Assessment

Assessing Recruitment methods

If recruitment is successful, common metrics:
o Applications received
o Cost per application received
o Applicant quality
Problems
o Few systems track how applicants heard about an opportunity
Often leads to broad multi-prong advertising efforts
o Few learning opportunities

Assessing Selection Efforts

Commonly used metrics:
o Yield ratios (% of offers accepted)
o Recruitment costs
o # of new hires
Ideal (but not possible) metrics:
o Information on future job performance of both selection and not selected
Desirable metrics:
o Correlation between key applicant characteristics and performance
o Test to see predictive power of quantifiable applicant characteristics

Summary and Key Takeaways

Candidate recruitment and selection is critical to organizations
o Firms often succeed or fail on the basis of employees abilities and retention
Recruitment decisions build the pool of applicants
Worker selection systems are becoming more analytical
o Seek to quantify desirable worker characteristics that can be objectively
measured
Competency assessments
o Research suggests that firms should use intelligence and contentiousness as
criteria for jobs requiring problem solving and autonomy
Recruitment and selection systems are ideally iterated and tested for effectiveness

Lecture 4: Diversity and Bias

Diversity and Performance

Two Views on Diversity + Performance

1. Diversity as cost view - might introduce problems
1. Different viewpoints can cause conflicts
 2. Diversity may diminish group cohesiveness
3. Additional recruitment costs
b. Diversity Pays view
1. Move access to novel set of ideas
2. Unique information from social networks
3. Additional creativity

A Business Case for Diversity

Novel solutions may emerge from organizations/groups with more varied experiences
and perspectives
Research: companies with highest levels of diversity
o Brought in more sales
o Served more customers

Where similar training + backgrounds can be good:

Army
Possible to slot-in; easily interchangeable

Individual vs. Group-Level Intelligence

Individual intelligence
Those who do well on one mental test or task frequently do well on others
o Ex: IQ tests, SATs, GMATs, GREs, LSATs, etc.
However a poor indicator/predictor of group performance
o Group of smart people may not be good groups

Collective Intelligence
A groups general ability to successfully perform together
Important for collective efforts, collaboration, and consensus-based decision making
Types of tasks:
o Visual puzzles, brainstorming, collective moral judgments, negotiating over
limited resources, building exercises, games
Associated with:
o Social perceptiveness of group members
o Equality of participation in conversation
o Proportion of women in the group
This is why more women in groups

Diverse Workforce for Diverse Clients and Customers

Diverse + inclusive workforces show (particularly in client-facing roles):
o More discretionary effort
o Higher intention to remain with the organization
o Greater team collaboration
o Higher team commitment
Better equipped to serve diverse client populations
Firms with diverse leaders:
o Increase in likelihood of ideas developed/prototyped
 o Greater innovation implementation
o Market share improvement
Increases in creativity + new product development
US will continue to become increasingly diverse
o Can result in revenue growth for firms that identify new products and consumer
space by targeting new diverse markets

How might labor market characteristics result in unequal worker outcomes?

Labor market characteristics

Multiplicity of markets
o No central clearing house
o Challenge: awareness in opportunities; who has access to these opportunities?
Workers are not standardized
o Uncertainty
o Workers productivity/abilities
o Differential access to education
Continuity of the employment relationship
o Not all workers have access to long-term jobs
Workers deliver themselves along with their labor
o Family/social/health commitments may affect availability of certain groups

Bias in Modern Labor Markets

Most people deny prejudice -- only about 10% of people in Western cultures display
overt racism
Yet 30-50% of minority group members report encountering discrimination
Modern discrimination is often subtle, indirect, outside of conscious awareness, the
result of discomfort and lack of awareness rather than hate or superiority

First Impressions Video

All of them are current employees in Facebook
First impression management
Smile, attire, firmness of handshake, etc. may impact initial assessments of individuals
Strong first-impressions can cause evaluators to look for confirmation / support of initial
views
Similarly, unrelated evaluator factors can impact outcomes
Small effects can have large impacts
o This is why bias can have big effects

Inequality Theories
Sociology, psychology, and economics, have explored why decision makers may reach
biased assessments in labor markets
o Typically general theories; explain unequal outcomes associated with an
individuals characteristics
 o May be applied to other non-employment settings

Generalizations
People are cognitive misers who economize through categorization
Why might individuals generalize?
o A response to uncertainty
o An innate desire to identify predictable processes and outcomes
o Basis in genetics?
From hunter-gatherer society
o How we build habits

Schemas
Processing of social phenomena
Theory derived from psychology
One of the primary tools associated with quick judgements
Pattern imposed on complex reality or experience to help interpret, explain, and predict
outcomes
Allows individuals to more effectively interact with the world
Earliest works: did not necessarily have to do with people
o Participants waited in an office for 35 seconds
o Then give surprise memory test
Average recall = 13.5 objects
Items with high schema expectancy and salience more likely to be
recalled
But things that were absent but would have been in an office were falsely
recalled also

Stereotypes: Person Schemas

Organized set of general knowledge and beliefs about the traits and characteristics of
people
Involve inferences that go beyond the information given
o May create mental picture based on whatever information available

Associations with Observable Characteristics

Particular demographic groups may be associated with certain social and economic
outcomes
o Education, family structure, life expectancy, risk taking, poverty, unemployment,
crime, technological abilities, social networks, etc.

Generalizations, Schemas, and Stereotyping

The danger of generalizations about people
o Cognitive shortcuts can lead to errors
o Subtle influence on expectations
o Emphasis on differences, rather than similarities

Three most general theories of generalizations/stereotypes

 Taste-based discrimination
Statistical discrimination
Status characteristics discrimination

Taste-Based Discrimination (a.k.a. Preference-based)

Decision makers may be biased against interacting with a particular group
Primarily due to cognitive beliefs or stereotypes regarding a group
May be intentional or unconscious
In the long-run, competitive market should eliminate such practices
o Organizations with biased practices will lose out on talented workers

Statistical Discrimination
Decision maker draws on group characteristics to make a decision about an individual
that is a member of that group (profiling)

Status Characteristics Theory

Unequal labor market outcomes arise because decision makers hold stereotypes about
the relative performance of different demographic groups
Status characteristics (i.e. age, race, sex) may be associated with cultural beliefs
o Associate social standing and competence to particular demographic groups
Social expectations (high/low performance)

Solutions: Rendering More Equitable Judgments

Most people deny prejudice -- only 10%
Yet 30-50% minority report encountering discrimination

Total US Equal Employment Opportunity Commission (EEOC) charges:

Pretty consistent 1997-2016
Slight jump in 2008-2009; recession + layoffs
Highest type: race sex nationality religion

Several (Non-Exhaustive) steps to address bias in work evaluations:

Mask applicant demographic characteristics during initial application assessments
Reach judgment with sufficient information
Use objective and quantifiable evaluation measures
Be aware of 1st impressions
Challenge dominant-emergent status expectations

Summary and Key Takeaways

Generalizations / schemas are responses to uncertainty. Identifying patterns is a key
part of learning. Stereotypes applied to people can be damaging
o Taste-based discrimination
Cognitive bias
Decision makers seek to avoid interaction and thus miss out on
productive workers
 o Status-based inequality
Cognitive bias
Socially-constructed status ordering of individual characteristics informs
performance expectations
o Statistical discrimination
Generalizations regarding group performance applied to individuals
To reach merit-based judgements:
o Be aware of work-irrelevant first impressions
o Use objective criteria established in advance
o Collect more information

Lecture 5: Personality

Definition of Personality
The sum total of ways in which an individual reacts to and interacts with others
o Robbins & Judge definition
o Sum total of ways = typical cognitions, emotions, and behaviors
o Ex: Shes really driven; He has high self-esteem; He is shy
An individuals characteristic patterns of thought, emotion, and behavior, together with
the psychological mechanisms -- hidden or not -- behind those patterns
o Funders definition

The Psychological Trait Approach

The many trait approach
o Allport and Odbert (1936)
o List of 17,953 traits
o Rich list but hard to compare across people
The essential trait approach
o The Big Five Inventory (BFI)
Most consistent
o Myers-Briggs Type Indicator (MBTI)
o Ten-Item Personality Inventory (TIPI)
The single trait approach
o Self-monitoring
o Machiavellianism

Fundamental Assumptions Behind the Trait Approach to Personality

Assume personality is:
o Unique
o Stable
Allow people to gauge + measure personality with regards to first impressions,
interviews, personality tests, etc.
Individual Trait Approach

Self-Monitoring
An individuals ability to adjust his or her behavior to external, situational factors
High self-monitors: good performance reviews, more mobile
Downside of this approach:
Snyders Self-Monitoring Scale
o In different situations and with different people, I often act like very different
persons
o Im not always the person I appear to be

Machiavellianism
The degree to which an individual is pragmatic, maintains emotional distance, and
believes that the ends justify the means
o
High Machs: highly persuasive, persuaded less, perform well in some jobs, less in others
MACH-IV
o It is hard to get ahead without cutting corners here and there
o Anyone who completely trusts anyone else is asking for trouble

The Essential Trait Approach

The Big Five Traits

Openness - open to new ideas and experiences
Conscientiousness - responsible and achievement-oriented
Extraversion - outgoing, sociable, energetic, assertive
Agreeableness - warm, friendly, cooperative, helpful
Neuroticism - emotional control and security
Factor analysis
o Take large number of dimensions and analyze the correlations between them to
identify smaller number of factors
Extraversion predictable of higher performance?
May be contradictory
The Person-Situation Interactionist Approach
Weak vs. Strong situations
o Situations can hide individual personality characteristics
If-then personality signatures
o Personality may be consistent within, but not across, situations

Weak vs. Strong Situations

Do certain situations reveal, or hide, our true personality?
Weak situation
o Situation where behavior is considered appropriate
o No guidance on how one should behave
o Unstructured; ambiguous
o Examples
Rorschach Test
Yellow light situation
Strong situation
o Situation that pulls for particular behaviors
o There is an appropriate way to behave, interpret the situation
o Structured
o Examples
 Late to interview interviewers act mostly agreeable
Trying to do better than other team in sports
First impressions

Freshman Roommate Study (Columbia Univ., 2007)

Example of strong situation; first impressions
Provided ratings on Big Five dimensions 1st week of school and again 9 months later
Ratings on extraversion most consistent
Agreeableness and conscientiousness very different

If-Then Personality Signatures

Looks at mean levels of personality variables averaged across situations
Personality may be stable within situations but not across situations
Ex: Bill Cllinton
o High degree of self-control in certain achievements
If faced with academic challenge: =)
o Struggles when
If faced with female intern: =(

Personality and Employment Screen

Employment Ads
May lean towards certain set of psychological characteristics

Firms Use of Personality Assessments

In 2001: 26% of US employers used pre-hire assessments
By 2013: 57% of US employers used pre-hire assessments
o Often used as initial screen to reduce the applicant pool
In 2014, 22% of organizations used personality testing to evaluate job candidates

The Big 5 and Work Assessments

Intended to predict attitudes and behavior at work and elsewhere
Most predictive of job performance: Conscientiousness
o Particularly preferred
o Reflects work ethic
o But hard to predict long-term conscientiousness

Summary and Key Takeaways

What is personality?
o Stability and uniqueness of behaviors, cognitions, emotions
What can it tell us?
o How someone will perform overall
o Cannot tell how someone will perform in a specific situation
 Best way to find out about someones personality:
o Multiple observations across a wide range of situations
o Observations in specific situations of interest
Some employers are using personality assessments during screening
o Contentiousness tends to offer greater job performance insight

Lecture 6 & 7: Motivation

What is Motivation?
A psychological process that arouses, directs, and maintains voluntary, purposeful,
and goal-directed behavior
An internal force that determines the choices people make among alternative courses of
action

Theories of Motivation
Content Theories
o Maslow, Herzberg, McClelland
Process theories
o Equity, goal setting, expectancy

Extrinsic vs. Intrinsic Motivation

Extrinsic motivation
We expect rewards or have learned are followed by specific consequences (money,
tangible matters)
Ex:

Intrinsic motivation
A natural inclination toward assimilation, mastery, spontaneous interest, and exploration,
which leads to two general kinds of behavior:
o Seeking stimulation
Seeking out novelty and challenges; to explore, to learn
o Conquering challenges
To extend or exercise our capabilities
There is no apparent reward other than the activity itself
Purpose: to satisfy an innate need to feel competent
Ex: (conquering challenges)

Motivation Content Theories

Self-Determination Theory
Cognitive Evaluation Theory
Maslows Need Theory
Herzbergs Two-Factor Model
McClellands Theory of Needs
Self-Determination Theory
We are drawn towards challenge and towards mastering challenges
Ex: climbing Uris Hall

Cognitive Evaluation Theory

The role of autonomy
Who regulates (or what causes) your behavior?

Maslows Need Theory

Herzbergs Two-Factor Model

Hygiene factors low <-------> high
o Quality of supervision, pay, company policies, physical working conditions,
relations with others, job security
Job Satisfaction low <-------> high
o Promotion opportunities, opportunities for personal growth, recognition,
responsibility, achievement

McClellands Theory of Needs

Need for achievement
o Drive to excel
o Achieve in relation to a set of standards
o Strive to succeed
Need for power
o To control others
o To get desired things done
Need for affiliation
o Friendship
o Good relationship
Process Theories
Equity Theory
Goal-setting Model
Expectancy Theory

Equity Theory
I want to be treated fairly, and fairly means getting back how much I contributed
Ex: !

Why wont we think life is fair?

Homans: Learning theory; the universality of reciprocity
Blau: Socialization
Lerner: Fairness as a psychological need

Goal-Setting Model
Goal: an intention to behave; motivational force
o Two major attributes
Content
The desired outcome
Includes how difficult, how specific, and how complex the goal is
Intensity
Goal importance, value relative to other goals, and commitment to
goal
Goals affect behavior by:
o Directing attention to the task
o Mobilizing on-task effort
o Encouraging task persistence
o Facilitating development of strategies
Who sets the goals, how, and what kind of goals?
o Specific vs. general
o Assigned vs. non-assigned (goal acceptance)
o Hard vs. easy
o Long-term vs. short-term

Expectancy Theory (VIE Theory)

Cognitive choice model
Choices
o Made among alternatives to maximize gain and minimize losses
Based on 3 factors:
o Valence - anticipated satisfaction
Come from personal needs, values, interests, desires
o Instrumentality - beliefs about behavior-outcome contingencies
Come from observations and personal experiences, learning
o Expectancy - beliefs about ones ability to engage in this behavior
Come from skills and abilities
 The role of self: efficacy

Job Design
How do we design jobs that are challenging, motivating, satisfying, and lead to high
performance?

Work Redesign Model

A diagnostic device, a tool to build better jobs
Not an ultimate answer to intrinsic motivation

Hackman and Oldham Model

Classic work redesign model
Focus is on the task
Three critical psychological states for intrinsic motivation
Experience work as meaningful
Experience responsibility for the results
Knowledge of results

Core Job Dimensions

Meaningfulness
o Skill variety
o Task identity
o Task significance
Responsibility
o Autonomy
Knowledge of results
o Feedback (from job and others)

The Motivating Potential Score

Lecture 8: Job Satisfaction

Job Satisfaction and Productivity

Critical Question: Worker Job Satisfaction

Is a happy worker a productive worker?
o Important to understand what this means, what makes a happy worker

Happy worker is a Productive Worker

Proposition made in 1930
One of the most studied predictions in organizational behavior
Represented beginning of human resources movement
 o Holy Grail of organizational behavior research
Research on this subject since the 1930s have been mixed
To different operationalizations of the construct of happiness
o Happiness as job satisfaction
o Happiness as positive affect

Hawthorne Studies (1927-1932)

Changes in worker happiness and its correlation with productivity
People were rarely viewed as human beings; rather just working entities
Conditions changed:
o Vacations
Vacations increased productivity
o Lighting
Any changes in lighting -- whether brighter or dimmer -- made them
happier
Even if brought back to original setting, each change brought change to
productivity
Earliest studies in working environment condition + satisfaction
Hawthorne Effect
If one is being watched, productivity increases

Job Satisfaction Scales

Question asked everyday to measure specific aspect of job
o All things considered, how satisfied are you with your job?
o Ask yourself: How satisfied am I with this aspect of my job?
Difficulty with this:
o Specific questions; hard to recall ones experience
o A lot of things to ask
o Hard to take routinely

Job Satisfaction
Attitude - a positive or negative evaluation of an object, person, or event
Usually consists of a global evaluation
o This aspect of my job in general, not necessarily today or right now
Does a persons attitude predict their performance?
o Not necessarily

Attitudes and Behaviors

Why might a persons attitudes and behaviors not add up?
o Holding an idea is priceless
o
Ex: Believing in fixing world hunger but not taking any action about it
Attitude-Behavior relationship is stronger when:
o Attitude is personally important
o Attitude corresponds to a specific behavior
o Attitude is regularly accessible
 o We have direct experience with the topic
o There arent competing social pressures

Criticisms of Job Satisfaction Measures

Standard job satisfaction measures
o Dont take importance into account, only belief
o Questions are rarely specific to work behaviors
o Job attitudes are not constantly accessible
For these reasons, job satisfaction is:
o Only weak~moderate correlation with performance outcomes -- how individuals
perform on the job on a daily basis
Ex: organizational citizenship behavior, absenteeism, etc.
o More strongly related to performance outcomes like turnover (broader) evaluative
decision

Measures of Positive and Negative Job Satisfaction

Originally asked more about
Positive and Negative Affectivity Scale (PANAS)
o Looking at underlying emotions and affect actually better predict
o Ex: Nervous, irritable, proud, alert, jittery, excited, upset, distressed, etc.
o More strongly tied to specific work behavior
o Almost immediately accessible
Happier people -- more positive results

Positive and Negative Affect: Work Performance

Affect
o More strongly tied to specific work behaviors
o Almost always immediately accessible
More closely linked to motivation and specific work outcomes
o Positive affect linked to approach tendencies
o Happier people
Generally viewed as smarter
Have more influence
Find it easier to get help
Tend to get more promotions and pay
Their performance is more positively evaluated by their peers

Relationship Between Job Satisfaction and Work Behavior

Cognitive Dissonance
An inconsistency between two or more attitudes or behaviors
Uncomfortable feeling
To minimize:
o Change attitude
o Change behavior
o Rationalizing --
Cognitive Dissonance Experiment
Participants completed two long, painfully boring tasks
Assigned to one of following groups:
o Asked to lie to others that it was fun for $1
o Asked to lie to others that it was fun for $20
o No discussion with others (control)
Rated how enjoyable they actually thought the tasks were
o People who were paid $1 said it was more fun

Criticisms of Relationship between Job Satisfaction and Work Behavior

Researchers / practitioners assumed: job satisfaction work performance
BUT, cognitive dissonance: the relationship may go in the other direction
o Work performance job satisfaction
Based on most empirical evidence, we can rarely be sure about the direction of causality

Job Satisfaction and Pay

How much annual income would you actually need to make to get happy?
Robbins and Judge: $40,000
o Enough to cover basic necessity
o But this was measure from 10 years ago
Other, more recent research: $75,000

o
o Happiness measure -- positive affect -- levels off at around $75,000
o Related to the ladder measure

The Ladder Measure

 Assume that the ladder is a way of picturing your life
o Top: best possible life for you
o Bottom: worst possible life for you
Indicate where on the ladder you feel you personally stand right now
With increase in income, people rate higher on the ladder measure

The Relationship Between Income and Happiness

Insufficient pay: unhappy and dissatisfied
o Employers need to pay employees enough
After a certain threshold, more pay doesnt necessarily make workers more happy
But individuals may continue to internally evaluate their lives more positively with
increasing income
o Constantly rate higher on the ladder measure but no actual increase in life quality
o Ex: lottery winner -- happiness dies off

Adaptation Level Theory: The Hedonic Treadmill

Homeostatic model of subjective well-being
o Everyone has an individual setpoint of happiness
o Change in environmental shifts our level of happiness
o Psychological adaptations bring us back to setpoint
Big events can change our happiness for a short period of time, but it comes back
o Other things are less exciting by comparison
 o We get bored of our new stuff
o We go back to pre-winning levels of happiness over time
Best way to measure happiness: longitudinal measures

TSummary and Key Takeaways

Is a happy worker a productive worker?
o Depends on operationalization of happiness
o May be the other way around (direction of effect is often unclear)
What does it mean to be a happy worker?
o Positive affect is distinct from job satisfaction and may have different
consequences
What makes a person happy with their job?
o Pay, but only to a certain point
o Other factors like task variety, autonomy, and social context may matter more

1/25 LECTURE NOTES

The Study of Organizational Behavior
An interdisciplinary field:
Psychology: individual behavior
Sociology, economics, anthropology: group and org. behavior
Professional experiences: business practices and strategies
Examines key organizational processes and outcomes:
Hiring and selection, bias, worker personality, motivation, decision-making, conflict and
negotiation, power, organizational structure, social connections, leadership, and culture
There are few absolutes in the study of organizational behavior
Common Organizational Behavior Distinctions
Micro Individual Psychology: Lab studies
I
Group
I
Macro Organization Sociology/Economics: Field Studies
Application of OB Concepts
Xerox as an Early Pioneer (became base to Apple, Microsoft, etc.)
o If Xerox had known what it had and had taken advantage of its real opportunities, it could
have been as big as I.B.M. plus Microsoft plus Xerox combined and the largest high-
technology company in the world. Steve Jobs, Former CEO of Apple
Xerox PARC (Palo Alto Research Center)
o Started in 1970 so that Xerox wouldnt get lost in the paperless future
o Located in Palo Alto, CA, while Xerox HQ was in Rochester, NY
o A think tank that wooed top computer scientists and inventors with promises of resources and
autonomy to do own research
Google - innovative working conditions, places -> Xerox was the pioneer of this in the 1970s
Innovations from the XEROX PARC Creative Team
First PC (Xerox Alto)
Graphical interface (GUI)
Modern mouse
Laser printer
 Local area network via Ethernet
Object-oriented programming (e.g., C++, Java)
Adobe and Pixar are descendants of PARC
So What Happened to these Innovations?
Xerox didnt realize their financial possibilities
o Began talks with possible external partners
Xerox management offered PARC visits to members of leading CA firms (notably Apple
Computers). Led to loss of key innovations. (got demos for the technology they were
developing)
Around 1990, Xerox sued Apple and Microsoft for copyright infringement. The suit was
dismissed because statute of limitations had passed.
Key Questions for OB Scholars I
What went wrong at Xerox?
Leadership - No coherent vision for PARC innovations (didnt have clear ideas what they
were going to do with the things they got out of it: what is our goal? Our end game?)
Team Composition - Creative and management teams were each too homogeneous
Organizational Structure - Creative and management teams were isolated from one another
Organizational Culture - Strong (and distinct) subcultures made communication difficult and
eroded trust (ex. Palo Alto - wearing jeans and casual, Rochester - vision toward global)
Social Networks - Key information traveled to distant contacts
Key Questions for OB Scholars II
Xerox, to its great credit, had a PARC a place where, a continent away from the top
managers, an engineer could sit and dream, and get every purchase order approved, andf ire a
laser across the Foothill Expressway if he was so inclined. - Malcom Gladwell quote
Key Question for OB Scholars III
What went right at Xerox?
Motivation - Creative team had own meaningful vision: PARC was inventing the future of
computing
Team Composition - Attracted top researchers; Creative team had high trust and was
incredibly cohesive
Organizational Structure - Creative team was given lots of resources and autonomy; left to
own devices to invent
Organizational Culture - Created an atmosphere that was conducive to creativity
Social Network - PARC teams diffuse contacts provided impt. Info (got ideas for mouse from
Stanford)

1/30 LECTURE NOTES

Lecture 2: Human Capital
Topic Context:
o Human capital
o Skills and signals
o Education access
Money is not human capital
Physical capital vs. Human capital
o Physical capital: tangible assets (often created by humans) used in the production process
Ex) buildings, machinery, computers, tools and equipment
o Human capital: the economic value of an individuals skill set
Ex) education, training, intelligence, experience
Human Capital (Insights from Labor Economics)
o What is human capital?
Any stock of knowledge or characteristics the worker has (either innate or acquired) that
contributes to his or her productivity (Acemoglu and Autor 2011)
human capital cannot be separated from a person, in contrast to financial assets
includes schooling, training, skills, expertise, personal attitude, innate intelligence, among
others
o Education and training are two of the most important huan capital investments
Highly correlated with economic outcomes in labor markets (Becker 1964)
As individuals invest on these, they realize certain disproportionate labor markets over time
Weekly Median U.S. Earnings by Educational Attainment, 2015 graph
U.S. Unemployment by Educational Attainment, 2015 graph
College Graduates Share of All Hours Worked (%) in the US (all working-age adults) graph
The Demand for Higher Education
o Why might more and more jobs require a college education?
Worker productivity is enhanced through technology
Automation technology is limiting the quantity of workers needed in jobs involving assembly,
manufacturing, and routine tasks
The importance of concise and clear communication is increasing
o Some jobs/occupations require a college degree (Bidwell 2014)
Highly paying occupations in the US that require high education and substantial training (ex.
surgeon)
o A very basic supply/demand model (the education race):
If the supply of available educated workers does not keep pace with employer demand for
such skilled workers, the skill premium for those workers will rise
U.S. College/High School Wage Premium graph
Real Wages by Education Level (Relative to 1963) graph
o Relatively stagnant wage growth for high school dropouts and high school graduates
Income of U.S. Households in the Bottom 99%, 2000 graph
National Differences in Wage Returns to Skills, 2011-13
o Program for the International Assessment of Adult Competencies (PIAAC) is an internationally
harmonized test for literacy, numeracy and problem solving among adults
o The PIAAC was administered to large representative samples of OECD countries from 2011-
13
o Test score results then correlated with full-time workers earnings
o Graph
Returns to Education
o Since the 1980s, scholars have observed a dramatic increase in the wage premium
associated with higher education and cognitive ability
These trends have similarly been observed across different countries, and
Even though the supply of skilled labor is generally increasing (even though more and more
people are trying to satisfy the demands)
o In the last three decades, the US earnings gap between college and high school graduates
has more than doubled (Autor 2014)
o Scholars suggest the increase in the education wage premium explains 60-70% of the rise in
US wage dispersion (Goldin and Katz 2008)
Note this study pertains to wages, not income or wealth
General and Firm-Specific Human Capital
o What types of education or skills will employers likely provide to workers? (Lazear 2009)
o Employers often invest in firm-specific human capital, that is, skills that solely contribute to
productivity within the current firm/job
 Ex) Floorplan knowledge, programs or procedures used by the firm (knowing where products
are in grocery store, it is a skill that makes workers very productive at that specific store), this
skill does not add much to other firms/jobs, also decreases incentives to jump-shift to rival firm
Expect greater firm training investments in skills that are non-transferable
o Employers rarely invest in general human capital, that is, skills that are directly beneficial to
the worker, and frequently portable
Ex) Excel skills, a masters degree, or training in a widely-applicable programming language
Fewer employers today offer to pay for graduate school (ex) paying employees for MBA, and
this decrease is because its expensive, also employees can just take the gain and move to
another firm (some write contracts that they will not leave the firm after the education, legal
binding to prevent workers from leaving))
Firm Strategies: Training and Development
o Traditionally, training focuses on improving employees performance in their current jobs
o Development helps employees prepare for the future
Such programs may also ready employees for other positions in the company and increases
their ability to move into other jobs (sometimes referred to as internal labor markets)
Developmental programs may refer to formal education, job experiences, relationships,
rotational assignments, and assessment of personality/abilities
US Training Numbers
o Research shows positive correlation between:
Organizations revenues/overall productivity, and
The amount of training provided to employees
o Training Magazines ongoing industry report (www.trainingmag.com)
In 2012, US companies spent $55.8 billion to provide employees with an average of 41 hours
of formal training. This rose to $70.6 billion in 2015.
Training dollars spent by employee type:
Executives ($6.5 billion) 13%
Managers ($12.6 billion) 25%
Supervisors ($12.4 billion) 24%
Employees ($19.6 billion) 39%
Companies that Train Best
o Based on a study of about 1,000 companies and in-depth case studies of training in 7 firms,
Watson Wyatt (a consultancy) concluded:
Companies that link employee skill development to business strategy have 40 percent higher
total shareholder return than companies that do not
o Some of the companies with the most training include:
Motorola (trained employees with specific codes) 3.6% of payroll spent on training and an
average of 36 hours per year per employee
FedEx (Specific rules and routines that it wants its employees/drivers to follow) 4.5% of
payroll on training and an average of 27 hours per year per employee
Individual Skill Upgrading Strategies
o Individuals often have to foot the bill when developing their own general skills
Undergraduate and graduate education
Scanning relevant business, academic, and media sources
Training: Consider specializing (but also hedging your bet)
Follow industry trends
Firm (and government) investments
Look for hiring booms (see O*Net)
Determine what credentials, certifications, and/or skills might be valued in your chosen
profession
 Some risks may be associated with skill investment
Two Views on the Value of Education
o Education imparts skills
Employers pay higher wages for workers with greater abilities and productivity (Becker 1968)
o Education provides a signal
Even if schooling were to provide limited skills, it may still be valuable to employers as a
means of finding high or low ability workers (Spence 1973)
This view would work if high ability people find it easier to attend school (lower costs due to
scholarships, or classes require less effort)
Educational Signals and The Sheepskin Effect
o For employers seeking to hire workers, there is a lot of uncertainty
Resumes are a very coarse summary of ones experiences and skills
o One piece of evidence that diplomas function, in part, as signals comes from comparing
newly-minted bachelors graduates with those that are very nearly complete (ex. Diploma vs.
Diploma with 99% complete, having a Harvard education without a degree and having a
Harvard degree without having the education there (students are pleased to have their classes
cancelled even though they are getting less education because they are still getting diplomas),
importance of getting the diploma itself in our society)
Video Education: Signal or Skills?
What would you rather have?
Having an MBA diploma without any related knowledge vs. vice versa
Some Believe College is Unnecessary Today
o Peter Thiel (a college degree is not necessary to succeed) vs. Vivek Wadhwa (a college
degree is critical)
o There are indeed some people like Steve Jobs or Bill Gates who are without college degree
and succeeded worldwide but in the long run, such individuals tend to/can have hard time
succeeding
High School and College Completion by Sex graph
High School and College Completion by Race graph
Education Access and Inequality
o While high school and college completion across the sexes has largely reached parity,
substantial racial gaps persist for college attainment
Such underlying demographic differences in college completion will affect job access (see
allocative inequality) and subsequent earnings
o What factors may explain racial differences in college attainment?
Rising tuition costs
Unequal access to quality high school educations (a key prerequisite)
Positive social factors and financial resources (encouragement, tutoring)
Negative societal factors shaping test performance and/or expectations (e.g. stereotype
threat)
Rising Costs of Higher Education
o US Dept. of Education data shows that since 1964-5, the cost of an undergrad degree has
more than doubled
o Despite this increase, higher education remains a good deal for many
o The annual return on investment of a college degree has been largely constant at 15-17%
during this period
Summary and Key Take-Aways
o Two views pertaining to human capital
1. Human capital represents skills/ability/expertise often conferred through schooling or
training. Proportional market rewards are allocated (Becker 1964)
 2. Human capital is a signal that is costly to obtain
o Types of human capital
General human capital: Skills and abilities that are broadly transferable across settings.
Typically paid for by individuals. Example: B.S. degree
Firm-specific human capital: Skills and abilities that are generally not portable across
employers. Typically paid for by the firm. Example: Floorplan knowledge
o Increasing demand for college-educated workers, but access is not uniform

2/1 LECTURE NOTES

Applicant Hiring and Selection
Todays Agenda
Work and labor markets
Topic context
o 1. Job analysis: what skills are necessary?
o 2. Recruitment methods
o 3. Candidate selection criteria
o 4. Assessing effectiveness
Application: Hiring Criteria at Google, UpWork
What is Work? I
Work as a set of (goal-directed) activities:
o A set of physical or mental efforts or activities toward the production or accomplishment of
something
o Work is the doing of human beings in the sphere of necessity (Kosik 1976)
o Work is any exertion of mind or body undergone partly or wholly with a view to some good
other than the pleasure derived directly from the work
What is Work? II
Work is often determined by social context
o Work is a set of activities that are performed within certain social relationships
o The difference between work and non-work is often shaped by the social context
Firms/scholars/policymakers often seek to delineate work as a specific type of activity
o Ex) labor contributing to billable hours, checking emails?
o Labor market vs. commodity market
Labor Markets vs. Commodity Markets
How does the structure of labor markets differ from those of markets for goods (i.e.
steel, rice)?
o 1. A multiplicity of markets
o 2. No central clearing house
o 3. Workers are not standardized
o 4. Continuity of the employment relation
o 5. Workers deliver themselves along with their labor
o 6. Workers (may) have bargaining power
Key Recruitment and Selection Stages (3 big steps)
Job Analysis Build the Applicant Pool Select Candidate(s)
Job Analysis
Job analysis and competency modeling provide systematic information about:
o Duties associated with jobs
o Skills/behavior necessary to fulfill those duties
o competencies (capabilities/merits) needed by employees
 This is helpful for hiring, training, developing performance metrics, setting pay, and promotion
Standardized versus customized approaches
Analyzing Necessary Job Competencies
Standardized (generic) approach
o Some consulting firms develop generic competency models (exp: PDI Ninth House)
o For many situations, firms begin with a generic job analysis:
Dictionary of Occupational Titles (DOT) developed in 1938 to improve job placement (this
phased out and O*NET appeared)
Occupational Information Network (O*NET): a comprehensive source of descriptive data
detailing job features
o Customized approach
Organization-specific, ideally iterative
Some recruitment methods (discussed in class)
Externalizing recruitment (recruitment firms), recruitment people going to college campuses,
having potential internal employees who can be laterally, internally recruited, scholarships and
buyouts, referral hiring
Common Types of Recruitment Methods
Career fairs and university hiring events
Online job databases (exp: monster.com, usajobs.com)
Physical-media ads
Job postings on the hiring firms website
Advertising through social media (Facebook, LinkedIn)
Passive job search (identifying individuals who might not be responsive to job ads)
Seeking candidates through networks (i.e. referrals)
Internal hires (promotion, lateral hire, movement btw establishments)
These decisions influence the risk set of candidates
how firm advertises jobs -> fundamental for who might be under consideration for a job
Recruitment
Recruitment is the process of locating potential hires and encouraging them to apply for job
openings
o External hires (workers outside the firm)
o Internal transfers (workers located elsewhere within the firm)
Benefit firms with firm specific skills and greater attachment to the organization (less likely to
be fired or to quit)
External hires may bring outside knowledge or expertise
Internal transfers may possess firm-specific skills and greater firm attachment
Research has found that internal transfer tend to offer superior performance over (external)
hires (Huckman and Pisano 2006, Groysberg 2010, Bidwell 2011)
How firms evaluate candidates (discussed in class)
existing relevant skills to the organization, examinations (how well does the person do on tests
or specific evaluation tests for the specific job), recommendation letters
Selection: How do Firms Assess Applicants?
Common approaches:
External screens of ability (GPA, SAT test scores, among others)
Personality tests
Job trials, including job-specific tests (ex. internship (this is a relatively costless testing))
informational interviews
Hiring Selection Processes: Intelligence and Conscientiousness I
General Intelligence
o Ability to solve problems
 Conscientiousness
o The degree to which an individual is achievement-oriented, careful, hard-working, organized,
planful, persevering, responsible, thorough
Use general intelligence and conscientiousness when
o The job requires abstract thinking, problem solving, and autonomy
For jobs not requiring the above, consider precise matching (or fit)
Hiring Selection Processes: Intelligence and Conscientiousness II
Applicant Characteristics Valued at Google
An example of hiring based on intelligence and conscientiousness
For every job, though, the No. 1 thing we look for is general cognitive ability, and its not I.Q.
Its learning ability. Its the ability to process on the fly. Its the ability to pull together disparate
bits of information. We assess that using structured behavioral interviews
Also, responsibility and humility: Your end goal is what can we do together to problem-solve.
Ive contributed my piece, and then I step back. Laazlo Bock, Google Head of HR
Upwork, An Online Market for Freelancers, Applicant Screening Tests
An example of hiring based on fit and precise matching
Competency Assessment Tools
Commonly-used in firm hiring, university admissions decisions, and performance-based
bonus decisions, among others
o Intended to produce fair and merit-based assessments by applying common evaluation
criteria across candidates
o To be effective, criteria must be quantifiable
o Applied to avoid gut feelings about candidates
Often organization-specific, linked o desirable characteristics
o Ex) Modeling Leadership Competencies at 3M (Alldredge and Nilan 2000)
Four-stage process
Job Analysis Build the Applicant Poll Select candidate(s) (Iterate) Job Analysis
Assessing Recruitment Methods (Iterating process)
How can an organization determine if a recruitment method is successful?
Common metrics:
o Applications received, cost per application received, applicant quality
Problems:
o Few systems track how applicants heard about an opportunity (and applicants may not
remember)
o This often leads to broad multi-prong advertising efforts
o Few learning opportunities
Assessing Selection Efforts
When is an applicant selection process successful?
Commonly used metrics:
o Yield ratios (% of offers accepted), recruitment costs, number of new hires
Ideal (not possible) metrics:
o Info on future job performance of both selected and non-selected candidates
Desirable metrics:
o Examine correlation between key applicant characteristics and subsequent performance
outcomes
o Test to see predictive power of quantifiable applicant characteristics
o (if high GPAs do not necessarily connect to better job performance, the firm should change
the GPA selection)
Iterating to see if the firms criteria are tied to high competency
Summary and Key Points
 Candidate recruitment and selection is critical to organizations
o Firms often succeed or fail on the basis of employees abilities and retention
Recruitment (job advertising) decisions build the pool of applicants
Worker selection systems are becoming more analytical
o Seek to quantify desirable worker characteristics that can be objectively measured (also
termed competency assessments)
o Research suggests that firms should use intelligence and contentiousness as criteria for jobs
requiring problem solving and autonomy
Recruitment and selection systems are ideally iterated and tested for effectiveness

2/6 LECTURE NOTES

Diversity and Bias
Todays Agenda
Diversity and Performance
Inequality Theories
Solutions: Rendering More Equitable Judgements
Two Views on Diversity and Performance
Diversity as a Cost View (diversity can come as a cost to an organization
o Some are skeptical re: beneficial effects of diverse teams:
Diversity may result in conflict
Diversity may diminish group cohesiveness, performance
May increase absenteeism and turnover
Could impose additional recruitment costs
Diversity Pays View
o Demographically diverse workforces provide access to:
Broad and divergent perspectives
Unique information gleaned from social networks
Sources of additional creativity
A more complex learning environment
In nature - for defense mechanism, homogeneity is important
In army, also homogeneity is favored
A Business Case for Diversity
Novel solutions may emerge from orgs./groups with more varied experiences and
perspectives
o As a result, business leaders and policy makers have explored the return on investment (ROI)
in terms of performance and economic outcomes resulting from a diverse workforce (notably
leveraging variations in knowledge, skills, ability, talent, working styles, and perspectives)
Research indicates that companies with the highest levels of diversity
o Brought in more sales than t hose with the lowest diversity levels
o Served more customers
Individual Intelligence
There have been substantial efforts over the last 100 years to measure and quantify human
intelligence
o Current examples: IQ tests, SATs, GMATs, GREs, LSATs, among many
People who do well on one mental test/task, frequently do well on others
Yet, individual intelligence is a poor predictor of group performance
Collective Intelligence
The general ability of a group to successfully perform a wide variety of tasks
Important for collective efforts, collaboration, and consensus-based decision making
 A property of the group, not just the individuals that comprise it
Collective Intelligence Tasks I
Visual puzzles
Brainstorming
Collective moral judgments
Negotiating over limited resources
Building exercises
Games
What Shapes Collective Intelligence?
Collective intelligence is associated with:
o 1. The social perceptiveness of group members (how somebody is able to read other
peoples comments, etc.)
o 2. Equality of participation in conversation
o 3. Proportion of women in the group
largely explained by this groups higher propensity for social perceptiveness
A Diverse Workforce for Diverse Clients and Customers
Research suggests that diverse workforces, particularly those in client-facing roles, are better
equipped to serve diverse client populations
Note that the U.S. will continue to become increasingly diverse at a population level in the
years ahead
This can similarly result in revenue growth for firms that identify new products and consumer
space by targeting new diverse markets
Diversity Outcomes for Workers and Firms
Diverse and inclusive workforces show
o 12% more discretionary effort
o 19% higher intention to remain with the organization
o 57% greater team collaboration
o 42% higher team commitment
For firms with diverse leaders, employees reported
o 60% increase in likelihood of ideas developed/prototyped
o 75% greater innovation implementation
o 70% more likely to increase market share
o 45% market share improvement
How Might Labor Market Characteristics Result in Unequal Worker Outcomes?
Labor Market Characteristics
o 1. A multiplicity of markets
No central clearing house. Importance of informal search, social ties, status
o 2. Workers are not standardized
Uncertainty re: workers productivity/abilities. Differential access to education
o 3. Continuity of the employment relationship
Not all workers have access to long-term (often high-pay) jobs
o 4. Workers deliver themselves along with their labor
Family/social/health commitments may affect availability of certain groups
Bias in Modern Labor Markets
Most people deny prejudice - only about 10% of people in Western cultures display overt
racism
Yet 30-50% of minority group members report encountering discrimination
Modern discrimination is often subtle, indirect, outside of conscious awareness, the result of
discomfort and lack of awareness rather than hate or superiority
First Impressions (Facebook HR video)
 Smile, attire, firmness of handshake, etc. may impact initial assessments of individuals
Strong first-impressions can cause evaluators to look for confirmation/support of initial views
Similarly, unrelated evaluator factors can impact outcomes
Small effects can have large impacts
Impact of a 1% Bias (women and men) graph
Concern over inequality is not unique to humans (video)
Theories of Labor Market Inequality
Sociology, psychology, and economics, have explored why decision makers may reach
biased assessments in labor markets
o Proposed theories are typically general, seeking to explain unequal outcomes associated with
an individuals (typically demographic) characteristics
o Many of these mechanisms may also be applied to other non-employment settings
Generalizations
People are cognitive misers who economize through categorization
Why might individuals generalize?
o A response to uncertainty
o An innate desire to identify predictable processes and outcomes
o Basis in genetics?
o The Power of Habit by Charles Duhigg
The Processing of Social Phenomena: Schemas
A theory derived from psychology
One of the primary tools associated with quick judgments
A pattern imposed on complex reality or experience to help interpret, explain, and predict
outcomes
Allows individuals to more effectively interact with the world
Academic Study regarding Schemas
Participants waited in an office for 35 seconds
Then given surprise memory test
o Average recall = 13.5 objects
o Items with high schema expectancy (e.g. chair) and salience (e.g., brain) more likely to be
recalled
o 19/88 recalled objects were inferred (i.e. not actually in the room)
Lamp, pens, filing cabinet, books, telephone, pencils
Stereotypes: Person Schemas
Organized set of general knowledge and beliefs about the traits and characteristics of people
As with other schemas, person schemas involve inferences that go beyond the information
given
o Individuals may create a mental picture based on whatever information in available (i.e. fill-in
the blanks)
Associations with Observable Characteristics
Particular demographic groups may be associated with certain social and economic
outcomes:
o Education, family structure, life expectancy, risk taking, poverty, unemployment, crime,
computer/tech. abilities, social networks
Generalizations, Schemas, and Stereotyping
the danger of generalizations about people:
o cognitive short-cuts can lead to errors
o subtle influence on expectations
o emphasis on differences, rather than similarities
o Powerful actors may control/influence dominant narratives
 While some stereotypes are true, many are not, and all are incomplete Ngozi Adichie,
Maxine Williams
How are Generalizations/Stereotypes Applied?
How do generalizations or stereotypes translate into unequal outcomes in labor market
settings?
This topic has been explored at length within the fields of economics, psychology, and
sociology
Three of the most general theories:
o Taste-based (aka preference-based) discrimination
o Statistical discrimination
o Status characteristics
Taste-Based Discrimination
Taste-Based Discrimination (aka Preference-based)
o Decision makers may be biased against interacting with a particular group
o Primarily due to cognitive beliefs or stereotypes regarding a group
o May be intentional or unconscious
o In the long-run, a competitive market should eliminate such practices, as organizations with
biased practices will lose out on talented workers
Statistical Discrimination
Decision maker draws on group characteristics to make a decision about an individual that is
a member of that group (also termed profiling)
Ex: an employer has data on current worker productivity broken down by demographic
groups. An employer that discriminates statistically would use this this information to draw
inferences about the expected productivity of future hires that are members of such groups (ex.
people from University X shows good performance, so I would assume that candidates from the
university would also show good performance)
Status Characteristics Theory I
Unequal labor market outcomes arise because decision makers hold stereotypes about the
relative performance of different demographic groups
o Not necessarily associated with observed aggregate differences
Status characteristics, such as age, race, sex may be associated with cultural beliefs.
These beliefs associate social standing and competence (i.e., technical competence,
attractiveness) to particular demographic groups
decision makers may thus expect high/low performance from members possessing different
status characteristics
Verizon video
Several (Non-Exhaustive) Means of Addressing Bias in Worker Evaluations
Mask applicant demographic characteristics during initial application assessments
Reach judgements with sufficient (employment-relevant) information
Use objective and quantifiable performance measures
Be aware of first impressions. Assess whether they are relevant to an individuals
job/performance. Self-examine decision processes and interactions
Summary and Key Take-Aways
Generalizations/schemas are responses to uncertainty. Identifying patterns is a key part of
learning. Stereotypes applied to people can be damaging
Tastebased Discrimination: A cognitive bias. Decision makers seek to avoid interaction and
thus miss out on productive workers
Statusbased Inequality: A cognitive bias. Sociallyconstructed status ordering of individual
characteristics informs performance expectations
Statistical Discrimination: Generalizations regarding group performance applied to individuals
 To reach meritbased judgements: Be aware of workirrelevant first impressions, use
objective criteria established in advance, collect more information

2/8 LECTURE NOTES

Several (Non-Exhaustive) Means of Addressing Bias in Worker Evaluations
Mask applicant demographic characteristics during initial application assessments
Reach judgements with sufficient (employment-relevant) information
Use objective and quantifiable evaluation measures
Be aware of first impressions. Assess whether they are relevant to an individuals
job/performance
Challenge dominant/emergent status expectations
What is Personality?
Robbins and Judge definition: the sum total of ways in which an individual reacts to and
interacts with others
Sum total of ways = typical cognitions, emotions, and behaviors
Ex: Shes really driven, He has high self-esteem, He is shy
Alternative definition: An individuals characteristic patterns of thought, emotion, and
behavior, together with the psychological mechanisms - hidden or not - behind those patterns
(David Funder)
The Psychological Trait Approach
The many trait approach: (one extreme)
o Allport and Odbert (1936) identified 17,953 traits (e.g., talkative, assertive, sociable, reserved,
quiet)
The essential trait approach (the in-between approach that most HR people use)
o The Big Five Inventory (BFI)
o See also the Myers-Briggs Type Indicator (MBTI) or Ten-Item Personality Inventory (TIPI)
The single trait approach: (the other extreme)
o Self-monitoring (My behavior is usually an expression of my true inner feelings and
attitudes)
o Machiavellianism (Never tell anyone the real reason you did something unless it is useful to
do so) - how a person deals with an ideal type, ends justify the means
Individual Trait Approach: Self-monitoring
An individuals ability to adjust his or her behavior to external, situational factors
Example items from Snyders Self-Monitoring Scale
o In different situations and with different people, I often act like very different persons
o Im not always the person I appear to be
High self-monitors get good performance reviews and are more mobile in their careers
Individual Trait Approach: Machiavellianism
The degree to which an individual is pragmatic, maintains emotional distance, and believes
that the ends justify the means
Example items from the MACH-IV
o Its hard to get ahead without cutting corners here and there
o Anyone who completely trusts anyone else is asking for trouble
High Machs persuade more ad are persuaded less; perform well in some jobs, less so in
others
The Essential Trait Approach and the Five-Factor Model of Personality (Big Five) I
Factor Analysis: Take large number of dimensions and analyze the correlations between them to
identify smaller number of factors
(scoring high or low does not mean that ones better over the other)
Openness - think flexibly; open to new ideas and experiences
 Conscientiousness - responsible and achievement-oriented
Extra(o)version - outgoing, sociable, energetic, assertive
Agreeableness - warm, friendly, cooperative, helpful
Neuroticism (emotional stability) - emotional control and security
The Essential Trait Approach and the Five-Factor Model of Personality (Big Five) II
Examples of essential questions about a person that correspond to the Big Five traits:
Can I bully X or will X try to bully me? (extraversion)
Is X warm and pleasant or distant and cold? (agreeableness)
Can I count on X? (conscientiousness)
Is X crazy? (neuroticism)
How easy will it be for me to teach X new things? (openness)
may bring up questions would the traits be consistent in different situations?, respondents can
steer answers and disguise themselves because the question easily shows what theyre asking
for (ex. I frequently get depressed and feel alone, can disguise oneself to fit what the company
is looking for (ex. Google - openness, diversity)), 4 of the 5 factors say that the predicted
outcome is higher performance - they seem to bring similar outcomes (graph in textbook)
Fundamental Assumptions Behind the Trait Approach to Personality
Assume personality is
o Unique - an individuals personality differentiates them from others
o Stable - an individuals personality is consistent over time and across situations (e.g. Shes
an extrovert)
These assumptions are what allow people to gauge and measure personality with regards
to
o First impressions
o Interviews
o Personality tests
o but are they right?
The Person-Situation Interactionist Approach
Weak vs. strong situations: Situations can hide individual personality characteristics
If-then personality signatures: Personality may be consistent within, but not across, situations
Do certain situations reveal, or hide, our true personality?
o Weak situation: a situation where any behavior is considered (more notes)
o Strong situation: a situation that pulls for particular behaviors; there is an appropriate way to
behave, interpret the situation; structured
Strong Situations
Interviews: Tommy was polite when the interviewer showed up late.
o Does Tommy have an agreeable personality?
Sports: Amanda tried to do better than the other team.
o Does Amanda have a competitive personality?
Traffic: When approaching a red light, Amy slows her car to a stop.
o Does Amy comply with legal rules?
Weak Situations
Rorschach Test
Talking about yellow light than red light in the above question
Examples?
Strong Situations: First Impressions
Freshman Roommate Study (Karmmrath et al. 2007, Columbia University)
Provided ratings on Big Five dimensions first week of school (more notes)
Example of how first impressions greatly changed throughout the 9-month study
 Easy to come up as an agreeable person in the beginning (explains why the agreeable
rate is very high in the graph in the first impression and drops greatly after 9 months),
extraverted relatively stays stable (ex. after having a conversation, likely to say ex, Ill go back
to reading this book)
Freshman Roommate Study graph
Keeping Up Impressions
Different traits are differentially stable over the course of a relationship
o Extraversion highly stable
o Conscientiousness and agreeableness less so
IfThen Personality Signatures
Trait approach looks at mean levels of personality variables (presumably) averaged across
situations
Personality may be stable within situations but not across situations
Bill Clinton example - great educational and political background -> seems to have great
conscientiousness
Bill Clintons If Then Personality Profile
If faced with an academic challenge (e.g., staying up late studying for a law exam), then
displays high self-control
If interacting with a female intern, then struggles with self-control
Skepticism that measured personality is stable over time and across situations
Firms use of Personality Assessments
In 2001, 26 percent of large US employers used pre-hire assessments. By 2013, the number
had climbed to 57 percent - note that these are not limited to personality tests
o These are often used as an initial screen to reduce the applicant pool
Survey results found that in 2014, 22 percent of organizations used personality testing to
evaluate job candidates
The Big Five Personality Types and Work Assessments
Intended to predict attitudes and behavior at work and elsewhere
Which Big 5 trait most strongly predicts job performance across a variety of jobs?
o A: Openness
o B: Conscientiousness
o C: Extraversion
o D: Agreeableness
o E: Neuroticism / Emotional stability

In the Freshman Roommate Study, the scores of initial impression and 9 months later were one
positive and the other negative - huge change
Summary and Key Take-Aways
What is personality?
o Traditionally implies stability and uniqueness of behaviors, cognitions, and emotions
What can personality traits tell us?
o Can (sometimes) tell us how someone will perform overall
o Generally cannot tell us how someone will perform in a specific situation
What is the best way to find out about someones personality?
o Multiple observations across a wide range of situations
o Observations in specific situations of interest
Some employers are using personality assessments during screening
o Contentiousness tends to offer greater job performance insight
2/22 LECTURE NOTES
Critical Questions re: Worker Job Satisfaction
Is a happy worker a productive worker?
What does it mean to be a happy worker?
What makes a happy worker? Specifically, does paying employees more make them
happier?
A Happy Worker is a Productive Worker
This proposition was made in the 1930s and has been one of the most studied predictions in
organizational behavior
Represents the beginning of the Human Relations (HR) movement and, in some ways, the
Holy Grail of OB research
Hawthorne Studies (1927-1932)
Industrial plant located in Chicago (Western Electric company, Hawthorne Works)
Taylorism - organizing production minds in the most efficient way
Hawthorne in contrast gave more flexibility to workers -> greater worker involvement, sort of a
short experiment
Hawthorne effect - when people are observed, they work harder for some extent
(A Happy Worker is a Productive Worker continued) Research on this subject since the
1930s has been mixed!
Many researchers believe this is due, in part, to different operationalizations of the construct
of happiness
o Happiness as job satisfaction
o Happiness as positive affect
Job Satisfaction Scales
All things considered, how satisfied are you with your job?
OR
Ask yourself: How satisfied am I with this aspect of my job?
o The variety in my work
o The chance to work by myself
o My job security
o The amount I get paid
o The technical know-how of my supervisor
o The credit I get for the work that I do
o The routine in my work
o Being able to take pride in my work
o The chance to be alone on the job
o How my pay compares to that of others
o Being able to stay busy
Job Satisfaction
Job satisfaction is an attitude - a positive or negative evaluation of an object, person, or event
Usually consists of a global evaluation - this aspect of my job in general, not necessarily
today or right now
Does a persons attitude about their job predict their work performance/job behaviors?
Attitudes and Behaviors
Why might a persons attitudes and behaviors not add up?
Attitude-behavior relationship is stronger when:
o Attitude is personally important
o Attitude corresponds to a specific behavior
Not like I am patriotic, Americ, etc.
o Attitude is regularly accessible
o We have direct experience with the topic
o There arent competing social pressures
Criticisms of Job Satisfaction Measures
Standard Job Satisfaction Measures
o Dont take importance into account, only belief
o Questions are rarely specific to work behaviors
o Job attitudes are not constantly accessible
For these reasons, job satisfaction is
o Only weakly to moderately related to performance outcomes that get at how individuals
perform on the job on a daily basis (exp: organizational citizenship behavior, absenteeism, etc.)
o More strongly related to performance outcomes like turnover, which is a broader, evaluative
decision
Measurement of Positive and Negative Job Satisfaction
How often do you feel/behave this way while working?
o I feel downhearted and blue
o I get tired for no reason
o My mind is clear
o I am irritable
o I have pep and energy
o I smile
o I feel hopeful about the future
o I chuckle or laugh
Positive and Negative Affectivity Scale (PANAS)
o Nervous
o Irritable
o Proud
o Alert
o Jittery
o Excited
o Upset
o Distressed
Positive and Negative Affect: Work Performance
Affect
o Is more strongly tied to specific work behaviors
o Is almost always immediately accessible
o Ex) how often do you smile?
More closely linked to motivation and specific work outcomes
o Positive affect linked to approach tendencies
o Happier people are generally viewed as smarter, have more influence, and find it easier to get
help
o Happier people tend to get more promotions, pay, and their performance is more positively
evaluated by their peers
Cognitive Dissonance
Ex. Jane selling a camera after finding out that the camera is defected
An inconsistency between two or more attitudes or behaviors
Is uncomfortable; people seek to minimize dissonance by:
o Changing an attitude
o Changing a behavior
o Rationalizing the inconsistency
What did you tell yourself if your attitudes and behaviors didnt add up?
Festinger and Carlsmith 1959 Experiment
Screwing and Unscrewing wooden blocks for 30 minutes and lying to subsequent person for $1
dollar and $20 dollars
When they were asked how enjoyable the task was,
$1 people said that they fairly enjoyed it -> Mentally reoriented themselves that they enjoyed it
$20 people didnt express so -> No need to conduct reorientation of thinking because they could
rationalize the inconsistency
Criticisms of the Relationship between Job Satisfaction and Work Behavior
Researchers/practitioners have largely assumed job satisfaction -> work performance
BUT cognitive dissonance suggests the relationship may go in the opposite direction, i.e.:
work performance -> job satisfaction
Based on most empirical evidence, we can rarely be sure about the direction of causality
Does [More] Money Make People Happy?
(iClicker question of How much annual income would you actually need to make so that no
additional amount of money would make you any happier?)
Robbins Judge: $40,000
Other Highly Cited Research (Kahneman and Deaton 2010): $75,000
The Ladder Measure
Assume that this ladder is a way of picturing your life. The top of the ladder represents the best
possible life for you. The bottom rung of the ladder represents the worst possible life for you.
Indicate where on the ladder you feel you personally stand right now by marking the circle.
The $75,000 Threshold
Recall the Implemented PPP at Safelite
PPP + Higher Guaranteed Wages, PPP + Lower Guaranteed Wages, No PPP
Releasing the stress of workers that they might not be able to meet the minimum number they
have to sell (because they have rent, other payments, etc.)
Graphs in PowerPoint
The Relationship Between Income and Happiness
Insufficient pay can make workers unhappy and dissatisfied, so employers need to pay
employees enough
But after a certain threshold, more pay doesnt necessarily make workers more happy (i.e.,
experience more positive affect)
However, individuals may continue to internally evaluate their lives (the ladder measure)
more positively with increasing income
I Still Really Think Id be Happier if I won a Million Dollars
Initial change and later adaptation ex. lottery winners
Adaptation Level Theory: The Hedonic Treadmill I
A homeostatic model of subjective well-being
o Everyone has an individual set point of happiness
o Change in the environment shifts our level of happiness
o Psychological adaptations bring us back to set point
Big event like winning the lottery changes our happiness for a short period of time, but
o Other things are less exciting by comparison
o We get bored of all our new stuff
o And we go back to pre-winning levels of happiness over time
Adaptation Level Theory: The Hedonic Treadmill II
(graph)
people rebounded afterward such difficulties
 Similarly, moving to California wouldnt make you happier (why is this?)
Summary and Key Take-Aways
Is a happy worker a productive worker?
o Depends on operationalization of happiness
o May be the other way around (direction of effect is often unclear)
What does it mean to be a happy worker
o Positive affect is distinct from job satisfaction and may have different consequences
What makes a person happy with their job?
o Pay, but only to a point
o Other factors like task variety, autonomy, and social context may matter more
Robbins/Judge and Reading Notes by Yejee

Chapter 1: What is Organizational Behavior?

Organizational behavior: Field of study that investigates the impact individuals, groups and
structure
o Motivation
o Leader behavior and power
o Interpersonal communication
o Group structure and process
o Attitude development and perception
o Change processes
o Conflict and negotiation
o Work design
Evidence based management (EBM)
o Complements systematic study by basing managerial decisions on the best
available scientific evidence.
Disciplines that contribute to the OB field
Psychology
o Measures, explain and change behavior of humans and other animals
Social psychology
o Branch of psychology, blends concepts from both psychology and sociology to
focus on peoples influence on one another.
Sociology
o Studies people in relation to their social environment or culture
Anthropology
o Study of societies to learn about human beings and their activities
Challenges and opportunities for OB
Responding to economic pressures
Employment options
Responding to globalization
Increased foreign assignments
Working with people from different cultures
Overseeing movement of jobs to countries with low cost labor
Adapting to different cultural and regulatory norms
Managing workforce diversity
Improving customer service
Improving personal skills
Working in networked organizations
Enhancing employee well-being at work
 Creating a positive work environment
Improving ethical behavior
Coming attractions: Developing an OB model
Model: Abstraction of reality, a simplified representation of some real-world
phenomenon.
Chapter 2: Diversity in Organizations
Diversity
Demographic characteristics in the US Workforce
o Levels of diversity
Surface level:
Deep-level
o Discrimination
Sexual harassment
Intimidation
Mockery and insults
Exclusion
Inclivity: Disrespectful treatment, ignoring
Biographical Characteristics
Age
Sex
Race and Ethnicity
Disability
Tenure, religion, sexual orientation and gender identity, cultural identity
Ability
Intellectual Abilities
Abilities needed to perform mental activities
General mental ability (GMA): General factor of intelligence generalized across culture
o Dimensions:
Number aptitude
Verbal comprehension
Perceptual speed
Inductive reasoning
Deductive reasoning
Spatial visualization
Memory
Physical abilities
Strength factors
1. Dynamic strength
2. Trunk strength
3. Static strength
4. Explosive strength
Flexibility factors
1. Extent flexibility
2. Dynamic flexibility
Other Factors
1. Body coordination
2. Balance
3. Stamina
Implementing diversity management strategies
Attracting, selecting, developing, and retaining diverse employees
 o Fairness more preferred
Diversity in groups
o Help or hurt group performancfe
o Need effective diversity programs
Chapter 3: Attitudes and Job satisfaction
Attitudes
o Evaluative statements about objects, people or events
Main components of attitudes
o Cognitive(Evaluation): Description of belief-My Pay is low
o Affective(Feeling): Critical part of attitude-I am angry over my low pay
o Behavioral(Action): Precursor to behavior-Im going to look for another job that
pays better
o leads to negative attitude toward supervisor
Cognitive dissonance: Incompatibility an individual might perceive between two or more
attitudes or between behavior and attitudes
What are the major job attitudes?
Job satisfaction
Job involvement
o Degree to which people identify psychologically with their jobs and consider
their perceived performance levels important to self-worth
Psychological empowerment
o Beliefs in the degree to which they influence their work environments, their
competencies, the meaningfulness of their jobs, and their perceived
autonomy
Organizational Commitment
Identifies with a particular organization and its goals and wishes to remain a
member
Perceived organizational support (POS)
Is the degree to which employees believe the organization values their
contributions and cares about their well-being.
Employee engagement
Individuals involvement with, satisfaction with, and enthusiasm for, the work she
does
Job satisfaction
Positive feeling about a job resulting from an evaluation of its characteristics-
clearly broad
Satisfaction levels vary a lot, depending on which facet of job it is
What causes job satisfaction?
Work and the people one worked with was satisfactory
Impact of Satisfied and dissatisfied employees on the workplace

Responses to dissatisfaction
o Constructive
o Destructive
o Active
o Passive
Exit response: Directs behavior toward leaving the organization
Voice response: Actively and constructively attempting to improve conditions
Loyalty response: Means passively but optimistically waiting for conditions to improve
 Neglect response: Allows conditions to worsen and includes chronic absenteeism or
lateness, reduced effort, and increased error rate
Job satisfaction Relationships
Job Performance
OCB: organizational citizenship behavior
Customer satisfaction
Absenteeism
Turnover
Workplace deviance
Chapter 4: Emotions and Moods
What are emotions and moods?
Affect: Generic term that covers a broad range of feelings people experience
Moods: Less intense feelings than emotions that often arise without a specific event acting
as a stimulus
Emotions: Intense feelings directed at someone or something
Basic moods: Positive and Negative effect
Positive effect: Mood dimension consisting of positive emotions
Negative effect: Mood dimension consisting of nervousness, stress and anxiety
Experience moods and emotions
Positivity offset: At zero input, most individuals experience a mildly positive mood
Emotions make people irrational
Emotions make people ethical
Sources of emotions and moods
Personality
o Affect intensity: Experience the same emotions with different intensities
Time of the day
Day of the week
Weather
o Illusory correlation: occurs when we associate two events that in reality have no
connection, explains why people tend to think in a certain way
Stress
Social activities
Sleep
Exercise
Age
Sex
Emotional Labor
Felt emotions: Actual emotions
Displayed emotions: That the organization requires workers to show and considers
appropriate in a given job
Surface acting: Hiding inner feelings and emotional expression
Deep acting: Trying to modify our true inner feelings based on display rules
Emotional dissonance: When employees have to project one emotion while feeling another
Affective events theory
Demonstrates that employees react emotionally to things that happen to them at work
Emotional intelligence
Persons ability to perceive emotions in the self and others, understand the meaning of
these emotions, and regulate ones emotions accordingly in a cascading model
Case for EI
Intuitive appeal
Predicts criteria that matter
 Biologically based
Case agasint EI
Do not agree on definitions
Cant be measured
Nothing but personality with a different label
OB applications of emotions and moods
Selection
Decision making
Creativity
Motivation
Leadership
Negotiation
Customer service
Job attitude
Deviant workplace behaviors
Safety and injury at work
Chapter 5: Personality and values
Personality: Sum total of ways in which an individual reacts to and interacts with others-is
partly genetic in origin
Defining personality
o Allport dynamic organization within the individual of those psychophysical
systems that determine his unique adjustments to his environment
Measuring personality
o Personality tests are useful in hiring decisions
Personality determinants
o Heredity
o Personality traits
Dominant personality frameworks:
Myers-Briggs type indicator: Most widely used personality assessment instrument in the
world-100 question personality test that asks how people feel in a situation
o Extraverted vs Introverted
o Sensing vs Intuitive
o Thinking vs Feeling
o Judging vs Perceiving
Introverts are more common
ISFJ and ISTJ are most common, INFJ are least common
Big Five Personality model
Five basic dimensions underlie all others and encompass most of significant variation in
human personality
o Extraversion: captures our comfort level with relationships
o Agreeableness: Individuals propensity to defer to others
o Conscientiousness: Measure of reliability
o Emotional stability: Taps a persons ability to withstand stress
o Openness to experience: Addresses range of interests and fascination with
novelty
How do big five traits predict behavior at work?
o Conscientiousness higher level of job performance
Other personality frameworks
Dark Triad: Three undesirable traits
 o Machiavellianism: Pragmatic, maintains emotional distance and believes ends
can justify means
o Narcissism: A person who places self-importance as first
o Psychopathy: Defined as a lack of concern for others
Approach-Avoidance
Cast personality traits as motivations. Represent the degree to which we react to stimuli
whereby approach motivation is our attraction to positive stimuli
Other Personality traits relevant to OB
Core self-evaluations
o See themselves as effective, capable and in control of their environment
Self-monitoring
o Describes an individuals ability to adjust her behavior to external, situational
factors
Proactive personality
o Identify opportunities, show initiative, take action and persevere until
meaningful change occurs
Personality and situations
Situation strength theory: Proposes that they way personality translates into behavior
dependson the strength of the situation
1. Clarity
2. Consistency
3. Constraints
4. Consequences
Trait Activation theory: Predicts that some situations, events, or interventions activate a trait
more than others
Values
Represent basic convictions that a specific mode of conduct or end state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end state of
existence
Value system: System for ranking values in terms of intensity
Terminal values: Refers to desirable end-states
Instrumental values: Preferable modes of behavior, or means of achieving terminal values
Personal job fit
Personality-job fit theory: Six personality types and proposes that satisfaction and the
propensity to leave a position depend on how well individuals match their personalities to a
job
o Realistic, investigative, social, conventional, enterprising, artistic
Person-organization fit: People are attracted to and selected by organizations that match
their values
Hofstedes framework
Power distance: degree to which people in a country accept that power in institutions and
organizations is distributed unequally
Individualism vs Collectivism
o Individualism: Degree to which people prefer to act as individuals rather than as
members of groups and believe in individual rights above all else
o Collectivism: Emphasizes a tight social framework in which people expect
others in groups of which they are a part to look after them and protect them
Masculinity vs Femininity
o Degree to which they prefer masculinity or feininity
 Uncertainty avoidance: Degree to which people in a country prefer structured over
unstructured situations
Long term vs Short term orientation
o Societys devotion to traditional values
Chapter 6: Perception and Individual Decision Making
Perception: Process by which individuals organize and interpret sensory impressions in
order to give meaning to their environment
Person perception: Making judgments about others
Attribution theory: Tries to explain the ways we judge people differently, depending on the
meaning we attribute to a behavior.
*Look at diagram
Fundamental attribution error: Explain why a sales manager is prone to attribute the poor
performance of her sales agents to laziness rather than to a competitors innovative product
line
Self-serving bias: When people attribute ambiguous info as relatively flattering, accept
positive feedback and reject negative feedback
Common shortcuts in judging others
Selective perception: select according to our interests, background, experience and attitude
Halo effect: When we draw an impression about an individual on the basis of a single
characteristic
Contrast effects: Distort perceptions. Reaction is influenced by other persons we have
recently encountered
Stereotyping: When we judge someone on the basis of our perception of the group to which
he belongs
Decision making in organizations
Rational decision making: makes consistent, value maximizing choices within
specified constraints
1. Define the problem
2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop the alternatives
5. Evaluate the alternatives
6. Select the best alternative
Bounded rationality
We can behave rationally within the limits of the simple model
Intuition
Nonconscious process created from distilled experience
Common biases and errors in decision making
Overconfidence bias
o Reducing:
Focus on goals
Look for info that disconfirms your beliefs
Dont try to create meaning out of random events
Increase your options
Anchoring bias: Tendency to fixate on initial info and fail to adequately adjust
for subsequent info
Confirmation bias: Represents a case of selective perception
Availability bias: Tendency to base judgments on information readily available
Escalation of commitment: Our staying with a decision even if there is clear
evidence its wrong
Risk aversion: This tendency to prefer a sure thing over a risky outcome
 Hindsight bias: Is the tendency to believe falsely, after the outcome is known,
that we would have accurately predicted it
Organizational constraints on decision making
Performance evaluation
Reward systems
Formal regulation
System-imposed time constraints
Historical precedents
What about ethics in decision making?
3 Ethical decision criteria
o Utilitarianism: Proposes making decisions solely on the basis of their outcomes
o Whistle blowers: When they reveal an organizations unethical practices to the
press or government agencies, using their right to free speech
Creativity in organizations
Three-stage model of creativity
o Causes of creative behavior
Creative potential
Creative environment
o Creative behavior
1. Problem formulation
2. Information gathering
3. Idea generation
4. Idea evaluation
o Creative outcomes
Human Capital-Gary S Becker
Human capital: People cannot be separated from their knowledge, skills, health or values in
the way they can be separated fro mtheir financial and physical assets
Education, training, health are the most important investments
High school and college education greatly raise a persons income even after netting out
direct and indirect costs of schooling
Higher education is an investment
Benefits of a college education increased in 1980s and 1990s
Women gravitated more towards teaching, home economics, foreign languages and
literature
Increase in labor participation of married women most important labor force change during
past 25 years
New technological advances are of little value to countries that have very few skilled
workers who know how to use them
Employee selection: Will intelligence and conscientiousness do the job?-Behling
Hiring is about finding people with the right mindset
Hire for attitude and train for skill
GI predicts performance, it also predicts employee job knowledge
Relation between g and performance holds beyond the employees first weeks or months on
the job
Relationship between g and performance is stronger for supervisors than it is for non-
supervisors
Reading resumes and interviewing for evidence of G
School grades: Do not indicate G perfectly
Vocabulary: Relates highly to g
Problem solving success: Many jobs and hobbies involve problem solving
 Reading resumes and interview for evidence of conscientiousness
Preparation for the interview: More prepared is probably more conscientious
Dress and self-presentation: Someone who dressed appropriately shows at least some signs
of conscientiousness
Career progression: Careful career planning would appear to be an attribute of those high in
conscientiousness
SG Cohen
Firm for top-tier research and strong equity sales and trading capabilities
Remain a boutique-sized firm but had access to the parents balance sheet
Team captains to every school students had a constant and familiar point of contact
Raes strategy: Core business schools company presentation in advance of the interview
dates
o Who are we
o What do we do
o What distinguishes us from competitors
o What are the next steps
On campus round super Saturday
Hiring criteria
o Using grid sheets for bankers to fill out vote
Candidates
o Natalya Godlewska
MBA in Cornell, high GPA, language barrier, financial background
o Martin Street
Second-year Wharton MBA who served 4 years in military, leadership,
dynamic personality
o Ken Goldstein
Second-year MBA at Berkeley who worked at PWC for 5 years
Quickly rose to be a manager at PWC
o Andy Sanchez
2 year MBA at USC, completed his undergraduate degree in UCLA,
nd

entrepreneur, SAT business

Enthusiastic, but low GPA
Performance Pay Safelite Auto Glass
Largest nation-wide auto glass company in the US
Maintained around 12% market share, while Harmon glass had 6%
Safelite grew, company wanted to dramatically increase store presence
Set up partnerships with key insurance companies
Played the role of third party administrator of claims through a network of independent
shops
Individual technicians were installing an average of only 25 glass units a day
Finding the correct location of the customer in a timely fashion was one of the problems
PPP Create loyalty among its largely transient workforce, combat the industrys
traditionally high turnover rates
o Technicians received a piece rate for every windshield they installed
o # of windshields a technician installed were accumulated and his pay for
the week would be based on the number of installations
o Guarantee rate, PPP rate
PPP for store managers
o Managers were encouraged to install a certain number of glass units per day in
addition to maintatining and motivating a staff of technicians.
 o Stores were categorized according to size
Reaction to PPP was mixed
o Uncertain of its effects and he stability of Safelites workforce.
o New pay system in an established industry
o Pay was out of the technicians control

Ann Hopkins
Ann Hopkins thought that her being not promoted was because of her gender
Bias-gender
; wearing makeup, being feminine
Taste bias-
Skills- interpersonal skills
Employed 7 females already- not a sexist?
Price Waterhouse said- they had talented female workers but other companies took
them.--?
Why wouldn't they want to stay?--maybe bc of taste based bias just like Ann
Hopkins
Not a career progression.
Salary
Ann Hopkins def. had weak interpersonal skills
Overwhelming clues underlying gender issues
It is not really a strong sex discrimination case ?
Acknowledging some advantages only females may have?
Thomas Beyer advising her about make-up and dressing in more feminine
manner
1980s
What if a man wore and behave in more "feminine" way/ then they would've
said the same thing?
Is it appropriate to comment on dress hygienic
but what she was advised was not very relevant to her work