OAM Test 1

Organizational Behavior

Systematic study of how people act in organizations to understand and predict how people will behave

Rational Decision Making Model

Steps to maximize outcome and make the best choice; establishes set of parameters in which options will be evaluated and generates alternatives; assumes people completely understand the decision to be made, know all available choices and have no bias

Intuitive Decision Making Model

Arriving to decisions without conscious reasoning when time pressures, constraints and uncertainty make it difficult to use rational decision model; one option considered at a time

Bounded Rationality Model

People knowingly limit their options to a manageable set and choose first acceptable alternative or what is “good enough”; Decision maker saves cognitive time and effort by accepting first choice that meets the minimum threshold

Heuristics

Mental shortcuts or rules of thumb to make decisions faster

Bias

the tendency for people to over- or under-estimate the true parameters

Cognitive Bias

errors in perception that lead to faulty decision making

Availability Bias

Occurs when people conflate how likely something is to happen with how frequently we are exposed to the information; events that are emotional, vivid, or more easily imagined also tend to be more available in memory

Representativeness Bias

Tendency to assess an event as more likely to occur based on our own stereotypes; representativeness is largely based on one’s own personal experience and familiarity with the situation

Anchoring or Adjustment Bias

Tendency to rely too heavily on initial figure and failing to adjust sufficiently

Framing Bias

Tendency to be influenced by the way problems are presented; Occurs due to loss aversion where people are more sensitive to losses than gains; when problems are framed as losses, people tend to engage in riskier behavior to try and avoid pain of dealing with loss

Confirmation Bias

Tendency to process and analyze information that supports one’s own preexisting ideas and beliefs; Ego-affirming and people see what they want to see and tend to not seek out information to the contrary

Escalation of Commitment Bias

When people continue on course after info reveals it may be a poor path to follow; people do not want to admit they are wrong

Sunk Cost Fallacy

Relates to Escalation of Commitment Bias; People are reluctant to abandon decisions they’ve already invested significant time, resources, or energy into

Hindsight Bias

When once we know the outcome it is hard to imagine how someone without such knowledge; easier to pass judgment and conclude something should have been obvious after the fact

Correlation and Causality Bias

When people confuse and association or connection between two events as a “cause and effect” relationship

Perception

Process of how people detect and interpret environmental stimuli'; bias impacts perception by influencing how much people pay selective attention to some aspects or ignore other elements

Self-Perception Bias

Self enhancement bias where people have a tendency to see themselves more positively than others do

False Consensus Error

When we overestimate how similar we are to other people

Overconfidence Bias

People overestimate their own abilities and overestimate their ability to predict future events

Planning Fallacy

People underestimate the amount of time they will need to complete a task

Endowment Effect

Tendency of people to value something they own at a higher value than its own market value

Halo Effect

Tendency for people to form an overall positive impression of someone based on a single characteristic or trait

Stereotypes

Generalizations based on perceived characteristic

Self Fulfilling Prophecy

Cycle that occurs when people believe a stereotype is accurate leading to behavior that confirms the stereotype

Attributions

Causal explanations we give for an observed behavior; internal is when you explain someones behavior using their internal characteristics and external is when you explain it with their environment or situation

Attribution Dimensions

Consensus (high - everyone else behaves this way), distinctiveness (high - this person does not usually behave this way in other situations), consistency (low - this person does not usually behave this way in this situation)

Fundamental Attribution Error

Self attribution we tend to make external attributions when things go bad and internal attributions when things go good

Individual Differences

relatively stable and enduring psychological features over time and across situations; measures of this used for employee selection

Intelligence

Mental Ability (IQ) - overall intelligence level, most powerful predictor of job performance and Emotional intelligence (EQ) - understanding others emotions

Self-esteem

Degree to which person has overall positive feelings about themselves

Self-Efficacy

Belief that one can perform a specific task successfully; task-specific

Locus of Control

Degree to which people feel accountable for their own behavior and outcomes; Internal locus of control says I control my destiny and what happens to me is my doing

Interviews

Structured questions predictive of job performance

Myers Briggs Type Indicator

Most well-known and used personality assessment; Lacks validity, reliability and predictive value

OCEAN

Five main personality traits that explain most of the variance in our personalities; openness, conscientiousness, extraversion, agreeableness, neuroticism

Openness

Degree to which person is open to new ideas, original and creative; least predictive value; low openness prefers simplicity and is attentive to details while high seeks complexity and prefers a broad view

Conscientiousness

Degree to which a person is organized, punctual, dependent, and achievement oriented; best predictor low conscientiousness is spontaneous, jumps from task to task, and is satisfied with current achievement; high is organized, plans everything and likes to complete tasks

Extraversion

Degree to which a person is outgoing, talkative and enjoys being in social situations; low extraversion prefer working alone. high extraversion prefers working with others and more readily trusts others

Agreeableness

Degree to which person is nice, tolerant, sensitive, and kind. Low agreeableness expresses opinions, welcomes discourse, and wants acknowledgment. High agreeableness keeps opinions to self, seeks harmony, and prefers to stay in the background.

Neuroticism

Degree to which person is anxious, irritable, and temperamental; Low neuroticism is calm, has optimistic expectations and rapid rebound time. High neuroticism worrisome, quick to anger, pessimistic expectations and longer rebound time

Self-Monitoring

Extent to which people are capable of adapting their actions and appearance across social situations

Factors of Job Performance

Motivation, Ability, Environment

Need Based Theories of Motivation

• Earliest studies of motivation involved an examination of people’s needs

• Provide some intuitive appeal but lack scientific research support

• Tends to lack guidance on practical application in organizational settings

• Maslow’s Hierarchy, ERG Theory, Two-Factor Theory, Acquired-Needs Theory

Maslow’s Hierarchy of Needs

Premise: Human beings have needs that are hierarchically ranked

▪ We have basic needs and in their absence, other needs are not considered

▪ Once basic needs are satisfied, it no longer serves as a motivator

Limitations are that people can have multiple needs at a time and a different order of needs is also possible

ERG Theory

Modifies and relaxes assumptions of Maslow’s Hierarchy and argues human needs can be grouped under three categories

▪ Existence: Physiological/safety needs

▪ Relatedness: Interpersonal relationships

▪ Growth: Personal development

Limitation is it might be overgeneralized and ultimately unclear what needs are

Two Factor Theory

Aspects of the work environment that motivate employees are different from aspects that create demotivation

▪ Motivators: Factors that are intrinsic to the job that increase motivation

▪ Hygiene factors: Factors that are extrinsic to the job that decrease motivation

Limitations: Not true that people can’t be motivated extrinsic factors

Acquired-Needs Theory

Premise: People acquire three types of needs as a result of their life experiences and are motivated by dominant need

▪ Achievement: Needs to be successful

▪ Affiliation: Wanting to be liked and accepted by others

▪ Power: Wanting to influence others and control environment

Has received greatest amount of empirical support

Process-Based Theories

View motivation as a calculated thought process; Equity Theory, Organizational Justice, Expectancy Theory, Reinforcement Theory

It is the job of a leader to increase perceptions of fairness, equity, and expectancy

Equity Theory

Premise: People are motivated by a sense of fairness in their interactions and specifically by our social comparisons

▪ Inputs: Contributions we feel we are making to environment

▪ Outcomes: Perceived rewards we can receive from situation

▪ Referent: Person we compare ourselves to

Perceptions of inequity create tension and often lead to demotivation

Likely Reactions to Unfairness/Inequity

• Emotional reaction like anger or disappointment

• Behavioral reaction - Distort perceptions (maybe referent is better than I thought), Reduce own input, Attempt to increase own outcomes, Possibly change referent (compare yourself to someone worse off), leave the situation

• What if we’re over-rewarded? Some feeling of guilt but more often than not we rationalize it

Organizational Justice

• Degree to which an organization treats its employees fairly

• Equity theory only looks at fairness of rewards

Distributive Justice

Degree to which outcomes received from organization are fair so equity theory is a distributive justice theory

Best Practices to Increase Perceptions of Distributive Justice

▪ Establish clear criteria for inputs

▪ Provide clear explanations for how outcomes are distributed

▪ Influence choice of referent

Procedural Justice

• Degree to which fair decision-making procedures are used to make a decision

  • People are more likely to accept a poor outcome if they feel the process was at least fair

Best Practices to Increase Perceptions of Procedural Justice

• Best practices to increase perceptions of procedural justice

  • Be consistent in treatment of employees

  • Allow employees voice in process

  • Provide advance notice before implementing changes

Interactional Justice

• Degree to which people are treated with respect, kindness, and dignity

  • Even when faced with negative outcomes, we expect to be treated a certain way

Best Practices to Increase Perceptions of Interactional Justice

• Signal openness: “Not now but in the future”

• Express empathy: You can empathize without necessarily agreeing

• Allow questions and follow up

Expectancy Theory

• Motivation is determined through a calculation as people ask themselves three questions:

  • Expectancy: Will my effort lead to performance?

  • Instrumentality: Will my performance lead to outcomes?

  • Valence: Do I find the outcomes desirable?

Practices for Increasing Expectancy

• Make sure employees have proper skills, abilities, and knowledge

• Ensure that the environment facilitates performance

• Provide encouragement to make people believe that their effort makes a difference

Practices for Increasing Instrumentality

• Reward employee performance

• Inform people in advance about the rewards

• Try to eliminate non-performance influence over rewards

Practices for Increasing Valence

• Find rewards that are desirable by the employees

• Make sure that the rewards are reviewed as fair

• Give employees choice over rewards

Reinforcement Theory

• Premise: Behavior is a function of outcomes

• Operant conditioning: People learn to repeat behaviors based on consequences

Increasing Positive Behavior

• Positive reinforcement

  • Providing positive consequences for desired behavior

  • Example: Praising employee for treating customer respectfully

• Negative reinforcement

  • Removal of negative consequences once desired behavior is seen

  • Example: Stop nagging employee once report is completed

Decreasing Negative Behavior

• Positive punishment

  • Presenting negative consequences for undesired behavior

  • Example: Warning employee after submitting work late

• Negative punishment

  • Removal of positive consequences for undesired behavior

  • Example: Ignoring employee after employee shows up late

Reinforcement Schedules

• Continuous: Reinforcing all instances of positive behavior

• Fixed-Ratio: Providing rewards after a set number of occurrences

• Fixed-Interval: Providing rewards after a specified amount of time

• Variable: Reinforcing on a random pattern

• Best combo for sustained behavioral change is positive reinforcement on variable schedule

Challenges Applying Reinforcement Theory

Challenges

▪ Ambiguity: Takes experimenting or time to see results to know if reinforcement is working

▪ Timing: Failure to reinforce behavior in a timely manner can lead people to miss seeing connection between behavior and outcome

▪ Alignment: Aligning organizational goals with individual goals is difficult (“Hoping for A, Rewarding for B”)

Hoping for A, Rewarding for B

• Organizations often unknowingly incentivize the wrong types of behaviors

  • Selective perception: More visible behaviors tend to be weighed more

  • What is easiest to measure is what tends to get rewarded

• Examples

  • Teachers and students

    • A: Knowledge | B: Grades

  • Delivery companies and drivers

    • A: Safe driving | B: Fast deliveries

  • Sports teams and athletes

    • A: Teamwork | B: Individual stats

How can companies align goals with employees’ personal goals?

• Look for integrative solutions: What are the company goals? What are the employee’s priorities and interests? What mutually beneficial opportunities are there?

• Cleary link how individuals contribute to overall business objectives and strategy

• Allow employees to participate in goal setting

• Recognize process and celebrate employees’ efforts (not just results)

Potential Pitfalls of Pay-for-Performance

• Diminished creativity

• Creates perceptions of inequity

• Citizenship behaviors may be neglected

• Undermines the importance of intrinsic motivation

Intrinsic Motivation

• Pursuing an activity for its inherent satisfaction

• Doing something for its own end: No apparent reward but the behavior itself

Extrinsic Motivation

Pursuing an activity in order to attain some separable outcome

What matters more intrinsic or extrinsic motivation?

• In general, intrinsic motivation is a better predictor of whether someone will persist and sustain in a behavior

• Intrinsic is a stronger predictor when performance is judged by quality

• Extrinsic is a stronger predictor when performance is judged by quantity

Ways to Boost Intrinsic Motivation

• Autonomy: Giving employees control over what they do, when they do it, who they do it with

• Mastery: Giving employees feedback to improve skills through learning and practice

• Purpose: Connecting employees’ personal goals to organizational targets

Purpose of Performance Review

• Give employees feedback and aid development

• Announce decisions on rewards such as bonuses, pay raises, or promotions

Rating Systems

• Absolute: Rating is based on whether performance meets a standard threshold

  • Pros: Employees generally prefer absolute ratings

  • Cons: Prone to rating inflation (defeats purpose of ratings)

• Relative: Performance is compared against peers

  • Pros: Prevent ratings from becoming inflated

  • Cons: Creates culture of competition, limited value in giving employees developmental feedback

Performance Review Criticisms

• Backwards-facing

  • Focus is on holding people accountable for past behavior at the expense of focusing on how to improve future performance

• Ambiguous criteria

  • Subjective judgments are made on performance, KSA’s, or leadership potential

• Too infrequent to make a difference

  • Lack of real-time feedback renders performance reviews ineffective

Performance Review Biases

• Liking

  • Managers give employees they have good relationship with higher ratings

  • Potential solution: Journaling

• Leniency

  • Managers may have desire to avoid confrontation which makes reviews relatively useless

  • Potential solution: Relative rating system

• Stereotypes

  • Manager’s beliefs about certain group may influence how a person is rated

  • Potential solution: Raising awareness of one’s own biases

What to do before Performance Reviews

• Provide more frequent opportunities for feedback

  • Small, informal conversations can lessen feelings of angst before annual review

• Adequate notice

  • Let employees know in advance what criteria will be used during review

• Solicit information from different sources

  • Check yourself for personal biases

What to do During Performance Reviews

• Fair hearing

  • Ensuring there is two-way communication and employee’s side of story is heard

• Documentation of evidence

  • Using factual evidence as opposed to personal opinions or subjective judgments

• Focus should be on future development

  • Offering mentorship for how employee can improve moving forward

Define Goal

A cognitive representation for a target for behavior; Give people direction

Goal Commitment

• Refers to one’s attachment or determination to reach a goal

• Organizational goals only work if people have high goal commitment

• Help to provide inspirational vision and include employees in goal setting

SMART Goals

Specific, Measurable, Achievable, Relevant and Time Bound

Downsides of Goal Setting

• Tunnel Vision

  • Goals tend to narrow peoples’ focus toward achievement and people become more single-minded

• Achievement Ceiling

  • Goals are often seen as a ceiling and not a floor

  • Once a goal is reached, people often stop when they could have kept going

  • Motivation can decrease once goals are achieved

• Unethical Behavior

  • An aggressive pursuit of goals may lead to unethical behavior

  • Employee might be tempted to cheat or misrepresent their performance if they are close to reaching a goal

Creativity

Generation of new ideas from divergent, non linear, lateral thinking

How do you evaluate whether your decision making process is creative?

• Fluency: How many ideas are you able to generate?

• Flexibility: How different are the ideas from each other?

• Originality: How unique are your ideas?

Individual Factors of Creativity

• Associated Individual Differences

  • Openness

  • Risk-taking

  • Low uncertainty avoidance

• But also requires…

  • Expertise: Changes how you see problem

  • Imagination: Creative thinking skills and ability

  • Motivation: Intrinsic motivation is a stronger predictor of creativity

Group Factors of Creativity

• Brainstorming: Idea generation phase

  • Quantity typically leads to quality

  • “The best way to have a good idea is to have a lot of ideas”

• Brainstorming in groups

  • Pros: Evidence shows that having people from a variety of backgrounds tends to lead to more creativity

  • Cons: Brainstorming in groups and interacting with other group members tends to lead to fewer quality ideas

  • Best practice: Have people brainstorm individually first and then come together as a group

Organizational Factors of Creativity

• Psychological safety: People feel that taking risks is acceptable

• Organizational culture: Culture of participation and questioning is encouraged

• Organizational structure: Flatter, more organic structure

Fostering Creativity

SCAMPER

Substitute

Combine to create new arrangements

Alter good or service to meet new needs

Modify; How can it be given a new shape?

Put to Other Use/Repurposing

Eliminate; What can be omitted?

Rearrange; Can other layouts create value?

Diversity

• The compositional ways in which people are different from each other

  • Surface-level diversity: Traits that are highly visible such as race, gender, age

  • Deep-level diversity: Harder to observe dimensions such as values, beliefs, and attitudes

Similar-Attraction Phenomenon

• Tendency to be more attracted to individuals who are similar to us

  • People show more positive attitudes, allocate greater resources, and are more strongly drawn to similar others

• Minority group members have fewer people to go to receive similar levels of support, assistance, or mentorship

Challenges to Diversity

• Hiring and Promotions

  • Study showed resumes that removed references to demographic categories in the minority were more likely to receive callbacks

• Mentoring

  • Employees often get ahead in organizations through having a powerful and influential mentor and people are more likely to informally adopt

    mentees who are similar to them

• Stereotypes

  • Generalizations about a group of particular people

  • Over rely on stereotypes instead of collecting data and verifying assumptions

  • Can lead to unfair and inaccurate decisions, perceptions, and attributions

Problems with Stereotypes

• Mere existence of a stereotype can enhance or diminish job performance

• People are more likely to make poor decisions or wrong attribution

  • Ex. Assuming men are more assertive and confident than women and as a consequence managers are more likely to promote men to leadership positions

Potential Benefits of Diversity

• Higher creativity in decision making

• Better understanding of customers

• More adaptability

• Better breadth of KSA’s

• Higher company performance

Potential Challenges of Diversity

• Social conflict

• Poor communication

• Loss of trust

• Power and status differences

• Feelings of injustice

What diversity really means

• Variety

  • Composition of information access: Differences on a feature that represents unique knowledge, skills, and abilities

  • To build draw from different social circles by using random assignment

• Seperation

  • Composition of feeling: Differences that represent where one stands on an issue

  • To avoid build social bridges

• Disparity

  • Composition of dominance: Differences on a feature of something that we own

  • To reduce increase input opportunities for all members by rotating leadership responsibilities and allowing for anonymous input

Faultline

• An attribute along which a group is split into subgroups

• Faultlines are most likely to emerge when all demographic attributes are distinct

  • Teams with faultlines tend to experience more conflict, are less cohesive, and perform worse

• To overcome avoid obvious and highly visible divisions on social categories and create team-based rewards

Managing Diversity

• Variety: Generates “good” task conflict

  • Disagreements that arise from differences in variety often lead to necessary discussions on how to move forward

• Separation/Disparity: Generates “bad” relationship conflict

  • Presence of separation and disparity can stifle variety

  • Good leaders actively identify and address potential for separation and disparity

Card Game Takeaway

• Working across cultures is like playing with different rules

  • Our rules seem like the standard and more correct than other rules

  • Entering a situation where you don’t know the rules can lead to culture shock