Organizational Behavior

Human Resource Management, Summer 1999, Vol. 38, No. 2, pp. 99-102
“Mastering the Competencies of HR Management” by Michael R. Losey
Michael R. Losey’s article on the competencies of HR management deal mainly
with Losey’s own contrivance: The Losey Competency Equation. Apart from it’s use as a tool to gauge the competency of Human Resources Professionals, as Losey does, it is also pertinent and applicable to the business world in general. In a protracted analogy with a yo-yo salesman, Losey expounds on each of the components of the equation, broadening upon each one. He begins with a general statement to the Human Resources field, indicating that they are indeed in line for a wake-up call. Gone are the days of the hiring/firing, payroll and OSHA regulation HR managers. Losey’s “new breed” of managers are more dynamic and have vision. They are pioneers in the field and believe in “strategic people management issues.” Losey then applies these ideas to his Competency Equation. The Equation (Intelligence + Education + Experience + Ethics +/- Interest = Competency) is the defining factor of the new breed of Human Resource Professionals and is described in length.
Losey takes each of the equation’s components in order. First is intelligence, or one’s IQ. Losey contends that genetics plays a role, as does the concept of “emotional intelligence.” Contending that everyone must work hard to be competent in their fields, Losey moves on to the next component.
Education is no longer something that is optional or ends with the award of a degree. The business world of today has entered the information age and education, both past and future, is a mandatory obligation. Losey attributes the growth of professional organizations to the need for further knowledge.
The experience of an individual, according to Losey, plays a vital role in competency. Losey contends that the power of group experience, coupled with the electronic advantages of today’s HR professionals.
Losey then identifies the two most important components of his equation: ethics and interest. In a recent study conducted by Losey and The Society of Human Resource Management, 47% of the respondents feel pressured by other employees or managers to compromise company ethics. Another 21% did not report observations of ethical misconduct. Losey concludes this by stating that, “poor ethics have long-term damaging effects on professional competency.”
Finally, Losey examines the interest quotient in his equation. Even without the parameters of the Human Resource field, Losey correctly surmises that a, “genuine passion for a trade or profession can have a stunning positive effect.” Although seeming like common sense, Losey has made simple, valid points.
Although geared specifically for the Human Resources field, Losey’s article is applicable to the business world in general. Although simple and a little too steeped in common sense, Losey’s Competency Equation is, nonetheless, valid. He has summarized a belief into his equation that is rarely thought of, and most times taken for granted. The applications of the equation run throughout the many aspects of business. For the components of the equation that are quantifiable, it makes for an interesting gauge which to measure one’s own, or one’s employees dedication to the success of the project.

Academy of Management Journal, December 1999, Vol. 42, No. 6, pp. 662-673
“Making Use of Difference: Diversity, Debate, and Decision Comprehensiveness in Top Management Teams” by Tony Simons, Lisa Hope Pelled & Ken A. Smith
The article by Simons, Pelled and Smith deal with their empirical study on the ramifications of the diversity of top management teams and the performance of the company. The study centered, mainly, around two distinct forms of team decision-making processes: debate and decision comprehensiveness. By combining the diversity variables that were job-related (as opposed to the diversity variables that were less job-related, such as age) and the debate that ensued from these different experiences the study attributes factors to two measures of company financial performance. In addition, the study assessed the degree to which decision comprehensiveness affected the debate and financial performance.
The core component of the theory had to deal with the top management team’s actual diversity. The study differentiated the degree to which certain types of diversity were job-related or not. The more job-relatedness found in the TMT’s (top management team’s) diversity, the more relevant the diversity was to, “distinct experiences, skills, or perspectives relevant to cognitive tasks at work.) Next, the study needed to explain the idea of “decision comprehensiveness,” or, the amount that the TMT looked at the total picture up for debate, not just at a personal level. Once the level of diversity was established and the amount of decision comprehensiveness that the TMT engaged in was made important to the study, the trio went on to explain their hypotheses.
The study dealt mainly with three hypotheses. First, the study maintained that, “Debate will moderate the impact of TMT diversity, increasing the tendency for diversity to enhance decision comprehensiveness and performance.” The second hypothesis stated, “Decision comprehensiveness will mediate the interactive effects of diversity and debate on company performance.” And third, “Interactions between more job-related forms of diversity and debate will have stronger positive associations with decision comprehen-siveness and company performance than will interactions between less job-related forms of diversity and debate.” The study began with sending out surveys to 925 CEOs of electronic components manufacturing companies, and received usable responses from 57 of them.
The study concluded that debate increased the tendency for diversity to enhance TMT performance. The job-relatedness of the diversity was also a factor and the decision comprehensiveness of the situations mediate the interactive effects. PEU (perceived environmental uncertainty) diversity, education-level diversity and company tenure diversity proved to be the least effective forms of diversity in company performance.
The study brings to light that some of the time-tested forms of diversity for TMTs to possess (age, experience, common environment) that have “historically” lead to company prosperity are false. The notion that all top management executives must be old, experienced, from the same background, etc. is no longer a valid discussion. The study has shown that the more job-related diversity in a management team, the more that the members of the TMT can bring to a debate. If the level of debate is heightened then the decision comprehensiveness is more effective. One executive’s experience in the field of sales can be applied to a current problem that the company has now. This experience might have been overlooked if that particular member of the TMT had been overlooked for inclusion based on the past notions of diversity.
Human Resource Management, Spring 2000, Vol. 39, No. 1, pp. 51-64
“Causes of Employee Theft and Strategies That HR Managers Can Use for Prevention” by Brian P. Niehoff and Robert J. Paul
The article begins with the staggering assumption that employee theft amounts to a total estimated at $200 billion annually. The behavioral consequences are then laid out, with interactive and procedural deterrents to try and stop it. Employee theft occurs, according to Hollinger and Clark (1985) for only five different reasons. They are economic pressure, demographics, opportunity, attitudinal and social norms. These, according to the study, are the only reasons for employees to engage in this type of behavior and the article is correct in stating that it only gives reasons, and not solutions, to the problem. Niehoff and Paul attempt to refine this behavior further.
There are three levels that employee theft occurs at. The Personal Level thieves, workers who are new, part-time, unmarried and young, are more likely to steal from their employer. More commonly, theft occurs at the Social Level. The Social Level includes employees who steal due to a perceived unfairness in compensation, or job duties or compliance with group norms. Procedural injustice is also a contributing factor to the thief. Recently, studies have theorized the concept of a psychological contract. This is a contract where an employee believes that the job qualifications and duties are one thing, and then the management loads on more responsibility, longer hours, etc. When either the employer or the employee perceives that they are being treated unfairly, it is a “breach” of the psychological contract, and theft becomes an option. Thirdly, there is employee theft at the Systematic Level. An employee’s equity is judged by that employee by comparison to others in the company. Perceived inequity in pay, discipline or responsibility can lead to employee theft as a sort of justice.
The article then sites strategies for the deterring of employee theft. Personal Level theft can be combated by integrity testing and background checks in the procedural stage (during hiring); training and development and employee assistance programs in the interactive stage (post hire). Social Level theft can be deterred in the procedural stage with realistic job previews, recruiter training, employer publications and orientation programs. In the interactive stage, Social Level theft can be reduced with contract monitoring, socialization and communication integrity. Finally, theft at the Systematic Level can be severely limited in the procedural stage with internal controls and security devices. In the interactive stage a compensation system, incentives, job redesign and process reengineering have been found effective. These theories of theft deterrent have been implemented in a number of instances, at a number of different companies represented in the article, at a minor cost. After the plans were put into effect, almost all of the companies profiled showed a gain in profits and a large dip in the cost of materials (if applicable to the particular organization).
Overall, alterations in the selection system, orientation processes, the availability of organizational literature, training and development programs, compensation programs and employee assistance programs seem to be the best deterrents to employee theft. The problems inherent in an organizational setting, in reference to staffing problems (whether actual or perceived) can be counteracted fairly quickly and efficiently. The fact that these problems exist to such a degree is astounding in the first place, coupled with the fact that they can be so easily avoided is even more so. The basic fact that organizations have to be proactive in their recognition and adjustment of behavior is a recurring theme.

Business Week Online, March 3, 2000 “The Economy’s Rising Tide” by David Leonhardt and Laura Cohn
One of the newest trends in the hiring of quality individuals is to train them immediately for the job. More companies are investing in low or unskilled workers and training them at company expense. Historically, that has been a “danger signal” to businesses. As an economy booms, companies are forced to hire workers who are less skilled. This, in turn, results in loss of productivity. The numbers given by the article seem to refute that claim. Wage increases have stayed stable at an increase of 1.8%, down from the 3% in 1998. Productivity, which should have been much lower, has proceeded at 2% annually.
Part of the explanation for this unprecedented trend seems to be the investment of companies into equipment. Technology has become so accessible that unskilled workers, bolstered by new technology, can many times be more productive. A company’s investment into more capital equipment has the positive effect of allowing their workers to become more productive. Also, a lack of union opposition to the hiring of non-union members has contributed to the rises.
The article then reiterates the fact that companies have to invest in human capital, also. Many companies have instituted programs that not only teach and orient the new worker to their operating procedures and rules, but have introduced classes that impact the employee’s lives. For instance, Burger King has started a Life 101 class that details how to balance a checkbook and the importance of getting to work on time. Not only are companies training their employees for job-related duties, many have instituted classes on stress management, self-esteem and others. Ecolab has even begun to teach entry-level employees math, basic physics and blueprint reading.
Without the availability of training procedures, many smaller companies are getting left behind in the talent market. With larger companies scooping up any and all competent candidates, smaller companies have been forced to “lower their standards.” Able One’s Moving Company, in Cleveland, has hired people with substance abuse problems and then referred them to Alcoholics Anonymous. Many smaller companies use a Welfare-to-Work program. They have reported that, surprisingly to them, that the retention rate for Welfare-to-Work employees is much higher than expected. In the interview stage, though, the companies have had to deal with more interview no-shows and drug test failures.
The question still remains, though, of what will happen to this new work force when the economy slumps. The article maintains that there is a higher rate in income inequality than twenty years ago, and the forces that keep a lid on wages (globalization and technology) are not going anywhere. The only answer postulated sees the continued training and productivity of new employees as a guard against downsizing and economical slumps.
The major applications of this article come from the efforts that these companies are expending in order to get high quality talent. Historically, employees had to meet the skill level that was needed before being hired. Now, classes and training are a common practice. What these classes do, especially the non-job-related classes, is foster a sense of community and organizational identity. By investing in the employee, the company has given something beyond a job. This has been proven to increase productivity, which increases profitability, and lowered turnover rates. The investment made by training and orientation classes has a recognizable positive effect.
Cambridge Center for Behavioral Sciences Online, Winter 2000 “Performance Management”
The article details the key principles of Performance Management, listing them out and then detailing the specific points that are being covered. Beginning with Do A Performance Analysis. In this process, a manager must measure the frequency of the behavior (what an individual says or the physical movements made) and the outputs (the physical evidence of completed work produced by the behaviors). Through this analysis, a manager can gauge present performance, establish performance and work-level standards, can specify why behavior is deficient, calculates the net economic value of improvement after the cost of solutions, and can place them in a priority order. The result of the analysis and the instituting of the program results in the identification of potentially high-payoff behaviors and outputs that can be improved. According to the article, key behaviors and outputs are often overlooked and undervalued in organizations. By introducing this program into the organization, the amount of change that occurs in specific time periods can be quantified. Historically, the investment in changing behavior has been very low. The implementation of a Performance Improvement Analysis can result in a high economic pay-off and a quick return on investment.
The next key to performance management is Be Specific. A performance manager is required to describe and communicate desired performances and the standards for judging them in terms that are measurable, observable and objective. The article also implores the performance manager to be specific. The largest inhibitor of productivity and general performance is vague language. By correctly stating the standards that the company wishes the performance level to be at and by measuring this performance by a standard form of measurement that is applicable to the performance, the desired behavior will occur.
Thirdly, the performance manager is asked to Measure the frequency of the performance against the desired standards. Many organizations measure some performance but many key outputs and behaviors are being overlooked and not measured. By having a standard measure of behavior, and within a standard time frame, performance managers have noticed an added economic value to the organization. Increased productivity, job satisfaction and a noticed lack of discipline are evident.
Lastly, the performance managers are asked to Give Feedback and Deliver Positive Consequences. They are asked to provide feedback on performance to the individual involved and to the individual’s immediate superior. The feedback should be given immediately, with sufficient information to allow for self-correction or to bolster the self-esteem. By delivering positive consequences, immediately after the performance of behavior that is up to the company’s standards. The consequences should be delivered as long as the certain performance is desired. The frequency of positive consequences should be determined by the phase of the behavior change and the pattern of responses that are desired.
This broad overview of the key issues in performance management should further the notion that most performance management is common sense. The process of performance ratings and the effects of positive consequences are well documented and have been in place for many years. The listing here is helpful from the aspect of being a checklist for performance management issues.
Fortune Online, December 1, 1999″Your Body, Your Job”
This article deals mainly with the influences that the internet in general and the World Wide Web, in particular, have on the performance and attitudes of employees today. In a common bad day at the office, before the advent of the internet, an employee might pull a resume from a drawer and send a few out. Today, employees can take that day of sulking and send out hundreds of resumes, instantly. The Web functions as a online university, employment agency and library everyday.
The article states that the Web makes it’s mark on individuals in two very distinct ways. First, it is a source of information. Second, the net serves to advance careers. In an age where workers need to advance their skills and learn no ways of working, the Web fills a gap. In a study done by Pete Goettner’s Digital Think, an online training site, corporate training costs American business and the government about $100 billion a year. Goettner believes that by outsourcing the training of it’s employees the company can save approximately $800 to $1000 per employee.
The education community has expressed their discontent with many of the educational opportunities offered on the internet. There is an MBA program from Duke University and continuing education centers at most universities. Enrollment in online testing preparation courses has also grown, evidenced by Kaplan and Review’s internet sites.
Newspapers, generally the mainstays of recruiting, have gotten onto the internet also. Eighty newspapers have already joined CareerPath.com, a company that will combine and offer the various newspapers jobs online. Career websites are also growing. The leader of these, Monster.com, has the talents of 1.6 million active resumes and 226,000 job openings.
There is concern that the internet has opened up employees to more job markets, thus increasing the instances of job-hopping. Job tenure is falling; The Bureau of Labor Statistics reports that the average employment tenure in 1998 was 3.6 years. In a quote near the end of the article, Monster.com’s founder, Jeff Taylor, stated, “My grandfather worked for one company for 37 years. I think my kids will have 20 to 25 jobs in their lifetimes. If you look at our industry, one of the main drivers is that everyone is looking for a job all the time.”
Employers and performance managers must now pay more attention to the attitudes and satisfaction levels of their employees. One bad day, or one case of actual or perceived injustice from the organization and an employee can be instantly in touch with thousands of hiring authorities. Job tenure is definitely sliding and more and more employees are turning to the internet for answers to job-related questions. Improving job skills, furthering their education and having a verifiable job market at their fingertips is an enticing incentive for career advancement.

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