have on an organization’s future. inputs Inputs are the variables like personality, group structure, and organizational culture that lead to processes. These variables set the stage for what will occur in an organization later. Many are determined in advance of the employment relationship. For example, individual diversity characteristics, personality, and values are shaped by a combination of an individual’s genetic inheritance and childhood environment. Group structure, roles, and team responsibilities are Exhibit 1-5 a Basic oB model Inputs Processes Outcomes Individual Level Individual Level Individual Level • Diversity • Emotions and moods • Attitudes and stress • Personality • Motivation • Task performance • Values • Perception • Citizenship behavior • Decision making • Withdrawal behavior Group Level • Group structure Group Level Group Level • Group roles • Communication • Group cohesion • Team responsibilities • Leadership • Group functioning • Power and politics Organizational Level • Conflict and negotiation Organizational Level • Structure • Productivity • Culture Organizational Level • Survival • Human resource management • Change practices

What Is Organizational Behavior? CHAPTER 1 65 processes Actions that individuals, typically assigned immediately before or after a group is formed. Finally, organi- groups, and organizations engage in as a zational structure and culture are usually the result of years of development and result of inputs and that lead to certain change as the organization adapts to its environment and builds up customs outcomes. and norms. outcomes Key factors that are affected Processes by some other variables. If inputs are like the nouns in OB, processes are like verbs. Processes are actions stress An unpleasant psychological that individuals, groups, and organizations engage in as a result of inputs and process that occurs in response to that lead to certain outcomes. At the individual level, processes include emo- environmental pressures. tions and moods, motivation, perception, and decision making. At the group level, they include communication, leadership, power and politics, and conflict task performance The combination of and negotiation. Finally, at the organizational level, processes include human effectiveness and efficiency at doing core resource management and change practices. job tasks. outcomes Outcomes are the key variables that you want to explain or predict, and that are affected by some other variables. What are the primary outcomes in OB? Schol- ars have emphasized individual-level outcomes, such as attitudes and stress, task performance, citizenship behavior, and withdrawal behavior. At the group level, cohesion and functioning are the dependent variables. Finally, at the organiza- tional level, we look at overall productivity and survival. Because these outcomes will be covered in all the chapters, we’ll briefly discuss each here so you can understand what the goal of OB will be. attitudes and stress Employee attitudes are the evaluations employees make, ranging from positive to negative, about objects, people, or events. For exam- ple, the statement “I really think my job is great” is a positive job attitude, and “My job is boring and tedious” is a negative job attitude. Stress is an unpleasant psychological process that occurs in response to environmental pressures. Some people might think influencing employee attitudes and stress is purely soft stuff and not the business of serious managers, but as we will show, attitudes often have behavioral consequences that directly relate to organizational effec- tiveness. The belief that satisfied employees are more productive than dissatis- fied employees has been a basic tenet among managers for years, though only now has research begun to support it. Ample evidence shows that employees who are more satisfied and treated fairly are more willing to engage in the above-and- beyond citizenship behavior so vital in the contemporary business environment. task Performance The combination of effectiveness and efficiency at doing your core job tasks is a reflection of your level of task performance. If we think about the job of a factory worker, task performance could be measured by the number and quality of products produced in an hour. The task performance of a teacher would be the level of education that students obtain. The task perfor- mance of consultants might be the timeliness and quality of the presentations they offer to the client. All these types of performance relate to the core duties and responsibilities of a job and are often directly related to the functions listed on a formal job description. Obviously task performance is the most important human output contribut- ing to organizational effectiveness, so in every chapter we devote considerable time to detailing how task performance is affected by the topic in question. organizational Citizenship Behavior (oCB) The discretionary behavior that is not part of an employee’s formal job requirements, and that contributes to the

66 PART 1 Introduction These employees of W. L. Gore & Associates engage in good citizenship behavior, one of the primary individual-level outcomes in organizational behavior. Working in teams, these employees perform beyond expectations in helping each other, recognizing their peers, and doing more than their usual job responsibilities. Source: pRNewsFoto/W. L. Gore & Associates, Inc/ Ap images organizational citizenship behavior psychological and social environment of the workplace, is called organizational (OcB) Discretionary behavior that citizenship behavior (OCB), or simply citizenship behavior. Successful organiza- contributes to the psychological and social tions have employees who will do more than their usual job duties—who will environment of the workplace. provide performance beyond expectations. In today’s dynamic workplace, where tasks are increasingly performed by teams and flexibility is critical, employees withdrawal behavior The set of actions who engage in “good citizenship” behaviors help others on their team, volun- employees take to separate themselves from teer for extra work, avoid unnecessary conflicts, respect the spirit as well as the the organization. letter of rules and regulations, and gracefully tolerate occasional work-related impositions and nuisances. Organizations want and need employees who will do things that aren’t in any job description. Evidence indicates organizations that have such employees out- perform those that don’t. As a result, OB is concerned with citizenship behavior as an outcome variable. Withdrawal Behavior We’ve already mentioned behavior that goes above and beyond task requirements, but what about behavior that in some way is below task requirements? Withdrawal behavior is the set of actions that employees take to separate themselves from the organization. There are many forms of withdrawal, ranging from showing up late or failing to attend meetings to ab- senteeism and turnover. Employee withdrawal can have a very negative effect on an organization. The cost of employee turnover alone has been estimated to run into the thousands of dollars, even for entry-level positions. Absenteeism also costs organizations significant amounts of money and time every year. For instance, a recent survey found the average direct cost to U.S. employers of unscheduled absences is 8.7 percent of payroll.60 And in Sweden, an average of 10 percent of the country’s workforce is on sick leave at any given time.61 It’s obviously difficult for an organization to operate smoothly and attain its objectives if employees fail to report to their jobs. The workflow is disrupted, and important decisions may be delayed. In organizations that rely heavily on assembly-line production, absenteeism can be considerably more than a dis- ruption; it can drastically reduce the quality of output or even shut down the

What Is Organizational Behavior? CHAPTER 1 67 What do i say about my termination? Career oBjectives I got fired! When prospective employers • Remember your soft skills count; in trends in social media, show it, but find out, they’ll never hire me. Is there fact, they top the lists of employer don’t go on about your friend’s tweet anything I can say to turn this around? requirements for all industries. to Rihanna. According to chuck Knebl, a com- Best wishes for your success! — Matt munications manager for the job Dear Matt: placement company WorkOne, Sources: Bureau of Labor Statistics, United Under this dark cloud, there are some sil- use your résumé and cover letter, States Department of Labor, Employment ver linings: 1) firing, or involuntary termi- interviews, and thank-you notes projections, http://www.bls.gov/emp/ep_ nation, happens to just about everyone to showcase your communication chart_001.htm; G. Jones, “How the Best at least once in a career; and 2) there is skills. Employers report they are Get Better and Better,” Harvard Business Re- a worldwide job shortage of skilled work- also looking for a teamwork atti- view (June 2008): 123–27; ManpowerGroup, ers. You might be amazed to know that tude, positivity, personal responsi- “The Talent Shortage continues/2014,” historically, individuals have changed bility, and punctuality, so use every http://www.manpowergroup.com/wps/ jobs an average of 11 times over their opportunity to demonstrate these wcm/connect/0b882c15-38bf-41f3-8882- early careers (from age 18 to 44). In fact, traits. 44c33d0e2952/2014_Talent_Shor tage_ you can probably expect to stay in a job Wp_US2.pdf?MOD=AJpERES; J. Meister, for less than three years, which means • Although your soft skills count, don’t “Job Hopping Is the ‘New Normal’ for Mil- you’ll have a lot of jobs in your lifetime. forget your technical skills; employ- lennials: Three Ways to prevent a Human ers agree they are equally important. Resource Nightmare,” Forbes (August Therefore, you shouldn’t feel hope- Knebl advises you to use your ré- 14, 2012), http://www.forbes.com/sites/ less; you are likely to find your next job sumé to list your technical abilities jeannemeister/2012/08/14/job-hopping- soon. ManpowerGroup’s recent survey and be prepared to elaborate upon is-the-new-normal-for-millennials-three-ways- of over 37,000 employers in 42 coun- request. Need some more skills? to-prevent-a-human-resource-nightmare/; tries found that 36 percent of organiza- Job training has been shown to be and N. Schulz, “Hard Unemployment Truths tions have talent shortages, the high- helpful and can sometimes be free about ‘Soft’ Skills,” The Wall Street Journal, est percentage in 7 years. through colleges and unemployment September 19, 2012, A15. offices. The opinions provided here are of the manag- Still, we know you are worried ers and authors only and do not necessar- about how to present the facts of your • Emphasize your ongoing training and ily reflect those of their organizations. The involuntary termination to prospective education, especially as they relate authors or managers are not responsible for employers. If you give a truthful, brief to new technology; top performers any errors or omissions, or for the results account of the reason for your termi- are known to be continuous learners. obtained from the use of this information. nation, you can position yourself well. Also, if you’ve kept up with recent In no event will the authors or managers, or Here are some additional suggestions: their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here. facility. Levels of absenteeism beyond the normal range have a direct impact on any organization’s effectiveness and efficiency. A high rate of turnover can also disrupt the efficient running of an organization when knowledgeable and expe- rienced personnel leave and replacements must be found to assume positions of responsibility. Research indicates that, in general, turnover is significantly harmful for organizational performance.62 All organizations have some turnover, of course. Turnover rates vary greatly by country and, in part, reflect the economy of that country. The U.S. national turnover rate in 2014 averaged about 40 percent; often the average is around 3 percent per month.63 Is this good or bad? To answer that question, we need to know why there is turnover. Turnover includes voluntary terminations by the employee (quitting), involuntary terminations by the employer without cause (layoffs and discharges), and other separations including involuntary termi- nations with cause (firing). The yearly average for quitting in 2014 was about 20 percent; layoffs and discharges averaged about 14 percent; and other separa- tions averaged about 4 percent for the year. Therefore, about half the turnover

68 PART 1 Introduction was due to employees quitting their jobs, about 35 percent was due to layoffs and discharges, and the remainder was for other reasons including firings. While high turnover often impairs an organization’s ability to achieve its goals, quitting is not all bad. In fact, U.S. Federal Reserve Chairwoman Janet Yellen has discussed the positive aspect of turnover for the economy: People quit because they are optimistic about their outside prospects.64 Moreover, if the “right” people are leaving—the poorer performers—quits can actually be positive for an organization. They can create opportunities to replace under- performing individuals with others who have higher skills or motivation, open up increased opportunities for promotions, and bring new and fresh ideas to the organization. In today’s changing world of work, reasonable levels of employee-initiated turnover improve organizational flexibility and employee independence, and they can lessen the need for management-initiated layoffs. Thus, while it is reasonable to conclude that high turnover often indicates high employee withdrawal (and thus has a negative effect on organizational perfor- mance), zero turnover is not necessarily the goal; and it’s also important for organizations to assess which employees are leaving, and why. So why do employees withdraw from work through counterproductive behaviors or quitting? As we will show later in the text, reasons include negative job attitudes, emotions, moods, and negative interactions with coworkers and supervisors. group cohesion The extent to which Group Cohesion Although many outcomes in our model can be conceptualized members of a group support and validate one as individual-level phenomena, some relate to the way groups operate. Group cohesion is the extent to which members of a group support and validate one another while at work. another at work. In other words, a cohesive group is one that sticks together. When employees trust one another, seek common goals, and work together to achieve these common ends, the group is cohesive; when employees are divided among themselves in terms of what they want to achieve and have little loyalty to one another, the group is not cohesive. There is ample evidence showing that cohesive groups are more effective.65 These results are found both for groups studied in highly controlled laboratory settings and for work teams observed in field settings. This fits with our intuitive sense that people tend to work harder in groups that have a common purpose. Companies attempt to increase cohesion in a variety of ways, ranging from brief icebreaker sessions to social events like picnics, parties, and outdoor adventure- team retreats. Throughout the text we assess whether these specific efforts are likely to result in increases in group cohesiveness. We’ll also consider ways that picking the right people to be on the team in the first place might be an effec- tive way to enhance cohesion. group functioning The quantity and qual- Group Functioning In the same way that positive job attitudes can be associated ity of a group’s work output. with higher levels of task performance, group cohesion should lead to positive group functioning. Group functioning refers to the quantity and quality of a group’s work output. In the same way that the performance of a sports team is more than the sum of individual players’ performance, group functioning in work organizations is more than the sum of individual task performances. What does it mean to say that a group is functioning effectively? In some organizations, an effective group is one that stays focused on a core task and achieves its ends as specified. Other organizations look for teams that are able to work together collaboratively to provide excellent customer service. Still oth- ers put more of a premium on group creativity and the flexibility to adapt to changing situations. In each case, different types of activities will be required to get the most from the team.

What Is Organizational Behavior? CHAPTER 1 69 productivity The combination of the effec- Productivity The highest level of analysis in OB is the organization as a whole. tiveness and efficiency of an organization. An organization is productive if it achieves its goals by transforming inputs into effectiveness The degree to which an outputs at the lowest cost. Thus productivity requires both effectiveness and organization meets the needs of its clientele efficiency. or customers. efficiency The degree to which an organi- A hospital is effective when it successfully meets the needs of its clientele. It is zation can achieve its ends at a low cost. 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 organizational survival The degree to confined to bed or increasing the number of staff–patient contacts per day, we say which an organization is able to exist and the hospital has gained productive efficiency. A business firm is effective when it grow over the long term. attains its sales or market share goals, but its productivity also depends on achiev- ing those goals efficiently. Popular measures of organizational efficiency include return on investment, profit per dollar of sales, and output per hour of labor. Service organizations must include customer needs and requirements in assessing their effectiveness. Why? Because a clear chain of cause and effect runs from employee attitudes and behavior to customer attitudes and profit- ability. For example, a recent study of six hotels in China indicated that negative employee attitudes decreased customer satisfaction and ultimately harmed the organization’s profitability.66 survival The final outcome we will consider is organizational survival, which is simply evidence that the organization is able to exist and grow over the long term. The survival of an organization depends not just on how productive the organization is, but also on how well it fits with its environment. A company that is very productively making goods and services of little value to the market is unlikely to survive for long, so survival also relies on perceiving the market suc- cessfully, making good decisions about how and when to pursue opportunities, and successfully managing change to adapt to new business conditions. Having reviewed the input, process, and outcome model, we’re going to change the figure up a little bit by grouping topics together based on whether we study them at the individual, group, or organizational level. As you can see in Exhibit 1-6, we will deal with inputs, processes, and outcomes at all three Exhibit 1-6 the Plan of the text The Individual The Group The Organization Inputs Inputs Inputs • Diversity in Organizations • Group structure • Structure (Ch. 15) • Culture (Ch. 16) (Ch.2) (Ch. 9 & 10) • Personality and Values • Group roles (Ch. 9 & 10) Processes • Team responsibilities • Human resource (Ch. 5) (Ch. 9 & 10) management (Ch. 17) Processes • Change practices • Emotions and moods (Ch. 4) Processes • Motivation (Ch. 7 and 8) • Communication (Ch. 11) (Ch. 18) • Perception and decision • Leadership (Ch. 12) • Power and politics (Ch. 13) Outcomes making (Ch. 6) • Conflict and negotiation • Productivity Outcomes (Ch. 14) (all) • Attitudes (Ch. 3) and stress • Survival Outcomes (Ch. 18) • Group cohesion (all) • Task performance (all) • Citizenship behavior (all) (Ch. 9 & 10) • Withdrawal behavior (all) • Group functioning (Ch. 9 & 10)

70 PART 1 Introduction levels of analysis, but we group the chapters as shown here to correspond with the typical ways research has been done in these areas. For example, it is easier to understand one unified presentation about how personality leads to moti- vation, which leads to performance, than to jump around levels of analysis. Because each level builds on the one that precedes it, after going through them in sequence you will have a good idea of how the human side of organizations functions. Summary Managers need to develop their interpersonal, or people, skills to be effective in their jobs. Organizational behavior (OB) investigates the impact that indi- viduals, groups, and structure have on behavior within an organization, and it applies that knowledge to make organizations work more effectively. Implications for Managers ●● Resist the inclination to rely on generalizations; some provide valid in- sights into human behavior, but many are erroneous. Get to know the person, and understand the context. ●● Use metrics rather than hunches to explain cause-and-effect relationships. ●● Work on your interpersonal skills to increase your leadership potential. ●● Improve your technical skills and conceptual skills through training and staying current with OB trends like big data. ●● OB can improve your employees’ work quality and productivity by show- ing you how to empower your employees, design and implement change programs, improve customer service, and help your employees balance work–life conflicts.

What Is Organizational Behavior? CHAPTER 1 71 the battle of the texts POInt COunterPOInt W alk into your nearest major bookstore and you’ll see shelves People want to know about management—the good, the bad, of management books whose titles tell us the topics we and the ugly. People who have experience or high interest write apparently need to know about: about the topics that interest readers, and publishers put out the best of these texts. When books become popular, we know people ●● The Secret (Berrett-Koehler, 2014) are learning from them and finding good results by applying the au- ●● Turn the Ship Around! (Portfolio, 2013) thor’s management ideas. It’s a good process. Texts like these can pro- ●● The Way You Do Anything Is the Way You Do Everything (Wiley, vide people with the secrets to management that others have worked out through experience. Isn’t it better to learn about management from 2014) people in the trenches, as opposed to the latest obscure references ●● Leadership Safari (Best Seller, 2014) from academia? Many of the most important insights we gain in life ●● Business Is a Baby (Amazon Digital Services, 2014) aren’t necessarily the product of careful empirical research studies. ●● Think Like a Freak (William Morrow, 2014) ●● Spiraling Upward (Amazon Digital Services, 2015) “Fluffy” management guides sometimes do get published, and ●● Refire! Don’t Retire (Berrett-Koehler, 2015) once in a while they become popular. But do they outnumber the ●● Top Dog (Amazon Digital Services, 2015) esoteric research studies published in scholarly journal articles every year? Far from it; sometimes it seems that for every popular business Popular books on organizational behavior often have cute titles text, there are thousands of scholarly journal articles. Many of these and are fun to read, but they make the job of managing people seem articles can hardly be read by individuals in the workplace—they are like it’s just a matter of having a good slogan and five easy steps. If buried in academic libraries, riddled with strange acronyms and “in- you dig into the texts, you’ll find that most are based on the author’s sider” terms, and light on practical application. Often they apply to opinions rather than substantive research. Most become popular, in specific management scenarios, so they are even less generalizable. part, because people largely agree with the opinions they are reading For example, a few recent management and OB studies were pub- and enjoy the author’s writing style. Often, the writers are presentation lished in 2015 with the following titles: speakers or consultants whose real business is in delivering ideas to you.When the author is a veteran from the business world, it is doubtful ●● Transferring Management Practices to China: A Bourdieusian that one person’s experience translates into an effective management Critique of Ethnocentricity practice for everyone. even when the authors are numbers-oriented, as are the “Freak” authors Steven Levitt and Stephen Dubner, their con- ●● Cross-Cultural Perceptions of Clan Control in Korean Multi- clusions for management are not management-research based. So national Companies: A Conceptual Investigation of Employ- why do we base our own management philosophies on these books ees’ Fairness Monitoring Based on Cultural Values when, with a little effort, we can access knowledge produced by thou- sands of scientific studies on human behavior in organizations? ●● The Resistible Rise of Bayesian Thinking in Management: Historical Lessons from Decision Analysis Organizational behavior is a complex subject. Few if any simple statements about human behavior are generalizable to all people in ●● A Model of Rhetorical Legitimation: The Structure of Commu- all situations. Would you try to apply leadership insights you got from nication and Cognition Underlying Institutional Maintenance a book about Star Wars or Breaking Bad to managing software engi- and Change neers in the twenty-first century? Surely not. neither should we try to apply leadership insights that aren’t based on research about the type We don’t mean to poke fun at these studies, but our point is that of workplaces in which we function. all ways of creating knowledge can be criticized. If business books can sometimes be “fluffy,” academic articles can be esoteric and even less relevant. Popular books can add to our understanding of how people work and how to best manage them; we shouldn’t assume they are not of value. And while there is no one right way to learn the science and art of managing people in organizations, the most enlightened managers gather insights from multiple sources: their own experience, research findings, observations of others, and, yes, the popular busi- ness press. Authors and academics have an important role to play, and it isn’t fair to condemn business books with catchy titles.

72 PART 1 Introduction chaPter revieW MyManagementLab Go to mymanagementlab.com to complete the problems marked with this icon. QuestiOns fOr revieW 1-5 Why are there so few absolutes in OB? 1-6 What are the challenges and opportunities for 1-1 What is the importance of interpersonal skills in managers in using OB concepts? the workplace? 1-7 What are the three levels of analysis in our 1-2 What is the definition of organizational OB model? behavior (OB)? 1-3 How does systematic study contribute to our understanding of OB? 1-4 What are the major behavioral science disciplines that contribute to OB? exPerientiaL exercise Managing the OB Way Divide the class into groups of approximately four band, and he feels that a ragged beard is an important part of the members each. Each group should consider the follow- act. Tom says his beard is a personal fashion statement that has to ing scenario: do with his individual freedom. You will assume the role of a special committee of There have been numerous complaints about Tom’s district managers at a large pharmaceutical company. Your appearance from both doctors and pharmacists. The manager committee will be meeting to discuss some problems. The has talked to him on many occasions about the impact his process set up by the company is as follows: appearance could have on his sales. Nevertheless, Tom still has the beard. 1. Each committee member should first review the problem privately and formulate independent ideas The manager is concerned about Tom’s decreasing sales as for what might be done. well as the professional image of the sales force in the medical community. Tom says his sales decrease has nothing to do with 2. At the start of the meeting, each member should his beard. However, sales in the other territories in the district are spend one minute addressing the group. significantly better than they were last year. During the meeting, the committee must reach a When the groups have reached their consensus consensus on both the best solution and supporting ratio- decisions, the following questions will serve for class nale to each problem. How this is done is entirely up to discussion: the committee members, but you must come up with a consensus decision and not a majority opinion achieved by 1-8. What do you think are the concerns for the com- voting. pany regarding Tom’s facial hair? Should they care about his appearance? Here is the problem your committee is to consider: 1-9. What was your group’s consensus decision regard- The company has no specific policy regarding facial hair. Tom, a ing the issue with Tom’s facial hair? pharmaceutical sales rep with a little more than a year’s experi- ence and an average (but declining) sales record, has grown a 1-10. Let’s say Tom told you he thinks the beard is part very long and ragged beard that detracts significantly from his of his personal religion that he is forming. Do appearance. His hobby is playing bass in an amateur bluegrass you think that announcement would change how you talk to Tom about the issue?

What Is Organizational Behavior? CHAPTER 1 73 ethicaL DiLeMMa There’s a Drone in Your Soup It is the year 2020, and drones are everywhere. Alibaba They’re really accurate, agile, and super quiet, so you’ll quadcopters have been delivering special ginger tea to barely even know they’re around. My friend wants us to customers in Beijing, Shanghai, and Guangzhou for years; have the first 100 drones here for free, and he’s willing to Amazon’s octocopters finally deliver packages in most send them over tomorrow! I figure we can hand them out major cities within 30 minutes without knocking down randomly, although of course we’ll each have one.” pedestrians; and college students everywhere welcome late-night nachos from Taco Bell Tacocopters. Indoor Your boss sits back, smiling and expecting applause. drones are still in the pioneering phase—backyard enthu- You glance at your team members and are relieved to see siasts are building tiny versions, but no large-scale com- doubt and hesitation on their faces. mercial efforts have been put toward indoor utility drones. That’s all about to change. “Sounds, uh, great,” you reply. “But how about the team takes the afternoon to set the ground rules?” You work for a multinational technology corporation on a sprawling, 25-acre headquarters campus, with offices Questions in 2 million square feet of interior space in one large build- 1-11. How might the R2D2 drones influence employee ing and four additional smaller (but still large) buildings. behavior? Do you think they will cause people to The official Head of Interior Spaces is your boss; you’re act more or less ethically? Why? the leader of the Consideration of New Things team. In 1-12. Who should get the drones initially? How can you a meeting with your team, your boss says, “I’ve just heard justify your decision ethically? What restrictions for from my friend at Right To Drones Too (R2D2) that his use should these people be given, and how do you group has perfected their inside drone. It’s small and light think employees, both those who get drones and but can carry up to 10 pounds. It includes a camera, a those who don’t, will react to this change? speaker, and a recorder.” 1-13. How will your organization deal with sabotage or misuse of the drones? The value of an R2D2 drone Your team expresses surprise; no one even knew an is $2,500. inside utility drone was under development, and govern- 1-14. Many organizations already use electronic moni- ments worldwide are still haggling over regulations for toring of employees, including sifting through drones. Your boss goes on enthusiastically, “I’ve seen the website usage and e-mail correspondence, often little drones, and I think you’ll be impressed—not only can without the employees’ direct knowledge. In what they scoot across the quad, but they can fetch things off ways might drone monitoring be better or worse tables, grab me a latté, attend meetings for me, check over for employees than covert electronic monitoring of your shoulders to see what you’re working on … anything! Web or e-mail activity? case inciDent 1 Apple Goes Global believe the intrinsic characteristics of the labor force avail- able to them in China—which they identify as flexibility, It wasn’t long ago that products from Apple, perhaps the diligence, and industrial skills—are superior to those of most recognizable name in electronics manufacturing the U.S. labor force. Apple executives tell of shorter lead around the world, were made entirely in America. This is times and faster manufacturing processes in China that are not the case anymore. Now, almost all of the approximately becoming the stuff of company legend. “The speed and 70 million iPhones, 30 million iPads, and 59 million other flexibility is breathtaking,” one executive said. “There’s no Apple products sold yearly are manufactured overseas. American plant that can match that.” Another said, “We This change represents more than 20,000 jobs directly lost shouldn’t be criticized for using Chinese workers. The U.S. by U.S. workers, not to mention more than 700,000 other has stopped producing people with the skills we need.” jobs given to foreign companies in Asia, Europe, and else- where. The loss is not temporary. As the late Steven P. Jobs, Because Apple is one of the most imitated companies in Apple’s iconic co-founder, told President Obama, “Those the world, this perception of an overseas advantage might jobs aren’t coming back.” suggest that the U.S. workforce needs to be better led, bet- ter trained, more effectively managed, and more motivated At first glance, the transfer of jobs from one workforce to be proactive and flexible. If U.S. (and western Europe- to another would seem to hinge on a difference in wages, an) workers are less motivated and less adaptable, it’s hard but Apple shows this is an oversimplification. In fact, some to imagine that does not spell trouble for the future of say paying U.S. wages would add only $65 to each iPhone’s the American workforce. Perhaps, though, Apple’s switch expense, while Apple’s profits average hundreds of dollars per phone. Rather, and of more concern, Apple’s leaders

74 PART 1 Introduction from “100 percent Made in the U.S.A.” to “10 percent company completely, but as one of the best examples of Made in the U.S.A.” represents the natural growth pat- global ingenuity. tern of a company going global. At this point, the iPhone is largely designed in the United States (where Apple has Questions 43,000 employees); parts are made in South Korea, Taiwan, 1-15. What are the pros and cons for local and overseas Singapore, Malaysia, Japan, Europe, and elsewhere; and labor forces of Apple’s going global? What are products are assembled in China. The future of at least 247 the potential political implications for country suppliers worldwide depends on Apple’s approximately relationships? $30.1 billion in orders per quarter. And we can’t forget that 1-16. As a U.S. corporation, does Apple and its man- Apple posted $16.1 billion in revenue from China in the agement have a moral obligation to provide jobs first quarter of 2015, up 70 percent from the first quarter of for U.S. employees first? If this is the case, then 2014, perhaps in part because its manufacturing in China does this put international employees at a distinct builds support for the brand there. disadvantage? 1-17. Is it possible for U.S. managers to organize, motivate, As maker of some of the most cutting-edge, revered and ensure quality in their Chinese manufacturing products in the electronics marketplace, perhaps Apple facilities? serves not as a failure of one country to hold onto a Sources: B. X. Chen, “IPhone Sales in China Bolster Apple Earnings,” The New York Times ( January 27, 2015), http://www.nytimes.com/2015/01/28/technology/apple-quarterly-earnings.html?_r=0; C. Duhigg and K. Bradsher, “How U.S. Lost Out on iPhone Work,” The New York Times, January 22, 2013, A1, A22–A23; H. Gao, “How the Apple Confrontation Divides China,” The Atlantic (April 8, 2013), www.theatlantic.com/china/archive/2013/04/how-the-apple-confrontation-divides-china/ 274764/; and A. Satariano, “Apple Slowdown Threatens $30 Billion Global Supplier Web,” Bloom- berg, www.bloomberg.com/news/2013-04-18/apple-slowdown-threatens-30-billion-global-supplier- web-tech.html. case inciDent 2 Big Data for Dummies Do you need big data? Maybe the question is better quick answer seems to be to hire talent. But not just any- phrased as: Can you afford not to use big data? The age of one will do. Here are some points to ponder when hiring big data is here, and to ignore its benefits is to run the risk data professionals: of missed opportunities. 1. Look for candidates with a strong educational back- Organizations using big data are quickly reaping re- ground in analytics/statistics. You want someone who wards, as a survey of 2,022 managers worldwide indicated knows more than you do about handling copious recently. In fact, 71 percent of respondents agreed that amounts of data. organizations using big data will gain a “huge competi- tive advantage.” These managers also saw the need for big 2. The ideal candidates will have specific experience in data: 58 percent responded that they never, rarely, or only your industry or a related industry. “When you have all sometimes have enough data to make key business deci- those Ph.D.s in a room, magic doesn’t necessarily hap- sions. Furthermore, they’ve witnessed the benefits: 67 per- pen because they may not have the business capability,” cent agreed that big data has helped their organization to said Andy Rusnak, a senior executive at Ernst & Young. innovate. So why did only 28 percent find that their access to useful data significantly increased in a year? 3. Search for potential candidates from industry leader organizations that are more advanced in big data. According to Amy Braverman, a principal statistician who analyzes NASA’s spacecraft data, the problem is in 4. Communication skills are a must. Look for a candidate interpreting the new kinds and volumes of data we are “who can translate Ph.D. to English,” says SAP Chief able to collect. “This opportunistic data collection is lead- Data Scientist David Ginsberg. He adds, “Those are ing to entirely new kinds of data that aren’t well suited to the hardest people to find.” the existing statistical and data-mining methodologies,” she said. IT and business leaders agree: in a recent sur- 5. Find candidates with a proven record of finding use- vey, “determining how to get value” was identified as the ful information from a mess of data, including data number 1 challenge of big data. from questionable sources. You want someone who is analytical and discerning. With strong need combating the high hurdle for usabil- ity, how should a company get started using big data? The 6. Look for people who can think in 8- to 10-week periods, not just long term. Most data projects have a short-term focus.

What Is Organizational Behavior? CHAPTER 1 75 7. Test candidates’ expertise on real problems. Netflix’s increase profits. What data might be available Director of Algorithms asks candidates, “You have to your decision-making process? What data this data that comes from our users. How can you use would be important to your decision? it to solve this particular problem?” 1-19. What kinds of data might we want in OB applications? Questions 1-20. As Braverman notes, one problem with big data 1-18. Let’s say you work in a metropolitan city for a large is making sense of the information. How might department store chain and your manager puts a better understanding of psychology help you you in charge of a team to find out whether keep- sift through all this data? ing the store open an hour longer each day would Sources: M. Taes, “If I Could Have More Data…,” The Wall Street Journal, March 24, 2014, R5; S. Thurm, “It’s a Whole New Data Game,” The Wall Street Journal, February 10, 2015, R6; and J. Willhite, “Getting Started in ‘Big Data’,” The Wall Street Journal, February 4, 2014, B7. MyManagementLab Go to mymanagementlab.com for the following Assisted-graded writing questions: 1-21. Now that you’ve read the chapter and Case Incident 1, if you were an Apple manager whose employees were losing their jobs to overseas workers, what would you advise your teams to do in order to find re-employment in  their professions? What types of training—basic, technical, interpersonal, problem-solving—would you recommend? 1-22. In relation to Case Incident 2, why do you think it is important to have educated, experienced statisticians on any team that is using big data for decision making? What might be the consequences of hiring someone with less experience? 1-23. MyManagementLab Only – comprehensive writing assignment for this chapter.

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What Is Organizational Behavior? CHAPTER 1 77 tips-for-dealing-with-employees-whose-social- pedia of Positive Psychology (Thousand Oaks, Decision Processes 108, no. 1 (2009): 1–13; and A. media-posts-reflect-badly-on-your-company/. CA: Sage, 2007). Ardichvili, J. A. Mitchell, and D. Jondle, “Char- 48E. Jaffe, “Using Technology to Scale the 54L. M. Roberts, G. Spreitzer, J. Dutton, R. acteristics of Ethical Business Cultures,” Journal Scientific Mountain,” Association for Psy- Quinn, E. Heaphy, and B. Barker, “How to of Business Ethics 85, no. 4 (2009): 445–51. chological Science Observer 27, no. 6 (2014): Play to Your Strengths,” Harvard Business Re- 59D. Meinert, “Managers’ Influence,” HR Maga- 17–19. view, January 2005, 1–6; and L. M. Roberts, J. zine, April 2014, 25. 49N. Fallon, “No Face Time? No Problem: E. Dutton, G. M. Spreitzer, E. D. Heaphy, and 60“Unplanned Absence Costs Organizations How to Keep Virtual Workers Engaged,” R. E. Quinn, “Composing the Reflected Best 8.7 Percent of Payroll, Mercer/Kronos Study” Business News Daily, October 2, 2014, http:// Self-Portrait: Becoming Extraordinary in Work (June 28, 2010), www.mercer.com/press- www.businessnewsdaily.com/7228-engaging- Organizations,” Academy of Management Review releases/1383785. remote-employees.html. 30, no. 4 (2005): 712–36. 61W. Hoge, “Sweden’s Cradle-to-Grave Welfare 50E. J. Hirst, “Burnout on the Rise,” Chicago 55“Five Jobs That Won’t Exist in 10 Years… Starts to Get Ill,” International Herald Tribune, Tribune, October 19, 2012, http://articles And One New Title You’ll Start to See,” HR September 25, 2002, 8. .chicagotribune.com/2012-10-29/business/ Magazine, February 2014, 16. 62T.-Y. Park and J. D. Shaw, “Turnover Rates and ct-biz-1029-employee-burnout-20121029_1_ 56Editorial Board, “NCAA Should Punish the Organizational Performance: A Meta-Analysis,” employee-burnout-herbert-freudenberger- University of North Carolina for Cheating Journal of Applied Psychology 98 (2013): 268–309. employee-stress. Scandal,” Chicago Tribune, November 7, 2014, 63“Job Openings and Labor Turnover 51S. Shellenbarger, “Single and off the Fast http://www.chicagotribune.com/news/ Survey/2014 Revised,” www.bls.gov, http:// Track,” The Wall Street Journal, May 23, 2012, opinion/editorials/ct-north-carolina-sports- www.bls.gov/jlt/revisiontables.htm, accessed D1, D3. scandal-edit-1108-20141107-story.html, March 13, 2015. 52M. Mithel, “What Women Want,” Business accessed March 11, 2015. 64N. Shah, “Good Sign for Jobs: Less Caution, Today, March 8, 2013, http://businesstoday 57W. Bailey and A. Spicer, “When Does More Quitting,” The Wall Street Journal, Febru- .intoday.in/story/careers-work-life-balance- National Identity Matter? Convergence and ary 10, 2014, A2. women/1/193135.html. Divergence in International Business Eth- 65M. Casey-Campbell and M. L. Martens, 53F. Luthans and C. M. Youssef, “Emerging ics,” Academy of Management Journal 50, no. 6 “Sticking It All Together: A Critical Assess- Positive Organizational Behavior,” Journal (2007): 1462–80; and A. B. Oumlil and J. L. ment of the Group Cohesion-Performance of Management, June 2007, 321–49; C. M. Balloun, “Ethical Decision-Making Differences Literature,” International Journal of Management Youssef and F. Luthans, “Positive Organi- between American and Moroccan Manag- Reviews 11 (2008): 223–46. zational Behavior in the Workplace: The ers,” Journal of Business Ethics 84, no. 4 (2009): 66X. Zhao and A. S. Mattila, “Examining Impact of Hope, Optimism, and Resilience,” 457–78. the Spillover Effect of Frontline Employees’ Journal of Management 33, no. 5 (2007): 58D. M. Mayer, M. Kuenzi, R. Greenbaum, Work-Family Conflict on Their Affective 774–800; and J. E. Dutton and S. Sonen- M. Bardes, and R. Salvador, “How Low Does Work Attitudes and Customer Satisfaction,” shein, “Positive Organizational Scholarship,” Ethical Leadership Flow? Test of a Trickle-Down International Journal of Hospitality Manage- in C. Cooper and J. Barling (eds.), Encyclo- Model,” Organizational Behavior and Human ment, June 2013, 310–15.

Diversity 2 in Organizations 78 Source: John Schultz/Quad-City Times/ZUMAPRESS/Alamy

Learning Objectives After studying this chapter, you should be able to: 2-1 Describe the two major forms of workplace 2-4 Explain how other differentiating characteristics diversity. factor into OB. 2-2 Demonstrate how workplace discrimination 2-5 Demonstrate the relevance of intellectual and undermines organizational effectiveness. physical abilities to OB. 2-3 Describe how the key biographical characteristics 2-6 Describe how organizations manage diversity are relevant to OB. effectively. MyManagement If your professor has chosen to assign this, go to the Assignments section of mymanagementlab.com to complete the chapter warm up. Exploiting a loopholE Welcome to Atalissa, Iowa, a quintessential small town of 311 people— and a nasty secret. If you’ve seen this picture before, you are probably aware that what happened in this converted schoolhouse is the basis of the largest U.S. Equal Employment Opportunity Commission (EEOC) award in history. The tale of the Atalissa bunkhouse begins in 1974, when Henry’s Turkey Service of Texas rented the abandoned building near its Iowa processing plant to house its workers, a group of young, mentally disabled men taken from state institutions. At the time, the unregulated work-to-live arrangement that pro- vided the men with an average of only $65 per month for full- time employment was completely legal. Why? A section of the Fair Labor Standards Act of 1938 allowed certified for-profit employers to pay less than minimum wage to workers with disabilities. Furthermore, the company legally deducted mon- ey from the men’s meager earnings and their Social Security checks to cover room, board, and “extras” like medical care, since the workers didn’t have health insurance or Medicaid. At the plant, the men were assigned the worst jobs of manually eviscerat- ing 20,000 turkeys per day. The work was back-breaking and “too bloody,” said Billy Penner, who awoke at 3 a.m. for decades to work alongside the hundreds of men who came and went from the bunkhouse. Conditions in the bunkhouse were horrible, with no heat, covered win- dows and padlocked doors, cockroaches, and filth. Two “caretakers” doled

80 PART 2 The Individual out punishments that included standing with hands on a pole for hours and walking in circles while carrying heavy weights. Men were sometimes hand- cuffed to their beds overnight, denied bathroom breaks, kicked in the groin, and verbally abused. Men who ran away were caught and brought back. Through the years, allegations about Henry’s Turkey Service made their way into the legal system. They cited the poor treatment of workers; violation of the federal Migrant and Seasonal Worker Protection Act; harsh labor that killed an elderly, disabled worker; pay inequity; deplorable conditions; and fire hazards. However, the Iowa Department of Human Services, the U.S. Department of Labor, Iowa Workforce Development, and the Department of Inspections and Appeals dismissed most of the allegations without investigation. None of the departments ever questioned whether the indentured servitude was legal. Finally, in 2009, a worker’s sister alerted a newspaper reporter, and in- vestigators rescued the 21 remaining men. A number of lawsuits followed, resulting in the largest verdict ever obtained by the EEOC and the largest verdict relating to the Americans with Disabilities Act, over $240 million (the business was worth only $4 million, though). No amount of money can restore the men to health or well-being. EEOC attorney Robert Canino referenced their “broken hearts, broken spirits, shattered dreams and, ulti- mately, their broken lives.” EEOC chairwoman Jacqueline Berrien said, “The verdict sends an im- portant message that the conduct that occurred here is intolerable in this nation.” But does it? After all, the people of Atalissa knew the men well. The workers attended Atalissa Zion Lutheran Church, sang in the choir, joined in town celebrations, and spent their money at the mini mart. Atalissa owned the bunkhouse Henry’s Turkey rented; the men were known by the mayor and the sheriff. And the town claimed to love them. Carol O’Neill of the Atal- issa Betterment Committee said, “Even though they were adult men, they were boys to us. They were like—our boys.” Sadly, these men were not ex- tended protection, and their rights were repeatedly ignored and dismissed. The Atalissa scandal serves as a reminder that true fairness is not just a warm feeling toward the disabled, but the ethical responsibility of us all. Sources: Atalissa Population, https://suburbanstats.org/population/iowa/how-many-people- live-in-atalissa, accessed March 24, 2015; K. Allemeier, “How 21 Men Lived in Atalissa Bunkhouse,” The WCF Courier (February 12, 2009), http://wcfcourier.com/news/local/how- men-lived-in-atalissa-bunkhouse/article_0d1867dc-c722-54f4-97e3-8b0d5e73e587.html; K. Bracken, “The ‘Boys’ in the Bunkhouse,” The New York Times (March 9, 2014), http:// www.nytimes.com/interactive/2014/03/09/us/the-boys-in-the-bunkhouse.html; C. Kauff- man, “Jury: $240 Million for Atalissa Workers,” Des Moines Register (May 1, 2013), http:// archive.desmoinesregister.com/article/20130501/NEWS/305010095/Jury-240-million- Atalissa-workers; and C. Kauffman, “Witness: Disabled Workers Physically Abused,” Des Moines Register (April 25, 2013), http://archive.desmoinesregister.com/article/20130425/ NEWS/304240092/Witness-Disabled-workers-physically-abused.

Diversity in Organizations CHAPTER 2 81 2-1 Describe the two major T he exploitation of the disabled men in the opening story is a tragic ex- forms of workplace ample of mistreating people for the ways in which they are different. Not diversity. only were the men abused by their supposed caretakers, but they also suffered workplace discrimination that kept them in debilitating roles without regard to their abilities and needs. In this chapter, we look at how organizations should work to maximize the potential contributions of a diverse workforce. Because each of us is different from others in myriad ways, we consider diversity in many different forms. We also show how individual differences in abilities affect em- ployee behavior and effectiveness in organizations. Diversity We are, each of us, unique. This is obvious enough, but managers sometimes forget they need to recognize and capitalize on individual differences to get the most from their employees. In this chapter, we’ll learn how individual charac- teristics like age, gender, race, ethnicity, and abilities can influence employee performance. We’ll also see how managers can develop awareness about these characteristics and manage a diverse workforce effectively. But first, let’s take an overview perspective of the changing workforce. Demographic Characteristics The predominantly white, male managerial workforce of the past has given way to a gender-balanced, multiethnic workforce. For instance, in 1950 only 29.6 percent of the U.S. workforce was female,1 but by 2014, women comprised 47 percent.2 Both in the United States and internationally, women today are much more likely than before to be employed full time, have an advanced education, and earn wages comparable to those of men (see the OB Poll).3 In addition, the earnings gap between whites and other racial and ethnic groups in the United States has decreased significantly, partially due to the rising number of minori- ties in the workforce. Hispanics will grow from 13 percent of the workforce in 2014 to 25.1 percent in 2044, blacks will increase from 12 to 12.7 percent, and Ob POLL gender Pay gap: narrowing but still there Human resource $1,536 managers $1,240 Financial managers $1,518 Computer and information $1,064 systems managers Marketing and $1,769 Men $1,549 Women sales managers Chief executives $1,658 $0 $1,124 $2,266 $1,811 $500 $1,000 $1,500 $2,000 $2,500 Approximate median weekly pay per occupation Source: Bureau of Labor Statistics, http://www.bls.gov/opub/reports/cps/highlights-of-womens-earnings-in-2013.pdf.

82 PART 2 The Individual Target store manager Jerald Bryant (center) motivating his team reflects demographic traits of today’s workforce. By making diversity management a central part of its policies and practices, Target has created a gender-balanced, multiethnic, and inclusive workplace. Sources: Lexington Herald-Leader/ZUMAPRESS/Alamy surface-level diversity Differences in Asians from 5 to 7.9 percent.4 Workers over the age of 55 are an increasingly easily perceived characteristics, such as large portion of the workforce as well, both in the United States and globally. gender, race, ethnicity, age, or disability, that In the United States, the 55-and-older age group will increase from 19.5 percent do not necessarily reflect the ways people of the labor force in 2010 to 25.2 percent by 2020.5 Currently, in Australia think or feel but that may activate certain there are more workers over age 55 than under age 25, and that shift is set to stereotypes. continue.6 These changes are increasingly reflected in the makeup of manage- rial and professional jobs. These changes also mean organizations must make deep-level diversity Differences in diversity management a central component of their policies and practices. values, personality, and work preferences that become progressively more important for levels of Diversity determining similarity as people get to know one another better. Although much has been said about diversity in age, race, gender, ethnicity, religion, and disability status, experts now recognize that these demographic characteristics are just the tip of the iceberg.7 Demographics mostly reflect surface-level diversity, not thoughts and feelings, and can lead employees to perceive one another through stereotypes and assumptions. However, evidence has shown that people are less concerned about demographic differences if they see themselves as sharing more important characteristics, such as personal- ity and values, that represent deep-level diversity.8 To understand the difference between surface- and deep-level diversity, consider an example. Luis and Carol are managers who seem to have little in common. Luis is a young, recently hired male from a Spanish-speaking neighborhood in Miami with a business degree. Carol is an older woman from rural Kansas who started as a customer service trainee after high school and worked her way up the hierarchy. At first, these coworkers may notice their surface-level differences in education, ethnicity, regional background, and gender. However, as they get to know one another, they may find they are both deeply committed to their families, share a common way of thinking about important work problems, like to work collaboratively, and are interested in international assignments. These deep-level similarities can overshadow the more superficial differences between them, and research suggests they will work well together.

Diversity in Organizations CHAPTER 2 83 affirmative action for Unemployed veterans an Ethical Choice Unemployed veterans, take heart: enough in the marketplace. Erik Sewell, individuals from the target group while Walmart wants YOU. In a historic an Iraq war veteran, suggested the rea- excluding qualified individuals from move, the retailing giant vowed son the veteran unemployment rate is other workforce segments. This might to hire any returning U.S. veteran who poor is partly that vets often don’t mar- mean hiring an underqualified veteran applied. As a result, the company hired ket their strengths well or showcase instead of a well-qualified civilian. more than 42,000 veterans by mid- their transferable skills to potential em- 2014 and expects that total to reach ployers. Bryson DeTrent, a 12-year vet- Resources are always scarce, and 100,000 by 2018. Other businesses eran of the National Guard, observed there are only so many jobs to go have launched similar initiatives, such that one of the key reasons some vets around. Managers must balance the as the 100,000 Jobs Mission, which haven’t found jobs is that they aren’t ethics of affirmative action against aimed to hire 100,000 veterans by working hard at it, preferring to col- the responsibility of strengthening 2020. The coalition, which originally lect unemployment instead. However, their workforces for the good of their included 11 companies, now consists he has also found that companies are organizations. of 190 companies from nearly every reluctant to hire veterans, especially industry. As of 2015, 217,000 veterans National Guard members, fearing these Sources: “100,000 Jobs Mission Hires Over had been hired, prompting the coalition employees may later be called to duty. 200,000 Veterans,” Veteran Jobs Mission to commit to hiring another 100,000 Mental and emotional well-being are press release (February 9, 2015), https:// veterans. Is this an ethical choice all also a concern as employers may worry www.veteranjobsmission.com/press- businesses should be emulating? that veterans suffer from post-trau- releases/750; D. C. Baldridge and M. L. matic stress disorder (PTSD). Despite Swift, “Withholding Requests for Disability Few people would disagree that concerns, some managers report that Accommodation: The Role of Individual Dif- there is a need to address the plight veterans’ work ethic, team outlook, and ferences and Disability Attributes,” Journal of returning soldiers to America. Many receptivity to training are greater than of Management (March 2013): 743–62; veterans say employers don’t want among the general populace. “Walmart Celebrates More Than 40,000 them. “There are a lot of companies Hires in First Year of Veterans Commit- that say they want veterans, but that Sometimes, affirmative action is ment,” Walmart Foundation press release conflicts with the unemployment num- needed to give an unfairly disadvan- (May 21, 2014), http://news.walmart. bers,” claims Hakan Jackson, a former taged workforce segment an oppor- com/news-archive/2014/05/21/walmart- technician in the Air Force. He’s right: tunity to succeed, whether it is done celebrates-more-than-40-000-hires-in-first- Unemployment rates remain higher for through percentage quotas, number year-of-veterans-commitment; B. Yerbak and veterans than civilians. quotas, or hiring all prospective employ- C. V. Jackson, “Battling to Get More Vets in ees from the desired groups. But any the Work Force,” Chicago Tribune (October According to some veterans, the program risks including underqualified 28, 2012), http://articles.chicagotribune. returning soldiers are not competitive com/2012-10-28/business/ct-biz-1028- vets-20121028_1_train-veterans-unem- ployment-rate-war-zone; and “Veterans Un- employment Drops but Remains High,” HR Magazine, February 2013, 16. discrimination Noting of a difference Throughout this text, we will encounter differences between deep- and between things; often we refer to unfair surface-level diversity in various contexts. Diversity is an important concept in OB since individual differences shape preferences for rewards, communication discrimination, which means making judg- styles, reactions to leaders, negotiation styles, and many other aspects of behav- ior in organizations. Unfortunately, increased diversity may also mean increases ments about individuals based on stereotypes in discriminatory practices, which we will discuss next. regarding their demographic group. 2-2 Demonstrate how Discrimination workplace discrimination undermines organizational Although diversity presents many opportunities for organizations, diversity man- effectiveness. agement includes working to eliminate unfair discrimination. To discriminate is to note a difference between things, which in itself isn’t necessarily bad. Notic- ing one employee is more qualified is necessary for making hiring decisions;

84 PART 2 The Individual stereotyping Judging someone on the noticing another is taking on leadership responsibilities exceptionally well is basis of our perception of the group to which necessary for making promotion decisions. Usually when we talk about discrimi- nation, though, we mean allowing our behavior to be influenced by stereotypes that person belongs. about groups of people. Stereotyping is judging someone on the basis of our perception of the group to which that person belongs. To use a machine meta- phor, you might think of stereotypes as the fuel that powers the discrimination engine. Stereotypes can be insidious not only because they may affect the perpe- trators of discrimination, but also because they can affect how potential targets of discrimination see themselves. stereotype threat The degree to which Stereotype threat we internally agree with the generally negative Let’s say you are sitting in a restaurant, waiting for the blind date your coworker stereotyped perceptions of our groups. arranged to find you in the crowded room. How do you think your coworker described you to this person? Now consider how you would describe yourself to this new person if you’d talked on the phone before the date. What identifiable groups would you mention as a shorthand way for your date to know a bit about you so he or she could recognize you in the restaurant? Chances are good that you’d mention your race, something about how you express your gender (such as the way you dress), how old you are, and maybe what you do for a living. You might also mention how tall you are if you are remarkably tall or short, and—if you’re candid—you might mention something about your build (heavyset, petite, in between). Overall, you’d give cues to your blind date about characteristics that are distinctive, or stand out, about you. Interestingly, what you tell someone about yourself says a lot about what you think about yourself. Just as we stereotype others, we also stereotype ourselves. Stereotype threat describes the degree to which we internally agree with the generally negative stereotyped perceptions of our groups. Along with that comes a fear of being judged when we are identified with the negative connota- tions of that group. This can happen when we are a minority in a situation. For instance, an older worker applying for a job in a predominately Millennial-age workforce may assume the interviewer thinks he is out of touch with current trends. What creates a stereotype threat is not whether the worker is or is not up to date with trends, but whether he internally agrees that older workers (the group he identifies with) are out of date (the stereotype). People become their own worst enemies when they feel a stereotype threat. Ironically, they may unconsciously exaggerate the stereotype, like an older job applicant who talks about aging, rambles during the conversation, and discloses too much.9 Second, they may over-identify with the stereotype. For example, studies of unemployed and underemployed workers have suggested they experi- ence the stereotyped identity of nonworkers as lazy and aimless. Even when re- employed, they often retain the stereotype threat of their earlier status.10 Third, people may over-compensate for the stereotype threat they feel. A Hispanic who tries to be as busy as possible at work and rushes conspicuously around the office may be attempting to overcome a stereotype threat of Hispanics as slower work- ers. This may happen even if the workplace has many ethnic minority employ- ees, since minorities perceive stereotypes about each other.11 Lastly, people may perform differently when reminded of their stereotyped group. For instance, older adults may not perform as well on memory tests when they are reminded beforehand of their older status, evoking stereotype threat.12 Stereotype threat has serious implications for the workplace. Employees who feel it may have lower performance, lower satisfaction, negative job atti- tudes, decreased engagement, decreased motivation, higher absenteeism, more health issues, and higher turnover intentions.13 Thankfully, this is something we can combat in the workplace by treating employees as individuals, and not

Diversity in Organizations CHAPTER 2 85 highlighting group differences. The following organizational changes can be successful in reducing stereotype threat: increasing awareness of how stereo- types may be perpetuated, reducing differential and preferential treatment through objective assessments, banning stereotyped practices and messages, confronting micro-aggressions against minority groups, and adopting transpar- ent practices that signal the value of all employees.14 PersoNal INveNTory assessmeNTs P I A PERSONAL INVENTORY Intercultural Sensitivity Scale ASSESSMENT Are you aware of intercultural dynamics? Take this PIA to assess your intercultural sensitivity. Discrimination in the Workplace To review, rather than looking at individual characteristics, unfair discrimina- tion assumes everyone in a group is the same. This discrimination is often very harmful for employees, as we’ve just discussed, and for organizations. Exhibit 2-1 provides definitions and examples of some forms of discrimina- tion in organizations. Although many are prohibited by law and therefore are not a part of organizations’ official policies, the practices persist. Tens of thou- sands of cases of employment discrimination are documented every year, and many more go unreported. Since discrimination has increasingly come under Exhibit 2-1 Forms of Discrimination Type of Discrimination Definition Examples from Organizations Discriminatory policies or practices Actions taken by representatives of the Older workers may be targeted for layoffs organization that deny equal opportunity because they are highly paid and have lucrative Sexual harassment to perform or unequal rewards for benefits. performance. Intimidation Salespeople at one company went on company-paid Mockery and insults Unwanted sexual advances and other visits to strip clubs, brought strippers into the office to verbal or physical conduct of a sexual celebrate promotions, and fostered pervasive sexual Exclusion nature that create a hostile or offensive rumors. work environment. African-American employees at some companies have Incivility found nooses hanging over their work stations. Overt threats or bullying directed at Arab-Americans have been asked at work whether members of specific groups of employees. they were carrying bombs or were members of terrorist organizations. Jokes or negative stereotypes; sometimes Many women in finance claim they are assigned to the result of jokes taken too far. marginal job roles or are given light workloads that don’t lead to promotion. Exclusion of certain people from job opportunities, social events, discussions, Female lawyers note that male attorneys frequently or informal mentoring; can occur cut them off or do not adequately address their unintentionally. comments. Disrespectful treatment, including behaving in an aggressive manner, interrupting the person, or ignoring his or her opinions. Sources: J. Levitz and P. Shishkin, “More Workers Cite Age Bias after Layoffs,” The Wall Street Journal, March 11, 2009, D1–D2; W. M. Bulkeley, “A Data-Storage Titan Confronts Bias Claims,” The Wall Street Journal, September 12, 2007, A1, A16; D. Walker, “Incident with Noose Stirs Old Memories,” McClatchy-Tribune Business News, June 29, 2008; D. Solis, “Racial Horror Stories Keep EEOC Busy,” Knight-Ridder Tribune Business News, July 30, 2005, 1; H. Ibish and A. Stewart, Report on Hate Crimes and Discrimination against Arab Americans: The Post-September 11 Backlash, September 11, 2001–October 11, 2001 (Washington, DC: American-Arab Anti-Discrimination Committee, 2003); A. Raghavan, “Wall Street’s Disappearing Women,” Forbes, March 16, 2009, 72–78; and L. M. Cortina, “Unseen Injustice: Incivility as Modern Discrimination in Organizations,” Academy of Management Review 33, no. 1 (2008): 55–75.

86 PART 2 The Individual both legal scrutiny and social disapproval, most overt forms have faded, which may have resulted in an increase in more covert forms like incivility or exclu- sion, especially when leaders look the other way.15 As you can see, discrimination can occur in many ways, and its effects can vary depending on organizational context and the personal biases of employ- ees. Some forms of discrimination like exclusion or incivility are especially hard to root out because they may occur simply because the actor isn’t aware of the effects of his or her actions. Like stereotype threat, actual discrimination can lead to increased negative consequences for employers, including reduced produc- tivity and organizational citizenship behavior (OCB), more conflict, increased turnover, and even increased risk-taking behavior.16 Unfair discrimination also leaves qualified job candidates out of initial hiring and promotions. Thus, even if an employment discrimination lawsuit is never filed, a strong business case can be made for aggressively working to eliminate unfair discrimination. Whether it is overt or covert, intentional or unintentional, discrimination is one of the primary factors that prevent diversity. On the other hand, recogniz- ing diversity opportunities can lead to an effective diversity management pro- gram and ultimately to a better organization. Diversity is a broad term, and the phrase workplace diversity can refer to any characteristic that makes people dif- ferent from one another. The following section covers some important surface- level characteristics that differentiate members of the workforce. 2-3 Describe how the key Biographical Characteristics biographical characteristics are relevant to oB. Biographical characteristics such as age, gender, race, and disability are some of the most obvious ways employees differ. Let’s begin by looking at factors that are biographical characteristics Personal easily definable and readily available—data that can be obtained, for the most characteristics—such as age, gender, race, part, from an employee’s human resources (HR) file. Variations in surface-level and length of tenure—that are objective and characteristics may be the basis for discrimination against classes of employees, easily obtained from personnel records. These so it is worth knowing how related they actually are to work outcomes. As a characteristics are representative of surface- general rule, many biographical differences are not important to actual work level diversity. outcomes, and far more variation occurs within groups sharing biographical characteristics than between them. age Age in the workforce is likely to be an issue of increasing importance during the next decade for many reasons. For one, the workforce is aging worldwide in most developed countries;17 by projections, 93 percent of the growth in the labor force from 2006 to 2016 will have come from workers over age 54.18 In the United States, the proportion of the workforce age 55 and older is 22 per- cent and increasing,19 and legislation has, for all intents and purposes, outlawed mandatory retirement. Moreover, the United States and Australia, among other countries, have laws directly against age discrimination.20 Most workers today no longer have to retire at age 70, and 62 percent of workers age 45 to 60 plan to delay retirement.21 The stereotypes of older workers as being behind the times, grumpy, and inflexible are changing. Managers often see a number of positive qualities older workers bring to their jobs, such as experience, judgment, a strong work ethic, and commitment to quality. The Public Utilities Board, the water agency of Singapore, reports that 27 percent of its workforce is over age 55 because older workers bring workforce stability.22 And industries like health care, education, government, and nonprofits often welcome older workers.23 But older workers are still perceived as less adaptable and less motivated to learn new technology.24

Diversity in Organizations CHAPTER 2 87 bald is better Myth or Science? Surprisingly, it appears true that heroes, winning athletes, and action he- survivor.” Men with shaved heads con- bald is better for men in the work- roes. No wonder study participants de- vey aggressiveness, competitiveness, place. A recent study showed clared that the men with shaved heads and independence, he adds. Will you that observers believe a male’s shaved were an inch taller and 13 percent join the 13 percent of men who shave head indicates greater masculinity, stronger than the same men with hair. their heads? Though we don’t wish to dominance, and leadership potential advocate head-shaving for this reason, than longer or thinning hair. Thinning A bald head has become the hall- it does demonstrate how biased we hair was perceived as the least power- mark of some important business continue to be in judging people by su- ful look, and other studies have agreed leaders, notably Jeff Bezos of Amazon, perficial characteristics. Time will tell if that male-pattern baldness (when Lloyd Blankfein of Goldman Sachs, this situation ever improves. some hair remains) is not considered Marc Andreessen of Netscape, and advantageous. Why is this? “Shark Tank” investor Daymond John. Sources: D. Baer, “People Are Psychologi- Men who shave their heads report it cally Biased to See Bald Men as Domi- In some respects, the reported can give them a business advantage, nant Leaders,” Business Insider (February youthful advantage of a shaved head whether or not it makes them look 13, 2015), http://www.businessinsider. is counterintuitive. Because we have younger (which is debatable). According com/bald-men-signals-dominance-2015-2; more hair when we are young, and con- to psychologist Caroline Keating, just J. Misener, “Men with Shaved Heads Ap- temporary culture considers youthful- as older silver-back gorillas are “typi- pear More Dominant, Study Finds,” The ness a desirable characteristic in the cally the powerful actors in their social Huffington Post (October 1, 2012), www. workplace (if you doubt this, see the groups,” so it is in the office, where huffingtonpost.com/2012/10/01/bald-men- discussions on aging in this chapter), it baldness may “signal who is in charge dominant-shaved-heads-study_n_1930489. would make more sense for a hairless and potentially dangerous.” Research html; A. E. Mannes, “Shorn Scalps and Per- head to be a distinct disadvantage. Yet professor Michael Cunningham agrees, ceptions of Male Dominance,” Social Psycho- the media is loaded with images of pow- adding that baldness “is nature’s way logical and Personality Science, (2012), doi: erful men with shaved heads—military of telling the rest of the world you are a 10.1177/1948550612449490; and R. E. Silverman, “Bald Is Powerful,” The Wall Street Journal (October 3, 2012), B1, B6. When organizations seek individuals who are open to change and training, the perceived negatives associated with age clearly hinder the initial hiring of older workers and increase the likelihood they will be let go during cutbacks. Now let’s take a look at the evidence. What effect does age actually have on turnover, absenteeism, productivity, and satisfaction? Regarding turnover, the older you are, the less likely you are to quit your job.25 As workers get older, they have fewer alternate job opportunities because their skills have become more specialized. Within organizations, older workers’ longer tenure tends to provide them with higher wages, longer paid vacations, and benefits that may bind them to their employers. It may seem likely that age is positively correlated to absenteeism, but this isn’t true. Most studies show that older employees have lower rates of avoid- able absence versus younger employees.26 Furthermore, older workers do not have more psychological problems or day-to-day physical health problems than younger workers.27 The majority of studies have shown “virtually no relationship between age and job performance,” according to Director Harvey Sterns of the Institute for Life-Span Development and Gerontology.28 Indeed, some studies indicate that older adults perform better. In Munich, a 4-year study of 3,800 Mercedes-Benz workers found that “the older workers seemed to know better how to avoid severe errors,” said Matthias Weiss, the academic coordinator of the study.29 Related to performance, there is a conception that creativity lessens as people age. Researcher David Galenson, who studied the ages of peak creativity, found

88 PART 2 The Individual At Tofutti, maker of dairy-free products, older employees are an integral part of the workforce. Tofutti’s CEO David Mintz values the experience, work ethic, maturity, enthusiasm, knowledge, and skills that older workers bring to their jobs. He says older employees have fewer absences, make fewer mistakes, are better at solving problems, and are willing to work more hours. Sources: Julio Cortez/AP images that people who create through experimentation do “their greatest work in their 40s, 50s, and 60s. These artists rely on wisdom, which increases with age.”30 What about age and satisfaction? Regarding life satisfaction, which we will discuss further in later chapters, there is a cultural assumption that older people are more prone to depression and loneliness. Actually, a study of adults ages 18 to 94 found that positive moods increased with age. “Contrary to the popular view that youth is the best time of life, the peak of emotional life may not occur until well into the seventh decade,” researcher Laura Carstensen said.31 Regarding job satisfaction, an important topic in Chapter 3, a review of more than 800 studies found that older workers tend to be more satisfied with their work, report better relationships with coworkers, and are more committed to their organizations.32 Other studies, however, have found that job satisfaction increases up to middle age, at which point it begins to drop off. When we sepa- rate the results by job type, though, we find that satisfaction tends to continually increase among professionals as they age, whereas among nonprofessionals it falls during middle age and then rises again in the later years. In sum, we can see that the surface-level characteristic of an employee’s age is an unfounded basis for discrimination, and that an age-diverse workforce is a benefit to an organization. Sex Few issues initiate more debates, misconceptions, and unsupported opinions than whether women perform as well on jobs as men. The best place to begin to consider this is with the recognition that few, if any, differences between men and women affect job performance.33 Though men may have slightly higher math ability and women slightly higher verbal ability, the differences are fairly small, and there are no consistent male–female differ- ences in problem-solving ability, analytical skills, or learning ability.34 One meta- analysis of job performance studies found that women scored slightly higher than men on performance measures.35 A separate meta-analysis of 95 leadership studies indicated that women and men are rated equally effective as leaders.36

Diversity in Organizations CHAPTER 2 89 Yet biases and stereotypes persist. In the hiring realm, managers are influ- enced by gender bias when selecting candidates for certain positions.37 For instance, men are preferred in hiring decisions for male-dominated occupa- tions, particularly when men are doing the hiring.38 Once on the job, men and women may be offered a similar number of developmental experiences, but females are less likely to be assigned challenging positions by men, assignments that could help them achieve higher organizational positions.39 Moreover, men are more likely to be chosen for leadership roles even though men and women are equally effective leaders. A study of 20 organizations in Spain, for example, suggested that men are generally selected for leadership roles that require han- dling organizational crises.40 According to Naomi Sutherland, senior partner in diversity at recruiter Korn Ferry, “Consciously or subconsciously, companies are still hesitant to take the risk on someone who looks different from their stan- dard leadership profile.”41 Sex discrimination has a pervasive negative impact. Notably, women still earn less money than men for the same positions,42 even in traditionally female roles.43 In a recent experiment, experienced managers allocated 71 percent of the fictional pay raise funds for male employees, leaving only 29 percent for females.44 Working mothers also face “maternal wall bias,” meaning they often are not considered for new positions after they have children, and both men and women experience discrimination for their family caregiving roles.45 Women who receive fewer challenging assignments and development oppor- tunities from biased managers tend to curtail their management aspirations.46 Research continues to underline that sex discrimination is detrimental to orga- nizational performance.47 We’ve seen that there are many misconceptions and contradictions about male and female workers. Thankfully, many countries have laws against sex dis- crimination including Australia, the United Kingdom, and the United States. Other countries, such as Belgium, France, Norway, and Spain are seeking gen- der diversity through laws to increase the percentage of women on boards of directors.48 Gender biases and gender discrimination are still serious issues, but there are indications that the situation is improving. Race and Ethnicity Race is a controversial issue in society and in organizations. We define race as the heritage people use to identify themselves; ethnicity is the additional set of cultural characteristics that often overlaps with race. Typically, we associate race with biology and ethnicity with culture, but there is a history of self-identify- ing for both classifications. Laws against race and ethnic discrimination are in effect in many countries, including Australia, the United Kingdom, and the United States.49 Race and ethnicity have been studied as they relate to employment out- comes such as hiring decisions, performance evaluations, pay, and workplace discrimination. Individuals may slightly favor colleagues of their own race in performance evaluations, promotion decisions, and pay raises, although such differences are not found consistently, especially when highly structured meth- ods of decision making are employed.50 Also, some industries have remained less racially diverse than others. For instance, U.S. advertising and media orga- nizations suffer from a lack of racial diversity in their management ranks even though their client base is increasingly ethnically diverse.51 Finally, members of racial and ethnic minorities report higher levels of dis- crimination in the workplace.52 African Americans generally fare worse than whites in employment decisions (a finding that may not apply outside the United States). They receive lower ratings in employment interviews, lower job

90 PART 2 The Individual positive diversity climate In an organi- performance ratings, less pay, and fewer promotions.53 Lastly, while this does zation, an environment of inclusiveness and not necessarily prove overt racial discrimination, African Americans are often discriminated against even in controlled experiments. For example, one study an acceptance of diversity. of low-wage jobs found that African American applicants with no criminal his- tory received fewer job offers than did white applicants with criminal records.54 As we discussed before, discrimination—for any reason—leads to increased turnover, which is detrimental to organizational performance. While better rep- resentation of all racial groups in organizations remains a goal, an individual of minority status is much less likely to leave the organization if there is a feeling of inclusiveness, known as a positive diversity climate.55 A positive climate for diversity can also lead to increased sales, suggesting there are organizational performance gains associated with reducing racial and ethnic discrimination.56 How do we move beyond the destructiveness of discrimination? The answer is in understanding one another’s viewpoint. Evidence suggests that some people find interacting with other racial groups uncomfortable unless there are clear behavioral scripts to guide their behavior,57 so creating diverse work groups focused on mutual goals could be helpful, along with developing a posi- tive diversity climate. Disabilities Workplace policies, both official and circumstantial, regarding individuals with physical or mental disabilities vary from country to country. Countries such as Australia, the United States, the United Kingdom, and Japan have specific laws to protect individuals with disabilities.58 These laws have resulted in greater ac- ceptance and accommodation of people with physical or mental impairments. In the United States, for instance, the representation of individuals with disabili- ties in the workforce rapidly increased with the passage of the Americans with Disabilities Act (ADA, 1990).59 According to the ADA, employers are required to make reasonable accommodations so their workplaces will be accessible to individuals with physical or mental disabilities. The U.S. Equal Employment Opportunity Commission (EEOC), the federal agency responsible for enforcing employment discrimination laws, classifies a person as disabled who has any physical or mental impairment that substantially limits one or more major life activities. One of the most controversial aspects of the ADA is the provision that requires employers to make reasonable accom- modations for people with psychiatric disabilities.60 Examples of recognized disabilities include missing limbs, seizure disorder, Down syndrome, deafness, schizophrenia, alcoholism, diabetes, depression, and chronic back pain. These conditions share almost no common features, so there’s no specific definition about how each condition is related to employment. The impact of disabilities on employment outcomes has been explored from a variety of perspectives. On one hand, when disability status is randomly manipulated among hypothetical candidates, disabled individuals are rated as having superior personal qualities like dependability.61 Another review sug- gested that workers with disabilities receive higher performance evaluations. However, individuals with disabilities tend to encounter lower performance expectations and are less likely to be hired.62 Mental disabilities may impair performance more than physical disabilities: Individuals with such common mental health issues as depression and anxiety are significantly more likely to be absent from work.63 The elimination of discrimination against the disabled workforce has long been problematic. In Europe, for instance, policies to motivate employers have failed to boost the workforce participation rate for workers with disabilities, and outright quota systems in Germany, France, and Poland have backfired.64

Diversity in Organizations CHAPTER 2 91 Employees with disabilities are valuable assets at the Anne-Sophie Hotel in Germany, where they use their talents and abilities in performing kitchen and service jobs. Posing here with Chef Serkan Guezelcoban (in blue shoes) at the hotel’s Handicap restaurant are some of the 18 disabled employees who work side by side with other employees of the hotel’s 39-member staff. Sources: Thomas Kienzle/EPA/Landov However, the recognition of the talents and abilities of individuals with disabili- ties has made a positive impact. In addition, technology and workplace advance- ments have greatly increased the scope of available jobs for those with all types of disabilities. Managers need to be attuned to the true requirements of each job and match the skills of the individual to them, providing accommodations when needed. But what happens when employees do not disclose their disabili- ties? Let’s discuss this next. hidden Disabilities As we mentioned earlier, disabilities include observable characteristics like miss- ing limbs, illnesses that require a person to use a wheelchair, and blindness. Other disabilities may not be obvious, at least at first. Unless an individual de- cides to disclose a disability that isn’t easily observable, it can remain hidden at the discretion of the employee. These are called hidden disabilities (or invisible disabilities). Hidden, or invisible, disabilities generally fall under the catego- ries of sensory disabilities (for example, impaired hearing), autoimmune dis- orders (like rheumatoid arthritis), chronic illness or pain (like carpal tunnel syndrome), cognitive or learning impairments (like ADHD), sleep disorders (like insomnia), and psychological challenges (like PTSD).65 As a result of recent changes to the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), U.S. organizations must accommodate employees with a very broad range of impairments. However, employees must disclose their conditions to their employers in order to be eligible for workplace accommodations and employment protection. Since many employees do not want to disclose their invisible disabilities, they are prevented from getting the workplace accommodations they need in order to thrive in their jobs. Research indicates that individuals with hidden disabilities are afraid of being stigma- tized or ostracized if they disclose their disabilities to others in the workplace, and they believe their managers will think they are less capable of strong job performance.66

92 PART 2 The Individual In some ways, a hidden disability is not truly invisible. For example, a person with undisclosed autism will still exhibit the behaviors characteristic of the con- dition, such as difficulty with verbal communication and lack of adaptability.67 You may observe behaviors that lead you to suspect an individual has a hidden disability. Unfortunately, you may attribute the behavior to other causes—for instance, you may incorrectly ascribe the slow, slurred speech of a coworker to an alcohol problem rather than to the long-term effects of a stroke. As for the employee, research suggests that disclosure helps all—the individ- ual, others, and organizations. Disclosure may increase the job satisfaction and well-being of the individual, help others understand and assist the individual to succeed in the workplace, and allow the organization to accommodate the situ- ation to achieve top performance.68 2–4 explain how other differen- Other Differentiating Characteristics tiating characteristics factor into oB. The last set of characteristics we’ll look at includes tenure, religion, sexual ori- entation and gender identity, and cultural identity. These characteristics illus- trate deep-level differences that provide opportunities for workplace diversity, as long as discrimination can be overcome. tenure Except for gender and racial differences, few issues are more subject to miscon- ceptions and speculations than the impact of seniority and tenure, meaning time spent in a job, organization, or field. Extensive reviews have been conducted of the seniority–productivity rela- tionship.69 If we define seniority as time on a particular job, the evidence demon- strates a positive relationship between seniority and job productivity. So tenure, expressed as work experience, appears to be a good predictor of employee pro- ductivity, though there is some evidence that the relationship is not linear: dif- ferences in tenure are more important to job performance for relatively new or inexperienced employees than among those who have been on the job longer. To use an NFL analogy, a second-year quarterback has more of an edge over a rookie than a 10th-year quarterback has over one in his 9th year. Religion Not only do religious and nonreligious people question each other’s belief systems; often people of different religious faiths conflict. There are few—if any—countries in which religion is a nonissue in the workplace. For this reason, employers are prohibited by law from discriminating against employees based on religion in many countries, including Australia, the United Kingdom, and the United States.70 Islam is one of the most popular religions in the world, and it is the majority religion in many countries. However, in the United States, Muslims are a minor- ity group that is growing. There are nearly 3 million Muslims in the United States, and the number is predicted to double by 2030, when they will repre- sent 1.7 percent of the population, according to the Pew Research Center. At that point, there will be as many Muslims in the United States as there are Jews and Episcopalians.71 Despite these numbers, there is evidence that people are discriminated against for their Islamic faith even in studies. For instance, U.S. job applicants in Muslim-identified religious attire who applied for hypothetical retail jobs had shorter, more interpersonally negative interviews than applicants who did not wear Muslim-identified attire.72

Diversity in Organizations CHAPTER 2 93 Faith can be an employment issue wherever religious beliefs prohibit or encourage certain behaviors. The behavioral expectations can be informal, such as employees leaving work early on Christmas Eve. Or they may be systemic, such as the Monday to Friday workweek, which accommodates a Christian tra- dition of not working on Sundays and a Jewish tradition of not working on Saturdays. Religious individuals may also believe they have an obligation to express their beliefs in the workplace, and those who do not share those beliefs may object. Religious discrimination has been a growing source of discrimination claims in the United States, partially because the issues are complex. Recently, Samantha Elauf, who was turned down for employment because she wears a hijab, a black head scarf, sued for religious discrimination. “I learned I was not hired by Abercrombie because I wear a head scarf, which is a symbol of mod- esty in my Muslim faith,” she said. She was not aware of the organization’s rule against head coverings and did not mention her reason for the scarf. Should employers be required to deduce why applicants dress as they do and then pro- tect them? Even the Supreme Court is not certain.73 Sexual orientation and gender identity While much has changed, the full acceptance and accommodation of lesbian, gay, bisexual, and transgender (LGBT) employees remains a work in progress. In the United States, a Harvard University study sent fictitious but realistic ré- sumés to 1,700 actual entry-level job openings. The applications were identical with one exception: Half mentioned involvement in gay organizations during college, and the other half did not. The applications without the mention re- ceived 60 percent more callbacks than the ones with it.74 Perhaps as a result of perceived discrimination, many LGBT employees do not disclose their status. For example, John Browne, former CEO of BP, hid his sexual orientation until he was 59, when the press threatened to disclose that he was gay. Fearing the story would result in turmoil for the company, he resigned. Browne wrote recently, “Since my outing in 2007, many societies around the world have done more to embrace people who are lesbian, gay, bisexual, or transgender. But the business world has a long way to go.”75 U.S. federal law does not prohibit discrimination against employees based on sexual orientation, though 29 states and more than 160 municipalities do. For states and municipalities that protect against discrimination based on sexual orientation, roughly as many claims are filed for sexual orientation discrimination as for sex and race discrimination.76 Some other countries are more progressive: for instance, Australia has laws against discriminating on the basis of sexual preference, and the United Kingdom has similar laws regard- ing sexual orientation.77 However, the distinctions in these laws may not be broad enough—researchers have acknowledged a new acronym, QUILTBAG, to describe individuals who are queer/questioning, undecided, intersex, les- bian, transgender, bisexual, asexual, or gay.78 As a first step in the United States, the federal government has prohibited discrimination against government employees based on sexual orientation. The EEOC recently held that sex-stereotyping against lesbian, gay, and bisexual indi- viduals represents gender discrimination enforceable under the Civil Rights Act of 1964.79 Also, pending federal legislation against discrimination based on sex- ual orientation—the Employment Non-Discrimination Act (ENDA)—passed the Senate but is not yet law.80 Even in the absence of federal legislation, many organizations have imple- mented policies and procedures that cover sexual orientation. IBM, once famous for requiring all employees to wear white shirts and ties, has changed

94 PART 2 The Individual its ultra-conservative environment. Former vice president Ted Childs said, “IBM ensures that people who are gay, lesbian, bisexual or transgender feel safe, wel- comed and valued within the global walls of our business…. The contributions that are made by [gay and transgender] IBMers accrue directly to our bottom line and ensure the success of our business.”81 IBM is not alone. Surveys indicate that more than 90 percent of the Fortune 500 have policies that cover sexual orientation. As for gender identity, compa- nies are increasingly adopting policies to govern the way their organizations treat transgender employees. In 2001, only eight companies in the Fortune 500 had policies on gender identity. That number is now more than 250. However, among the Fortune 1,000, some noteworthy companies do not cur- rently have domestic-partner benefits or nondiscrimination clauses for LGBT employees, including ExxonMobil, currently number 2 in the Fortune rankings is it okay to be gay at work? Career oBjectives I’m gay, but no one at my workplace urged to be open with peers and only on what you think are your ethi- knows it. How much should I be will- employees. As Ernst & Young global cal responsibilities, but also on your ing to tell? I want to be sure to have vice chairperson Beth Brooke said context—where you work, the culture of a shot at the big positions in the firm. about her decades of staying clos- your organization, and the support of the eted, the pressure to be “authentic” people within it. Thankfully, globaliza- — Ryan adds stress if you are keeping your tion is ensuring that the world becomes gay status a secret. increasingly accepting and fair. Dear Ryan: • Weigh your options. The word from Unfortunately, you are right to be con- people at the top who are gay (some Good luck in your career! cerned. Here are some suggestions: who have come out and others who have not) is mixed. Brooke said, Sources: M. D. Birtel, “’Treating’ Prejudice: • Look for an inclusive company cul- “Life really did get better” after she An Exposure-Therapy Approach to Reduc- ture. Apple CEO Tim Cook said, “I’ve announced her status in a company- ing Negative Reactions Toward Stigmatized had the good fortune to work at a sponsored video. Mark Stephanz, a Groups,” Psychological Science (November company that loves creativity and in- vice chairman at Bank of America 2012): 1379–86; L. Cooper and J. Raspanti, novation and knows it can only flour- Merrill Lynch, agreed, remarking “The Cost of the Closet and the Rewards of ish when you embrace people’s dif- that “most people still deal with you Inclusion,” Human Rights Campaign report ferences. Not everyone is so lucky.” the same way they always do.” Yet (May 2014), http://hrc-assets.s3-website- Recent research has focused on Deena Fidas, deputy director for the us-east-1.amazonaws.com//files/assets/ discovering new methods to coun- largest LGBT civil rights group in the resources/Cost_of_the_Closet_May2014. teract a discrimination culture in the United States, reported that being pdf; N. Rumens and J. Broomfield, “Gay Men United States, the United Kingdom, gay in the workplace is still “far from in the Police: Identity Disclosure and Man- and Australia. being a ‘nonissue’.” agement Issues,” Human Resource Man- • Be aware of international and na- agement Journal (July 2012): 283–98; and • Choose your moral ground. Do you tional laws. Sadly, some nations and A. M Ryan and J. L. Wessel, “Sexual Orien- feel you have a responsibility to states are intolerant. You will need tation Harassment in the Workplace: When “come out” to help effect social to study the laws to be sure you will Do Observers Intervene?” Journal of Orga- change? Do you have a right to keep be safe from repercussions when nizational Behavior (May 2012): 488–509. your private life private? The balance you reveal your status. is a private decision. A recent study The opinions provided here are of the manag- by the U.S. Human Rights Campaign So, think about your decision from ers and authors only and do not necessar- indicated that only half of LGBT em- both an ethical and a self-interested ily reflect those of their organizations. The ployees nationwide disclose their point of view. Your timing depends not authors or managers are not responsible for status. any errors or omissions, or for the results ob- tained from the use of this information. In no • Consider your future in top manage- event will the authors or managers, or their ment. Corporate-level leaders are related partnerships or corporations thereof, be liable to you or anyone else for any deci- sion made or action taken in reliance on the opinions provided here.

Diversity in Organizations CHAPTER 2 95 of the largest U.S. companies.82 Some companies claim they do not need to provide LGBT benefits for religious reasons. Recently, the U.S. Supreme Court allowed that Hobby Lobby, a retail arts and crafts chain, does not need to pro- vide contraception insurance coverage due to the religious objections of its founding family, and many fear this ruling will pave the way for overt LGBT discrimination by organizations.83 Moreover, some organizations that claim to be inclusive don’t live up to the claim. For example, a recent study of five social cooperatives in Italy indicated that these so-called inclusive organizations actu- ally expect individuals to remain quiet about their status.84 Thus, while times have certainly changed, sexual orientation and gender identity remain individual differences that organizations must address in elimi- nating discrimination and promoting diversity. Cultural identity We have seen that people sometimes define themselves in terms of race and eth- nicity. Many people carry a strong cultural identity as well, a link with the culture of family ancestry or youth that lasts a lifetime, no matter where the individual may live in the world. People choose their cultural identity, and they also choose how closely they observe the norms of that culture. Cultural norms influence the workplace, sometimes resulting in clashes. Organizations must adapt. Workplace practices that coincided with the norms of a person’s cultural identity were commonplace years ago, when societies were less mobile. People looked for work near familial homes and organizations established holidays, observances, practices, and customs that suited the majority. Organizations were generally not expected to accommodate each individual’s preferences. Thanks to global integration and changing labor markets, today’s organiza- tions do well to understand and respect the cultural identities of their employ- ees, both as groups and as individuals. A U.S. company looking to do business in, say, Latin America, needs to understand that employees in those cultures expect long summer holidays. A company that requires employees to work dur- ing this culturally established break will meet strong resistance. An organization seeking to be sensitive to the cultural identities of its employees should look beyond accommodating its majority groups and instead create as much of an individualized approach to practices and norms as pos- sible. Often, managers can provide the bridge of workplace flexibility to meet both organizational goals and individual needs. Watch It! If your professor has assigned this, go to the assignments section of mymanagementlab.com to complete the video exercise titled Verizon: Diversity. 2-5 Demonstrate the relevance Ability of intellectual and physical abilities to oB. Contrary to what we were taught in grade school, we weren’t all created equal in our abilities. For example, regardless of how motivated you are, you may not be able to act as well as Jennifer Lawrence, play basketball as well as LeBron James, or write as well as Stephen King. Of course, all of us have strengths and weaknesses that make us relatively superior or inferior to others in performing certain tasks or activities. From management’s standpoint, the challenge is to understand the differences to increase the likelihood that a given employee will perform the job well.

96 PART 2 The Individual ability an individual’s capacity to perform What does ability mean? As we use the term, ability is an individual’s current the various tasks in a job. capacity to perform the various tasks in a job. Overall abilities are essentially made up of two sets of factors: intellectual and physical. intellectual abilities The capacity to do mental activities—thinking, reasoning, and intellectual abilities problem solving. Intellectual abilities are abilities needed to perform mental activities—think- general mental ability (GMa) an ing, reasoning, and problem solving. Most societies place a high value on intel- overall factor of intelligence, as suggested by ligence, and for good reason. Smart people generally earn more money and the positive correlations among specific intel- attain higher levels of education. They are also more likely to emerge as leaders lectual ability dimensions. of groups. However, assessing and measuring intellectual ability are not always simple. People aren’t consistently capable of correctly assessing their own cogni- tive ability.85 IQ tests are designed to ascertain a person’s general intellectual abilities, but the origins, influence factors, and testing of intelligence quotient (IQ) are controversial.86 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 firms that produce these tests don’t claim they as- sess intelligence, but experts know they do.87 The seven most frequently cited dimensions making up intellectual abili- ties are number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization, and memory.88 Exhibit 2-2 describes these dimensions. Intelligence dimensions are positively correlated, so if you score high on verbal comprehension, for example, you’re more likely to also score high on spatial visualization. The correlations aren’t perfect, meaning people do have specific abilities that predict important work-related outcomes when considered individually.89 However, they are high enough that researchers also recognize a general factor of intelligence, general mental ability (GMA). Evidence supports the idea that the structures and measures of intellectual abilities generalize across cultures. Someone in Venezuela or Sudan, for instance, does not have a different set of mental abilities than a U.S. or Czech individual. There is some evidence that IQ scores vary to some degree across Exhibit 2-2 Dimensions of intellectual ability Dimension Description Job Example Number aptitude Accountant: Computing the sales tax on a set of items Verbal comprehension Ability to do speedy and accurate Plant manager: Following corporate policies on hiring arithmetic Perceptual speed Fire investigator: Identifying clues to support a charge of arson Ability to understand what is read Inductive reasoning or heard and the relationship of Market researcher: Forecasting demand for a product in the words to each other next time period Deductive reasoning Supervisor: Choosing between two different suggestions Spatial visualization Ability to identify visual similarities offered by employees and differences quickly and Interior decorator: Redecorating an office Memory accurately Salesperson: Remembering the names of customers Ability to identify a logical sequence in a problem and then solve the problem Ability to use logic and assess the implications of an argument Ability to imagine how an object would look if its position in space were changed Ability to retain and recall past experiences

Diversity in Organizations CHAPTER 2 97 physical abilities The capacity to cultures, but those differences become much smaller when we take into do tasks that demand stamina, dexterity, account educational and economic differences.90 strength, and similar characteristics. Jobs differ in the demands they place on intellectual abilities. Research con- sistently indicates a correspondence between cognitive ability and task perfor- mance.91 Where employee tasks are highly routine and there are few or no opportunities to exercise discretion, a high IQ is not as important to perform- ing well. However, that does not mean people with high IQs cannot have an impact on traditionally less complex jobs. It might surprise you that the intelligence test most widely used in hiring decisions takes only 12 minutes to complete. It’s the Wonderlic Cognitive Ability Test. There are different forms of the test, but each has 50 questions and the same general construct. Here are two questions to try: • When rope is selling at $0.10 a foot, how many feet can you buy for $0.60? • Assume the first two statements are true. Is the final one: 1. True. 2. False. 3. Not certain. a. The boy plays baseball. b. All baseball players wear hats. c. The boy wears a hat. The Wonderlic measures both speed (almost nobody has time to answer every question) and power (the questions get harder as you go along), so the average score is quite low—about 21 of 50. Because the Wonderlic is able to provide valid information cheaply (for $5 to $10 per applicant), many organi- zations use it in hiring decisions, including Publix supermarkets, Manpower staffing systems, British Petroleum (BP), and Dish satellite systems.92 Most of these companies don’t give up other hiring tools, such as application forms or interviews. Rather, they add the Wonderlic for its ability to provide valid data on applicants’ intelligence levels. While intelligence is a big help in performing a job well, it doesn’t make people happier or more satisfied with their jobs. Why not? Although intelligent people perform better and tend to have more interesting jobs, they are also more critical when evaluating their job conditions. Thus, smart people have it better, but they also expect more.93 physical abilities Though the changing nature of work suggests intellectual abilities are increas- ingly important for many jobs, physical abilities have been and will remain valu- able. Research on hundreds of jobs has identified nine basic abilities needed in the performance of physical tasks.94 These are described in Exhibit 2-3. High employee performance is likely to be achieved when the extent to which a job requires each of the nine abilities matches the abilities of employees in that job. In sum, organizations are increasingly aware that an optimally productive workforce includes all types of people and does not automatically exclude any- one on the basis of personal characteristics. The potential benefits of diversity are enormous for forward-thinking managers. For example, a pilot program of software company SAP in Germany, India, and Ireland has found that employ- ees with autism perform excellently in precision-oriented tasks like debugging software.95 Of course, integrating diverse people into an optimally productive workforce takes skill. We will discuss how to bring the talents of a diverse work- force together in the next section.