1. Chapter Thirteen Business

2. Copyright © Houghton Mifflin Company. All rights reserved.13-2 Industrial/Organizational Psychology The study of human behavior in the workplace. Hawthorne plant studies found that simply observing workers increased their productivity. “Hawthorne effect”

3. Copyright © Houghton Mifflin Company. All rights reserved.13-3 Personnel Selection

4. Copyright © Houghton Mifflin Company. All rights reserved.13-4 Putting Common Sense to the Test… Although flawed, job interviews consistently make for better hiring decisions. Answer: False…Let’s see why!

5. Copyright © Houghton Mifflin Company. All rights reserved.13-5 Traditional Employment Interviews Do interviews promote sound hiring? Research suggests interviewing has mixed effects. Live interviews may actually diminish the tendency to make simple stereotyped judgments. But one source of bias may be physical attractiveness.

6. Copyright © Houghton Mifflin Company. All rights reserved.13-6 Figure 13.1: The Bias for Beauty in Hiring From C.M. Marlowe, S.L. Schenider, and C.E. Nelson (1996) "Gender and Attractiveness Biases in Hiring Decisions: Are More Experienced Managers Less Biased?" Journal of Applied Psychology, 81, 11-21. Copyright (c) 1996 by the American Psychological Association. Adapted with permission.

7. Copyright © Houghton Mifflin Company. All rights reserved.13-7 Figure 13.2: Job Interviews: A Self- Fulfilling Prophecy? Phillips & Dipboye, 1989.

8. Copyright © Houghton Mifflin Company. All rights reserved.13-8 “Scientific”Alternatives to Traditional Interviews Polygraph or lie-detector test as a screening device Standardized tests measuring: Intellectual and cognitive abilities Job specific knowledge and skills Relevant personality traits Integrity

9. Copyright © Houghton Mifflin Company. All rights reserved.13-9 Figure 13.3: Can Integrity Tests Be Faked? From G.M. Alliger, S.O. Lillienfield and K.E. Mitchell, "The Susceptibility of Overt and Covert Integrity Tests to Coaching and Faking," Psychological Science, Vol. 7, 32-39, 1996. Reprinted with permission of Blackwell Publishing Ltd.

10. Copyright © Houghton Mifflin Company. All rights reserved.13-10 Structured Interviews Structured Interview: Each applicant is asked a standard set of questions and evaluated on the same criteria. Assessment Center: Structured setting in which job applicants are exhaustively tested and judged by multiple evaluators.

11. Copyright © Houghton Mifflin Company. All rights reserved.13-11 Personnel Selection as a Two-Way Street Concrete, job-specific tests and interview situations seen as most fair. Dislike for more general standardized tests of intelligence, personality, and honesty. Preference for in-person interviews.

12. Copyright © Houghton Mifflin Company. All rights reserved.13-12 Affirmative Action The policy whereby preferences in recruiting, hiring, admissions, and promotion are given to women and underrepresented minority groups. The debate: Preferential treatment is necessary to overcome past inequities. Policy results in unfair reverse discrimination.

13. Copyright © Houghton Mifflin Company. All rights reserved.13-13 Figure 13.4: American Attitudes Toward Affirmative Action USA Today Gallup Poll, 6/23/03

14. Copyright © Houghton Mifflin Company. All rights reserved.13-14 Why Can Preferential Selection Policies Have Negative Effects? People perceive a procedure as unjust to the extent that it excludes those who are qualified simply because of their nonmembership in a group. Recipients become less able to attribute success on the job to their own abilities and efforts. Seen as a form of assistance.

15. Copyright © Houghton Mifflin Company. All rights reserved.13-15 Figure 13.6: Varying Effects of Affirmative Action on Women Heilman et al., 1998.

16. Copyright © Houghton Mifflin Company. All rights reserved.13-16 Table 13.1: Managing Affirmative Action

17. Copyright © Houghton Mifflin Company. All rights reserved.13-17 Performance Appraisals

18. Copyright © Houghton Mifflin Company. All rights reserved.13-18 Performance Appraisals The process of evaluating an employee’s work within the organization. Objective, quantifiable measures are often not available for assessing a worker’s performance. So, performance appraisals are usually based on subjective measures.

19. Copyright © Houghton Mifflin Company. All rights reserved.13-19 Supervisor Ratings How accurate and fair are supervisors’ ratings of subordinates’ performances? Appraisal-related problems: Halo effect Contrast effect Restriction of range problem

20. Copyright © Houghton Mifflin Company. All rights reserved.13-20 Putting Common Sense to the Test… A problem with having workers evaluate their own job performance is that self-ratings are overly positive. Answer: True…Let’s see why!

21. Copyright © Houghton Mifflin Company. All rights reserved.13-21 Self-Evaluations Workers are sometimes asked to evaluate their supervisors (“upward feedback”). Self-evaluations are subject to many biases because people like to present themselves favorably to others. Self-evaluations put both subordinates and female employees at a disadvantage.

22. Copyright © Houghton Mifflin Company. All rights reserved.13-22 New and Improved Methods of Appraisal Make evaluations right after performance. Increase the number of evaluators used. Teach evaluators some of the skills necessary for making accurate appraisals.

23. Copyright © Houghton Mifflin Company. All rights reserved.13-23 Due Process Considerations Principle #1: There should be adequate notice of expected performance standards. Principle #2: Employees should receive a fair hearing. Principle #3: Appraisals should be based on evidence of job performance.

24. Copyright © Houghton Mifflin Company. All rights reserved.13-24 Leadership

25. Copyright © Houghton Mifflin Company. All rights reserved.13-25 Putting Common Sense to the Test… The most effective type of leader is one who knows how to win support through the use of reward. Answer: False…Let’s see why!

26. Copyright © Houghton Mifflin Company. All rights reserved.13-26 The Classic Trait Approach What traits characterize “natural-born” leaders? Some traits have been found to be characteristic of people who become leaders. More situationally-oriented theories posit that the emergence of a given leader depends on time, place, and circumstances.

27. Copyright © Houghton Mifflin Company. All rights reserved.13-27 Fiedler’s Contingency Model of Leadership Leaders are either primarily task oriented or relations oriented. Task oriented leaders are most effective in clear-cut situations that are either low or high in control. Relations oriented leaders perform better in situations that afford a moderate degree of control.

28. Copyright © Houghton Mifflin Company. All rights reserved.13-28 Vroom & Yetton’s Normative Model of Leadership Leadership effectiveness is determined by the amount of feedback and participation leaders invite from workers. Effective long-term leadership depends on the having the right amount of worker participation. The “right amount” depends on situational factors.

29. Copyright © Houghton Mifflin Company. All rights reserved.13-29 Transactional Leadership Compliance and support from followers is gained primarily through goal setting and the use of rewards. Depends on the leader’s willingness and ability to reward subordinates who perform as expected. As well as the willingness and ability to correct those who do not.

30. Copyright © Houghton Mifflin Company. All rights reserved.13-30 Transformational Leadership Motivates followers to transcend personal needs in the interest of a common cause. Particularly in times of growth, change, and crisis. Articulates a clear vision of the future and then mobilizes others to join in that vision.

31. Copyright © Houghton Mifflin Company. All rights reserved.13-31 Table 13.3: Characteristics of Transformational Leaders Reprinted by permission from Mind Garden, www.mindgarden.com. Based on Bass & Avolio, 1990.

32. Copyright © Houghton Mifflin Company. All rights reserved.13-32 Leadership Among Women and Minorities Women and minorities are extremely underrepresented in top leadership positions. Are there gender differences with respect to leadership? Only difference seems to be that men are more controlling and women more democratic in their approaches.

33. Copyright © Houghton Mifflin Company. All rights reserved.13-33 Why Are There So Few Women in Top Leadership Positions? Conflicted about having to juggle career and family responsibilities. Some shy away from competitive hierarchical positions that offer the potential for leadership. Societal stereotypes of women as followers, not as leaders.

34. Copyright © Houghton Mifflin Company. All rights reserved.13-34 Motivation

35. Copyright © Houghton Mifflin Company. All rights reserved.13-35 Vroom’s (1964) Expectancy Theory Workers become motivated and exert effort when they believe that: Their effort will result in an improved performance. Their performance will be recognized and rewarded. The money and symbolic rewards that are offered are valuable and desirable.

36. Copyright © Houghton Mifflin Company. All rights reserved.13-36 Figure 13.7: Goal-Setting and Performance Cycle Locke & Latham, 2002.

37. Copyright © Houghton Mifflin Company. All rights reserved.13-37 Figure 13.8: The Effect of Payment on Intrinsic Motivation From E.L. Deci (1971) "Effects of Externally Mediated Rewards on Intrinsic Motivation," Journal of Personality and Social Psychology, 18, 105-115. Copyright (c) 1971 by the American Psychological Association. Adapted with permission.

38. Copyright © Houghton Mifflin Company. All rights reserved.13-38 Bonuses, Bribes, and Intrinsic Motivation How a reward is interpreted determines its effect on motivation. Controlling rewards such as bribes can lower intrinsic motivation. Informational rewards such as bonuses can have a positive effect on intrinsic motivation.

39. Copyright © Houghton Mifflin Company. All rights reserved.13-39 Putting Common Sense to the Test… People who feel “overpaid” work harder on the job than those who see their pay as appropriate. Answer: True…Let’s see why!

40. Copyright © Houghton Mifflin Company. All rights reserved.13-40 Equity Considerations According to equity theory, people want rewards to be equitable. Being overpaid or underpaid should cause distress. To relieve the distress from inequity, a person can: Restore actual equity Convince oneself that equity already exists.

41. Copyright © Houghton Mifflin Company. All rights reserved.13-41 Figure 13.9: Equity in the Workplace From J. Greenberg (1988) "Equity and Workplace Status: A Field Experiment," Journal of Applied Psychology, 73, 606-613. Copyright (c) 1988 by the American Psychological Association. Adapted with permission.

42. Copyright © Houghton Mifflin Company. All rights reserved.13-42 Equity Considerations (cont.) Satisfaction may depend not only on equity outcomes but also on the perceived fairness of how the outcomes were determined. Equity in the workplace may be more important for men than for women.

43. Copyright © Houghton Mifflin Company. All rights reserved.13-43 Economic Decision Making

44. Copyright © Houghton Mifflin Company. All rights reserved.13-44 Social Influences in the Stock Market The stock market is influenced by social psychological factors as much as by rational economic factors. Social comparison and conformity revisited. Misperceptions of random events, misattributions, and even unpublished rumors can influence decisions of investors.

45. Copyright © Houghton Mifflin Company. All rights reserved.13-45 Putting Common Sense to the Test… People losing money on an investment tend to cut their losses rather than hang tough. Answer: False… Let’s see why!

46. Copyright © Houghton Mifflin Company. All rights reserved.13-46 Commitment, Entrapment, and Escalation People can become entrapped by own initial commitments. Explanations for the escalation effect Loss aversion Feelings of personal responsibility

47. Copyright © Houghton Mifflin Company. All rights reserved.13-47 Sunk Cost Principle People often violate the sunk cost principle of economics. The principle that only future costs and benefits, not past commitments, should be considered in making a decision. Economic decisions are biased by past investments of time, money, and effort.