MGT Textbook for Midterm .pdf

PART 1 Understanding Yourself and Others 1 What Is Organizational Behavior? LEARNING OBJECTIVES After studying this chapter, you should be able to: 1.1 Define organizational behavior (referred to as OB throughout the text). 1.2 Show the...

PART 1 Understanding Yourself and Others 1 What Is Organizational Behavior? LEARNING OBJECTIVES After studying this chapter, you should be able to: 1.1 Define organizational behavior (referred to as OB throughout the text). 1.2 Show the value of systematic study to OB. 1.3 Identify the major behavioral science disciplines that contribute to OB. 1.4 Demonstrate why few absolutes apply to OB. 1.5 Identify managers’ challenges and opportunities in applying OB concepts. 1.6 Compare the three levels of analysis in this text’s OB model. 1.7 Describe the key employability skills gained from studying OB that are applicable to other majors or future careers. R ight now, you might be wondering, “What is organizational behavior and why does it matter to me?” We will define organizational behavior (OB) very shortly, but first let us begin with the end in mind—why OB matters, and what the study of OB offers you. Historically, business school coursework on human behavior in organizations has received relatively little attention. This might be surprising to you, because you might be thinking, but “the people make the place”;1 organizations are only as effective as the people who comprise them. Should we not try to understand people in the workplace, as well as how we make decisions, communicate, and interact with one another? Over the last several decades, business schools and organizations have realized the significant role interpersonal skills play in determining a manager’s effectiveness. Understanding OB is important to you now, more than ever. We are in the midst of an OB revolution, of sorts, that is gaining traction year by year. As noted in the 2016 Deloitte Global Business Trends report, organizations have figured out that they need to understand “what makes people join, perform well in, and stay with an organization; who will likely be successful; who will make the best leaders; and what is required to deliver the highest-quality customer service and innovation.”2 A knowledge of OB and interpersonal skills is critical for your success and advancement in the modern workplace. According to Jeff Weiner, chief executive officer (CEO) of LinkedIn, “communications is the No. 1 skills gap across... major cities in the 27 28 Part 1 Understanding Yourself and Others United States.”3 It is also relevant to nearly every job: One study by Monster (a global employment company) mined nearly one million market-wide job postings to determine the most frequently desired skills in applicants.4 Communication skills was at the top of the list, followed by other OB-relevant skills, including problem-solving and influence skills. Furthermore, these skills are also necessary for your career advancement. A sur- vey of over 2,100 chief financial officers across twenty industries indicated that a lack of interpersonal skills is the top reason why some employees fail to advance.5 Ultimately, OB can equip you with tools that are critical to success and advancement in the work- place. In this text, we pay special attention to how the knowledge and practice of OB can help you (1) think analytically and critically, (2) make better decisions, (3) communicate and collaborate more effectively with others, and (4) act with a sense of social respon- sibility in the workplace. Research has demonstrated that these types of “employability skills” are highly valued and desired by employers, and a lack of these skills can lead to problems in the workplace.6 From the organizational standpoint, incorporating OB principles can help trans- Telefónica This Spanish form a workplace from good to great, with a positive impact on the bottom line. Com- multinational panies known as good places to work—such as Lululemon, LinkedIn, Zoom Video, broadband and Southwest Airlines, Bain & Company, Google, the Boston Consulting Group, and telecommunications Facebook7—have been found to generate superior financial performance as a result of provider is one their attention to OB.8 Second, developing managers’ interpersonal skills helps orga- of the best places to work because nizations attract and keep high-performing employees, which is important because of their “people” outstanding employees are always in short supply and costly to replace. Third, the focus. Telefónica’s quality of workplace relationships is strongly linked with employee job satisfaction, concerted efforts stress, and turnover. One study of hundreds of workplaces and more than 200,000 to keep its respondents showed that positive social relationships among coworkers and supervi- employees happy and productive sors were strongly related to overall job satisfaction, lower stress at work, and lower includes putting in intentions to quit.9 Positive work relationships help employees to flourish, leading place a confidential to improvements in job and life satisfaction, positive emotions at work, and percep- help channel, tions that one’s work has meaning.10 Fourth, an emphasis on OB in organizations which allows can foster awareness of social responsibility. Universities have started to incorporate employees to clarify queries regarding social entrepreneurship education into their curriculum in order to train future leaders operational matters in addressing social issues within their organizations.11 This is especially important and raise instances because there is a growing need for understanding the means and outcomes of corpo- of noncompliance. rate social responsibility (CSR).12 In today’s competitive and demanding workplace, employees and managers alike cannot succeed by virtue of their technical skills alone. They also must exhibit good peo- ple skills. This text has been written to help people in organizations develop those skills along with the knowledge that understanding human behavior provides. In so doing, we believe you will obtain lasting skills and insight about yourself and others. MANAGEMENT AND ORGANIZATIONAL BEHAVIOR More than ever, individuals are placed into management positions without sufficient man- agement training or informed experience. According to the US Bureau of Labor Statistics, employers with 100–500 employees provide less than one hour of management training per six-month period, on average.13 Furthermore, according to a large-scale survey, more  Chapter 1 What Is Organizational Behavior? 29 than 58 percent of managers reported they had not received any training and 25 percent admitted they were not ready to lead others when they were given the role.14 Added to that challenge, the demands of the job have increased: The average manager has seven direct reports (five was once the norm) and spends less time supervising them than managers of the past.15 Considering that a Gallup poll found organizations chose the wrong candidate for management positions 82 percent of the time,16 we conclude that the more you can learn about people and how to manage them, the better prepared you will be to be that right candidate. OB will help you get there. Effective Versus Successful Managerial Activities What makes one manager more effective than another? To answer this question, Fred Luthans, a prominent OB researcher, and associates looked at what managers do from a unique perspective.17 They asked, “Do managers who move up most quickly in an orga- nization do the same activities and with the same emphasis as managers who do the best job?” You might think the answer is yes, but that is not always the case. Luthans and associates studied more than 450 managers. All engaged in four man- agerial activities: 1. Traditional management. Decision making, planning, and controlling. 2. Communication. Exchanging routine information and processing paperwork. 3. Human resources (HR) management. Motivating, disciplining, managing con- flict, staffing, and training. 4. Networking. Socializing, politicking, and interacting with outsiders. The “average” manager spent 32 percent of their time in traditional management activities, 29 percent communicating, 20 percent in HR management activities, and 19 percent networking. However, the time and effort different individual managers spent on those activities varied a great deal. Among managers who were successful (defined in terms of speed of promotion within their organizations), networking made the largest relative contribution to success and HR management activities made the least relative contribution. Indeed, other studies in Australia, Israel, Italy, Japan, and the United States confirm the link between networking, social relationships, and success within an organization.18 However, Luthans and associates found that among effec- tive managers (defined in terms of quantity and quality of their performance and the satisfaction and commitment of their employees), communication made the largest Organizational relative contribution and networking the least. The connection between communication behavior A field of study and effective managers is also clear. Managers who explain their decisions and seek that investigates information from colleagues and employees—even if the information turns out to be the impact that negative—are the most effective.19 individuals, groups, and structure have on behavior within Organizational Behavior (OB) Defined organizations, for the purpose of applying Now that we have established what managers do and why this is important for OB, we such knowledge turn our focus more broadly toward how people behave in organizations. toward improving Organizational behavior (OB) is a field of study that investigates the impact that an organization’s individuals, groups, and structure have on behavior within organizations for the purpose effectiveness. 30 Part 1 Understanding Yourself and Others of applying such knowledge toward improving an organization’s effectiveness. That is a mouthful, so let us break it down. OB is a field of study, meaning that it is a distinct area of expertise with a com- mon body of knowledge. It focuses on three determinants of behavior in organizations: individuals, groups, and structure. In addition, OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organiza- tions work more effectively. To sum up our definition, OB is the study of what people do in an organization and the way their behavior affects the organization’s performance. Because OB is concerned specifically with employment-related situations, it examines behavior in the context of job satisfaction, absenteeism, employment turnover, productivity, human performance, and management. Although debate exists about the relative importance of each, OB includes these core topics:20 Motivation Leader behavior and power Interpersonal communication Group structure and processes Attitude development and perception Change processes Conflict and negotiation Work design COMPLEMENTING INTUITION WITH SYSTEMATIC STUDY Whether you have explicitly thought about it before or not, you have been “reading” people almost all your life by watching their actions and interpreting what you see, or by trying to predict what people might do under different conditions. The casual approach to reading others can often lead to erroneous predictions, but using a systematic ap- proach can improve your accuracy. Underlying the systematic approach is the belief that behavior is not random. Systematic study Rather, we can identify consistencies underlying people’s behavior and modify them to Looking at relationships, reflect individual differences. attempting to attribute These fundamental consistencies are very important. Why? Because they allow causes and effects, and predictability. Behavior is generally predictable, and the systematic study of behavior is drawing conclusions a way to make reasonably accurate predictions. When we use the term systematic study, based on scientific we mean looking at relationships, attempting to attribute causes and effects, and basing evidence. our conclusions on scientific evidence—that is, on data gathered under controlled condi- tions and measured, and interpreted, in a rigorous manner. Evidence-based management (EBM) Evidence-based management (EBM) complements systematic study by basing The basing of managerial decisions on the best available scientific evidence. For example, we want managerial decisions doctors to make decisions about patient care based on the latest available evidence, on the best available and EBM argues that managers should do the same, thinking more scientifically about scientific evidence. management problems. You might wonder what manager would not base decisions on evidence, but most management decisions are still made “on the fly,” with little to no Intuition An instinctive feeling systematic study of available evidence.21 not necessarily Systematic study and EBM add to intuition, or those “gut feelings” about what supported by research. makes others (and ourselves) “tick.” Of course, the things you have come to believe in  Chapter 1 What Is Organizational Behavior? 31 an unsystematic way are not necessarily incorrect; one review of hundreds of studies suggest that data-driven judgments (based on algorithms) were about 10 percent more accurate than human’s intuitive judgments.22 Another study found that, contrary to con- ventional wisdom, laypeople may actually prefer data-driven judgments to judgments made by others (e.g., experts) and even to judgments made by themselves.23 Jack Welch (former CEO of General Electric) noted, “The trick, of course, is to know when to go with your gut.”24 But if we make all decisions with intuition or gut instinct, we are likely working with incomplete information—like making an investment decision with only half the data about the potential for risk and reward. Building on Big Data with Artificial Intelligence Data has been used to evaluate behavior since at least 1749, when the word statistic was coined to mean a “description of the state.”25 Statistics back then were used for purposes of governance, but since the data collection methods were clumsy and simplis- tic, so were the conclusions. Big data—the extensive use of statistical compilation and analysis—did not become possible until computers were sophisticated enough to both store and manipulate large amounts of information.26 Let us look at the current use of the application of big data for business, which originated in the marketing department of online retailers. CURRENT USAGE No matter how many terabytes of data firms collect or from how many sources, the reasons for data analytics include predicting events, from a book purchase to a spacesuit malfunction; detecting how much risk is incurred at any time, from the risk of a fire to that of a loan default; and preventing catastrophes large and small, from a plane crash to the overstocking of a product.27 With big data, U.S. defense contractor BAE Systems protects itself from cyberattacks, San Francisco’s Bank of the West uses customer data to create tiered pricing systems, and London’s Graze.com analyzes customers’ preferences to select snack samples to send with their orders.28 Organizations are also beginning to focus more on fast data, drawing on a consistent influx of actionable data that can be used to guide business decisions in real time.29 NEW TRENDS The use of big data for understanding, helping, and managing people is relatively new but holds promise. It is good news for the future of business that researchers, the media, and company leaders have identified the potential of data-driven management and decision making. A manager who uses data to define objectives, develop theories of causality, and test those theories can determine which employee activities are relevant to accomplishing those objectives.30 Increasingly, big data is applied toward making effective decisions (which we discuss in the chapter on perception and individual decision making) and managing organizational change (discussed in the chapter on organizational change and stress management). Big data has enabled organizations to acquire and manage large amounts of data and information. Even more recent advancements have shifted toward how to process and analyze all this information.31 One way organizations have been able to adapt to the massive amounts of and sheer speed at which data is acquired is through artificial intelligence (i.e., machines programmed to think, work, and react like humans).32 When you think of artificial intelligence, your mind may wander to robots, regardless of your status as a Star Trek or Star Wars fan. We are certainly seeing robotics becoming used in the workplace (for example, robots can help hospital night 32 Part 1 Understanding Yourself and Others staff remotely assist their patients during night rounds).33 However, much of the modern focus has been on machine learning (i.e., a subset of AI in which software is trained to perform a task, while at the same time “learning” and “improving” from incoming data and feedback).34 Indeed, 60 percent of the billions of dollars invested in AI has been allocated toward machine learning.35 Machine learning has contributed immensely to the success of a number of organizations, especially those in the e-commerce industry; one estimate suggests that over a third of Amazon transactions stem from AI-facilitated product recommendations.36 In the coming chapters, we discuss how and in what ways artificial intelligence approaches, including robotics and machine learning, have contributed to the study and practice of OB. LIMITATIONS As technological capabilities for handling big data and artificial intelligence have increased, so have issues of privacy and appropriate application.37 This is particularly true when data collection includes surveillance instruments. For instance, an experiment in Brooklyn, New York, has been designed to improve the quality of life for residents, but the researchers will collect potentially intrusive data from infrared cameras, sensors, and smartphone Wi-Fi signals.38 Bread Winners Café in Dallas, Texas, constantly monitors all employees in the restaurant through surveillance and uses that data to promote or discipline its servers.39 These big data tactics and others might yield results—and research indicates that surveillance may increase task performance and citizenship behavior (helping behaviors toward others), at least in the short term.40 But critics point out that after Frederick Taylor introduced surveillance analytics in 1911 to increase productivity, these techniques were surpassed by Alfred Sloan’s greater success, achieved by providing meaningful work to employees.41 The use of artificial intelligence also has its own issues of privacy and appro- priate application.42 Despite traditional concerns regarding the safety and job security threats robots and automation bring to mind,43 perhaps the simplest limitation here is that machines can often fail to capture the obvious “big picture” and may ignore their own limits.44 For example, an algorithm may inadvertently include pizza topping prefer- ences in predicting which employees are more likely to steal at work (you have to watch out for those pineapple pizza lovers!). As such, it is important for machine learning to be supervised to avoid atheoretical predictions and decision making. AI may also be used to engage in unethical behaviors at work. For example, Facebook banned a large UK car insurance company from mining users’ social media information, learning their personality traits, and charging them different premiums based on their personality traits (and predictions for how safely they would drive).45 Overall, we are not advising you to throw your intuition out the window. We are also not advising you to base all your decisions on a machine learning algorithm. In dealing with people, leaders often rely on hunches, and sometimes the outcomes are excellent. At other times, human tendencies get in the way. What we are advising is to use evidence as much as possible to inform your intuition and experience. The prudent use of big data and artificial intelligence, along with an understanding of human behav- ioral tendencies, can contribute to sound decision making and ease natural biases. What we are advising is to use evidence as much as possible to inform your intuition and experience. That is the promise of OB.  Chapter 1 What Is Organizational Behavior? 33 DISCIPLINES THAT CONTRIBUTE TO THE OB FIELD OB is an applied behavioral science built on contributions from several behavioral disciplines, mainly psychology and social psychology, sociology, and anthropology. Psychology’s contributions have been principally at the individual or micro-level of analysis, while the other disciplines have contributed to our understanding of macro concepts such as group processes and organization. Exhibit 1-1 is an overview of the major contributions to the study of OB. Psychology Psychology seeks to measure, explain, and sometimes change the behavior of humans Psychology and other animals. Contributors to the knowledge of OB are learning theorists; person- The science that seeks ality theorists; counseling psychologists; and, most important, industrial and organiza- to measure, explain, and sometimes change tional psychologists. the behavior of humans Early industrial and organizational psychologists studied the problems of fatigue, and other animals. boredom, and other working conditions that could impede efficient work performance. More recently, their contributions have expanded to include learning, perception, per- sonality, emotions, training, leadership effectiveness, needs and motivational forces, job Behavioral Contribution Unit of Output EXHIBIT 1-1 science analysis Toward an OB Learning Motivation Discipline Personality Emotions Perception Training Leadership effectiveness Psychology Job satisfaction Individual decision making Performance appraisal Attitude measurement Employee selection Work design Work stress Individual Behavioral chang e Attitude change Social psychology Communication Group processes Group decision making Communication Study of Power Group organizational Conflict behavior Intergroup behavior Sociology Formal organization theory Organizational technology Organizational change Organizational culture Organization Comparative value s system Comparative attitudes Cross-cultural analysis Anthropology Organizational culture Organizational environment Power 34 Part 1 Understanding Yourself and Others satisfaction, decision-making processes, performance appraisal, attitude measurement, employee-selection techniques, work design, and job stress. Social Psychology Social psychology Social psychology, generally considered a branch of psychology, blends concepts from An area of psychology both psychology and sociology to focus on people’s influence on one another. One that blends concepts major study area is change—how to implement it and how to reduce barriers to its ac- from psychology and sociology to focus on ceptance. Social psychologists also contribute to measuring, understanding, and chang- the influence of people ing attitudes; identifying communication patterns; and building trust. Finally, they have on one another. made important contributions to our study of group behavior, power, and conflict. Sociology Sociology While psychology focuses on the individual, sociology studies people in relation to their The study of people in social environment or culture. Sociologists have contributed to OB through their study of relation to their social group behaviors in organizations, particularly formal and complex organizations. Perhaps environment or culture. most importantly, sociologists have studied organizational culture, formal organization theory and structure, organizational technology, communications, power, and conflict. Anthropology Anthropology Anthropology is the study of societies in order to learn about human beings and their The study of societies activities. Anthropologists’ work on cultures and environments has helped us understand to learn about human differences in fundamental values, attitudes, and behavior among people in different beings and their activities. countries and within different organizations. Much of our current understanding of or- ganizational culture, organizational climate, and differences among national cultures is a result of the work of anthropologists or those using their methods. THERE ARE FEW ABSOLUTES IN OB Laws in the physical sciences—chemistry, astronomy, physics—are consistent and apply in a wide range of situations. They allow scientists to generalize about the pull of gravity or to be confident about sending astronauts into space to repair satellites. Human beings are complex, and few, if any, simple principles explain human behavior. Because we are not alike, our ability to make generalizations about ourselves is limited. Two people often act very differently in the same situation, and the same person’s behavior changes in different situations. For example, not everyone is motivated by money, and you may behave much more differently during a job interview than you would hanging out with your friends on a Saturday morning. This does not mean, of course, that we cannot offer reasonably accurate explana- tions of human behavior. It does mean that OB concepts must reflect situational, or Contingency contingency, conditions. We can say x leads to y, but only under conditions specified in variables z—the contingency variables. Situational factors or OB was developed by applying general concepts to a particular situation, person, variables that moderate the relationship or group. For example, OB practitioners would avoid stating that everyone likes com- between two or more plex and challenging work (a generalization). Why? Because not everyone wants a chal- variables. lenging job. Some people prefer routine over varied work, or simple over complex tasks.  Chapter 1 What Is Organizational Behavior? 35 A job attractive to one person may be unattractive to another; its appeal is contingent on the person who holds it. Often, we will find both general effects (money does have some ability to motivate most of us) and contingencies (some of us are more motivated by money than others, and some situations are more about money than others). We will best understand OB when we realize how both (general effects and the contingencies that affect them) often guide behavior. CHALLENGES AND OPPORTUNITIES FOR OB Understanding organizational behavior has never been more important for managers. Take a quick look at the dramatic changes in organizations. The workforce is becoming increasingly diverse; and global competition requires employees to become more flex- ible and cope with rapid change. As a result of these changes and others, employment options have adapted to include new opportunities for workers. Exhibit 1-2 details some of the types of options individuals may find offered to them by organizations or for which they would like to negotiate. Under each heading in the exhibit, you will find a grouping of options from which to choose—or combine. For instance, at one point in your career you may find yourself employed full EXHIBIT 1-2 Employment Options Sources: J. R. Anderson Jr., et al., “Action Items: 42 Trends Affecting Benefits, Compensation, Training, Staffing and Technology,” HR Magazine (January 2013) p. 33; M. Dewhurst, B. Hancock, and D. Ellsworth, “Redesigning Knowledge Work,” Harvard Business Review (January–February 2013), 58–64; E. Frauenheim, “Creating a New Contingent Culture,“Workforce Management (August 2012), 34–9; N. Koeppen, “State Job Aid Takes Pressure off Germany,” The Wall Street Journal (February 1, 2013), p. A8; M. A. Shaffer, M. L. Kraimer, Y,-P. Chen, and M.C. Bolino, “Choices, Challenges, and Career Consequences of Global Work Experiences: A Review and Future Agenda,” Journal of Management (July 2012), 1282–327. Categories of Types of Places of Conditions of Compensation Employment Employment Employment Employment for Employment Anchored Employed Full-time (office/cubicle) Local Salary Underemployed/ Floating (shared underutilized Part-time space) Expatriate Hourly Re-employed Flextime Virtual Short-term assignee Overtime Unemployed/jobless Job share Flexible Flexpatriate Bonus International Entrepreneur Contingent Work from home business traveler Contract Independent Retired contractor Visa employee Time off Union/nonunion Job seeking Temporary employee Benefits Furloughed Reduced hours Laid off Intern 36 Part 1 Understanding Yourself and Others time in an office in a localized, nonunion setting with a salary and bonus compensation package, while at another point you may wish to negotiate for a flextime, virtual position and choose to work from overseas for a combination of salary and extra paid time off. In short, today’s challenges bring opportunities for managers to use OB concepts. In this section, we review some—but not nearly all—of the critical developing issues confronting managers and employees for which OB offers solutions or, at least, mean- ingful insights toward solutions. Globalization Globalization Globalization has led organizations, leaders, and employees to become increasingly The process in which connected across the globe, now more than ever.46 Samsung, the largest South Korean worldwide integration business conglomerate, sells most of its products to organizations in other countries; and interdependence is promoted across Burger King is owned by a Brazilian firm; and McDonald’s sells hamburgers in 101 national borders. countries on six continents. Although globalization united the international community following the second World War, the slow recovery from the global financial crisis has caused much of the world’s population to be embittered by globalization.47 In modern times, the world is at a tension point in which societies are choosing between sectioning off their economies versus remaining open to the world, given how globalization can change the employment landscape rapidly for many communities, sometimes result- ing in poverty and economic inequality.48 Meanwhile, we are on the brink of a new Industrial Revolution that has disrupted many industries and left many without jobs.49 One of the new challenges of this tide of globalization is to forge cooperation between the public and its constituents, and between organizations and their employees across the globe, to pursue the public good with social responsibility in mind. Furthermore, as a result of globalization, the manager’s job has changed. To be effective in the workplace, you should try to anticipate and adapt your approach to the global issues we discuss next. WORKING WITH PEOPLE FROM DIFFERENT CULTURES In your own country or on foreign assignment, you will find yourself working with bosses, peers, and other employees born and raised in different cultures. What motivates you may not motivate them. Or your communication style may be straightforward and open, which others may find uncomfortable and threatening. To work effectively with people from different cultures, you need to understand how their culture and background have shaped them and how to adapt your management style to accommodate these differences. ADAPTING TO DIFFERING CULTURAL AND REGULATORY NORMS To be effective, managers need to know the cultural norms of the workforce in each country where they do business. For instance, in some countries a large percentage of the workforce enjoys long holidays. There are national and local regulations to consider, too. Managers of subsidiaries abroad need to be aware of the unique financial and legal regulations applying to “guest companies” or else risk violating them. Violations can have implications for their operations in that country and for political relations between countries. Managers also need to be cognizant of differences in regulations for competitors in that country; many times, understanding the laws can lead to success or failure. For example, knowing local banking laws allowed one multinational firm—the Bank of China—to seize control of a storied (and very valuable) London building, Grosvenor House Hotel,  Chapter 1 What Is Organizational Behavior? 37 from the owner, the Indian hotel group Sahara. Management at Sahara contended that the loan default that led to the seizure was a misunderstanding regarding one of their other properties in New York.50 Globalization can get complicated. Workforce Demographics The workforce has always adapted to variations in the economy, longevity, birth rates, socioeconomic conditions, and other changes that have a widespread impact. People adapt to survive, and OB studies the way those adaptations affect individuals’ behavior. For instance, even though the 2008 global recession ended many years ago, some trends from those years are continuing: many people who have been long unemployed have left the workforce,51 while others have cobbled together several part-time jobs52 or settled for on-demand work.53 Further options that have been particularly popular for younger educated workers have included obtaining specialized industry training after college,54 accepting full-time jobs that are lower level,55 and starting their own companies.56 Longevity and birth rates have also changed the dynamics in organizations. Global longevity rates have increased by about six years in a short time (since 2000—the fast- est increase since the 1960s),57 while birth rates are decreasing for many developed countries, trends that together indicate a lasting shift toward an older workforce. OB research can help explain what this means for employee attitudes, organizational cul- ture, leadership, structure, and communication. Finally, socioeconomic shifts have a profound effect on workforce demographics. For example, equal access to work and education, regardless of gender identity or sexual orientation, has been deemed a human rights issue by the United Nations.58 Despite increasing representation in the workforce, people of various demographic backgrounds (e.g., gender identities and sexual orienta- tions) continue to experience inequality, under-representation as managers, prejudice, and even violence.59 OB researchers study how people from diverse backgrounds fare in the workplace and the unique challenges and benefits they experience as well as how their conditions can be improved. This is just one illustration of how cultural and socio- economic changes affect the workplace, but it is one of many. We discuss how OB can provide understanding and insight on workforce issues throughout this text. Workforce Diversity One of the most important challenges for organizations is in managing increasing workforce diversity, a trend by which organizations are becoming more heterogeneous Workforce diversity in terms of employees’ gender, age, race, ethnicity, sexual orientation, and other char- The concept that organizations are acteristics. Though we have more to say about it in the next chapter, diversity presents becoming more great opportunities and poses challenging questions for managers and employees. How heterogeneous in can we recognize the strengths in our diversity? Should we treat all employees alike, terms of gender, age, or adapt to accommodate each other’s differences? What are the legal requirements in race, ethnicity, sexual each country that protect workplaces from prejudice, discrimination, and inequality? orientation, and other characteristics. Does workforce diversity lead to positive outcomes for employees and organizations? It is important to address the spoken and unspoken concerns of organizations today. Social Media As we discuss in the chapter on communication, social media in the business world is here to stay. Despite its pervasiveness, many organizations continue to struggle 38 Part 1 Understanding Yourself and Others with employees’ use of social media in the workplace. For instance, in February 2015, a Texas pizzeria fired an employee before the first day of work because of an unflattering tweet about the job. In December 2014, Nordstrom fired an Oregon employee who had posted a personal Facebook comment seeming to advocate vio- lence against police officers.60 These examples show that social media is a difficult issue for today’s managers, presenting both a challenge and an opportunity for OB. For instance, how much should HR investigate a candidate’s social media presence? Should a hiring manager read the candidate’s Twitter feeds, or just do a quick pe- rusal of their Facebook profile? How can managers attract applicants and customers through their own social media presence?61 Managers need to adopt evidence-based policies designed to protect employees and their organizations with balance and understanding. Once employees are on the job, many organizations have policies about accessing social media at work—when, where, and for what purposes. But what about the impact of social media on employee well-being? One recent study found that subjects who woke up in a positive mood and then accessed Facebook frequently found their mood wors- ened during the day. Moreover, subjects who checked Facebook frequently over a two- week period reported a decreased level of satisfaction with their lives.62 Managers—and OB—are trying to increase employee satisfaction and therefore improve and enhance positive organizational outcomes. We will discuss these issues further in the chapters on attitudes and job satisfaction and emotions and moods. Employee Well-Being at Work One of the biggest challenges to maintaining employee well-being is the reality that many workers never get away from the virtual workplace. While communication tech- nology allows many technical and professional employees to do their work at home, in their cars, or on the beach in Tahiti, it also means many feel like they are not part of a team. “The sense of belonging is very challenging for virtual workers, who seem to be all alone out in cyberland,” said Ellen Raineri of Kaplan University.63 Another chal- lenge is that organizations are asking employees to put in longer hours. According to one recent study, one in four employees shows signs of burnout, and two in three report high stress levels and fatigue.64 This may be an underestimate because workers report maintaining “always on” access for their managers through e-mail and texting. Finally, employee well-being is challenged by heavy outside commitments. Millions of single- parent employees and employees with dependent parents face significant challenges in balancing work and family responsibilities, for instance. As you will see in later chapters, the field of OB offers several suggestions to Positive guide managers in designing workplaces and jobs that can help employees deal with organizational work–life conflicts. Furthermore, there are several suggestions for managing stress and scholarship preventing burnout that you can apply, both in school and in the workplace. An area of OB research that concerns how organizations Positive Work Environment develop human strengths, foster A growing area in OB research is positive organizational scholarship (POS; also vitality and resilience, called positive organizational behavior), which studies how organizations develop and unlock potential. human strengths, foster vitality and resilience, and unlock potential. Researchers  Chapter 1 What Is Organizational Behavior? 39 in this area say too much of OB research and management practice has been tar- geted toward identifying what is wrong with organizations and their employees. In response, they try to study what is good about them. 65 Some key subjects in positive OB research are engagement, hope, optimism, and resilience in the face of strain. Although positive organizational scholarship does not deny the value of the nega- tive (such as critical feedback), it does challenge us to look at OB through a new lens, pushing organizations to make use of employees’ strengths rather than dwell on their limitations. One aspect of a positive work environment is the organization’s culture, the topic of the chapter on organizational culture. Organizational culture influences employee behavior so strongly that organizations have employed “culture officers” to shape and preserve the company’s personality.66 Ethical Behavior In an organizational world characterized by cutbacks, expectations of increasing pro- ductivity, and tough competition; it is not surprising many employees feel pressured to cut corners, break rules, and engage in other questionable practices. Increasingly they face ethical dilemmas and ethical choices in which they are required to identify right Ethical dilemmas and and wrong conduct. Should they “blow the whistle” if they uncover illegal activities ethical choices Situations in which in their companies? Do they follow orders with which they do not personally agree? individuals are Should they “play politics” to advance their careers? required to define right What constitutes good ethical behavior has never been clearly defined, and the and wrong conduct. line differentiating right from wrong is blurry. We see people all around us engaging in unethical practices: Elected officials pad expense accounts or take bribes; corporate executives inflate profits to cash in lucrative stock options; and university administra- tors look the other way when winning coaches encourage scholarship athletes to take easy courses or even, in the recent case at the University of North Carolina–Chapel Hill, sham courses with fake grades.67 When caught, we see people give excuses such as “Everyone does it” or “You have to seize every advantage.” Today’s manager must create an ethically healthy climate for employees in which they can do their work productively with minimal ambiguity about right and wrong behaviors. Companies that promote a strong ethical mission, encourage employees to behave with integrity, and provide strong leadership can influence employee decisions to behave ethically.68 Classroom training sessions in ethics have also proven helpful in maintaining a higher level of awareness of the implications of employee choices as long as the training sessions are given on an ongoing basis.69 In upcoming chapters, we discuss the actions managers can take to create an ethically healthy climate and help employees sort through ambiguous situations. COMING ATTRACTIONS: DEVELOPING AN OB MODEL We conclude this chapter by presenting a general model that defines the field of OB and stakes out its parameters, concepts, and relationships. By studying the model, you will have a good picture of how the topics in this text can inform your approach to manage- ment issues and opportunities. 40 Part 1 Understanding Yourself and Others EXHIBIT 1-3 A Basic OB Model Inputs Processes Outcomes Individual Level Individual Level Individual Level Diversity Emotions and moods Attitudes and stress Personality Motivation Task performance Values Perception Citizenship behavior Decision making Withdrawal behavior Group Level Group Level Group Level Group structure Communication Group cohesion Group roles Leadership Group functioning Team responsibilities Power and politics Conflict and negotiation Organizational Level Organizational Level Organizational Level Structure Human resource Productivity Culture management Survival Change practices An Overview Model A model is an abstraction of reality, a simplified representation of some real-world An abstraction of phenomenon. Exhibit 1-3 presents the skeleton of our OB model. It proposes three reality, a simplified types of variables (inputs, processes, and outcomes) at three levels of analysis (in- representation of some real-world dividual, group, and organizational). In the chapters to follow, we proceed from the phenomenon. individual level (Chapters 2 through 8) to group behavior (Chapters 9 through 14) to the organizational system (Chapters 15 through 17). The model illustrates that inputs lead to processes, which lead to outcomes; we discuss interrelationships at each level of analysis. Notice that the model also shows that outcomes can influence inputs in the future, which highlights the broad-reaching effect OB initiatives can have on an organization’s future. Inputs Inputs Inputs are variables like personality, group structure, and organizational culture that Variables like lead to processes. These variables set the stage for what will occur in an organization personality, group later. Many are determined in advance of the employment relationship. For example, structure, and organizational culture individual diversity characteristics, personality, and values are shaped by a combina- that lead to processes. tion of an individual’s genetic inheritance and childhood environment. Group structure, roles, and team responsibilities are typically assigned immediately before or after a group is formed. Organizational structure and culture are usually the result of years of development and change as the organization adapts to its environment and builds up customs and norms.  Chapter 1 What Is Organizational Behavior? 41 Processes If inputs are like the nouns in OB, processes are like verbs. Processes are actions that Processes individuals, groups, and organizations engage in as a result of inputs and that lead to cer- Actions that individuals, groups, tain outcomes. At the individual level, processes include emotions and moods, motiva- and organizations tion, perception, and decision making. At the group level, they include communication, engage in as a result of leadership, power and politics, and conflict and negotiation. Finally, at the organiza- inputs and that lead to tional level, processes include HR management and change practices. certain outcomes. Outcomes Outcomes are the key variables that you want to explain or predict, and that are affected Outcomes by other variables. What are the primary outcomes in OB? Scholars have emphasized Key factors that are affected by some other individual-level outcomes, such as attitudes and stress, task performance, citizenship variables. behavior, and withdrawal behavior. At the group level, cohesion and functioning are the dependent variables. At the organizational level, we look at overall productivity and survival. Because these outcomes are covered in all the chapters, we briefly discuss each so you can understand the goal of OB. Attitudes ATTITUDES AND STRESS Employee attitudes are the evaluations that employees Evaluative statements make, ranging from positive to negative, about objects, people, or events. For example, or judgments concerning objects, the statement “I really think my job is great” is a positive job attitude, while “My job people, or events. is boring and tedious” is a negative job attitude. Stress is a psychological process that occurs in response to environmental pressures. Stress Some people might think influencing employee attitudes and stress is purely soft A psychological process in which stuff, but as you will learn, attitudes often have behavioral consequences that directly an individual is relate to how well you do your job. Ample evidence shows that employees who are more confronted with satisfied and treated fairly are more willing to engage in the above-and-beyond citizen- an opportunity, ship behavior that is so vital in the contemporary business environment. demand, or resource related to what the individual desires TASK PERFORMANCE The combination of effectiveness and efficiency at doing and for which the your core job tasks is a reflection of your level of task performance. If we think outcome is perceived about the job of a factory worker, task performance could be measured by the number to be both uncertain and quality of products produced in an hour. The task performance measurement of and important (e.g., a teacher would be the level of education that students obtain. The task performance stressors). measurement of consultants might be the timeliness and quality of the presentations Task performance they offer to the client. All these types of performance relate to the core duties and The combination of responsibilities of a job and are often directly related to the functions listed on a effectiveness and formal job description. efficiency at doing core job tasks. ORGANIZATIONAL CITIZENSHIP BEHAVIOR (OCB) The discretionary behavior Organizational that is not part of an employee’s formal job requirements, and that contributes to the citizenship behavior psychological and social environment of the workplace, is called organizational (OCB) Discretionary behavior citizenship behavior (OCB), or simply citizenship behavior. Successful organizations that contributes to the have employees who do more than their usual job duties—who provide performance psychological and beyond expectations. Organizations want and need employees who make positive social environment of contributions that are not in any job description, and evidence indicates organizations the workplace. 42 Part 1 Understanding Yourself and Others that have such employees outperform those that do not. As a result, OB is concerned with citizenship behavior as an outcome variable. WITHDRAWAL BEHAVIOR We have already mentioned behavior that goes above and beyond task requirements, but what about behavior that in some way is below task Withdrawal behavior requirements? Withdrawal behavior is the set of actions that employees take to separate The set of actions themselves from the organization. There are many forms of withdrawal, ranging from employees take to showing up late or failing to attend meetings to absenteeism and turnover. Employee separate themselves from the organization. withdrawal can have a very negative effect on an organization. GROUP COHESION Although many outcomes in our model can be conceptualized as Group cohesion individual-level phenomena, some relate to the way groups operate. Group cohesion The extent to which is the extent to which members of a group support and validate one another at work. members of a group In other words, a cohesive group is one that sticks together. When employees trust one support and validate one another while at another, seek common goals, and work together to achieve these common ends, the work. group is cohesive; when employees are divided among themselves in terms of what they want to achieve and have little loyalty to one another, the group is not cohesive. GROUP FUNCTIONING In the same way that positive job attitudes can be associated with higher levels of task performance, group cohesion should lead to positive group Group functioning functioning. Group functioning refers to the quantity and quality of a group’s work The quantity and output. Similar to how the performance of a sports team is more than the sum of each quality of a group’s individual player’s performance, group functioning in work organizations is more than work output. the sum of individual task performances. PRODUCTIVITY The highest level of analysis in OB is the organization as a whole. An organization is productive if it achieves its goals by transforming inputs into outputs at Productivity the lowest cost. Thus, productivity requires both effectiveness and efficiency. The combination A business firm is effective when it attains its sales or market share goals, but of the effectiveness its productivity also depends on achieving those goals efficiently. Popular measures of and efficiency of an organization. organizational efficiency include return on investment, profit per dollar of sales, and output per hour of labor. Effectiveness Organizations in the service industry must include customer needs and require- The degree to which an ments in assessing their effectiveness. Why? Because a clear chain of cause and effect organization meets the needs of its clientele or runs from employee behavior to customer attitudes and profitability. For example, a customers. recent study of over 50,000 online TripAdvisor reviews and nearly 8,000 managerial responses suggests that when managers personally respond to online reviews, financial Efficiency The degree to which performance (e.g., revenue per available room) increases.70 an organization can achieve its ends at a SURVIVAL The final outcome we consider is organizational survival, which is simply low cost. evidence that the organization is able to exist and grow over the long term. The survival Organizational of an organization depends not just on how productive the organization is, but also on survival how well it fits with its environment. A company that is very productive in making The degree to which an goods and services of little value to the market is unlikely to survive for long, so survival organization is able to also relies on perceiving the market successfully, making good decisions about how exist and grow over the and when to pursue opportunities, and successfully managing change to adapt to new long term. business conditions.  Chapter 1 What Is Organizational Behavior? 43 EMPLOYABILITY SKILLS Challenges relevant to OB can be found in just about every function of business, from finance and accounting to management and marketing. Without a doubt, at some point in your career, you will come across an issue that hinges to a large degree on the behavior of people in organizations. A review of the great challenges that most businesses face reveals that OB is an essential piece of the puzzle in solving many problems that involve managing integrity/social responsibility, managing resources, competing among busi- nesses, bolstering customer and employee loyalty, reducing uncertainty, complying with government regulation, managing risks, and finding the right staff—all while growing revenue and increasing profit.71 But OB is not relevant to business majors only; it is important for all students, no matter what their majors are. At first glance, for example, it might not seem as if a university student with a microbiology degree would have any need to take an OB class. But what happens after that student graduates? Wouldn’t knowledge of OB principles and concepts help them apply to and be successful at a job as a biology technician with Battelle? What about a graduate with a nursing degree working at the Mayo Clinic? A com- puter science graduate who is about to begin work with Cisco? OB principles matter for students of all majors and can help increase employability as well as interpersonal skills in the workplace. These skills can even help you to become successful in your classes as you interact with other students and your professors! Clearly, the knowledge of OB concepts such as stress management, change, attitudes, emotions, and motivation, among others, can help you navigate your interactions with your classmates as you continue to learn. People, along with their behaviors, differences, attitudes, emotions, moods, personalities, values, intentions, thoughts, and motivations, are inextricably linked to life in the workplace. As stated earlier in the chapter, “The people make the place.”72 Employees interact and communicate with one another within and across work groups, departments, teams, and organizations to help accomplish the organization’s goals. Leaders within these organizations (along with the employees themselves) seek to effect change, establish an organizational culture, and set policies and procedures—processes that inevitably involve leadership, politicking, conflict, and negotiation. Given the per- vasiveness of OB in organizational life, entry-level employees and working profes- sionals would therefore benefit from having solid foundational skills in OB, such as communication, collaboration, critical thinking, problem solving, social responsibility, and knowledge application and analysis. In this section, we explore the career employability skills that a course in OB can help expand for those who select any major—from English, to engineering, to political science. Employability Skills That Apply Across Majors Throughout this text, you will learn and practice many skills that hiring managers iden- tify as important to success in a variety of business settings, including small and large firms, nonprofit organizations, and public service. These skills will also be useful if you plan to start your own business, for example: Critical thinking involves purposeful and goal-directed thinking used to define and solve problems and to make decisions or form judgments related to a situation or 44 Part 1 Understanding Yourself and Others set of circumstances. It involves cognitive, metacognitive, and dispositional com- ponents that may be applied differently in specific contexts. Communication is defined as the effective use of oral, written, and nonverbal com- munication skills for multiple purposes (e.g., to inform, instruct, motivate, per- suade, and share ideas); effective listening; the use of technology to communicate; and the ability to evaluate the effectiveness of communication efforts—all within diverse contexts. Collaboration is a skill in which individuals can actively work together on a task, constructing meaning and knowledge as a group through dialogue and negotiation that results in a final product reflective of their joint, interdependent actions. Knowledge application and analysis is defined as the ability to learn a concept and then apply that knowledge appropriately in another setting to achieve a higher level of understanding. Social responsibility includes skills related to both business ethics and corporate social responsibility. Business ethics includes sets of guiding principles that influ- ence the way individuals and organizations behave within the society that they operate. Corporate social responsibility is a form of ethical behavior that requires that organizations understand, identify, and eliminate unethical economic, envi- ronmental, and social behaviors. The employability skills matrix (ESM) links the five employability skills that were just defined with sections in each chapter. Within these sections, you will be primed to think critically and apply your knowledge to consider special cases and concepts. You will also learn how to improve your collaboration and communication skills by learning what you might do or say in these given situations to navigate the work world positively and Employability Skills Matrix (ESM) Part 1 Part 2 Part 3 Part 4 Part 5 Critical Thinking ✓ ✓ Communication ✓ ✓ ✓ ✓ Collaboration ✓ ✓ ✓ Knowledge Application and ✓ ✓ ✓ Analysis Social Responsibility ✓ ✓  2 Diversity in Organizations LEARNING OBJECTIVES After studying this chapter, you should be able to: 2.1 Demonstrate how workplace discrimination undermines organizational effectiveness. 2.2 Explain how stereotypes function in organizational settings. 2.3 Describe how key biographical characteristics are relevant to OB. 2.4 Explain how other differentiating characteristics factor into OB. 2.5 Demonstrate the relevance of intellectual and physical abilities to OB. 2.6 Describe how organizations manage diversity effectively. DIVERSITY Our world is getting smaller and smaller every day. With the tide of globalization discussed in the previous chapter, it is clearer more than ever that each of us is a mosaic—made up of many tiles that make us unique.1 Our uniqueness is obvious enough, but employees and managers alike sometimes forget they need to recognize, appreciate, and manage indi- vidual differences to forge productive workplaces. Consider Mughal Emperor Shah Jahan, who employed 22,000 artisans from around the world to construct and design the Taj Mahal—today, this “crown of palaces” represents myriad influences, including Islamic, Persian, Ottoman, and Indian, among others.2 In this chapter, you will learn how individ- ual characteristics like age, gender, race, identity, sexual orientation, ethnicity, and abilities can influence interactions and performance in the workplace. You will also see how man- agers can develop awareness about these characteristics and manage a diverse workforce effectively. But first, let us take an overview perspective of the changing workforce. Demographic Characteristics The predominantly white, male managerial workforce of the past has given way to a gender-balanced, multiethnic workforce. For instance, in 1950, only 29.6 percent of the U.S. workforce was female,3 but by 2016, women comprised 46.8 percent of the work- force.4 Both in the United States and internationally, women today are much more likely than before to be employed full time, and women’s labor force representation should continue to grow, along with the diversity of the labor force.5 In addition, the earnings 46  Chapter 2 Diversity in Organizations 47 gap between whites and other racial and ethnic groups in the United States has decreased significantly, partially due to the rising number of minorities in the workforce. Hispanics will grow from 13 percent of the workforce in 2014 to 25.1 percent in 2044; blacks will increase from 12 to 12.7 percent, and Asians from 5 to 7.9 percent.6 Workers over the age of 55 are an increasingly large portion of the workforce as well, both in the United States and globally. In the United States, the 55-and-older age group will increase from 21.7 percent of the labor force in 2014 to 25 percent by 2024, a growth rate three times larger than the overall labor force.7 These changes are increasingly reflected in the makeup of managerial and professional jobs. They also indicate organizations must make diversity management a central component of their policies and practices. Levels of Diversity Although much has been said about diversity in age, race, gender, ethnicity, religion, and disability status, experts now recognize that these demographic characteristics are just the tip of the diversity iceberg.8 Demographics mostly reflect surface-level diversity, Surface-level and not thoughts and feelings. Surface-level diversity can lead employees to make stereo- diversity types and assumptions about others from certain demographic backgrounds. However, Differences in easily perceived character- evidence has shown that people are less concerned about demographic differences if they istics such as gender, see themselves as sharing more important characteristics, such as personality and values, race, ethnicity, age, or that represent deep-level diversity.9 disability, that do not To understand the difference between surface- and deep-level diversity, consider necessarily reflect an example. Some of you may have worked in a professional kitchen or as a member of the ways people think or feel but that the wait staff at a restaurant. You would certainly agree that these environments are often may activate certain stressful: during busy periods, things can get hectic both in the kitchen and out on the stereotypes. floor.10 To top it all off, there are so many people you have to interact with to ensure the customer has an excellent experience: the hosting staff, management, kitchen, runners, Deep-level diversity bussers—not to mention, the most important people: the customers! Differences in values, All these people bring their own set of unique characteristics “to the table.” One of personality, and work preferences that the kitchen staff members, Bellamy, is a young, transgender person from a black family become progressively who grew up in Austin and is working toward an accounting degree. On the other hand, more important for Hector is an older cisgender man who immigrated from Honduras earlier in life, con- determining similar- verted to Islam in his late twenties, grew up in Seattle, and is now the general manager of ity as people get to the restaurant. At first, these coworkers may notice their surface-level differences in edu- know one another better. cation, ethnicity, regional background, and gender identity. However, as they get to know one another, they may find they share a common way of thinking about work problems and have similar perspectives on time management. These deep-level similarities can overshadow the more superficial differences between them, and research suggests that sharing similarities (especially similar work styles) will help them work well together.11 For example, if Bellamy and Hector have similar time management styles (both get to work on time and do prep work well in advance), they will be more likely to get along together and experience less conflict. Throughout this text, you will encounter differences between deep- and surface- level diversity in various contexts. Diversity is an important concept in OB since individual differences shape preferences for rewards, communication styles, reactions to leaders, negotiation styles, and many other aspects of behavior in organizations. Unfortunately, increased diversity may give way to discriminatory practices, which we discuss next. 48 Part 1 Understanding Yourself and Others DISCRIMINATION AND STEREOTYPING Although diversity presents many opportunities for organizations, diversity management Discrimination includes working to eliminate unfair discrimination. To discriminate is to note a dif- Noting a difference ference between things, which is not necessarily bad. Noticing one employee is more between things; qualified is necessary for making good hiring decisions. Usually when we talk about often we refer to unfair discrimination, discrimination, though, we mean allowing our behavior to be influenced by stereotypes which means making about groups of people. Stereotyping is judging someone based on our perception of the judgments about group to which that person belongs. For example, in the 2018 U.S. Open Finals, profes- individuals based on sional tennis grand champion Serena Williams was penalized several times in an escalat- stereotypes regarding ing argument with the umpire.12 Serena, along with many other experts and officials, their demographic group. believed that her penalties were unduly harsh, when compared with penalties that have been historically levied toward men.13 As Wharton organizational psychologist Adam Stereotyping Grant notes, “When a man argues with an umpire, it’s passion. When a woman does it, Judging someone it’s a meltdown. When a black woman does it, it’s a penalty.”14 based on one’s per- ception of the group Stereotype Threat to which that person belongs. Let us say you are sitting in a restaurant (perhaps the one where Hector and Bellamy work!), waiting to meet with recruiters from an organization you want to work at for an informal interview. How did you describe yourself to the recruiters so that they could find you? What identifiable characteristics would you mention so that they know a bit more about you and so that they can recognize you in the restaurant? Chances are good that you would mention something about what you are wear- ing or your hairstyle. You might also mention how tall you are if you are remarkably tall or short. Overall, you would give cues to the recruiters about characteristics that are distinctive, or that stand out about you. However, with these characteristics follows the fear of being judged or treated negatively based on these superficial characteristics. Stereotype threat Stereotype threat describes the degree to which we are concerned with being The degree to which judged by or treated negatively based on a certain stereotype.15 For instance, older we are concerned workers applying for a job in a predominately millennial-age workforce may assume with being judged by or treated negatively the interviewer thinks they are out of touch with current trends. What creates stereotype based on a certain threat is not whether these workers are or are not up to date with trends but whether they stereotype. believe the interviewer will judge them based on this stereotype. Stereotype threat has serious implications for the workplace. Stereotype threat can occur during preemployment tests and assessments, performance evaluations, and everyday workplace exchanges. It can lead to underperformance on tests, performance evaluations, training exercises, negotiations, and everyday interactions with others as well as to disengagement, poor job attitudes, a reluctance to seek feedback, and poor performance in the employees experiencing the threat.16 Although the occurrence of stereotype threat is not inevitable and occurs infrequently in testing environments, we can combat it in the workplace by treating each other as individuals and not highlight- ing group differences.17 The following organizational changes can be successful in reducing stereotype threat: increasing awareness of how stereotypes may be perpetu- ated (especially when developing policies and practices), reducing differential and preferential treatment through objective assessments, confronting microaggressions against minority groups, and adopting transparent practices that signal the value of all employees.18  Chapter 2 Diversity in Organizations 49 Discrimination in the Workplace ALDI To review, unfair discrimination assumes that everyone in a group is the same rather than The UK branch of the multinational looking at the characteristics of individuals within the group. This discrimination is often German supermarket very harmful for employees, as we have just discussed, and for organizations. discount chain Exhibit 2-1 provides definitions and examples of some forms of discrimination in recognizes the organizations. Although many are prohibited by law and therefore are not a part of orga- importance of nizations’ official policies, the practices persist. Tens of thousands of cases of employ- equal opportunity and prevention of ment discrimination are documented every year, and many more go unreported. Since discrimination at discrimination has increasingly come under both legal scrutiny and social disapproval, work. As part of overt forms have tended to give way to more covert forms like incivility or exclusion, the governmental which can be just as perilous.19 gender pay gap As you can see, discrimination can occur in many ways, and its effects can vary reporting regulations, ALDI (UK) depending on organizational context and the personal biases of employees. Like ste- recently reported a reotype threat, actual discrimination can lead to increased negative consequences for 4.8 percent median employers, including reduced productivity and organizational citizenship behavior gender pay gap (OCB; see Chapter 1: What Is Organizational Behavior?), more conflict, increased in 2018, which turnover, and even increased risk-taking behavior.20 Unfair discrimination also leaves is considered well below the qualified job candidates out of initial hiring and promotions. Thus, even if an employ- UK median ment discrimination lawsuit is never filed, a strong business case can be made for gender pay gap aggressively working to eliminate unfair discrimination. at 18.4 percent. Whether it is overt or covert, intentional or unintentional, discrimination is one of Furthermore, the primary factors that prevents diversity. On the other hand, recognizing diversity oppor- as part of its commitment to tunities can lead to an effective diversity management program and ultimately to a better equal pay, the organization. Diversity is a broad term, and the phrase workplace diversity can refer to any management has characteristic that makes people different from one another. The following section covers established the some important surface-level characteristics that differentiate members of the workforce. “Women in Aldi Forum,” which will examine diversity BIOGRAPHICAL CHARACTERISTICS issues in an effort to address and further Biographical characteristics, such as age, gender, race, ethnicity, and disability, are reduce the gender some of the most obvious ways employees differ. Let us begin by looking at factors that pay gap at ALDI in the future.21 are easily definable and readily available—data that can be obtained, for the most part, from an employee’s human resources (HR) file. These, and several other characteristics, Biographical are what comprise surface-level diversity. Variations in these surface-level characteristics characteristics may be the basis for discrimination against classes of employees. Personal characteristics—such Age as age, gender, race, and length of tenure— Age in the workforce is likely to be an issue of increasing importance during the next that are objective and decade for many reasons. For one, the workforce is aging worldwide in most developed easily obtained from countries.22 In the United States, the proportion of the workforce aged 55 and older is personnel records. These characteristics projected to be nearly 24.8 percent by 2024.23 Legislation has, for all intents and pur- are representative of poses, outlawed mandatory retirement. Moreover, reflecting global trends, over forty surface-level diversity. countries spanning all continents, have laws directly against age discrimination.24 Most workers today no longer have to retire at age 70, and 53 percent of workers over the age of 60 plan to delay retirement, likely due to the strong financial benefits of delay- ing retirement.25 However, one study of Dutch taxi drivers suggests that perceptions of 50 Part 1 Understanding Yourself and Others EXHIBIT 2-1 Forms of Discrimination in Organizations Sources: J. Levitz and P. Shishkin, “More Workers Cite Age Bias after Layoffs,” The Wall Street Journal, March 11, 2009, D1–D2; W. M. Bulkeley, “A Data-storage Titan Confronts Bias Claims,” The Wall Street Journal, September 12, 2007, A1, A16; D. Walker, “Incident with Noose Stirs Old Memories,” McClatchy-Tribune Business News, June 29, 2008; D. Solis, “Racial Horror Stories Keep EEOC Busy,” Knight-Ridder Tribune Business News, July 30, 2005, 1; H. lbish and A. Stewart, Report on Hate Crimes and Discrimination against Arab Americans: The Post-September 11 Backlash, September 11, 2001–October 11, 2001 (Washington, DC: American-Arab Anti-Discrimination Committee, 2003); A. Raghavan, “Wall Street’s Disappearing Women,” Forbes, March 16, 2009, 72–78; L. M. Cortina, “Unseen Injustice: Incivility as Modern Discrimination in Organizations,” Academy of Management Review 33, no. 1 (2008): 55–75. Type of Discrimination Definition Examples from Organizations Discriminatory Actions taken by representatives Older workers may be targeted for policies or practices of the organization that deny equal layoffs because they are highly paid opportunity to perform or unequal and have lucrative benefits. rewards for performance. Sexual harassment Unwanted sexual advances and Salespeople at one company went other verbal or physical conduct of a on company-paid visits to strip clubs, sexual nature that create a hostile or brought strippers into the office to offensive work environment. celebrate promotions, and fostered pervasive sexual rumors. Intimidation Overt threats or bullying directed African American employees at some at members of specific groups of companies have found nooses hanging employees. over their workstations. Mockery and insults Jokes or negative stereotypes; Arab Americans have been asked sometimes the result of jokes taken at work whether they were carrying too far. bombs or were members of terrorist organizations. Exclusion Exclusion of certain people from Many women in finance claim they are job opportunities, social events, assigned to marginal job roles or are discussions, or informal mentoring; given light workloads that do not lead to can occur unintentionally. promotion. Incivility Disrespectful treatment, including Female lawyers note that male behaving in an aggressive manner, attorneys frequently cut them off interrupting the person, or ignoring or do not adequately address their varying opinions. comments. stereotype threat, or that colleagues/customers feel negatively about older taxi drivers in this instance, leads to higher retirement intentions.26 Stereotypes of older workers as being behind the times, grumpy, and inflexible are changing. Managers often see a number of positive qualities that older workers bring to their jobs, such as experience, judgment, a strong work ethic, and a commitment to quality. For example, the Public Utilities Board, the water agency of Singapore, reports that 27 percent of its workforce is over age 55 and the older workers provide workforce stability.27 Industries like health care, education, government, and nonprofit service often welcome older workers.28 But older workers are still perceived as less adaptable and less motivated to learn new technology.29 When organizations seek individuals who are open to change and training, the perceived negatives associated with age clearly  Chapter 2 Diversity in Organizations 51 hinder the initial hiring of older workers and increase the likelihood they will be let go during cutbacks. Now let us look at the evidence. What effect does age have on two of our most important outcomes, job performance and job satisfaction? AGE AND JOB PERFORMANCE The majority of studies have shown “virtually no relationship between age and job performance,” according to Director Harvey Sterns of the Institute for Life-Span Development and Gerontology.30 Indeed, some studies indicate that older adults perform better. In Munich, a four-year study of 3,800 Mercedes-Benz workers found that “the older workers seemed to know better how to avoid severe errors,” said Matthias Weiss, the academic coordinator of the study.31 Related to performance, there is a conception that creativity lessens as people age. Researcher David Galenson, who studied the ages of peak creativity, found that people who create through experimentation do “their greatest work in their 40s, 50s, and 60s. These artists rely on wisdom, which increases with age.”32 Finally, there is evidence that age-diverse teams and organizations perform better than those with similar ages, primarily because both older and younger workers bring a complementary, diverse set of knowledge, skills, and abilities to their teams.33 AGE AND JOB SATISFACTION Regarding job satisfaction, an important topic in the chapter on attitudes and job satisfaction, a review of more than 800 studies found that older workers tend to be more