Organization Behaviour: Emerging Knowledge and Practice for the Real World.(Textbook Summary) Essay

Organizational Behavior and Design Chapter 2 – Individual Behavior, Values & Personality MARS Model of Individual Behavior & Results (Pg 34) – Employee engagement covers all four MARS driven indv behavior and results – M (Motivation), A (Ability), R (Role Perceptions) and S (Situational Factors) have combined effect on individual performance o If any factor weakens, employee performance will decrease – [1] Personality, [2] values, [3] individual perceptions and learning, [4] emotions and attitudes and [5] stress influence M, A, R and S o [1] Personality and [2] values are most stable characteristics o [4] Emotions and attitudes and [5] stress are most fluid characteristics o [3] Individual perceptions and learning lie somewhere between – Employee Motivation (Forces within person affecting [1] direction, [2] intensity and [3] persistence of voluntary behavior) o Direction refers to fact that motivation is goal-oriented, not random o Intensity is amount of effort allocated to goal o Persistence refers to continuing effort for certain amount of time – Ability (Both [1] natural aptitudes and [2] learned capabilities required to successfully complete task) o Aptitudes are natural talents helping employees learn specific tasks more quickly and perform them better eg being able to manipulate small objects better o Learned capabilities refer to skills and knowledge acquired. Physical and mental skills possessed ot required for later use. o Employee Competencies (Skills, knowledge, aptitudes and other characteristics of people leading to superior performance) ? Problem 1 – Disagreement whether competencies should include personal values and personality traits ? Problem 2 – Some companies describe competencies so broadly that they are difficult to measure or understand ?

Problem 3 – Most firms try to identify single cluster of competencies, but researchers increasingly believe alternative combinations of competencies may be equally successful o Person-Job Matching ? Method 1 – Select applicants whose existing competencies best fit required tasks (Compare their requirements with the job unit) ? Method 2 – Provide training so employees develop required skills and knowledge ? Method 3 – Redesign job so employees are only given tasks within capabilities – Role Perceptions (Possesses RP in 3 ways: [1] understands the specific tasks assigned, [2] understand the relative importance of the task and [3] understands preferred behaviors to accomplish those tasks) o Organizations improve role perceptions by [1] nsuring clear job descriptions, [2] ongoing coaching and [3] showing how goals relate of organizational goals o Employees clarify role perceptions by [1] working together over time and [2] receiving frequent and meaningful performance feedback o Results: ore engage to their work because they know where to direct their effort 1 Organizational Behavior and Design Situational Factors o Situational factors are factors beyond employee’s and organization’s control that constrain or facilitate their behavior and performance o Beyond control/External situations: [1] consumer preferences and [2] economic conditions o Controlled by people in organization are [1] time, [2] people, [3] budget and [4] physical work facilities o Corporate leaders need to carefully arrange these so employees can achieve max potential

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Types of Individual Behavior in Organizations (Pg 38) – Task Performance (Goal-directed behaviors under individual’s control that support organizational objectives) o Include [1] physical behaviors and [2] mental processes leading to behaviors – Exhibiting Organizational Citizenship (Behaviors that extend beyond employee’s normal job duties) o Include [1] helping others without selfish intent, [2] being actively involved in organizational activities, [3] avoiding unnecessary conflicts, [4] performing tasks beyond normal role requirements and [5] gracefully tolerating impositions – Counterproductive Work Behaviors (CWBs) (Voluntary behaviors that are potentially harmful to organization’s effectiveness) o [1] Abuse of others, e. g. nsults and nasty comments, [2] threats, e. g. threatening harm, [3] work avoidance, e. g. tardiness, [4] work sabotage, e. g. doing work incorrectly, and [5] overt acts, e. g. theft o Include [1] acts of commission, i. e. deliberately harming organization and employees, and [2] acts of omission, i. e. ignoring or avoiding actions benefiting colleagues and organization o Factors include [1] stress (Chapter 7), [2] perceptions of organizational injustice (Chapter 5) and [3] personality traits, e. g. Machiavellianism (Chapter 12) – Joining & Staying with the Organization o Qualified people have to join and stay with organization for above performancerelated behaviors, e. g. 1] task performance, [2] organizational citizenship and [3] lack of CWBs, to occur o Keeping Talented Employees ? Much of organization’s intellectual capital is knowledge employees carry around in their heads ? Main cause of turnover is low job satisfaction (person’s evaluation of job and work context) and specific “shock events” need to be considered – Maintaining Work Attendance o People have to show up for work at scheduled times to make products and provide services o Causes of absenteeism are [1] situational factors, e. g. severe weather or car breakdown, [2] factors affecting ability, e. g. illness of injury, [3] lack of motivation, e. g. job dissatisfaction or work-related stress and [4] generous sick leave 2

Organizational Behavior and Design Values in the Workplace (Pg 45) – Values (Stable, long-lasting beliefs about what is important in variety of situations, that guide decisions and actions) – Each person’s unique value system (Individual’s values arranged in hierarchy of preferences) is developed and reinforced through socialization from parents, religious institutions, friends, personal experiences and society in which one lives – Types of Values o Bipolar Dimension 1 ? Openness to Change ? Self-Direction, i. e. independent thought and action ? Stimulation, i. e. excitement and challenge ? Conservation ? Conformity, i. e. adherence to social norms and expectations ? Security, i. e. safety and stability ? Tradition, i. e. moderation and preservation of status quo o Bipolar Dimension 2 ? Self-Enhancement ? Achievement, i. e. pursuit of personal success ? Power, i. e. dominance over others ? Hedonism ? Self-Transcendence ? Benevolence, i. e. concern for others in one’s life ? Universalism, i. e. oncern for welfare of all people and nature o Espoused values need to be distinguished from enacted values – Values Congruence (Two or more entities having similar value systems) o Benefits of values congruence are [1] decisions are compatible with organization’s goals, [2] higher job satisfaction and organizational commitment and [3] lower stress and turnover o Benefits of values incongruence are [1] different perspectives on issues, which may lead to better decision making, [2] thinking is sharpened about definition of problem and rationale for preferred choices and [3] creativity, organizational flexibility and business ethics o Compatibility of rganization’s values with prevailing values of society in which it conducts business is important due to [1] information technology and [2] globalization Values across Cultures (Pg 49) – Individualism & Collectivism o Individualism (Extent to which person values independence and personal uniqueness) relates most closely to self-direction dimension o Collectivism (Extent to which people value duty to [1] groups to which they belong and [2] group harmony) is located within conservation range of values o Individualism and collectivism are actually unrelated, not opposites – Other Cross-Cultural Values o Power Distance (Extent to which people accept unequal distribution of power in society) 3

Organizational Behavior and Design In high power distance cultures, employees are comfortable [1] receiving commands from superiors and [2] resolving conflicts through formal rules and authority ? In low power distance cultures, employees prefer [1] being involved in decisions and [2] resolving conflicts through personal networks and coalitions o Uncertainty Avoidance (Degree to which people tolerate ambiguity or feel threatened by ambiguity and uncertainty) ? In high uncertainty avoidance cultures, employees [1] value structured situations where rules of conduct and decision making are clearly documented and [2] prefer direct rather than indirect or ambiguous communications o Achievement versus Nurturing Orientation ? In achievement-oriented cultures, people value [1] assertiveness, [2] competitiveness and [3] materialism ?

People [1] appreciate tough people and [2] favor acquisition of money and material goods ? In nurturing-oriented cultures, people emphasize [1] relationships and [2] well-being of others ? People focus on [1] human interaction and [2] caring o Long-Term versus Short-Term Orientation ? In long-term-oriented cultures, people anchor thoughts more in future ? People value [1] thrift, [2] savings and [3] persistence ? In short-term-oriented cultures, people emphasize more on past and present ? People respect [1] tradition and [2] fulfilling social obligations All cross-cultural values research assumes everyone in a society has similar cultural values However, this is not so in culturally diverse societies, e. g. United States ? –

Ethical Values & Behavior (Pg 53) – Ethics (Study of moral principles or values determining whether [1] actions are right or wrong and [2] outcomes are good or bad) – Employees and customers value companies and leaders with ethical values – Four Ethical Principles o Utilitarianism (Moral principle stating decision makers should seek greatest good for greatest number of people when choosing among alternatives) ? Problem 1 – Impossible to evaluate benefits or costs of many decisions, particularly when many stakeholders have wide-ranging needs and values ? Problem 2 – Most people are uncomfortable engaging in seemingly unethical behaviors to attain ethical results o Individual Rights (Moral principle stating every person is entitled to legal and human rights) ?

Problem – Certain individual rights may conflict with others o Distributive Justice (Moral principle stating similar people should be rewarded similarly and dissimilar people should be rewarded differently in proportion to differences) ? Problem – Difficult to agree on who is “similar” and what factors are “relevant” 4 Organizational Behavior and Design o Care (Moral principle stating people should benefit those with whom they have special relationships) ? Problem – Can degenerate into unjust favoritism, conflicting with [1] utilitarianism and [2] distributive justice Moral Intensity, Ethical Sensitivity & Situational Influences o Moral Intensity (Degree to which issue demands application of ethical principles) ? Higher the moral intensity, the more ethical principles should provide guidance to resolve issue ?

Factors influencing moral intensity are extent to which [1] issue clearly produces good or bad consequences, [2] others in society think issue is good or bad, [3] how quickly issue affects people, [4] how close decision maker feels to issue and [5] how much control person has over issue o Ethical Sensitivity (Personal characteristic enabling people to [1] recognize presence and [2] determine relative importance of ethical issue) ? Ethically sensitive people are not necessarily more ethical ? Ethically sensitive people tend to have [1] higher empathy and [2] more information about specific situation o Situation in which Unethical Conduct Occurs ? People need to recognize ituational factors influencing wrongdoing so that organizations can correct these problems in future Cultural Differences in Business Ethics o Corporate decision makers face larger set of ethical dilemmas when entering global marketplace o Fundamental ethical principles are similar across cultures, but people interpret moral intensity of specific situations differently in their situation Supporting Ethical Behavior o Strategy 1 – Ethical codes of conduct ? [1] Establish organization’s ethical standards and [2] signal to employees that company takes ethical conduct seriously o Strategy 2 – Provide ethics training ? [1] Provide details about company’s ethics code, [2] direct employees to online primers on ethics and ethical challenges and [3] analyze case studies involving ethical conduct o Strategy 3 – Ethics officers ? [1] Distribute company’s ethics code, [2] educate staff and [3] answer questions about ethical dilemmas o Strategy 4 – Highly confidential and active ombuds office ? 1] Investigates and [2] acts on information about wrongdoing o Strategy 5 – Leaders demonstrate authentic ethical conduct ? [1] Focus on organization’s shared vision in culture of openness and dialogue – – – Personality in Organizations (Pg 57) – Personality (Relatively [1] stable pattern of behaviors and [2] consistent internal states, explaining person’s behavioral tendencies) – Personality traits are less evident in situations where [1] social norms, [2] reward systems and [3] other conditions constrain behavior – The Origins of Personality 5 Organizational Behavior and Design o Personality is based on [1] genetic code, [2] environment, e. g. volve through socialization and life experiences or [3] both Personality & Organizational Behavior o Certain personality traits predict certain [1] work-related behaviors, [2] stress reactions and [3] emotions fairly well under certain conditions o However, personality is still considered relatively poor selection test The Big Five Personality Dimensions Dimension Conscientiousness Agreeableness Neuroticism ? People scoring “high” tend to be more: Careful, dependable, self-disciplined – – ? Courteous, good-natured, emphatic, caring ? Anxious, hostile, depressed, self-conscious Sensitive, flexible, creative, curious Outgoing, talkative, sociable, assertive Openness to Experience ? Extroversion* ? Note: Introverts do not necessarily lack social skills o These personality dimensions affect [1] work-related behavior and [2] job performance Myers-Briggs Type Indicator (MBTI) (Personality inventory designed to identify individuals’ basic preferences for perceiving and processing information) o Dimension 1 – Extroversion/Introversion ? SEE ABOVE o Dimension 2 – Sensing/Intuition ? Sensing types use [1] organized structure to acquire factual and preferably quantitative details ? Capable of synthesizing large amounts of seemingly random information to form quick conclusions ? Intuitive types rely more on [1] subjective evidence, [2] intuition and [3] sheer inspiration o Dimension 3 – Thinking/Feeling ?

Thinking types rely on [1] rational cause-effect logic and [2] scientific method to make decisions ? Weigh evidence objectively and unemotionally ? Feeling types consider [1] how their choices affect others ? Weigh options against personal values o Dimension 4 – Judging/Perceiving ? Judging types [1] enjoy control of decision making and [2] want to resolve problems quickly ? Perceiving types [1] are more flexible, [2] like to spontaneously adapt to events as they unfold and [3] want to keep options open o These 4 pairs of traits give 16 distinct types and each has strengths and weaknesses 6 Organizational Behavior and Design o Effectiveness of the MBTI ?

MBTI predicts preferences for [1] information processing in decision making and [2] particular occupations ? Thus, MBTI should be used in improving self-awareness for career development and mutual understanding ? However, MBTI is less able to predict job performance ? Thus, MBTI should not be used in selecting job applicants Other Personality Traits o Locus of Control (Extent to which people believe events are within their control) ? Individuals having internal locus of control feel they are very much in charge of own destiny ? Internals tend to be [1] more successful in careers, [2] earn more money, [3] more satisfied with jobs, [4] cope better in stressful situations and [5] more motivated by performance-based reward systems ?

Individuals having external locus of control think events in their life are due mainly to fate/luck or powerful others o Self-Monitoring (Level of [1] sensitivity to expressive behavior of others and [2] ability to adapt appropriately to situational cues) ? High self-monitors adjust behavior easily, showing little stability in other underlying personality traits ? Tend to be [1] better at social networking, [2] interpersonal conversations, [3] leading people, [4] promoted and [5] receive better jobs elsewhere ? Low self-monitors reveal moods and personal characteristics easily Personality & Vocational Choice o Career is complex alignment of [1] personality, [2] values and [3] competencies with [1] work requirements and [2] work environment characteristics – – 7

Organizational Behavior and Design o Holland’s Six Types Holland Type Realistic Personality Traits Practical, shy, materialistic, stable Work Environment Characteristics Work with hands, machines or tools; focus on tangible results Work involves discovering, collecting and analyzing; solving problems Work involves creation of new products or ideas, typically in unstructured setting Work involves serving or helping others; working in teams Work involves leading others; achieving goals through others in results-oriented setting Work involves systematic manipulation of data or information Sample Occupations Assembly worker; dry cleaner, mechanical engineer Biologist, dentist, systems analyst Journalist, architect, advertising executive Social worker, nurse, teacher, counselor Salesperson, stockbroker, politician Accountant, banker, administrator

Analytic, introverted, Investigative reserved, curious, precise, independent Artistic Creative, impulsive, idealistic, intuitive, emotional Sociable, outgoing, conscientious, need for affiliation Confident, assertive, energetic, need for power Dependable, disciplined, orderly, practical, efficient Social Enterprising Conventional o Practical Implications of Holland’s Theory ? Problems are [1] represent only Big Five dimensions of openness and extroversion, [2] Holland’s hexagon does not represent true relationships among six types, i. e. some opposing categories are less opposite than others and [3] generalizing for other cultures 8 Organizational Behavior and Design Chapter 3 – Perception & Learning in Organizations Perception (Receiving information about and making sense of world around us)

The Perceptual Process (Pg 76) – Perceptual process is imperfect – [1] Environmental stimuli are received through senses, [2] most stimuli are screened out and rest are organized and interpreted and [3] resulting perceptions influence emotions and behavior – Selective Attention (Filtering information received by senses) o Influenced by [1] size, intensity, motion, repetition and novelty of target, including people, and [2] context in which target is perceived o Characteristics of the Perceiver ? Also affected by characteristics of perceiver ? Tend to remember information consistent with our values and attitudes and ignore information that is inconsistent ? Emotions screen out information threatening our beliefs and values, i. e. perceptual defense, to [1] protect self-esteem and [2] minimize stress in long run ? Also affected by expectations ?

Unique events are excluded from our thoughts, so experts urge us to develop splatter vision, i. e. take everything in as whole while focusing on nothing – Perceptual Organization & Interpretation o Perceptual grouping, i. e. rely on perceptual grouping principles to organize people and objects into recognizable and manageable patterns or categories ? Occurs when [1] making assumptions about people based on their similarity or proximity to others and [2] seeing trends in otherwise ambiguous information ? Helps to make sense of workplace ? However, [1] inhibits creativity and [2] open-mindedness ? Influenced by mental models o Mental Models (Broad worldviews or “theories in-use” people rely on to guide perceptions and behaviors) ?

Minimize perceptual problems with mental models by [1] constantly questioning them and [2] working with people from diverse backgrounds Social Identity Theory (Pg 78) – Social Identity Theory (How we perceive world depends on how we define ourselves in terms of our membership in various social groups) – People maintain [1] social identity by defining themselves in terms of groups they belong and have emotional attachment and [2] personal identity by characteristics making them unique and distinct from people in any group – People adopt degrees of personal and social identity depending on situation o If people in group are similar, personal identity will dominate self-concept o If people in group are different, social identity will dominate self-perception 9 Organizational Behavior and Design Groups are emphasized in our social identity if [1] our membership in group is obvious and [2] status of group in society is high Perceiving Others Through Social Identity o Social identity is comparative process, i. e. define ourselves in terms of differences with people belonging to other groups ? To simplify process, we homogenize people within social categories ? To support self-esteem, we identify people with groups having negative categories

Stereotyping in Organizational Settings (Pg 80) – Stereotyping (Assigning traits to people based on their membership in social category) – [1] Personal experiences shape stereotypes, but [2] we mostly adopt stereotypes provided within our culture – Based on easily observable information – Why Stereotyping Occurs o Reason 1 – Absorbing unique constellations of attributes about each person is huge cognitive challenge ? Thus, categorical thinking, i. e. grouping people and objects into preconceived categories stored in our long-term memory o Reason 2 – Strong need to understand and anticipate how others will behave o Reason 3 – Enhances our self-perception and social identity ?

By [1] contrasting our social groups with other groups and [2] emphasizing negative aspects of contrasting groups – Problems with Stereotyping o Problem 1 – Do not accurately describe every person o Problem 2 – Cause us to ignore or misinterpret information inconsistent with stereotype o Problem 3 – Foundation for prejudice and intentional or unintentional (systemic) discrimination ? Prejudice (Unfounded negative emotions and attitudes toward people belonging to stereotyped group) ? Unintentional (systemic) discrimination, i. e. decision makers rely on stereotypes to establish notions of “ideal” person, limits opportunities of qualified employees and job applicants – Minimizing Stereotyping Bias o Might not be able to prevent activation of stereotypes, but can minimize application of stereotypic information o Diversity Awareness Training ? Educate employees about organizational benefits of diversity and problems with stereotyping ? [1] Increases sensitivity to equality and [2] motivates to block inaccurate perceptions ?

However, potentially reinforce rather than weaken stereotyping o Meaningful Interaction ? Have people interact with each other and is based on contact hypothesis (more we interact with someone, less we rely on stereotypes to understand that person) 10 Organizational Behavior and Design [1] Participants must have close and frequent interaction working toward shared goal where they need to rely on each other and [2] everyone must have equal status and is engaged in meaningful task ? Develop more accurate perceptions ? However, usually does not change, but just minimizes application of stereotypes o Decision-Making Accountability ? Hold decision makers accountable for information relied on and criteria used to make choices ?

Encourages active information processing process Attribution Theory (Pg 85) – Attribution Process (Deciding whether observed behavior or event is caused largely by internal or external factors) Internal Attribution Behavior is attributed to internal factors, e. g. individual’s ability or motivation ? Frequently (High Consistency) How often did person act this way in past? Seldom (Low Consistency) Frequently (Low Distinctiveness) How often does person act this way in other settings? Seldom (High Distinctiveness) Seldom (Low Consensus) How often do other people act this way in similar situations? Frequently (High Consensus) External Attribution Behavior is attributed to external factors, e. g. ack of resources, other people, luck Attributions influence most, if not all, voluntary behaviors and decisions Attribution Errors o Fundamental Attribution Error (Tendency to attribute behavior of other people more to internal than external factors) ? Can lead to disagreement over degree to which employees should be held responsible o Self-Serving Bias (Tendency to attribute own favorable outcomes to internal factors and own failures to external factors) o Attributions vary from person to another based on personal values and experiences Self-Fulfilling Prophecy (Pg 87) – Self-Fulfilling Prophecy (Expectations about another person cause that person to act consistently with those expectations) – Stage 1 of Cycle – Supervisor forms expectations about employee 11 Organizational Behavior and Design o Sometimes inaccurate because first mpressions are usually formed from limited information Stage 2 of Cycle – Expectations influence supervisor’s treatment of employees o High-expectancy employees receive [1] more emotional support through nonverbal cues, [2] more frequent and valuable feedback and reinforcement, [3] more challenging goals, [4] better training and [5] more opportunities to demonstrate performance Stage 3 of Cycle – Supervisor’s behaviors have two effects on employee o [1] High-expectancy employee learns more skills and knowledge and [2] is more selfconfident, resulting in higher motivation and willingness to set more challenging goals Stage 4 of Cycle – High-expectancy employees demonstrate desired behaviors and better performance Self-Fulfilling Prophecies in Practice o Employees tend to be victims of negative self-fulfilling prophecy, so leaders need to develop positive self-fulfilling prophecies ? Approach 1 – Develop learning orientation (learning process, i. e. opportunities to acquire knowledge through experience and experimentation) ? Approach 2 – Apply appropriate leadership behaviors to all employees (Chapter 14) ? Approach 3 – Increase employees’ self-efficacy (person’s belief of having ability, motivation and resources to complete task successfully) – – –

Other Perceptual Errors (Pg 89) – Primacy Effect (Quickly form opinion of people based on first information received about them) o Occurs because [1] we need to make sense of world around us and [2] easier on brain cells than remembering every detail about person o Difficult to change because we tend to [1] select subsequent information that supports first impression and [2] screen out opposing information – Recency Effect (Most recent information dominates one’s perception of others) o Stronger than primacy effect when there is long delay between first impression and evaluation o Found in performance appraisals – Halo Effect (General impression, based on one prominent characteristic, colors perception of other characteristics) o

Occurs when [1] concrete information about perceived target is missing or [2] we are not sufficiently motivated to search for it o Distorts judgments, resulting in poor decision making – Projection Bias (Individual believes other people have same beliefs and behaviors that we do) o Defense mechanism to protect self-esteem Improving Perceptions (Pg 91) – Improving Perceptions Through Empathy (Person’s understanding and sensitivity to feelings, thoughts and situation of others) o [1] Cognitive component, i. e. perspective taking, is intellectual understanding of another’s situational and individual circumstances and [2] emotional component is experiencing another’s feelings 12 Organizational Behavior and Design o Empathy comes naturally to some people, but others can develop empathy skills by [1] receiving intensive feedback through coaching and [2] taking on others’ roles in workplace Know Yourself: Applying the Johari Window Feedback ? Known to Self Disclosure ? – Unknown to Self Blind Area Known to Others Open Area Unknown to Hidden Area Unknown Area Others Objective is to increase size of open area ? By reducing hidden area through disclosure, i. e. informing others of your beliefs, feelings and experiences ? By reducing blind area through feedback, i. e. feedback from others about your behaviors Learning in Organizations (Pg 93) – Learning (Relatively permanent change in behavior or behavior tendency resulting from interaction with environment) – [1] Essential for open systems thinking and knowledge management (Chapter 1) and [2] influences individual behavior and performance (Chapter 2) o People acquire skills and knowledge, resulting in competencies to perform tasks more effectively o Learning clarifies role erceptions, resulting in better understand of tasks and relative importance o People learn effort will result in desired performance – Learning Explicit & Tacit Knowledge o Explicit knowledge is [1] organized and [2] can be communicated from one person to another o Tacit knowledge is [1] action-oriented, [2] known below level of consciousness, [3] acquired through observation and direct experience Behavior Modification: Learning Through Reinforcement (Pg 94) – Behavior modification takes rather extreme view that learning is completely dependent on environment – A-B-C’s of Behavior Modification o Objective is change behavior (B) by managing antecedents (A) and consequences (C) o Antecedents are events preceding behavior, informing employees certain behaviors will have particular consequences o Consequences are events following particular behavior, influencing future occurrence 13

Organizational Behavior and Design Contingencies of Reinforcement Consequence is introduced Behavior increases or is maintained Positive Reinforcement E. g. You receive bonus after successfully completing important project No consequence Consequence is removed Negative Reinforcement E. g. Supervisor stops criticizing you when your job performance improves Behavior decreases Extinction Punishment Punishment E. g. Co-workers no longer E. g. You give up your E. g. You are threatened praise you when you “employee of the month” with demotion or discharge engage in dangerous parking spot to this month’s after treating client badly pranks winner – – To increase or maintain desired behaviors, positive reinforcement is preferred because of fewer adverse consequences o To decrease undesirable behaviors, extinction is preferred because of fewer adverse consequences o However, punishment [1] may be necessary for extreme behaviors and [2] maintains sense of equity Schedules of Reinforcement o Schedule of reinforcer affects learning more than size of reinforcer ? Continuous Reinforcement – Reinforcing every occurrence of desired behavior ? Most effective ? Fixed Interval Schedule – Reinforcement (paycheck) after fixed time period ? Variable Interval Schedule – Reinforcement (promotion) after variable time period ? Fixed Ratio Schedule – Reinforcement after fixed number of behaviors or accomplishments ? Variable Ratio Schedule – Reinforcement after variable number of behaviors or accomplishments ? 1] Low cost because of infrequent rewards and [2] highly resistant to extinction Behavior Modification in Practice o [1] Reduces absenteeism, [2] minimizes accidents and [3] improves task performance o However, [1] more difficult to apply to conceptual activities than to observable behaviors, [2] “reward inflation”, i. e. reinforcer is eventually considered entitlement, [3] variable ratio schedule takes lottery form, conflicting with ethical values of some employees and [4] people can learn through mental processes, e. g. observing others and thinking logically about possible consequences Social Learning Theory: Learning by Observing (Pg 98) – Social learning theory states learning occurs by observing others and then [1] modeling behaviors leading to favorable outcomes and [2] avoiding behaviors leading to punishing consequences – Behavioral Modeling 14

Organizational Behavior and Design o Works best when [1] model is respected and [2] model’s actions are followed by favorable consequences o Valuable form of learning because tacit knowledge and skills are mainly acquired in this way o Behavioral Modeling & Self-Efficacy ? Increases self-efficacy because people gain self-confidence [1] after seeing someone else do it and [2] when environmental cues follow predictable pattern Learning Behavior Consequences o Learn by [1] logically thinking through consequences of actions and [2] observing consequences other people experience Self-Reinforcement o Occurs when employee has control over reinforcer, but does not “take” it until completing self-set goal o Increasingly important because employees are [1] given more control over working lives and [2] less dependent on supervisors to dole out positive reinforcement and punishment – –

Learning Through Experience (Pg 99) – Stage 1 of Cycle – Concrete Experience o Sensory and emotional engagement in some activity – Stage 2 of Cycle – Reflective Observation o Listening, watching, recording and elaborating on experience – Stage 3 of Cycle – Abstract Conceptualization o Develop concepts and integrate observations into logically sound theories – Stage 4 of Cycle – Active Experimentation o Test previous experience, reflection and conceptualization in particular context – Polar opposites are [1] stage 1 and 3 and [2] stage 2 and 4 – All four stages are required to be in proper balance – Experiential Learning in Practice o Works best when there is strong learning orientation, i. e. rganizations encourage employees to appreciate process of individual and team learning, not just performance results o Without learning orientation, mistakes are hidden and problems are more likely to escalate or reemerge later o Action Learning (Variety of experiential learning activities in which employees are involved in “real, complex and stressful problem”, usually in teams, with immediate relevance to company) [1] Involves both tacit and explicit learning, [2] forces employees to diagnose new situations, [3] makes them rethink current work practices and [4] potentially add value to organization in terms of better work process or service 15

Organizational Behavior and Design Chapter 4 – Workplace Emotions & Attitudes [1] Emotions people experience and [2] judgments about work make a difference in organization’s [1] performance, [2] customer loyalty and [3] employee well-being Emotions in the Workplace (Pg 110) – Emotions [1] are brief events or “episodes”, [2] are directed toward someone or something, [3] are experienced both psychologically and physiologically and [4] create a state of readiness – Types of Emotions o Affect Circumplex Model Aroused Astonished Stimulated Distressed Fearful Jittery Enthusiastic Elated Excited Activated Unhappy Sad Gloomy Unpleasant Pleasant Happy Cheerful Delighted Unactivated Bored Tired Drowsy Relaxed Content Calm Quiet Tranquil Still –

Emotions, Attitudes & Behavior o Attitudes (Cluster of beliefs, assessed feelings and behavioral intentions toward object) are [1] judgments, [2] involve logical reasoning and [3] more stable over time ? Beliefs – Established perceptions about attitude object ? Feelings – Positive or negative evaluations of attitude object ? Behavioral Intentions – Motivation to engage in particular behavior with respect to attitude object ? Beliefs determine feelings ? Feelings influence behavioral intentions o Behavioral intentions are better than feelings or beliefs at predicting behavior o However, behavioral intentions only represent motivation to act, not other factors in MARS, e. g. [1] ability, [2] role perceptions and [3] situational factors o Linking Emotions to Attitudes & Behavior ?

Step 1 – Emotional center produces emotional episodes tagged to information ? Step 2 – Rational center processes information with emotional episodes tagged ? Emotional markers shape feelings toward attitude object ? Behavior is also affected by emotions, not just attitudes 16 Organizational Behavior and Design o Cognitive Dissonance (Psychological tension occurring when people perceive inconsistency between beliefs, feelings and behavior) ? Behavior is most difficult to change, so beliefs and feelings are usually changed to reduce inconsistency o Emotions & Personality ? Emotions are also determined by personality, not just experiences ? Positive Affectivity (PA) (Tendency to experience positive emotions) ?

Negative Affectivity (NA) (Tendency to experience negative emotions) Managing Emotions at Work (Pg 116) – Emotional Labor (Effort, planning and control needed to express organizationally desired emotions during interpersonal transactions) – Conditions Requiring Emotional Labor o Jobs require frequent and long durations of voice or face-to-face contact with clients and others o Jobs require employees to display variety and intense emotions o Employees must abide by display rules o Person receiving service is powerful and not personally related o Emotional display norms and values are low – Emotional Dissonance (Conflict between required and true emotions) o Common where [1] employees must display emotions different from true feelings and [2] emotional display rules are highly regulated o Surface acting, i. e. thinking through and acting out behaviors reflecting required emotions and holding back different emotions, [1] is stressful o Deep acting, i. e. hanging emotions to meet job requirements, [1] is less stressful and [2] creates sense of accomplishment if performance is effective – Supporting Emotional Labor o Teach employees subtle behaviors expressing appropriate emotions o Hire employees with natural tendency to display desired emotions – Emotional Intelligence (EI) (Ability to [1] perceive and express emotion, [2] assimilate emotion in thought, [3] understand and reason with emotion and [4] regulate emotion in oneself and others) Self (Personal Competence) Other (Social Competence) Self-Awareness Emotional Self-Awareness Accurate Self-Assessment Self-Confidence Self-Management Emotional Self-Control Transparency Adaptability Achievement Initiative Optimism Social Awareness Empathy Organizational Awareness

Service Relationship Management Inspirational Leadership Influence Developing Others Change Catalyst Conflict Management Building Bonds Teamwork & Collaboration 17 Recognition of emotions Regulation of emotions Organizational Behavior and Design o Each dimension consists of set of emotional competencies that people must possess to fulfill that dimension ? Relationship management is highest level of EI because it requires all other dimensions ? Self-awareness is lowest level of EI because it does not require other dimensions o Most jobs involve social interaction, so employees need emotional intelligence to work effectively in social settings o Improving Emotional Intelligence ?

Training programs may help, but people require [1] personal coaching, [2] plenty of practice, [3] frequent feedback and [4] maturity because EI increases with age Job Satisfaction (Pg 122) – Job Satisfaction (Person’s evaluation of his or her job and work context) is difficult to compare o Reason 1 – Dissatisfied employees are reluctant to reveal feelings so as to avoid admitting to [1] poor job choice and [2] not enjoying life o Reason 2 – Cultural Values – Job Satisfaction & Work Behavior o Exit-Voice-Loyalty-Neglect (EVLN) Model (Four ways employees respond to dissatisfaction) ? Exit – Leaving situation, including [1] searching for other employment, [2] leaving organization and [3] transferring to another work unit ? Linked to specific “shock events”, e. g. [1] conflict episode or [2] important violation of expectations ?

Voice – Any attempt to change dissatisfying situation ? Either [1] constructive or [2] destructive ? Loyalty – Patiently waiting for problem to [1] work itself out or [2] get resolved by others ? Neglect – Includes [1] reducing work effort, [2] paying less attention to quality and [3] increasing absenteeism and lateness o If job prospects are good, employees use exit o If employees identify with organization, they use voice o If conscientiousness is high, employees use voice o Choice of action is also influenced by [1] high or low collectivism and [2] past experience – Job Satisfaction & Performance o Relationship between job satisfaction and performance is moderate, but not stronger ?

Reason 1 – Job satisfaction does not always result in lower job effort, i. e. neglect of EVLN, but can result in [1] exit, [2] voice or [3] loyalty ? Reason 2 – Job performance leads to job satisfaction, not vice versa, but only when performance is linked to valued rewards ? Reason 3 – Some employees have little control over job output 18 Organizational Behavior and Design Job Satisfaction & Customer Satisfaction o Employee-Customer-Profit Chain Model Organizational Practices Employee Satisfaction with ? Job & Company – Less Turnover – Consistent Customer Service ? ? Perceptions of Value – Motivated Staff – Satisfied Customers – Less Customer Turnover – Customer Referrals

Higher Revenue Growth & Profits Organizational Commitment (Pg 126) – Organizational Commitment (Employee’s [1] emotional attachment to, [2] identification with and [3] involvement in organization) – Continuance Commitment (Calculative decision to remain with organization because quitting would be costly) – Consequences of Organizational Commitment o [1] Employees are less likely to quit and be absent, [2] improves customer satisfaction, [3] higher work motivation, [4] higher organizational citizenship and [5] higher job performance o However, [1] limits organization’s opportunity to hire new employees with new knowledge and fresh ideas and [2] results in conformity, undermining creativity and ethical conduct o Consequences of Continuance Commitment ? Reduces turnover ?

However, [1] employees have lower performance, [2] less likely to engage in organizational citizenship behaviors, [3] more likely to use formal grievances when employee-employer relations sour – Building Organizational Commitment o Justice & Support – [1] Fulfill obligations to employees and [2] abide by humanitarian values, e. g. fairness, courtesy, forgiveness and moral integrity o Job Security – [1] Offer enough job security that employees feel some permanence and mutuality in employment relationship o Organizational Comprehension – [1] Use communication processes to keep employees informed about what is happening in company and [2] allow employees to have opportunities to interact with co-workers across organization o Employee Involvement – [1] Allow employees to make decisions guiding organization’s future o Trusting Employees – [1] Put faith in employees and [2] demonstrate trust 19

Organizational Behavior and Design Psychological Contracts (Pg 128) – Psychological Contract (Individual’s beliefs about terms and conditions of reciprocal exchange agreement between that person and another party) o Inherently perceptual, so one person’s understanding of psychological contract may differ from other party’s understanding – Types of Psychological Contracts Contract Transactional Characteristics Contracts Focus Time Frame Stability Scope Tangibility Economic Closed-Ended & Short-Term Static Narrow Well-Defined Relational Contracts Economic & Socioemotional Open-Ended & Indefinite Dynamic Pervasive More Subjective – o Organizational citizenship behaviors are more likely to prevail under relational than transactional contracts Psychological Contracts Across Cultures & Generations o Vary across cultures and groups of employees based on unique cultures and cohort experiences o Vary across generations of employees ? For baby boomers, if you are loyal to company and perform job well, company will be loyal to you by providing job security and managing your career development ?

For Generation-X and Generation-Y, psychological contract is [1] based on employability and [2] weaker with job security 20 Organizational Behavior and Design Chapter 5 – Motivation in the Workplace – Motivation (Forces within person affecting his or her direction, intensity and persistence of voluntary behavior) – Motivating employees has become more challenging o Globalization has changed jobs and has resulted in corporate restructuring and downsizing ? Trust and commitment necessary for employees to exert effort beyond minimum requirements are damaged o Companies flatten hierarchies to reduce costs ? Supervisors are no longer relied on to practice old “command-and-control” methods of motivating employees o Employee needs are changing ?

Companies are not changing quickly enough to address different expectations brought to workplace by younger generations Needs-Based Theories of Motivation (Pg 140) – Unfulfilled needs (Deficiencies energizing or triggering behaviors to satisfy those needs) create a tension, i. e. motivate, making us want to find ways to reduce or satisfy those needs – Needs Hierarchy Theory (Five instinctive needs arranged in hierarchy, whereby people are motivated to fulfill higher need as lower need becomes gratified) o Level 1 – Physiological Needs ? Biological requirements for food, air, water and shelter o Level 2 – Safety Needs ? Need for secure and stable environment and absence of pain, threat or illness o Level 3 – Belongingness ? Need for love, affection and interaction o Level 4 – Esteem ? Self-esteem and social esteem o Level 5 – Self-Actualization ?

Need for self-fulfillment o Behavior is motivated by lowest unsatisfied need at time o Satisfaction-progression process (People become increasingly motivated to fulfill higher need as lower need is gratified) applies o However, [1] individual needs do not cluster neatly around the five categories and [2] gratification of one level does not necessary lead to motivation to satisfy next higher level – ERG Theory (Three instinctive needs arranged in hierarchy, whereby [1] people progress to next higher need when lower need is fulfilled and [2] regress to lower need if unable to fulfill higher need) o Level 1 – Existence ? Physiological and safety needs o Level 2 – Relatedness ? Belongingness needs o Level 3 – Growth ?

Esteem and self-actualization o Behavior is motivated simultaneously by more than one level o Satisfaction-progression process still applies 21 Organizational Behavior and Design o Frustration-regression process (Person unable to satisfy higher need becomes frustrated and regresses to next lower need) is included o [1] Human needs cluster more neatly around the three categories and [2] combined processes of satisfaction-progression and frustration-regression provide more complete explanation of needs changing over time o However, humans may not inherently have same needs hierarchy Innate Human Drive o Four Fundamental Drives ? Drive to Acquire ?

Drive to seek, take, control and retain objects and personal experience ? [1] Foundation of competition, [2] basis of esteem need and [3] insatiable because purpose of motivation is to achieve higher position than others ? Drive to Bond ? Drive to form social relationships and develop mutual caring commitments ? Fundamental ingredient in [1] organizational success and [2] society development because of motivation to cooperate ? Drive to Learn ? Drive to satisfy curiosity, know and understand ourselves and environment ? Fulfills need for [1] personal and [2] social identity (Chapter 3) ? Drive to Defend ? Drive to protect ourselves physically and socially ? Reactive, i. e. triggered by threat ?

Innate drives speed up rational center’s making of conscious choice that motivates behavior because emotional markers created highlight alternative actions to avoid and favor Theory of Learned Needs o People also have secondary needs or drives that are learned and reinforced through childhood learning, parental styles and social norms o Need for Achievement (nAch) (People wanting to accomplish reasonably challenging goals through own efforts and desiring ambiguous feedback regarding success) ? Successful entrepreneurs tend to have high nAch because they establish challenging goals for themselves and thrive on competition ? Corporate and team leaders should have low nAch because they must delegate work and build support through involvement o Need for Affiliation (nAff) (People seeking approval from others, conforming to their wishes and expectations and avoiding conflict and confrontation) ? Employees with high nAff tend to [1] be more effective in coordinating roles and [2] in sales positions, [3] prefer working with others, [4] have better attendance records and [5] better at mediating conflicts ?

However, they tend to be less effective at [1] allocating scarce resources and [2] making potential conflict-generating decisions o Need for Power (nPow) (People wanting to control environment to benefit themselves, i. e. personalized power, or others, i. e. socialized power) 22 – – Organizational Behavior and Design Corporate and political leaders have high nPow, motivating them to influence others ? Effective leaders should have [1] high need for socialized power, [2] high degree of altruism and social responsibility and [3] concern about consequences of own actions on others o Learning Needs ? Training programs can strengthen these needs, e. g. chievement-motive courses Practical Implications of Needs-Based Motivation Theories o Need to balance drive to acquire with drive to bond o Need to support drive to learn o Need to minimize unnecessary threats to personal safety, well-being and social relationship employees value because of drive to defend o Offer employees choice of rewards because different people have different needs at different times o Avoid relying on financial rewards as employee motivation ? – Expectancy Theory of Motivation (Pg 147) – Based on idea that work effort is directed toward behaviors that people believe will lead to desired outcomes – Expectancy Theory Model E? P Expectancy P?

O Outcomes & Expectancy Valences Outcome 1 + or – Effort Performance Outcome 2 + or – Outcome 3 + or o Effort level, i. e. motivation, depends on [1] effort-to-performance (E? P) expectancy, [2] performance-to-outcome (P? O) expectancy and [3] outcome valences (V) o E? P Expectancy (Perceived probability that effort will result in particular level of performance) o P? O Expectancy (Perceived probability that specific behavior of performance level will lead to specified outcomes) ? Outcomes refer to those of interest to us at the time o Outcome Valences (Anticipated satisfaction or dissatisfaction that individual feels toward outcome) 23 Organizational Behavior and Design Expectancy Theory in Practice o Increasing E? P Expectancies o Increasing P?

O Expectancies o Increasing Outcome Valences Objective Applications – Select people with required skills and knowledge – Provide required training and clarify job requirements – Provide sufficient time and resources – Assign simpler or fewer tasks until employees can master them – Provide examples of similar employees who have successfully performed task – Provide coaching to employees who lack selfconfidence – Measure job performance accurately – Clearly explain outcomes that will result from successful performance – Describe how employee’s rewards were based on past performance – Provide examples of other employees whose good performance has resulted in higher rewards – Distribute rewards that employees value – Individualize rewards – Minimize presence of countervalent outcomes Expectancy Theory Component Increasing E? P Expectancies To increase belief that employees are capable of performing job successfully Increasing P? O Expectancies To increase belief that good performance will result in certain (valued) outcomes Increasing Valences of Outcomes – To increase expected value of outcomes resulting from desired performance Does Expectancy Theory Fit Reality? o Critics suggest theory assumes employees have strong feelings of personal control, but E? P expectancy directly varies with employee’s perceived control over work situation o Valence element captures some of emotional process, but only peripherally

Goal Setting & Feedback (Pg 151) – Goals (Immediate or ultimate objectives that employees try to accomplish from work effort) – Goal Setting (Establishing performance objectives to motivate employees and clarify role perceptions) – Management-by-Objectives (MBO) (Participative goal-setting process in which organizational objectives are cascaded down to work units and individual employees) can create too much paperwork, but can be effective – Characteristics of Effective Goals o Specific Goals 24 Organizational Behavior and Design Goals should be specific so as to communicate more precise performance expectations o Relevant Goals ? Goals should be relevant to job and within control o Challenging Goals ?

Goals should be challenging so as to fulfill person’s achievement or growth needs o Goal Commitment ? Employees should be committed to accomplishing goals as E? P expectancy that goal can be accomplished is increased o Goal Participation (sometimes) ? Employees should participate in setting goals because [1] employees identify more with goals they are involved in setting and [2] it improves goal quality o Goal Feedback ? Goals should receive feedback because [1] it informs whether goal is achieved or effort is properly directed toward it and [2] satisfies growth needs Characteristics of Effective Feedback o Specific ? Feedback should be specific so as to focus on task, not person o Relevant ?

Feedback should be relevant so as to ensure feedback is not distorted by situational factors o Timely ? Feedback should be timely so as to help employees see clear association between behavior and consequences o Sufficiently Frequent ? Feedback should be more frequent for [1] employees working on new tasks and [2] jobs with short cycle time o Credible ? Feedback should be credible so that employees are more likely to accept feedback o Multisource Feedback ? 360-Degree Feedback (Performance feedback received from full circle of people around employee) ? [1] Improves credibility and quality of information received about performance and [2] provides more complete and accurate information ?

However, [1] can be expensive and time-consuming, [2] ambiguous and conflicting, [3] peers may provide inflated rather than accurate feedback to avoid conflict and [4] can have emotional consequences o Executive Coaching (Helpful relationship using behavioral methods to assist clients in identifying and achieving goals for professional performance and personal satisfaction) ? Coaches are “thought partners” who offer more accurate feedback, open dialogue and constructive encouragement ? Useful for improving [1] emotional intelligence, [2] goal setting, [3] interpersonal skills and related activities requiring specific feedback and support 25 ? –

Organizational Behavior and Design However, [1] anyone can assume the title and [2] some treat symptoms rather than causes o Choosing Feedback Sources ? Nonsocial feedback sources, e. g. job itself, to learn about progress toward goal accomplishment because [1] more accurate and [2] less damaging to selfesteem ? Social feedback sources, e. g. multisource feedback and executive coaching, to improve self-image because [1] feels better and [2] motivates by fulfilling relatedness and growth needs Applications & Limitations of Goal Setting & Feedback o When goals are tied to monetary incentives, employees tend to select easy rather than difficult goals o Many dimensions of performance have complex and long-term performance outcomes that are difficult to measure ? –

Organizational Justice (Pg 157) – Distributive Justice (Perceived fairness in outcomes received relative to contributions, outcomes and contributions of others) & Equity Theory o Organizations typically use combination of [1] equality principle (everyone receives same outcomes), [2] need principle (those with greater need receives more outcomes) and [3] equity principle (outcomes are proportional to individual’s, group’s or organization’s inputs) for different situations o Elements of Equity Theory (People develop perceptions of fairness in distribution and exchange of resources by comparing outcome/input ratio) ? Inputs include skills, effort, experience, amount of time worked, performance results and other employee contributions ? Outcomes are things employees receive from organization in exchange for inputs ?

Hard to determine overall value because employees receive many outcomes and weight each outcome and input differently ? Employees frequently collect information on several referents to form “generalized” comparison other ? Comparison other varies from person and is not easily identifiable o Equity Evaluation ? Underreward inequity if comparison other receives higher outcomes for comparable inputs ? Equity condition if outcome/input ratio is similar ? Overreward inequity if comparison other receivers lower outcomes for comparable inputs o Correcting Inequity Feelings ? Reduce Inputs ? If outcomes are not affected ? Increase Outcomes ? E. g. [1] ask for pay increase, [2] join labor union to demand changes and [3] use company resources for personal gain ?

Act on Comparison Other 26 Organizational Behavior and Design Employees feeling overrewarded encourage referent to work more leisurely ? Employees feeling underrewarded suggest referent to do larger workload share ? Changing Perceptions ? Employees feeling overrewarded increase perceived inputs rather than ask for less outcomes ? Change Comparison Other ? Leaving Field ? Results in [1] employee turnover, [2] job transfer and [3] employees taking more time off work o Individual Differences Through Equity Sensitivity (Person’s outcome/ratio preferences and reaction to various outcome/input ratios) ? “Benevolents” are tolerant of being underrewarded ? Equity Sensitives” want outcome/input ratio to be equal ? “Entitleds” feel more comfortable receiving proportionately more than others o Problems with Equity Theory ? Doesn’t indicate which inputs or outcomes are most valuable ? Doesn’t identify comparison other against which outcome/input ratio is evaluated ? Incorrectly assumes people are individualistic, rational and selfish ? Accounts for only some feelings of fairness and justice in workplace Procedural Justice (Fairness of procedures used to decide distributions of resources) o Influenced by [1] structural rules and [2] social rules o Structural Rules ? People should have “voice” in decision process ?

Decision maker should [1] be unbiased, [2] rely on complete and accurate information, [3] apply existing policies consistently, [4] listen to all sides of dispute and [5] allow decision to be appealed to higher authority o Social Rules ? People should be treated with respect ? Accountability, i. e. people should be entitled to explanations about decisions o Consequences of Procedural Injustice ? Anger toward source of injustice generates [1] withdrawal or [2] aggression behaviors ? For withdrawal, employees are less willing to comply, e. g. [1] less motivated to follow orders, [2] attend work, [3] engage in organizational citizenship, i. e. being helpful and tolerant and [4] perform tasks at high standard ? For aggression, employees have counterproductive work behaviors, e. g. [1] sabotage, [2] theft, [3] conflict and [4] acts of violence ?

Employees retaliate to [1] restore self-esteem, [2] reinstate status and power and [3] educate decision maker Organizational Justice in Practice o People can improve their procedural fairness through training programs, e. g. [1] lectures, [2] case studies, [3] role playing and [4] discussion ? – – 27 Organizational Behavior and Design Chapter 6 – Applied Performance Practices The Meaning of Money in the Workplace (Pg 174) – Organizations distribute money and other benefits to align individual goals more closely with corporate objectives – Money is not just economic medium of exchange, it affects needs, emotions and selfperception – Money & Employee Needs o Money [1] satisfies individual needs, e. g. existence needs, [2] is symbol of status, i. e. innate drive to acquire, [3] symbolizes personal accomplishment, i. e. rowth needs and [4] is feedback and representation of goal achievement – Money Attitudes & Values o Money generates variety of emotions, most of which are negative o People with strong money ethic believe money is [1] not evil, but [2] symbol of achievement, respect and power and [3] should be budgeted carefully o Cultural values seem to influence attitudes toward money and money ethic – Money & Social Identity o Money influences [1] self-worth and [2] self-perceptions of social status o Men emphasize money in self-concept more because they [1] believe money equals power and that power is path to respect, [2] more confident managing money and [3] use money to influence and impress others Reward Practices (Pg 176) – Membership- & Seniority-Based Rewards – Job Status-Based Rewards – Competency-Based Rewards – Performance-Based Rewards o Individual Rewards ? Individual bonuses or awards ? Commissions ? Piece-rate system, i. e. based on number of units produced o Team Rewards ? Gainsharing plans, i. e. based on [1] reducing costs and [2] increasing labor efficiency ? Improve [1] team dynamics, [2] knowledge sharing, [3] pay satisfaction and [4] E? P expectancy ?

Variation is open-book management (Sharing financial information with employees and encouraging them to recommend ideas that improve those financial results) o Organizational Rewards ? Profit-sharing plans, i. e. based on previous year’s level of corporate profits ? Employee Stock Ownership Plans (ESOPs) (Reward system that encourages employees to buy stock in company) ? Stock options (Reward system that gives employees right to purchase company stock at future date at predetermined price) don’t require employees to own stock, but allow them to benefit from its increase above threshold level 28 Organizational Behavior and Design ? Balanced scorecard, i. e. ased on composite of financial, customer, internal processes and employee factors Sample Rewards Advantages Disadvantages – Doesn’t directly motivate performance – May discourage poor performers from leaving – Golden handcuffs may undermine performance – Encourages political tactics to increase job worth o Employees compete with each other o Employees exaggerate duties and hoarding resources to increase pay rate – Creates psychological distance between employees and executives o Reward functional specialization rather than central goals of anticipating and responding to market needs – Subjective measurement of competencies o Skill-based pay systems are usually more objective and accurate – Skill-based pay plans are expensive o Employees spend more time learning new tasks – May weaken motivation of job itself – May distance reward giver from receiver – May discourage creativity – Viewed as quick fixes, but don’t solve real causes Reward Objective Membership/Seniority – Financial rewards increase with years of seniority – Fixed pay – Most employee benefits – Paid time off – May attract applicants – Minimizes stress of insecurity – Reduces turnover

Job Status – Organizations use [1] job evaluation (systematically evaluating worth of jobs by measuring required skill, effort, responsibility and working conditions) or [2] surveys estimating what other companies pay – Promotion-based pay increase – Status-based benefits – Tries to maintain internal equity, i. e. fair pay levels across different jobs – Minimizes pay discrimination – Motivates employees to compete for promotions Competencies – Pay increase based on competency – Skill-based pay, i. e. depends on number of skill modules mastered – Improves workforce flexibility – Tends to improve quality – Consistent with employability Task Performance – Commissions Merit pay Gainsharing Profit sharing Stock options Motivate task performance – Attract performanceoriented applicants – Organizational rewards create ownership culture – Pay variability may avoid layoffs during downturns 29 Organizational Behavior and Design Improving Reward Effectiveness o Link Reward

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