Organizational Behavior Chapter 1 Organizational Behavior and Management Organizations are social inventions for accomplishing common goals

ls through group effort. By social inventions, we mean that their essential characteristic is the coordinated presence of people, not necessarily things. The field of organizational behavior is about understanding people and managing them to work effectively. The field of organizational behavior is concerned with how organizations can survive and adapt to change. Organizations are based on group effort and they depend on interaction and coordination among people to accomplish their goals. The field of organizational behavior is concerned with how to get people to practice effective teamwork. What is Organizational Behavior? Organizational behavior refers to the attitudes and behaviors of individuals and groups in organizations. The discipline studies these attitudes and behaviors and provides insight about how to effectively manage and change them. It also studies how organizations can be structured more effectively and how events in external environments affect organizations. Goals of Organizational Behavior Effectively predicting, explaining, and managing behavior that occurs in organizations Regularity of behavior in organizations helps predict future occurrence Explaining events is more complicated than predicting them; a particular behavior could have multiple causes

Managing Organizational Behavior Management is defined as the art of getting things accomplished in organizations Managers acquire, allocate, and utilize physical and human resources to accomplish goals If behavior can be predicted and explained, it can often be controlled or managed Management constitutes action Point is to approach a problem with a systematic understanding of behavioural science

Early Prescriptions Concerning Management 1. The Classical View and Bureaucracy a. Tended to advocate a very high degree of specialization of labour and a very high degree of coordination b. Each department was to tend to its own affairs with centralized decision making from upper management c. Scientific management advocated use of careful research to determine optimum degree of specialization and standardization d. Development of written instructions that clearly defined work procedures and encouraged supervisors to standardize workers movements and breaks for maximum efficiency e. Weber made the term bureaucracy (rationally managing complex organizations) which has the following qualities: i. Strict chain of command in which each member reports to only a single superior ii. Selection and promotion based solely on impersonal technical skills rather than favoritism iii. Set of detailed rules, regulations, and procedures ensuring tha the job gets done regardless of the worker iv. Strict specialization to match duties with technical competence v. Centralization of power at the top

Bureaucracy was seen as the ideal type or theoretical model that would standardize organizations and provide workers with security and purpose g. Workers would have a fair chance of being promoted and rising in the power structure 2. Human Relations Movement and a Critique of Bureaucracy a. Hawthorne studies were concerned with the impact of fatigue, rest pauses, and lighting on productivity b. Began to notice the effects of psychological and social processes on productivity and work adjustment c. Suggested that there could be dysfunctional aspects to how work was organized d. Human relations movement called attention to certain dysfunctional aspects of classical management and bureaucracy an advocated more people oriented styles of management that catered more to the social and psychological needs of employees e. Critique of bureaucracy addressed several specific problems i. Strict specialization is incompatible with human needs for growth and achievement could lead to employee alienation ii. Strong centralization on formal authority failed to take advantage of creative ideas and knowledge of lower level members who were often closer to the customer organization will fail to learn from its mistakes and there is a resistance to change iii. Strict, impersonal rules lead members to adopt minimum acceptable level of performance that rules specify even though higher performance levels are possible iv. Strong specialization causes employees to lose sight of overall goals of organization red tape mentality which states that forms, procedures, and recquired signatures becomes ends in themselves divorced from the true needs of customers, clients, and other departments in the organization 3. Contemporary Management The Contingency Approach a. Classical advocates point out the critical role of control and coordination in getting organizations to achieve their goals b. Human religionists point out dangers of certain forms of control and coordination and addressed need for flexibility and adaptability c. Contingency approach recognizes that there is no best way to manage; rather, an appropriate style depends on the demands of the situation d. Effectiveness of a leadership style is contingent on the abilities of the followers What Do Managers Do? Have strong impact on what happens in and to organizations and can both influence and are influenced by organization behavior

f.

Managerial Roles 1. Interpersonal Roles a. Expected behaviors that have to do with establishing and maintaining interpersonal relations b. Figurehead Role managers serve as symbols of their organization rather than active decision makers c. Leadership Role managers select, mentor, reward, and discipline employees d. Liaison Role maintain horizontal contacts inside and outside the organization 2. Informational Roles a. Concerned with the various ways managers receive and transmit information b. Monitor Role managers can scan internal and external environments of the firm to follow current performance and keep themselves informed of new ideas and trends c. Disseminator Role send information on both facts and preferences to others

d. Spokesperson Role sending messages into the organizations external environment 3. Decisional Roles a. Deals with decision making b. Entrepreneur Role turn problems and opportunities into plans for improved changes c. Disturbance Handler Role deal with problems stemming from employee conflicts and addresses threats to resources and turn d. Resource Allocation Role decide how to deploy time, money, personnel, and other critical resources e. Negotiator Role conduct major negotiations with other organizations or individuals - Relative importance of these roles vary with management level and organizational technology - Complex balancing act managers face when they must play different roles for different audiences Managerial Activities Managers engage in four basic types of activities: 1. Routine Communication formal sending and receiving of information (ex. Meetings) 2. Traditional Management planning, decision making, and controlling 3. Networking interacting with people outside of the organization and informal socializing with insiders 4. Human Resource Management motivating and reinforcing, disciplining and punishing, managing conflict, staffing, and training and developing employees If we define success as moving up ranks of organization quickly, networking proved critical If we define success in terms of unit effectiveness and employee satisfaction and commitment, less networking and more effort in human resource management

Managerial Agendas 1. Agenda Setting gradually developed agendas of what managers wanted to accomplish for the organization 2. Networking managers established da wide formal and informal network of key people both inside and outside of their organization and this provided managers with information and established cooperative relationships relevant to their agendas 3. Agenda Implementation managers use networks to implement agendas and they would go anywhere in network for help - Managers used their formal organizational power but often found themselves dependent on people over whom they wielded no power International Managers Style in which managers do what they do and emphasis they give to activities vary greatly across cultures because of different values Technical requirements for accomplishing goals are same Behavioral requirements differ Demographics of North America are changing and labour force and customers are becoming increasingly culturally diverse Diversity of age is also having an impact in organizations

Employee- Organization Relationships Full time jobs are being replaced by part time work which will change the nature of employee organization relationships Employee satisfaction with bonuses, promotion policies, training programs, and coworkers is on the decline

Absenteeism in Canadian organizations is on the rise Intense competition for customers both locally and globally has given rise to quality of products and services Correctly identifying customer needs and satisfying them before, during, and after the sale are now seen as key competitive advantages Quality can be defined as everything from speedy delivery to producing goods and services in environmentally friendly manner Closely allied with quality is speed and speed can prove to be a real competitive advantage In addition, flexibility on part of employees and organizations is also important competitive advantage Hypercompetitive environments are characterized by constant change an high levels of uncertainty and in order to survive, organizations must be flexible so they can respond rapidly to change Quality, speed, and flexibility all require high degree of employee involvement and commitment and all require high degree of teamwork between individuals and groups

Talent Management Refers to an organizations processes for attracting, developing, retaining, and utilizing people with the required skills to meet current and future business needs Ability of organizations to attract and retain talent is very important especially in todays business environment Organizational behavior provides means for organizations to be designed and managed in ways that optimize talent attraction, development, retention, and performance

Focus on Corporate Social Responsibility Increasing concern about corporate social responsibility and the need to be a good citizen Refers to an organization taking responsibility for the impact of its decisions and actions on its stakeholders Has to do with overall impact on society at large and extends beyond interests of shareholders Has to do with how organization performs its core functions of producing goods and providing services and that it does so in a socially responsible way Believe that CSR has implications for organizations reputation and financial performance and has led to increasing number of organizations placing greater emphasis on CSR initiatives Becoming major concern for organizations today Has implications for recruitment and retention of employees as an increasing number of workers want to work for organizations that are environmentally friendly and rank high on CSR

Organizational Behavior Chapter 5 Theories of Work Motivation There is no single all-purpose motivation theory In combination, a good set of theories should recognize human diversity and consider the same conditions will not motivate everyone A good set of theories should be able to explain how it is that some people seem to be self-motivated while others require external motivation A good set of theories should recognize the social aspect of human beings peoples motivation is often affected by how they see others being treated

What is Motivation? From an organizations perspective, when we speak of a person as being motivated, we mean the person works hard, keeps at his or her work, and directs his or her behavior toward appropriate outcomes

Basic Characteristics of Motivation Formally defined as the extent to which persistent effort is directed toward a goal Effort strength of the persons work related behavior, or the amount of effort the person exhibits on the job Persistence second characteristic is the persistence that individuals exhibit in applying effort to their work tasks Direction effort and persistence refer mainly to the quantity of work an individual produces, however, of equal importance is the quality of a persons work; the third characteristic is the direction of the persons work related behavior Motivation means working smart as well as working hard Goals ultimately, all motivated behavior has some goal or objective toward which it is directed and we assume that motivated people act to enhance organizational objectives

Extrinsic and Intrinsic Motivation Some people are motivated by factors in the external environment while some people are self-motivated without application of these external factors Intrinsic Motivation stems from the direct relationship between the worker and the task and is usually selfapplied Extrinsic Motivation stems from the work environment external to the task and is usually applied by someone other than the person being motivated Some motivators have both extrinsic and intrinsic qualities

Extrinsic and Intrinsic factors are used in the Self-Determination Theory to explain what motivates people and whether motivation is controlled or autonomous. When people are motivated by intrinsic factors, they are in control of their motivation, what is known as autonomous motivation When people are motivated to obtain a desired consequence or extrinsic reward, their motivation is controlled externally, what is known as controlled motivation Key aspect of Self-Determination Theory is the extent to which ones motivation is autonomous versus controlled Autonomous motivation facilitates effective performance, especially on complex tasks Both kinds of rewards are important and compatible in enhancing work motivation

Motivation and Performance Performance can be defined as the extent to which an organizational member contributes to achieving the objectives of the organization Relationship is not one-to-one because a number of factors influence performance Two forms of intelligence are particularly important for performance 1. General Cognitive Ability a. Cognitive ability refers to what people call intelligence or mental ability b. General cognitive ability refers to a persons basic information processing capacities and cognitive resources c. Reflects individuals overall capacity and efficiency for processing information (verbal, spatial, numerical, and reasoning) d. Predicts learning and training success as well as job performance in all kinds of jobs and occupations e. Both general cognitive ability and motivation are necessary for performance 2. Emotional Intelligence a. Has to do with an individuals ability to understand and manage his or her own and others feelings and emotions b. Ability to perceive and express emotion, assimilate emotion in thought, and reason about emotions, and manage emotions in oneself and others c. High in EI are able to identify and understand meanings of emotions and manage and regulate their emotions for problem solving, reasoning, thinking, and action

Four Branch model of EI: 1. Perceiving emotions accurately in oneself and others: a. Involves ability to perceive emotions and to accurately identify ones own emotions and the emotions of others b. Most basic level of EI and is necessary to be able to perform other steps in model 2. Using emotions to facilitate thinking: a. Refers to ability to use and assimilate emotions and emotional experiences to guide and facilitate ones thinking and reasoning b. One is able to use emotions in functional ways c. Involves being able to shift ones emotions and generate new emotions that help see things from different perspectives d. Important skill because emotions and moods affect what and how people think when making decisions 3. Understanding emotions, emotional language, and signals conveyed by emotion: a. Able to understand emotional information, the determinants and consequences of emotions, and how emotions evolve and change overtime b. People understand how different situations and events generate emotions as well as how they and others are influenced by various emotions 4. Managing emotions so as to attain specific goals: a. Ability to maintain ones own and others feelings and emotions as well as emotional relationships b. Highest level of EI because must have mastered previous stages c. Individual is able to regulate, adjust, and change his or her emotions as well as others emotions to suit situation - EI predicts performance in number of areas including job performance and academic performance - EI most strongly related to job performance in jobs that require high levels of emotional labour

Importance of EI depends on ones cognitive ability Found to be most importance for performance of employees with lover levels of cognitive ability and less important for job performance of employees with high levels of cognitive ability

Motivation-Performance Relationship Possible for performance to be low even when person is highly motivated Poor performance due to poor understanding of task or luck and chance factors Person with weak motivation might perform well because of luck Cannot consider motivation in isolation Motivational interventions will not work if employees are deficient in important skill abilities

Need Theories of Work Motivation These theories attempt to specify kind of needs people have and conditions under which they will be motivated to satisfy these needs in a way that contributes to performance Needs are physiological and psychological wants or desires that individuals can satisfy by acquiring certain incentives or achieving particular goals Behavior stimulated by this acquisition process that reveals motivational character of needs Needs Behaviour Incentives and Goals Need theories are concerned with what motivates workers Can be contrasted with process theories which are concerned with how various factors motivate people

Maslows Hierarchy of Needs Humans have five sets of needs that are arranged in a hierarchy beginning with most basic and compelling needs: 1. Physiological Needs: a. Include needs that must be satisfied for person to survive 2. Safety Needs: a. Include needs for security, stability, freedom from anxiety, and a structured and ordered environment 3. Belongingness Needs: a. Include needs for social interaction, affection, love, companionship, and friendship 4. Esteem Needs: a. Include needs for feelings of adequacy, competence, independence, strength, and confidence, and the appreciation and recognition of these characteristics by others 5. Self-Actualization Needs: a. Involve desire to develop ones true potential as an individual to fullest extent and to express ones skills, talents, and emotions in a manner that is most personally fulfilling b. Have clear perceptions of reality, accept themselves and others, and are independent, creative, and appreciative of the world around them Lowest level unsatisfied need category has the greatest motivating potential Motivation depends on the persons position in the need hierarchy When a need is unsatisfied, it exerts a powerful effect on individuals thinking and behavior and this is sense in which needs are motivational When needs at particular level are satisfied, individual turns attention to next higher level

A satisfied need is no longer an effective motivator Exception is self-actualization needs as these are growth needs that become stronger as satisfied

Alderfers ERG Theory Streamlines Maslows need classifications and makes different assumption between needs and motivation Three categories: 1. Existence needs: a. Needs that are satisfied by some material substance or condition (physiological and safety needs) 2. Relatedness Needs: a. Satisfied by open communication and exchange of thoughts and feelings with other organizational members (belongingness and self-esteem needs) 3. Growth Needs: a. Fulfilled by strong personal involvement in work setting (self-actualization) b. Involve full utilization of ones skills and abilities and development of new skills and abilities As existence needs are fulfilled, relatedness needs gain motivational power Unlike need hierarchy, ERG theory does not assume lower level needs must be gratified before a less concrete need becomes operative ERG theory does not propose a rigid hierarchy of needs Assumes that if higher level needs are ungratified, individuals will increase desire for gratification of lower level needs Apparently satisfied need can act as a motivator by substituting for an unsatisfied need We can identify its two major motivational premises: 1. More lower level needs are gratified, more higher level need satisfaction is desired 2. Less higher level needs are gratified, more lower level need satisfaction is desired

McClellands Theory of Needs Needs reflect relatively stable personality characteristics that one acquires through early life experiences and exposure to selected aspects of ones society Not interested in hierarchical relationship More concerned with specific behavioral consequences of needs Under what conditions are certain needs likely to result in particular patterns of motivation? Three needs that have special relevance for organizational behavior: 1. Need for Achievement (n Ach) a. Have strong desire to perform challenging tasks well b. A preference for situations in which personal responsibility can be taken for outcomes c. A tendency to set moderately difficult goals that provide for calculated risks d. Desire for performance feedback e. Concerned with bettering their own performance or that of others f. They do things because they are intrinsically satisfying, thus it would appear to be an example of a growth or self-actualization need 2. Need for Affiliation (n Aff) a. Strong desire to establish and maintain friendly, compatible interpersonal relationships b. They like to like others, and they want others to like them c. Example of a belongingness or relatedness need 3. Need for Power (n Pow) a. Strong desire to have influence over others

b. Wish to make significant impact or impression on others c. Seek out social settings in which they can be influential d. Corresponds most closely to self-esteem need McClelland predicts that people will be motivated to seek out and perform well in jobs that match their needs

Research Support for Need Theories Maslows hierarchy suggests two main hypotheses 1. Specific needs should cluster into five main need categories 2. As needs in a given category are satisfied, they should become less important, while needs in the adjacent higher need category should become more important a. Captures progressive, hierarchal aspect of theory Research support for both these hypotheses is weak or negative Support for simpler two level need hierarchy comprising needs toward top and bottom of Maslow hierarchy Indirect encouragement for ERG theory Simplicity and flexibility of ERG theory seems to capture human need structure better than Maslows complex and rigid theory McClellands need theory has generated a wealth of predictions about many aspects of human motivation Results are generally supportive of idea that particular needs are motivational when the work setting permits satisfaction of these needs

Managerial Implications of Need Theories 1. Appreciate Diversity a. Lack of support for fairly rigid need hierarchy suggest managers must be adept at evaluating needs of individual employees and offering incentives that correspond to their needs 2. Appreciate Intrinsic Motivation a. Ned theories serve valuable function of alerting managers to existence of higher order needs b. Recognition of these needs is important for two reasons i. Basic conditions for organizational survival is expression of some creative and innovative behavior on part of members ii. Frustration of higher order needs prompts demands for greater satisfaction of lower order needs 1. Can lead to vicious motivational cycle factors that gratify lower level needs are easy to administer c. Needs will fail to develop for most employees unless lower level needs are reasonably well gratified d. If basic needs are met, jobs can be enriched to be more stimulating and challenging and to provide feelings of responsibility and achievement e. Organizations could pay more attention to designing career paths that enable interested workers to progress through series of jobs that continue to challenge higher order needs Process Theories of Work Motivation Concentrate on how motivation occurs rather than on what motivates people

Expectancy Theory Basic idea is the belief that motivation is determined by outcomes that people expect to occur as a result of their actions on the job

- Basic components of Brooms expectancy theory 1. Outcomes a. Consequences that may follow certain work behaviors b. First level outcomes are of particular interest; ex. High productivity versus average productivity c. Concerned with specifying how an employee might attempt to choose one first level outcome instead of another d. Second level outcomes are consequences that follow attainment of a particular first level outcome e. Second level outcomes are more personally relevant to individual worker; ex. amount of pay 2. Instrumentality a. Probability that a particular first level outcome (such as high productivity) will be followed by a particular second level outcome (such as pay) b. Performance Outcome 3. Valence a. Expected value of outcomes, the extent to which they are attractive or unattractive to the individual b. Second level outcome might be more or less attractive to particular workers c. Valence of first level outcome is the sum of products of the associated second level outcomes and their instrumentalities d. Valence of a first level outcome depends on the extent to which it leads to favorable second level outcomes 4. Expectancy a. Probability that the worker can actually achieve a first level outcome b. Effort Performance 5. Force a. End product of other components of the theory b. Represents relative degree of effort that will be directed toward various first level outcomes c. Force directed toward a first level outcome is a product of the valence of that outcome and the expectancy that it can be achieved d. We can expect an individuals effort to be directed toward the first level outcome that has the largest force product - People will be motivated to perform in those work activities that they find attractive and they feel they can accomplish - The attractiveness of various work activities depends on the extent to which they lead to favourable personal consequences - Expectancy theory is based on perceptions of individual worker - Expectancies, valences, instrumentalities, and relevant second level outcomes depend on perceptual system of person whose motivation we are analyzing - People implicitly take expectancy, valence, and instrumentality into account as they go about their daily business of being motivated Research Support for Expectancy Theory Good evidence that valence of first level outcome depends on extent to which they lead to favourable second level consequences Experts in motivation generally accept expectancy theory

Managerial Implications of Expectancy Theory 1. Boost Expectancies

a. Ensure that employees expect to be able to achieve first level outcomes that are of interest to the organization b. Force equation suggests that workers will not pursue these goals if expectancy is low c. Expectancies can usually be enhanced by providing proper equipment and training, demonstrating correct work procedures, carefully explaining how performance is evaluated, and listening to employee performance problems d. Point of all this is to clarify path to beneficial first level outcomes 2. Clarify Reward Contingencies a. Attempt to ensure that paths between first and second level outcomes are clear b. Employees should be convinced that first level outcomes desired by organization are clearly instrumental in obtaining positive second level outcomes and avoiding negative outcomes c. To ensure that instrumentalities are strongly established, they should be clearly stated and then acted on by the manager d. Availability of intrinsic motivation reduces need for manager to constantly monitor and clarify instrumentalities 3. Appreciate Diverse Needs a. Managers would do well to analyze diverse preferences of particular employees and attempt to design individualized motivational packages to meet their needs Equity Theory Asserts that workers compare inputs that they invest in their jobs and outcomes that they receive against the inputs and outcomes of some other relevant person or group When ratios are equal, worker should feel that a fair and equitable exchange exists with organization Fair exchange contributes to job satisfaction When ratios are unequal, workers perceive inequity and should experience job dissatisfaction Individuals are motivated to maintain an equitable exchange relationship inequity is unpleasant and tension producing and people will devote considerable energy to reducing inequity and achieving equity: 1. perceptually distort ones own inputs or outcomes 2. perceptually distort inputs or outcomes of comparison person or group 3. choose another comparison person or group 4. alter ones inputs or alter ones outcomes 5. leave the exchange relationship equity theory is vague about just when individuals will employ various inequity reduction strategies

Gender and Equity both women and men have tendency to choose same sex comparison persons

Research Support for Equity Theory Most research has been restricted to economic outcomes and has concentrated on alteration of inputs and outcomes as means of reducing inequity Very supportive of theory when inequity occurs because of underpayment Theorys predictions regarding overpayment inequity have received less support

Managerial Implications of Equity Theory

Perceived underpayment will have negative motivational consequences Trick is to strike equitable balance Managers must understand that feelings about equity stem from a perceptual social comparison process in which the worker controls the equation Understanding role of comparison is especially crucial Awareness of comparison people chosen by workers might suggest strategies for reducing felt inequity

Goal Setting Theory Basic characterization of all organizations is that they have goals Goal is object or aim of an action Individual performance is defined as extent to which a member contributes to attainment of goals or objectives Implicit performance goals do not make an impression According to goal setting theory, goals are most motivational when they are specific, challenging, and when organizational members are committed to them Feedback about progress toward goal attainment should be provided Positive effects of goals are due to four mechanisms; they direct attention toward goal relevant activities; they lead to greater effort; they increase and prolong persistence; and they lead to discovery and use of task relevant strategies for goal attainment 1. Goal Specificity a. Specify exact level of achievement for people to accomplish in a particular time frame 2. Goal Challenge a. Much more of a personal matter since it depends on experience and skills of organizational member b. When goals become so difficult that they are perceived as impossible to achieve, they will lose potential to motivate c. Goal challenge is best when pegged to competence of individual workers and increased as particular task is mastered 3. Goal Commitment a. Must be committed to specific, challenging goals if goals are to have motivational effect b. Effect of goals is strongest when individuals have high goal commitment c. Really are not goals and cannot improve performance unless individual accepts them and is committed to working towards them 4. Goal Feedback a. Have most benefit when accompanied by ongoing feedback that allows for comparison between current performance and goal

Enhancing Goal Commitment Important to consider some factors that might affect commitment 1. Participation a. Members should be more committed to goals that are set with participation instead of simply handed to them by superior b. If goal commitment is potential problem, participation might prove beneficial c. If employees have trust with their superior and when superior has good understanding of capability of employees, participation might be unnecessary d. Participation can improve performance by increasing difficulty of goals that employees adopt 2. Rewards

a. Goal setting has led to performance increases without introduction of monetary incentives for goal accomplishment 3. Supportiveness a. Supervisors must demonstrate desire to assist employees in goal accomplishment and behave supportively if failure occurs b. Adjust goal downward if it proves to be unrealistically high c. Threat and punishment will be counterproductive Goal Orientation and Types of Goals Refers to individuals goal preference in achievement situations Stable individual difference that affects performance Some individuals have preference for learning goals while other have preference for performance prove or performance avoid goal 1. Learning Goal Orientation a. Concerned about learning something new and developing competence in activity by acquiring new skills and mastering new situations b. Focus on acquiring new knowledge and skills and developing competence 2. Performance Prove Goal Orientation a. Concerned about demonstrating competence in performing a task by seeking favourable judgments about outcome of their performance 3. Performance Avoid Goal Orientation a. Concerned about avoiding negative judgments about the outcome of their performance Goal orientation is important for learning and performance Learning goal orientation most effective for learning and performance outcomes Performance avoid goal is detrimental for learning and performance Can be distinguished whether they are performance goals or learning goals Can be distinguished in terms of whether they are distal or proximal 1. Distal Goal a. Long term or end goal 2. Proximal Goal a. Short term or sub goal that is instrumental for achieving a distal goal b. Involve breaking down a distal goal into smaller, more attainable sub goals c. Provide clear markers of progress towards a distal goal because they result in more frequent feedback

Research Support for Goal Setting Theory Considered one of most practical and valid theories of employee motivation Positive results persist over long time periods High performance goal is most effective when individuals already have ability to perform a task Proximal goals are important for complex tasks and distal gals can have negative effect unless distal goals are accompanied with proximal goals Group goals result in superior group performance especially when goals are set by group and everyone participates in setting them

Managerial Implications of Goal Setting Theory

Goals have limitations Must set certain goals for certain situations to maximize motivation potential

Do Motivation Theories Translate Across Cultures Differences in extent to which societies value more collective or more individualistic approach to life Cultures differ in extent to which they value achievement as well as how they conceive achievement Expectancy theory is effective when applied cross culturally Setting specific and challenging goals should be motivational when applied cross culturally For goal setting to be effective, careful attention will be required to adjust goal setting process in different cultures Appreciating cultural diversity is critical in maximizing motivation

Integrating Theories of Work Motivation In order for individuals to obtain rewards, they must achieve designated levels of performance Performance is a function of motivation as well as other factors We are concerned about the amount, persistence, and direction of effort in terms of motivation Perceptions of expectancy and instrumentality relate to all three components of motivation; individuals direct their effort toward a particular first level outcome and increase the amount and persistence of effort to the extent that they believe it will result in second level outcomes Goal setting theory indicates specific and challenging goals that people are committed to, as well as feedback about progress toward goal attainment will have a positive effect on amount, persistence, and direction of effort Goal specificity should strengthen both expectancy and instrumentality connections Motivation will be translated into good performance if worker has levels of general cognitive ability and emotional intelligence relevant to job and if worker understands task Particular level of performance will be followed by certain outcomes To the extent that performance is followed by outcomes that fulfill individual needs and are positively valent second level outcomes, they can be considered rewards for good performance Connection between performance and occurrence of intrinsic rewards should be strong and reliable because such rewards are self-administered To the extent that rewards fulfill individual needs, they will be motivational Rewards that individuals receive are outcomes of equity theory equation Perceptions of equity influence motivation and job satisfactions Individuals in state of equity have high job satisfaction and individuals who are in a state of inequity have job dissatisfaction Good performance leads to job satisfaction if performance is rewarded and job satisfaction leads to good performance

Organizational Behavior Chapter 6 Motivation in Practice Money as a Motivator Employees and managers underestimate importance of pay as motivator Pay should be especially motivational to those who have strong lower level needs Pay can function to satisfy social, self-esteem, and self-actualization needs According to expectancy theory, if pay can satisfy a variety of needs, it should be highly valent and it should be a good motivator to the extent that it is clearly tied to performance Research is consistent on financial incentives and it has been found to increase performance and lower turnover and also be the most important and effective motivator of performance Ability to earn money for outstanding performance is competitive advantage

Linking Pay to Performance on Production Jobs Piece rate is set up so individual workers are paid certain sum for each unit of production they complete More common than piece rate is hourly wage and piece rate on top Various schemes to link pay to performance on production jobs are called wage incentive plans Introduction of wage incentives usually leads to substantial increases in productivity Problems with wage incentives: 1. Lowered Quality a. Wage incentives can increase productivity at the expense of quality b. Does not require ingenuity to devise system to monitor and maintain quality in manufacturing 2. Differential Opportunity a. Threat exists when workers have different opportunities at a high level b. Some workers at unfair disadvantage under incentive system c. Workers will differ in expectancy that they can produce at high level 3. Reduced Cooperation a. Might decrease cooperation among workers 4. Incompatible Job Design a. The way jobs are designed can make it difficult to implement wage incentives b. As the size of team increases, relationship between individuals productivity and their pay decreases c. Team size increases, linkage between performance and pay is erased removing intended effect 5. Restriction of Productivity a. Tendency for workers to restrict productivity b. Workers come to informal agreement about what constitutes fair days work and limit their output c. Restriction of productivity can decrease expected benefits d. Workers feel that increased productivity will lead to reductions in workforce e. Fear if they produce at especially high level, employer will reduce rate of payment to cut labour cost f. Restriction seems less likely when climate of trust and history of good relations exist between employees and management

Linking Pay to Performance on White-Collar Jobs White collar jobs offer fewer objective performance criteria to which pay can be tied Performance is evaluated subjectively by managers Attempts to link pay to performance on white collar jobs is called merit pay plans Periodically, managers are required to evaluate performance of employees on some form of rating scale

Using these evaluations, managers recommend some amount of merit pay be awarded above basic salaries Individuals who see strong link between rewards and performance perform better White collar workers support notion that performance should be important determination of pay Merit pay plans employed more frequently than wage incentive plans Appears many of systems now in use are ineffective Many individuals who work under such plans do not perceive link between job performance and pay Evidence that pay is, in fact, not related to performance under some merit plans In most organizations, seniority, the number of employees, and job level account for more variation in pay than performance does

Potential Problems with Merit Pat Plans 1. Low Discrimination a. Managers might be unable or unwilling to discriminate between good performers and poor performers b. Subjective evaluations of performance can be difficult to make and are often distorted by number of perceptual errors c. Effective rating systems are rarely employed d. If there are true performance difference among employees, equalization over rewards poorer performers and under rewards better performers 2. Small Increases a. Merit increases might be too small to be effective b. Intended motivational effects of pay increases may not be realized c. Some firms have replaced conventional merit pay with lump sum bonus that is paid out all at one time and not built in base pay d. Lump sum bonuses have become common to motivate and retain employees at all levels of organization e. Management has to take care to ensure it ties merit pay to performance criteria that truly benefit the organization 3. Pay Secrecy a. Extreme secrecy surrounds salaries in most organizations b. Employees might remain ignorant because they have no way of comparing their own merit treatment with that of others c. Such secrecy might damage motivational impact of well-designed merit plan d. In absence of better information, employees are inclined to invent salaries for other members e. Invention reduces both satisfaction and motivation and these tendencies will reduce satisfaction with pay, damage perceptions of the linkage between performance and rewards, and reduce valence of promotion to higher level of management f. More open pay policy will expose inadequacy of merit system and force managers to evaluate performance in manner that reduces conflict Using Pay to Motivate Teamwork People sometimes end up pursuing their own agendas at expense of goals of their work group, department, or organization As a result, firms have replaced or supplemented individual incentive pay with plans designed to foster teamwork 1. Profit Sharing a. One of the most commonly used group oriented incentive systems b. Unlikely that profit sharing is highly motivational

c. Too many factors beyond control of workforce can affect profits no matter how well employees perform their jobs d. In large firms, it is difficult to see impact of ones own actions on profits e. Works best in smaller firms that regularly turn in profit 2. Employee Stock Ownership Plans a. Allow employees to own set amount of companys shares b. Employees are often allowed to purchase shares at fixed price c. Provide employees with stake in companys future earnings and success and create sense of ownership d. Believed to increase employees loyalty and motivation because they align workers goals and interest with that of organization and create psychological and legal ownership e. Evidence that ESOPs can improve employee retention and profitability f. Work best in small organizations g. Lose motivational potential in weak economy 3. Gainsharing a. Group incentive plans based on improved productivity or performance over which the workforce has control b. When measured costs decrease, company pays monthly bonus according to predetermined formula that shares this gain between employees and the firm c. Builds trust and commitment to the formulas that are used to convert gains into bonuses d. Used to align company and employee goals 4. Skill Based Pay a. Motivate employees to learn a wide variety of work tasks, irrespective of the job that they might be doing at any given time b. More skills acquired, higher persons pay c. Used to encourage employee flexibility in task assignments and to give them broader picture of the work processes d. Useful on self-managed teams and flexible manufacturing however, training costs can be high with a skill based pay system Group based financial incentives can have positive effect on collective efforts of employees and business unit outcomes

Job Design as a Motivator Use of money as motivator is attempt to capitalize on extrinsic motivation Use of job design as motivator to capitalize on intrinsic motivation Goal of job design is to identify characteristics that make some tasks more motivating than others and to capture these characteristics in design of jobs Many workers are motivated more by stimulating, challenging, and meaningful work

Traditional Views of Job Design From beginning of Industrial Revolution until 1960s, prevailing philosophy regarding design of most non managerial jobs was job simplification Preindustrial period characterized by increasing urbanization and growth of free market economy which prompted demand for manufactured goods Division of labor within society occurred and newly developed machinery helped meet this demand Organizations recognized specialization was key to efficient productivity

Jobs designed according to principles of scientific management do not seem intrinsically motivating Motivational strategies management used during this period was close supervision and piece rate pay However, job simplification was unwelcomed by workers

Job Scope and Motivation Job scope can be defined as breadth and depth of a job Breadth refers to number of different activities performed on job Depth refers to degree of discretion or control worker has over how these tasks are performed Broad jobs require workers to do a number of different tasks while deep jobs emphasize freedom in planning and how to do the work Jobs that have great depth and breadth are called high scope jobs Classic example of low scope job is traditional assembly line job Traditional views of job design were attempts to construct low scope jobs in which workers specialized in single task We encounter jobs that have high breadth but little depth or vice versa; these jobs can be considered relatively low in scope High scope jobs should provide more intrinsic motivation than low scope jobs Maslows need hierarchy and ERG theory indicate people can fulfill higher order needs by opportunity to perform high scope jobs; expectancy theory suggests high scope jobs can provide intrinsic motivation if outcomes derived from jobs are attractive One way to increase scope of job is to assign employees stretch assignments Stretch assignments offer employees challenging opportunities to broaden skills b working on variety of tasks with new responsibilities Another approach for increasing scope is job rotation which involves rotating employees to different tasks and jobs in an organization Job rotation is effective for developing new skills and expertise that can prepare employees for future roles

The Job Characteristics Model Proposes that there are several core job characteristics that have a certain psychological impact on workers Psychological states induced by nature of job lead to certain outcomes relevant to worker and organization

Core Job Characteristics 1. Skill Variety a. Opportunity to do a variety of job activities using various skills and talents b. Corresponds closely to notion of job breadth 2. Autonomy a. Freedom to schedule ones own work activities and decide work procedures b. Corresponds to job depth 3. Task Significance a. Impact that a job has on others 4. Task Identity a. Extent to which a job involves doing a complete piece of work, from beginning to end 5. Feedback a. Information about ones performance effectiveness

b. Essential for high intrinsic motivation as people are not motivated for long if they do not know how well they are doing Critical Psychological States Work will be intrinsically motivation when it is perceived as meaningful, when the worker feels responsible for the outcomes of the work, and when the worker has knowledge about their progress When individual uses variety of skills to do a whole job that is perceived significant to others, they perceive work as meaningful When worker has autonomy to organize and perform job as they see fit, they feel personally responsible for outcome of work When job provides feedback about performance, worker will have knowledge of results of this opportunity and to exercise responsibility

Outcomes Result in high intrinsic motivation When worker is truly in control of challenging job that provides good feedback, prerequisites for intrinsic motivation are present Relationship between work and worker is emphasized and worker is able to draw motivation from job itself Workers will report satisfaction with higher order needs and general satisfaction with job itself Should lead to reduced absenteeism and turnover

Moderators Jobs that are high in motivating potential do not always lead to favourable outcomes Propose certain moderator or contingency variables that intervene between job characteristics and outcomes One of these is job relevant knowledge and skill of worker Workers with weak knowledge and skills should not respond favourable to jobs that are high in motivating potential Another moderator is growth need strength which refers to extent to which people desire to achieve higher order need satisfaction by performing their jobs Those with high growth needs should be most responsive to challenging work Workers who are dissatisfied with context factors surrounding job (ex. pay) will be less responsive to challenging work that those who are satisfied with context factors

Research Evidence Supportive of basic prediction of model workers tend to respond more favourably to jobs higher in motivating potential All five core job characteristics were positively related to outcomes in model as well as other outcomes Some of core job characteristics were also related to behavioral and well-being outcomes With respect to psychological states, strong support for role of experienced meaningfulness of work but less support for experienced responsibility and no support for role of knowledge of results Results suggest that experienced meaningfulness is most critical psychological state

Job Enrichment Design of jobs to enhance intrinsic motivation, quality of working life, and job involvement

Job involvement refers to cognitive state of psychological identification with ones job and importance of work to ones total self-image Employees who have challenging and enriched jobs tend to have higher levels of job involvement All core job characteristics have been found to be positively related to job involvement Employees who are more involved in their job have higher job satisfaction and organizational commitment Job enrichment involves increasing motivating potential of jobs via arrangement of core characteristics Many job enrichment schemes do the following 1. Combining Tasks a. Involves assigning tasks that might be performed by different workers to a single individual b. Increases variety of skills employed and might contribute to task identity as each worker does job from start to finish 2. Establishing Eternal Client Relationships a. Involves putting employees in touch with people outside organization who depend on product or services b. Might involve use of new skills, increase identity and significance of job, and increase feedback 3. Establishing Internal Client Relationships a. Involves putting employees in touch with people who depend on their products or services within organization b. Might involve use of new skills, increase identity and significance of job, and increase feedback 4. Reducing Supervision or Reliance on Others a. Increase autonomy and control over ones own work 5. Forming Work Teams a. Alternative to a sequence of small jobs that individual workers perform when product or service is too large or complex for one person to complete alone b. Should lead to formal and informal development of variety of skills and increase job identity 6. Making Feedback More Direct a. Used in conjunction with other job design aspects

Potential Problems with Job Enrichment 1. Poor Diagnosis a. Problems can occur when it is instituted without a careful diagnosis of the needs of the organization and the particular jobs in question b. Especially likely error is increasing job breadth by giving employees more tasks to perform at the same level while leaving other crucial characteristics unchanged (known as job enlargement) c. Thus, workers are simply given more boring, fragmented, routine work d. Organizations might enrich jobs that are already perceived as too rich 2. Lack of Desire or Skill a. Some workers do not desire enriched jobs as enrichment places greater demands on workers b. Some might lack the skills and competence necessary to perform enriched jobs effectively c. Might be difficult or expensive to train some workers 3. Demand for Rewards a. Workers who experience job enrichment ask that greater extrinsic rewards accompany redesigned jobs b. Desire is prompted by fact that such jobs require development of new skills and entail greater responsibility 4. Union Resistance

a. North American unions have not been enthusiastic about job enrichment due to historical focus on negotiating with management about easily quantified extrinsic motivators b. Unions have tended to equate narrow division of labour with preserving jobs for their members c. Companies and unions however, have begun to dismantle restrictive contract provisions regarding job design d. Fewer job classifications mean more opportunities for flexibility by combining tasks and using team approaches 5. Supervisory Resistance a. Might fail because unanticipated impact on other jobs or other parts of organization b. Change might disenrich bosss job c. Enrichment can increase need for supervisory function Recent Developments in Job Design: Work Design Work design characteristics refers to attributes of task, job, and social and organizational environment and consists of three categories: 1. Motivational Characteristics a. Include task characteristics which are similar to the core job characteristics of the Job Characteristics Model, as well as knowledge characteristics that refer to the kinds of knowledge, skill, and ability demands required to perform a job b. Make a distinction between task variety and skill variety i. Task variety involves degree to which job requires employees to perform wide range of tasks on job ii. Skill variety reflects extent to which job requires individual to use variety of different skills to perform job 2. Social Characteristics a. Have to do with interpersonal and social aspects of work 3. Work Context Characteristics a. Refers to context within which work is performed Knowledge, social, and work context characteristics represent an important addition to study of work design Work design characteristics have large and significant effect on employee attitudes and behaviors

Management by Objectives Elaborate, systematic, ongoing management program designed to facilitate goal establishment, goal accomplishment, and employee development Objectives are simply another label for goals Primary focus is nature of interaction between managers and individual workers in MBO program

Research Evidence MBO programs result in clear productivity gains However, MBO is an elaborate, difficult, time consuming process, and its implementation must have full commitment Excessive short term orientation can be a problem Setting specific, quantifiable objectives can be difficult

Alternative Working Schedule as Motivators for a Diverse Workforce

Many organizations have modified traditional working schedules Purpose is to meet diverse workforce needs and promote job satisfaction

Flex-Time Requires employees to report for work on each working day and work a given number of hours Times at which they arrive and leave are flexible as long as they are present during core times Allows employees to tailor arrival and departure times Signal a degree of prestige and trust Might lead to problems in achieving adequate supervisory coverage in manufacturing settings Most frequently implemented in office environments

Research Evidence Almost always prefer this system to fixed hours Work attitudes become more positive and absenteeism are decreased Slight productivity gains are seen Positive effect on productivity, job satisfaction, and satisfaction with work schedule; all lower absenteeism

Compressed Workweek Compresses the hours worked each week into fewer days Could result in reduced customer service and fatigue

Research Evidence People seem to like it but increased job satisfaction might be short lived Workers have often reported increased fatigue Potential gains in attendance might be nullified as workers might take day off because of fatigue Positive effect on job satisfaction and satisfaction with work schedule but no effect on absenteeism and productivity

Job and Work Sharing Occurs when two part time employees divide the work of a full time Two can share all aspects of the job however they choose Work sharing involves reducing number of hours employees work to avoid layoffs when there is reduction in normal business activity Work sharing cuts costs, saves jobs, and avoids layoffs; it also helps retain highly skilled workers

Research Evidence No hard research but job sharing can result in coordination problems if communication is poor

Telecommuting Employees are able to work at home but stay in touch with their offices through use of communications technology Provides workers with greater flexibility in work schedules Distant staffing enables employees to work for company without ever having to come into office

Research Evidence

Benefits to organizations and individuals Lower costs as reduction in turnover and need for office space and equipment Can improve work like balance and increase productivity Positive effect on job satisfaction and job performance and results in lower stress and turnover intentions No detrimental effect on quality of workplace relationships Increases employees perceptions of autonomy Negative aspects can result from damage due to informal communication Hesitant to implement because trust and control issues Must have strong perception of trust between employees and management before implemented

Motivation Practices in Perspective Motivational systems chosen should have good fit with strategic goals of organization Balance among components of motivational system is critical No simple formulas to improve attitudes and performance and no set of laws to solve problems Choice of motivational practices requires thorough diagnosis of organization as well as consideration of employee needs Systems that make use of a variety of motivators used in conjunction with one another are likely to be the most effective

Organizational Behavior Chapter 4 Values, Attitudes, and Work Behavior What are Values? Broad tendency to prefer certain states of affairs over others Preference aspect means that values have to do with what we consider good and bad Values are motivational, since they signal the attractive aspects of our environment that we seek and the unattractive aspects that we try to avoid or change Signal how we believe we should and should not behave Broad tendency mean that values are very general and that they do not predict behavior in specific situations very well Not everyone holds the same values and we learn values through the reinforcement process

Generational Differences in Values Generations comprise of the Traditionalists, the Baby Boomers, Generation X, and the Millennials (Generation Y) Distinguished by age and by having grown up under different socialization experiences Contrasting experiences led to notable value differences Traditionalists are portrayed as being respectful of authority and having high work ethic; baby boomers are viewed as optimistic workaholics; Gen X is seen as cynical, confident, and pragmatic; and Gen Y is said to be confident, social, demanding of feedback, and somewhat unfocused Latter two generations are seen as more accepting of diversity and striving for good work life balance, and comfort with technology is noticeable Gen X and Y are more inclined to value status and rapid career growth that baby boomers Generational differences in work values or in way values are expressed is important because there is much evidence that good fit between a persons values and those of the organization leads to positive work attitudes and behaviors Tailor job designs, leadership styles, and benefits to the generational mix of their workforce

Cultural Differences in Values Business has become global in its scope Work itself is valued different across cultures

Hofstedes Study Four basic dimensions along which work-related values differed across cultures: 1. Power Distance a. Refers to extent to which society members accept unequal distribution of power including those who hold more power and those who hold less b. In small power distance cultures, inequality is minimized c. In large power distance societies, inequality is accepted as natural 2. Uncertainty Avoidance a. Refers to extent to which people are uncomfortable with uncertain and ambiguous situations b. Strong uncertainty avoidance cultures stress and regulations, hard work, conformity, and security c. Cultures with weak uncertainty avoidance are less concerned with rules, conformity, and security, and hard work is not seen as a virtue; risk taking is valued 3. Masculinity/Femininity

a. More masculine cultures differentiate gender roles, support dominance of men, and stress economic performance b. More feminine cultures accept fluid gender roles, stress sexual equality, and stress quality of life 4. Individualism/Collectivism a. Individualistic societies tend to stress independence, individual initiative, and privacy b. More collective cultures favor interdependence and loyalty to ones family or clan 5. Long Term/Short Term Orientation a. Cultures with a long term orientation tend to stress persistence, perseverance, thrift, and close attention to status differences b. Cultures with a short term orientation stress personal steadiness and stability, face saving, and social niceties Cultures that are more individualistic tend to downplay power differences while those that are more collectivistic tend to accentuate power differences

Implications of Cultural Variation Important message is that North American practices might not translate well to other societies Basic questions remain the same but answers differ Good fit between company practices and host culture is important Understanding cultural value differences can enable organizations to successfully import management practices by tailoring the practice to home cultures concerns Appreciation of cross cultural differences in values is essential to understanding needs and tastes of customers or clients around the world Appreciating values of global customers is also important when customers enter your own culture Companies need to select, train, and develop employees to have a much better appreciation of differences in cultural values and implications of these differences Attitudes do not always get translated into behaviors

What Are Attitudes? An attitude is a fairly stable evaluative tendency to respond consistently to some specific object, situation, person, or category of people Attitudes involve evaluations directed toward specific targets Must more specific than values which dictate only broad preferences Attitudes are tendencies to respond to the target of the attitude Thus, attitudes often influence our behavior toward some object, situation, person, or group Attitude Behavior Attitudes are not always consistent with behavior and they provide useful information over and above actions we observe Behavior is most likely to correspond to attitudes when people have direct experience with target of attitude and when attitude is held confidently Attitudes are a function of what we think and what we feel Attitudes are the product of a related belief and value Belief + Value Attitude Behavior Attitudes develop from basic beliefs and values Organizations can attempt to change employee attitudes which are usually initiated by a communicator who tries to use persuasion to modify beliefs or values of audience that supports currently held attitude Persuasion designed to modify or emphasize values is usually emotionally oriented

Persuasion slanted toward modifying certain beliefs is usually rationally oriented

What is Job Satisfaction? Refers to a collection of attitudes that people have about their jobs Can differentiate two aspects of satisfaction: 1. Facet satisfaction, the tendency for an employee to be more or less satisfied with various facets of the job a. Most relevant attitudes toward jobs are contained in a rather small group of facets 2. Overall satisfaction, an overall or summary indicator of a persons attitude toward his or her job that cuts across the various facets a. Overall satisfaction is an average or total of the attitudes individuals hold toward various facets of the job

What Determines Job Satisfaction Differences in average scores across jobs are found Various jobs might differ objectively in facets that contribute to satisfaction Frequently find decided differences in job satisfaction expressed by individuals performing same job in given organization

Discrepancy Attitudes are the product of associated beliefs and values These two factors cause differences in job satisfaction even when jobs are identical People might differ in beliefs about job; might differ in their perceptions concerning actual nature of job Even if individuals perceive jobs as equivalent, might differ in what they want from job; preferences are dictated by value systems Discrepancy theory of job satisfaction asserts that satisfaction is a function of discrepancy between job outcomes people want and outcomes they perceive they obtain

Fairness Issues of fairness affect what people want and how they react to discrepancies of organizational life Three basic kinds of fairness: 1. Distributive Fairness a. Occurs when people receive outcomes they think they deserve from their jobs b. It involves ultimate distribution of work rewards and resources c. Equity theory states that inputs people perceive themselves as investing in job and outcomes that job provides are compared against inputs and outcomes of other relevant person or group d. Inputs consist of anything relevant to exchange with organization, give up, offer, or trade to the organization e. Outcomes are factors that organization distributes to employees in return for their inputs f. Inequity is a dissatisfying state g. Equity considerations have indirect effect on job satisfaction by influencing what people want from their jobs h. Equitable distribution of work outcomes contributes to job satisfaction by providing feelings of distributive fairness 2. Procedural Fairness a. Occurs when individuals see process used to determine outcomes as reasonable

b. Rather than involving actual distribution of resources or rewards, it is concerned with how these outcomes are decided and allocated c. Especially likely to provoke dissatisfaction when people also see distributive fairness as being low d. Dissatisfaction will be maximized when people believe that they would have obtained better outcomes if the decision maker had used other procedures that should have been implemented 3. Interactional Fairness a. Occurs when people feel that they have received respectful and informative communication about some outcome b. Extend beyond actual procedures used to interpersonal treatment received when learning about outcome c. Important because it is possible for absolutely fair outcomes or procedures to perceived as unfair when they are inadequately explained d. Both procedural and interactional fairness can offset negative effects of distributive fairness Disposition Job satisfaction can increase when work environment changes to increase fairness and decrease discrepancy between what individual wants and what job offers Idea that some people are predisposed by virtue of their personalities to be more or less satisfied despite changed in discrepancy or fairness Some personality characteristics originating in genetics or early learning contribute to adult job satisfaction

Mood and Emotion Affect is a broad label for feelings Feelings include emotions, which are intense, short lived, and caused by a particular event Affect also refers to moods, which are less intense, longer lived, and more diffuse feelings Jobs consist of series of events that have potential to provoke emotions or influence moods A persons disposition can interact with job events to influence satisfaction Interesting way in which mood and emotion can influence job satisfaction is through emotional contagion which is the tendency for mods and emotions to spread between people or throughout a group Peoples moods and emotions tend to converge with interaction Interesting way in which mood and emotion can influence job satisfaction is through need for emotional regulation which is requirement for people to conform to certain display rules in job behavior despite their true mood or emotions Often referred to as emotional labour Frequent need to suppress negative emotions takes a toll on job satisfaction and increases stress Occupations high cognitive demands tend to be paid more when jobs are also high in emotional labour Occupations with low cognitive demands entail wage penalty when emotional labour is higher Consideration of mood and emotion helps explain phenomenon: how people with similar believes and values doing same job for same compensation exhibit different satisfaction levels Satisfaction is function of certain dispositional factors, discrepancy between job outcomes a person wants and outcomes received, and mood and emotion People experience greater satisfaction when they meet or exceed job outcomes they want, perceive job outcomes they receive as equitable compared with others, and believe fair procedures determine job outcomes Outcomes people want from job are function of personal value systems , moderated by equity considerations Outcomes people perceive themselves as receiving from job represents beliefs

Some Key Contributors to Job Satisfaction Mentally challenging wok, adequate compensation, career opportunities, and friendly or helpful colleagues 1. Mentally Challenging Work a. Work that tests employees skills and abilities and allows them to set their own working pace b. Usually perceive such work as personally involving and important c. Provides worker with feedback regarding performance 2. Adequate Compensation a. Pay and satisfaction are positively related b. Not everyone is equally desirous of money; some people willing to accept less responsibility for lower pay 3. Career Opportunities a. Opportunity for promotion is important contributor to job satisfaction because promotions contain number of valued signals about persons self-worth b. Some signals may be material and others are of social nature 4. People a. Friendly, considerate, good natured superiors and coworkers contribute to job satisfaction via positive moods and emotions b. Tend to be satisfied in presence of people who help us attain job outcomes we value

Consequences of Job Satisfaction 1. Absence from Work a. Expensive in North America b. Less satisfied employees more likely to be absent and satisfaction with content of work is best predictor of absenteeism c. However, some absence is simply unavoidable, opportunities for off the job satisfaction on missed day may vary, some organizations have attendance control policies that influence absence more than satisfaction does, and in many jobs, it may be unclear to employees how much absenteeism is reasonable/sensible d. Connection between job satisfaction and good attendance stems from tendency for job satisfaction to facilitate mental health and satisfaction with life in general 2. Turnover a. Refers to resignation for organization and can be very expensive b. Less satisfied workers are more likely to quit c. Relationship between job satisfaction and turnover is far from perfect d. Various shocks can contribute to intentions to leave and such intentions sometimes prompt turnover impulsively e. Reduced satisfaction or commitment can also stimulate a more deliberate evaluation of utility of quitting and a careful job search and evaluation of job alternatives f. Some reasons why satisfied people sometimes quit or dissatisfied people stay: i. Certain shocks might stimulate turnover despite satisfaction ii. Employees dissatisfaction might be offset by strong commitment to values and mission of organization iii. Employee might be embedded in community that they are willing to endure dissatisfying job rather than move iv. Weak job market might result in limited employment opportunities

g. Decrease in job satisfaction often precedes turnover and those who quit experience boos in satisfaction on new job i. Some boost might be due to honeymoon effect in which bad facets of old job are gone, good facets of new job are apparent, and bad facets of new job are not yet known ii. Over time, as bad facets in new job are recognized, hangover effect can occur, in which overall satisfaction with new job decreases 3. Performance a. Happy worker is a productive worker b. Satisfaction facets are not equal in terms of stimulating performance c. Most important facet has to do with content of work itself d. Interesting, challenging jobs are most likely to stimulate high performance e. Performance can also contribute to job satisfaction (when followed by rewards) f. Satisfaction is more likely to affect performance however 4. Organizational Citizenship Behavior a. Voluntary, informal behavior that contributes to organizational effectiveness b. Job satisfaction contributes to occurrence of OCB more than it does to regular task performance c. One prominent form of OCB is helping behavior d. Another might be conscientiousness to details of work e. Third form involves being good sport when inevitable frustrations of organizational life crop up f. Final form is courtesy and cooperation g. People in pleasant, relaxed, optimistic mood are more likely to provide assistance to others h. OCB contributes to productivity and efficiency and to reduced turnover 5. Customer Satisfaction and Profit a. Can reduce employee absenteeism and turnover and increase employee performance and citizenship behavior b. Job satisfaction is translated into customer/client satisfaction and organizational profitability c. Organizations with higher average levels of employee satisfaction are more effective d. Makes good sense to use employee satisfaction as one criterion in judging effectiveness of local unit managers What is Organizational Commitment? Attitude that reflects strength of linkage between employee and organization Linkage has implications for whether someone tends to remain in organization 1. Affective Commitment: a. Based on persons identification and involvement with organization b. People with high affective commitment stay with organization because they want to 2. Continuance Commitment a. Based on costs that would be incurred in leaving organization b. People with high continuance commitment stay with organization because they have to 3. Normative Commitment a. Based on ideology or feeling of obligation to organization b. People with high normative commitment stay because they think they should do so

Key Contributors to Organizational Commitment Best predictor of affective commitment is interesting, satisfying work

Continuance commitment occurs when people feel that leaving organization will result in personal sacrifice or they perceive good alternative employment is lacking Normative commitment can be fostered by benefits that build sense to organization Strong identification with product or service can foster normative commitment Certain socialization practices that emphasize loyalty to organization can stimulate normative commitment

Consequences of Organizational Commitment All forms of commitment reduce turnover intentions and actual turnover Affective commitment is positively related to performance because focuses attention on goals and enhances motivation Continuance commitment is negatively related to performance Very high levels of commitment can cause conflicts between family and work life High levels of commitment to particular form or style of organization can cause lack of innovation and lead to resistance when change in culture is necessary

Change in the Workplace and Employee Commitment Organizations are experiencing shits in workforce demographics, technological innovation, and global competition - Impacts of changes can be seen in three main areas: 1. Changes in the nature of employees commitment to the organization a. Employees levels of affective, continuance, and normative commitment can increase or decrease b. Changes made in organizations best interest but detrimental to employees well-being are most likely to damage affective commitment 2. Changes in the focus of employees commitment a. Employees generally have multiple commitment b. Changes in workplace might alter focus of commitments both inside and outside organization 3. The multiplicity of employer-employee relationships within organizations a. Organizations need to be flexible enough to shrink or expand their workforce b. At same time, they need workforce that is flexible to get any job done c. Idea is that relationships enables organizations to have flexible workforce and at same time foster high level of affective commitment among core employees - Changes in workplace are having impact on nature of employee commitment and employee-employer relationships - Important organizations understand how changes in workplace change profile and focus of employees commitment and impact this can have on employee behavior and organizational success

Organizational Behavior Chapter 2 Personality and Learning Learning is critical requirement for effective organizational behavior Employee learning must be continuous and life long Behavior is also a function of peoples personalities

What is Personality? Relatively stable set of psychological characteristics that influences the way an individual interacts with his or her environment and how he or she feels, thinks, and behaves Summarizes their personal style of dealing with the world Consists of number of dimensions and traits that are determined by genetic predisposition and long term learning history Susceptible to change through adult learning experiences People have variety of personality characteristics

Personality and Organizational Behavior Initially believed personality was important factor in many areas of organizational behavior Dispositional approach because it focuses on individual dispositions and personality According to dispositional approach, individuals possess stable traits or characteristics that influence their attitudes and behaviours Individuals are predisposed to behave in certain ways However, mixed/inconsistent findings failing to support usefulness of personality as predictor of organizational behavior and job performance Research began to shit to factors in work environment that might predict and explain organizational behavior Situational approach deals with characteristics of organizational setting that influence peoples feelings, attitudes, and behavior Interactionist approach is function of both dispositions and situation o To predict and understand organizational behavior, one must know something about individuals personality and setting which they work o Most widely accepted perspective Extent to which personality influences peoples attitudes and behavior depends on situation Extent to which people perceive stressors as stressful and way react to stress is influenced by personality Important implication to interactionist perspective is some personality characteristics are useful in certain situations There is no one best personality Key concept is fit: putting right person in right job

The Five-Factor Model of Personality - Psychologists discovered there are about five basic general dimensions that describe personality 1. Extraversion a. Extent to which a person is outgoing versus shy b. People who score high tend to be sociable, outgoing, energetic, joyful, and assertive c. Especially important for jobs that require lot of interpersonal interaction 2. Emotional Stability/Neuroticism a. Degree to which person has appropriate emotional control b. High emotional stability (low neuroticism) are self-confident and have high self esteem

c. Lower emotional stability (high neuroticism) tend toward self-doubt and depression d. For almost any job, performance of persons with low emotional stability is likely to suffer e. High emotional stability are likely to have more effective interactions because more calm and secure 3. Agreeableness a. Extent to which person is friendly and approachable b. More agreeable people are warm, considerate, friendly, cooperative, and eager to help others c. Less agreeable people tend to be cold and aloof d. Most likely to contribute to job performance in jobs that require interaction and involve helping 4. Conscientiousness a. Degree to which person is responsible and achievement oriented b. More conscientious people are dependable and positively motivated and achievement striving c. Less conscientious people are irresponsible, lazy, and impulsive d. Persons who are high on conscientiousness are likely to perform well on most jobs because they are achievement oriented 5. Openness to Experience a. Extent to which person thinks flexibly and is receptive to new ideas b. People high on openness to experience likely to do well in jobs that involve learning and creativity - Big five are independent and are held cross culturally - They have genetic basis Research Evidence Big five are related to job performance Dimensions that best predict job performance depend on job However, high conscientiousness predicts performance in all jobs and is strongest predictor of Big Five Big five are related to other work behaviours Big five also related to motivation and job satisfaction o Neuroticism and conscientiousness were strongest predictors of motivation Big five shown to be significantly related to job satisfaction o Strongest predictor was neuroticism, then conscientiousness, then extraversion, then agreeableness Big five also related to job search and career success o All positively related except neuroticism which is negatively related o Results suggest that effects of personality on career success are relatively enduring

Locus of Control Refers to individuals beliefs about location of factors that control their behavior One end are high internals who believe that opportunity to control own behavior resides within themselves Other end are high externals who believe external forces determine behaviour Externals see world as unpredictable Internals see strong link between effort they put in and performance level achieved o Perceive greater degree than externals that organization will notice high performance and reward it o More likely to be aware and take advantage of information that will enable them to perform effectively People high on internal control are more satisfied with jobs and perceive less stress

Self-Monitoring Extent to which people observe and regulate how they appear and behave in social settings and relationships

Low self-monitors are not concerned with scoping out and fitting in with those around them High self-monitors take great care to observe and control images that they project High self-monitors tend to gravitate toward jobs that require degree of role playing and self-presentation skills High self-monitors tend to be more involved in jobs, perform at higher level, and more likely to be leaders High self-monitors more likely to experience stress and show less commitment to organization High self-monitors are unlikely to feel comfortable in ambiguous social settings and are weak innovators and would have difficulty resisting social pressure

Self-Esteem Degree to which person has positive self-evaluation People with high self-esteem have favourable self-images People with low self-esteem have unfavourable self-images People tend to be highly motivated to protect themselves from threats to their self-esteem According to behavior plasticity theory, people with low self-esteem tend to be more susceptible to external and social influences than those who have high self-esteem Events and people in organizational environment have more impact on beliefs and actions of employees with low self-esteem Employees with low self-esteem tend to react badly to negative feedback Modeling correct behavior should be especially effective with employees with low self esteem Organizations should avoid assigning those with low self-esteem jobs that inherently provide lot of negative feedback Organizations will benefit from workforce with high self esteem

Recent Developments in Personality and Organizational Behavior 1. Positive and Negative Affectivity a. People who are high on positive affectivity experience positive emotions and moods and view the world in a positive light including themselves and other people b. People who are high on negative affectivity experience negative emotions and moods and view the world in negative light c. Positive and negative affectivity are emotional dispositions that predict peoples general emotional tendencies d. Can influence peoples emotions and mood states at work and influence job attitudes and work behavior e. People high on PA report higher job satisfaction and performance 2. Proactive Personality a. Taking initiative to improve ones current circumstances or creating new ones b. Involves challenging status quo rather than passively adapting to present conditions c. People who have proactive personality are unconstrained by situational forces and act to change and influence environment d. Proactive personality is stable personal disposition that reflects tendency to take personal initiative across range of activities and situations and effect positive change in ones environment e. Search for and identify opportunities, take action, and persevere until they bring meaningful change f. People not proactive are passive and react and adapt to their environment i. Tend to be shaped by environment instead of shaping it g. Proactive personality has been positively related to many outcomes 3. General Self-Efficacy

a. General trait that refers to an individuals belief in their ability to perform successfully in variety of challenging situations b. Considered to be motivational trait rather than affective trait because reflects individuals belief that they can succeed at variety of tasks rather than how individual feels about themselves c. If you experienced many successes in life, you are likely to have high GSE 4. Core Self-Evaluations a. Refers to broad personality concept that consists of more specific traits b. Individuals hold evaluations about themselves and their self-worth, worthiness, competence, and capability c. Four traits that make up persons core self-evaluation i. Self-esteem, general self-efficacy, locus of control, and neuroticism d. people with more positive self-evaluations have higher job satisfaction and performance e. core self-evaluations are related to job satisfactions over time f. persons with positive self-regard experience job as more intrinsically satisfying What is Learning? Environment can change peoples behaviour and shape personalities and peoples lifestyle behaviors can be changed Learning occurs when practice or experience leads to relatively permanent change in behavioural potential Practice or experience that prompts learning stems from environment that gives feedback Can be understood in terms of taxonomies that indicate what employees learn, how they learn, and different types of learning experiences What aspect of learning can be described as learning content and there are four main categories: 1. Practical Skills a. Include job specific skills, knowledge, and technical competence 2. Intrapersonal Skills a. Skills such as problem solving, critical thinking, learning about alternative work processes, and risk taking 3. Interpersonal Skills a. Include interactive skills such as communicating, teamwork, and conflict resolution 4. Cultural Awareness a. Involves learning social norms of organizations and understanding company goals, business operations, and company expectations and priorities

Operant Learning Theory The subject learns to operate on the environment to achieve certain consequences Operantly learned behaviour is controlled by consequences that follow it Consequences depend on behaviour, and this connection is what is learned Can be used to increase probability of desired behaviours and reduce or eliminate probability of undesirable behaviours

Increasing the Probability of Behaviour Reinforcement is process by which stimuli strengthen behaviours A reinforce is a stimulus that follows some behaviour and increases or maintains the probability of that behaviour

Reinforcement serves to strengthen behaviours that fulfill organizational goals Positive reinforcers work by their application to a situation while negative reinforcers work by their removal from a situation

Positive Reinforcement Increases or maintains probability of some behaviour by the application or addition of a stimulus to the situation in question Stimulus is positive reinforcer Positive reinforcers tend to be pleasant things Whether or not something is a positive reinforcer depends only on whether it increases or maintains occurrence of some behaviour by its application

Negative Reinforcement Increases or maintains probability of some behaviour by removal of stimulus from situation in question Occurs when response prevents some event or stimulus from occurring Removed or prevented stimulus is negative reinforcer Negative reinforcers are usually aversive or unpleasant stimuli Negative reinforcers increase the probability of behaviour Negative reinforcers generally tend to be unpleasant things Negative reinforcers are defined only by what they do and how they work, not their unpleasantness

Organizational Errors Involving Reinforcement 1. Confusing Rewards with Reinforces a. Such rewards can fail to serve as reinforcers because organizations do not make them contingent on specific behaviours that are of interest to organization 2. Neglecting Diversity in Preferences for Reinforcers a. Organizations often fail to appreciate individual differences in preferences for reinforcers 3. Neglecting Important Sources of Reinforcement a. While concentrating on potential reinforces of formal nature, organizations and managers neglect those that are administered by coworkers or are intrinsic to job being performed b. One important source of reinforcement is feedback c. Performance feedback involves providing quantitative or qualitative information on past performance for purpose of changing or maintaining performance in specific ways d. Performance feedback is most effective when it is i. Conveyed in positive manner ii. Delivered immediately after performance is observed iii. Represented visually iv. Specific to behaviour that is being targeted for feedback e. Social recognition is important and involves informal acknowledgement, attention, praise, approval, or genuine appreciation for work well done from one individual or group to another f. When social recognition is made contingent on employee behaviour it can be effective means for performance improvement g. Managers should understand positive feedback and pat on back for job well done is positive reinforcer that is easy to administer Reinforcement Strategies

To obtain fast acquisition of some response, continuous and immediate reinforcement should be used o Reinforcer should be applied every time behaviour of interest occurs and should be applied without delay after each occurrence Behaviour that individuals learn under such conditions tends not to persist when reinforced less frequently or stopped Behaviour tends to be persistent when it is learned under conditions of partial and delayed reinforcement o It will tend to persist under reduced or terminated reinforcement when not every instance of behaviour is reinforced during learning or when some time period elapses between its enactment and reinforcement Continuous, immediate reinforcement facilitates fast learning, and delayed, partial reinforcement facilitates persistent learning It is impossible to maximize both speed and persistence with a single reinforcement strategy Many responses in our everyday lives cannot be continuously and immediately reinforced Managers have to tailor reinforcement strategies to the needs of the situations and managers must alter these strategies over time to achieve effective learning and maintenance of behaviour

Reducing the Probability of Behaviour Both positive and negative reinforcement can accomplish the goal of increasing probability of various work behaviours - In many cases, we want to stop behaviors - Two strategies that can reduce probability of learned behaviour: 1. Extinction a. Involves terminating reinforcement that is maintaining unwanted behaviour b. If behaviour is not reinforced, it will gradually dissipate or be extinguished c. Extinction works best when coupled with reinforcement of some desired substitute behaviour 2. Punishment a. Involves following unwanted behaviour with some unpleasant, aversive stimulus b. When actor learns that behaviour leads to unwanted consequences, this should reduce probability of response c. In negative reinforcement, nasty stimulus is removed following some behaviour increasing probability of behaviour d. With punishment, nasty stimulus is applied after some behaviour, decreasing probability of that behaviour 3. Using Punishment Effectively a. In theory, punishment should be useful in eliminating unwanted behaviour b. Unique characteristics that often limit effectiveness c. While punishment provides clear signal as to which activities are inappropriate, does not by itself demonstrate which activities should replace punished response d. Punishment indicates only what is not appropriate e. Since no reinforced substitute behaviour is provided, punishment only temporarily suppresses unwanted response and when surveillance is removed, response will tend to recur f. Must provide acceptable alternative for punished response g. Second difficulty is that it has tendency to provoke strong emotional reaction especially when delivered in anger and perceived to be unfair h. Several principles can increase effectiveness of punishment i. Make sure chosen punishment is truly aversive

i. j.

1. Presumed punishment may actually act as positive reinforcer for unwanted behaviour ii. Punish immediately 1. Managers frequently overlook early instances of rule violations or ineffective performances 2. Allows for behaviour to gain strength through repetition iii. Do not reward unwanted behaviours before or after punishment 1. Actions present employees with confusing signals about how to behave iv. Do not inadvertently punish desirable behaviour Punishment can be effective means of stopping undesirable behaviour however managers must apply it very carefully and deliberately to achieve effectiveness Reinforcing correct behaviours and extinguishing unwanted responses are safer strategies than frequent use of punishment

Social Cognitive Theory Human behaviour is not simply due to environmental influences and people often learn and behave through their own volition and self-influence People have cognitive capacity to regulate and control their own thoughts, feelings, motivation, and actions Social cognitive theory emphasizes role of cognitive processes in regulating peoples behaviour o States that human behaviour can best be explained through a system of triadic reciprocal causation in which personal factors and environmental factors work together and interact to influence peoples behaviour o Peoples behaviour also influences personal factors and environment o Operant learning theory and social cognitive theory complement each other Social cognitive theory involves three components: 1. Observational Learning a. Humans learn by observing behaviour of others b. Process of observing and imitating behaviour of others c. Learning occurs by observing or imagining behaviour of others rather than through direct personal experience d. Involves examining behaviour of others, seeing what consequences they experience, and thinking about what might happen if we act that same way e. Self-reinforcement that occurs in observational process f. Attractive, credible, competent, high status people stand good chance of being imitated 2. Self-Efficacy a. Refers to beliefs people have about their ability to successfully perform a specific task b. Task specific cognitive appraisal of ones ability to perform specific tasks c. Not a generalized personality trait d. Different self-efficacy beliefs for different tasks e. Can be changed and modified in response to different sources of information f. Self-efficacy is influenced by ones experiences and success performing the task in question, observation of others performing task, verbal persuasion and social influence, and ones physiological or emotional state g. Critical component of behaviour that can influence activities people choose to perform, amount of effort they devote to a task, affective and stress reactions, and job performance 3. Self-Regulation

a. Employees can use learning principles to manage own behaviour making external control less necessary b. Basic process involves observing ones own behaviour, comparing behaviour with a standard, and rewarding oneself If behaviour meets standard c. Key part is peoples pursuit of self-set goals d. When there exists a discrepancy between ones goals and performance, individuals are motivated to modify behaviour (discrepancy reduction) e. When individuals attain goals, they are likely to set higher goals (discrepancy production) f. People continually engage in goal setting g. Discrepancy reduction and discrepancy production are heart of self-regulatory process h. Self-regulation can improve learning and result in a change in behaviour Organizational Learning Practices 1. Organizational Behaviour Modification a. Most reinforcement occurs naturally b. OB Mod involves systematic use of learning principles to influence organizational behaviour c. Key is to make reinforcers contingent on specific behaviour d. Research shows OB Mod is effective and had positive effect on improving work attendance and task performance e. Use of money, feedback, and social recognition in combination has strongest effect on task performance 2. Employee Recognition Programs a. Formal organizational programs that publicly recognize and reward employees for specific behaviours b. Formal employee recognition program must specify i. How person will be recognized ii. Type of behaviour being encouraged iii. Manner of public acknowledgement iv. Token or icon of event for recipient c. Key part is public acknowledgement d. Found to be related to number of individual and organizational outcomes including job satisfaction, performance and productivity, and lower turnover e. Key factor in implementation and success of program is to link them to organizational goals and make them relevant for employees throughout organization 3. Training Programs a. Refers to planned organizational activities that are designed to facilitate knowledge and skill acquisition to change behaviour and performance b. One of most widely used and effective methods is behaviour modeling training which is based on observational learning component of social cognitive theory and involves following steps i. Describe to trainees a set of well-defined behaviours to be learned ii. Provide model displaying effective use of those behaviours iii. Provide opportunities for trainees to practice using those behaviours iv. Provide feedback and social reinforcement to trainees following practice v. Take steps to maximize transfer of those behaviours to job c. Found to increase trainees self-efficacy in addition to having positive effect on learning and job behavior 4. Career Development

a. Ongoing process in which individuals progress through series of stages that consist of unique set of issues, themes, and tasks b. Career planning involves assessment of individuals interests, skills, and abilities in order to develop goals and career plans c. Career management involves taking necessary steps that are required to achieve individuals goals and career plans

Organizational Behavior Chapter 11 Decision Making (pg. 359-374) What is Decision Making? Process of developing commitment to some course of action Three things are noteworthy about definition o Involves making a choice among several action alternatives o Process that involves more than simply the final choice among alternatives want to know how the decision was reached o commitment usually involves commitment of resources can describe it as process of problem solving problem exists when gap is perceived between some existing state and some desired state

Well-Structured Problems for a well-structured problem, existing state is clear, desired state is clear, and how to get from one state to the other is fairly obvious these problems are simple and solutions arouse little controversy because such problems are repetitive and familiar organizations attempt to program the decision making for well-structured problems program is a standardized way of solving problems programs usually go under labels such as rules, routines, standard operating procedures, etc. many of problems encountered in organizations are well structured however, programs are only as good as decision making process that led to adoption of program in first place

Ill-Structured Problems extreme example is which existing and desired states are unclear and method of getting to desired state is unknown ill-structured problems can entail high risk and stimulate strong political consideration

The Compleat Decision Maker A Rational Decision-Making Model when a problem is identified, search for information has begun information clarifies nature of problem and suggests alternative solutions which are carefully evaluated best alternative is chosen for implementation and is then monitored over time to ensure its immediate and continued effectiveness if difficulties occur at any point in the process, repetition, or recycling may be affected

Perfect versus Bounded Rationality prototype for perfect rationality is familiar Economic Person which is the perfect, cool, calculating decision maker who has the following characteristics o can gather information about problems and solutions without cost and is completely informed o perfectly logical o has only one criterion for decision making economic gain perfectly rational characteristics do not exists in real decision makers managers use bounded rationality rather than perfect rationality they are limited to capacity to acquire and process information and also under time constraints and political considerations

framing refers to aspects of presentation of information about problem that are assumed by decision makers o could include assumptions about boundaries of a problem, possible outcomes of a decision, or reference points used to decide if a decision is successful o how problems and decision alternatives are framed can have powerful impact on resulting decisions cognitive biases are tendencies to acquire and process information in particular way that is prone to error o biases constitute assumptions that can improve decision making efficiency but can lead to serious errors in judgment

Problem Identification and Framing problem exists when gap occurs between existing and desired conditions perfectly rational decision maker infinitely sensitive and completely informed should be great problem identifier bounded rationality can lead to following difficulties in problem identification: 1. Perceptual Defense a. Perceptual systems may act to defend perceiver against unpleasant perceptions 2. Problem defined in terms of functional specialty a. Selective perceptions can cause decision makers to view problem as being in domain of own specialty even when some other perspective might be warranted 3. Problem defined in terms of solution a. Form of jumping to solutions short circuits rational decision making process 4. Problem diagnosed in terms of symptoms a. Concentration on surface symptoms will provide decision maker with few clues about adequate solutions When problem is identified it is necessarily framed in some way Different decision frames might lead to very different decisions Rational decision makers should be conscious about how they frame problems and they should try out alternative frames

Information Search 1. Search for information is instigated once problem is identified Information search may clarify nature or extent of problem and begin to suggest alternative solutions Information search might be slow and costly Too Little Information a. Sometimes decision makers do not acquire enough information to make good decision b. We use whatever information most readily available and we tend to remember vivid, recent events c. Tendency for people to be overconfident in their decision making d. Difficult is exacerbated by confirmation bias, the tendency to seek out information that conforms to ones own definition of or solution to a problem 2. Too Much Information a. Too much information (information overload) is reception of more information than necessary to make effective decisions b. More is not necessarily better, however, decision makers seem to think so Alternative Development, Evaluation, and Choice Decision maker can now list alternative solutions to problem, examine solutions and then choose best one Decision maker can exhibit maximization; they can use alternative with greatest expected value

People avoid incorporating known existing data about likelihood of events into decisions Large samples warrant more confidence than small samples Decision makers often overestimate odds of complex chains of events occurring People are poor at revising estimates of probabilities and values as they acquire additional information o Anchoring effect, which illustrates that decision makers do not adjust their estimates enough from some initial estimate that serves as an anchor Possible to reduce basic cognitive biases by making people more accountable for decisions Accountability should be placed before decision is reached After the fact accountability increases probability of biases as people try to protect their identity as good decision makers Decision maker working under bounded rationality satisfices rather than maximizing o Satisficing means that decision maker establishes adequate level of acceptability for solution and then screens solutions until they find out that one exceeds this level

Risky Business Choosing between decision alternatives involves element of risk When people view a problem as a choice between losses, they tend to make risky decisions When people frame the alternatives as choice between gains, they make more conservative decisions

Solution Implementation and Evaluation 1. When decision is made, solution must be implemented Decision maker is effectively examining possibility that new problem has occurred Perfectly rational decision maker should be able to evaluate effectiveness with calm and objective detachment Bounded decision maker might encounter problems Justification a. People tend to be overconfident about adequacy of decisions b. Substantial dissonance can be aroused when decision turns out to be faulty c. Justification of faulty decision is best seen in irrational treatment of sunk costs d. Sunk costs are permanent losses of resources incurred as result of decision e. Since resources have been lost, they should not be entered in future decisions i. Despite this, people often throw good resources after bad ii. Process called escalation of commitment in which escalation involves devoting more resources to failing course of action f. Social norm that favors consistent behaviour y managers may also be at work i. Changing ones mind may signal weakness g. Escalation of commitment might be due to way problem is framed i. May be framed as sure loss of x dollars and uncertain loss of x + y dollars 1. When framed this way, people tend to avoid certain loss and choose riskier option 2. Personality, moods, and emotions can affect escalation h. Groups are more prone than individuals to escalate commitment 2. Hindsight a. Refers to tendency to review decision making process that was used to find out what was done right or wrong b. Reflects cognitive bias knew it all along effect

c. Tendency to take personal responsibility for successful decisions when things work out well, its because we made careful, logical decisions; when things go poorly, unexpected factor messed up sensible decisions How Emotion and Mood Affect Decision Making Emotionless decision making would be poor decision making Emotions can correct ethical errors Strong positive emotion has been implicated in creative decision making and proper use of intuition to solve problems Many cases which strong emotions are hindrance People experiencing strong emotions are often self-focused and distracted from actual demands of problem Mood affects what and how people think when making decisions Mood has greatest impact on uncertain decisions of type that are especially crucial for organizations People in positive mood remember positive information and vice versa People in positive mood evaluate things positively and vice versa People in good mood adopt simple decision making strategies and vice versa Positive mood promotes more creative decision making

Rational Decision Making A summary Rational decision making model provides good guide for how decisions should be made but offers only partially accurate view of how they are made For complex decisions, rational model provides good picture of how people actually make decisions Half decisions made in organizations fail

Organizational Behaviour Chapter 13 Conflict and Stress (pg. 437-458)