mgmt 570 course overview agenda part 1: course overview syllabus introductions part 2: management...

Mgmt 570 Course OverviewAgenda

Part 1: Course Overview

Syllabus

Introductions

Part 2: Management Epistemologies

Part 3: Research Methods

WHY A COURSE ON MANAGING EMPLOYEE ATTITUDES AND BEHAVIORS? Because…

(1) People (human resources) make a difference in “bottom line” outcomes

(2) Managers need to do things differently if they want to influence employee attitudes and behaviors

(2) The best way is influence employee attitudes and behaviors is to rely on information generated from scientific research

• A competitive, strategic, and bottom line difference in firm performance. “Facts are in”

• We will read articles to support how human resource activities create value

• Sears example: Has shown how human resources create value by showing interconnections among investors, employees and customers.

(1) People make a difference in “bottom line” outcomes(1) People make a difference in “bottom line” outcomes

• Support for employee ideas & innovation helped make Sears a compelling place to work. Satisfied employees assisted in making Sears a fun (compelling) place to shop. And more shopping raised profits, making Sears a compelling place to invest.

• A 5% increase in employee attitudes led to 1.3% increase in customer satisfaction which in turn led to 0.5% increase in revenue growth.

• This systems perspective represents a change in thinking for those interested in managing human resources for competitive advantage

(1) People make a difference in “bottom line” outcomes

• In Mgmt 507, you learned how to influence perceptions, attributions, & effort. This course focuses on managing job satisfaction, absenteeism turnover and other outcomes

• Organizations may fail if they do not realize employee-employer relations have changed dramatically

(1) People make a difference in “bottom line” outcomes(2) Managers need to do things differently if they want to influence employee attitudes and behaviors

The employer—employee “deal” is changing,

…and many employers still don’t get it.

Frederick Taylor introduces “scientific management,” which holds that jobs Should be defined in detailto remove individual discretion.

Some are stuck in 1911 or with an assembly line mentality:

Best Buy Co. allows its office workers to work wherever they want, whenever they want, as long as they get their jobs done.

The electronics retailer scores big gains in productivity and employee satisfaction.

The employer—employee “deal” is changing,

…and many employers still don’t get it.

• New labor market conditions: Boomers are 40% of the labor force (78 million). There are 3.8 million 35 to 55 year olds. · Future belongs to Gen X & Y (Millennials)

• Turnover in 2006 was ~ 17%.• Unscheduled absenteeism is rising.

• Boomer-aged employers & employees are not in sync regarding how pay, health care, retirement plans, and work-life balance programs affect retention.

(2) Managers need to do things differently if they want to influence employee attitudes and behaviors

Generational Labor Force (Ages 16 – 64)

• Our topic for tonight

• How Do Mangers Determine the Best Way to Manage People?

(1) People make a difference in “bottom line” outcomes(3) Information derived from science in the best way to influence employee attitudes and behavior

WHY A COURSE ON EMPLOYEE ATTITUDES AND BEHAVIORS?

• Review syllabus

• Introductions

• BREAK!!!

Part 2: Management Epistemologies

• How Do Mangers Determine the Best Way to Manage People?

• Baseline Quiz

• Fads

• Review Epistemologies

HOW DO MANAGERS DETERMINE THE BEST WAY TO MANAGE PEOPLE?

1. How do people (managers) determine truth (best way to manage)? Depends on one’s preferred way(s) of determining truth--epistemology preferences

2. Course will promote science but recognizes it is not the only way to manage.

3. Where do managers look for guidance?

a. Texts are not the solution (2 years behind) b. Internet unreliable c. Imitating a risky strategy.

Management Innovation or “Fad”????

The 1950s The 1960s The 1970sQuantitative Mgmt Managerial Grid Zero-based BudgetingTheory Y T (sensitivity) Groups Strategic PlanningMBO Matrix Management Portfolio Mgmt

The 1980s The 1990s 2000 & Beyond1-Minute Manager Downsizing Relationship MarketingTheory Z Reengineering Supply Chain MgmtCorporate Culture Cycle time ???JIT, TQM Employee Empowerment“In Search of Excellence”

HOW DO MANAGERS DETERMINE THE BEST WAY TO MANAGE PEOPLE?

4. My goal is to encourage greater reliance on scientific advice on management problems. Like it or not, the cutting-edge ideas are in the journals.

5. Also, to get you ahead of the curve by exposing you to original ideas and encouraging you to be a more discerning, critical consumer of advice to managers. Avoid “fads”.

6. It is NOT my goal to turn you into a scientific researcher but instead to understand the common epistemologies in use.

How Do Managers Determine the “Best” to Manage?

• Course promotes science but realizes effective mgmt is both an art & science

• Managers must act and they rely on multiple ways of determining truth (epistemologies) that may reach different conclusions.

• Sick leave policy example

EPISTEMOLOGIES USED BY MANAGERS

1. Experience

2. Intuition

3. Common Sense or logic

4. Expert testimony/Higher authority /Consultant

5. History or Tradition

6. Science

Why are Epistemologies Important to Mangers?

• Skip science for just a second

• Know what epistemologies are appealing to you and that you rely on so you can appreciate their strengths and limitations

• Appreciate that your preferred epistemology may not be valued by others

• A successful change agent will be to “shuttle” across epistemologies (i.e., meet people on their “playing fields”), and be convincing by using more than one

CHARACTERISTICS OF SCIENCE

1. Empirical

2. Rational

3. General - predict - explain

4. Cumulative: Seek to achievea systematic body of knowledge - tentative - replication - self-correcting

THE RESEARCH PROCESS

Org. Event Desire to Theoretical Operation-Phenomenon Explain Framework alizationProblem(high absenteeism)(low perf.) (curious, (consists of fame, $, concepts & solve a propositions) problem)

Derive Collect Analyze data Report Hypotheses the Data to test hypo- whether (statements of (where theses (where the data relationships sample & statistics support among variables) research enters) the hyp. design enter) or not

RESEARCH PROCESS TERMS

Concept: A mental image; abstract but rooted in sense experience

Proposition: A statement which links concepts together; it describes how concepts are related

Linkages: Words describing the relationship between two concepts

Theory: A set of one or more propositions. A simple theory describes how one concept is related (predicts) to another. A more complex (but realistic) theory entails more than one proposition

LINKAGESI. Linear Relationships (Straight line relationships) A. There is a direct or positive relationship between X and Y:

Hi Job Sat (Y)

Lo Lo Hi

Job Autonomy (X)

B. An inverse or negative relationship between X and Y:

Hi Job Sat (Y) Lo Lo Hi Job Autonomy (X)

LINKAGESII. Non-Linear Relationships

A. Curvilinear, exponential:

Hi Job Satisfaction (Y) Lo

Lo Hi Job Autonomy (X) B. Curvilinear, logarithmic:

Hi Job Performance (Y) Lo Lo Hi

Goal Clarity (X)

RESEARCH PROCESS TERMS

Concept: A mental image; abstract but rooted in sense experience

Proposition: A statement which links concepts together; it describes how concepts are related

Linkages: Words describing the relationship between two concepts

Theory: A set of one or more propositions. A simple theory describes how one concept is related (predicts) to another. A more complex (but realistic) theory entails more than one proposition

THE RESEARCH PROCESS

Org. Event Desire to Theoretical Operation-Phenomenon Explain Framework alizationProblem(high absenteeism)(low perf.) (curious, (consists of fame, $, concepts & solve a propositions) problem)

Derive Collect Analyze data Report Hypotheses the Data to test hypo- whether (statements of (where theses (where the data relationships sample & statistics support among variables) research enters) the hyp. design enter) or not

OPERATIONALIZATION, DERIVING HYPOTHESES, AND COLLECTING THE DATA

Abstract/Conceptual Level

[Concepts & props] x y Job Satisfaction Job Performance

operationalizaton

score on a job satisfaction index sales performance

Empirical Level

actual score $ profit/month

[Variables & hypotheses]

THE RESEARCH PROCESS

Org. Event Desire to Theoretical Operation-Phenomenon Explain Framework alizationProblem(high absenteeism)(low perf.) (curious, (consists of fame, $, concepts & solve a propositions) problem)

Derive Collect Analyze data Report Hypotheses the Data to test hypo- whether (statements of (where theses (where the data relationships sample & statistics support among variables) research enters) the hyp. design enter) or not

DATA COLLECTION TECHNIQUES

• Observation (Direct, video, participation)

• Questionnaires, surveys

• Interviews (face-to-face, telephone)

• Company records (archival)

THE RESEARCH PROCESS

Org. Event Desire to Theoretical Operation-Phenomenon Explain Framework alizationProblem(high absenteeism)(low perf.) (curious, (consists of fame, $, concepts & solve a propositions) problem)

Derive Collect Analyze data Report Hypotheses the Data to test hypo- whether (statements of (where theses (where the data relationships sample & statistics support among variables) research enters) the hyp. design enter) or not

ANALYZING THE DATA TO TEST HYPOTHESES

I. Visually Subject Questionnaire Co. Records (Employee) Mean JS score Profits/month 1 12 $3500 2 8 2100 3 10 2500 - -- ----- N 3 1600

II. Via Scatterplot . . . Hi . . . . N = 10 Job Performance . . (Y) . Lo Lo Hi Job Satisfaction (X)

III. Statistically

STATISTICS A way to summarize relationships among variables

For 2 variables in a linear relationship:

Pearson r -1 0 +1 (negative) (no relationship) (positive)

r = .30 Weak to moderate positive relationship r 2 = .09 (or 9% of the variance explained)

For more than 1 independent variable related to a dependent variable:

Use a multiple correlation coefficient R

THEORIES/MODELS

A theory is nothing more than a set of propositions, outlining howa set of factors is thought to “effect” a dependent variable.

E.g. A theory of absenteeism:

Job Satisfaction

Work Group Size Absenteeism

Family size

Use R summary statistic (Range is from 0 to 1; no direction can be specified)

RESEARCH DESIGNS

Case study: good for exploratory work, no cause and effect, all “after the fact”, not generalizable

Field study or field survey: findings generalizable and realistic but weak on control

Lab experiment: strong on control, good for isolating cause and effect relationships, weak on generalizability Potential ethical issues.

Field experiment: moderate on control and generalizability, difficult to get companies to participate in. Potential ethical issues.

SAMPLING1. There are many methods of sampling (random, stratified) but first specify the population or universe. What do you want to study? To what do you wish to be able to generalize to?

2. Technically, every unit in the population you wish to generalize to (i.e., infer results to) must have an equal opportunity to appear in the sample.

3. Practically speaking, compromises are always made: POP: Employees of Org. X Sample: Randomly pick 20% to interview

POP: American auto workers Sample: Ford, GM, Chrysler employees or Random Sample of just GM employees

Support Slides for Readings 1-6

Lawler (2009)

• Essay on what firms need to move away from a “control-focus” form of organization and better use their human resources

• What are some of his suggestions?

Lawler (2009) Take-Aways

• Demand metrics (measures) that track use and performance of human capital (e.g., wastage turnover rates)

• Design “analytics” (ways) to relate the metrics to indicators of organizational performance (e.g., does lower turnover result in higher customer satisfaction, market share, and/or profitability)

• An extension of “what gets measured gets done”

Cascio Article• Managers and HR professionals must develop

quantifiable metrics of their ability to manage people successfully.

• These metrics must be able to be communicated to leaders in financial cost/benefit terms.

• Be able to show how improvements in employee behaviors and attitudes affect “bottom line” outcome measures.

Rousseau Article

• Commentary on how science (evidence-based management) is doing in helping managers solve problems. What is evidence-based management?

• Managers should rely on valid information (generalizable and repeatable over time) rather than fads, fashions and gurus

• Why don’t managers practice evidence-based management?

Rousseau Take-Aways

• To persuade you to value science-based principles related to management

• To encourage managers facing a problem to ask, “what does research evidence say about this issue”?

• To encourage cause-and-effect thinking (i.e., the use of evidence) in seeking solutions to organizational problems. In other words, to combine evidence with expert judgment.

Culbertson ArticleCulbertson Article

•A response to Rousseau and Lawler’s A response to Rousseau and Lawler’s calls to more relevant: Translate key calls to more relevant: Translate key research findings in user-friendly research findings in user-friendly waysways

•Appear in the Appear in the Academy of Academy of Management PerspectivesManagement Perspectives

• Introduce the methodology known as Introduce the methodology known as “meta-analysis”“meta-analysis”

Culbertson (2009)• “Research Briefs” are a

valuable tool• Summary of original

research by Brown & Lam (2008) on how employee job satisfaction is related to customer satisfaction

• Research is a meta-analysis of 28 studies (next slide)

• In general, what did they find? Any surprises?

Is job satisfaction more strongly related to customer

satisfaction in businesses where services are performed

on objects (e.g., car repair) or people (e.g., haircutting)? Also

considered single vs. repeattransactions

Meta-analysis• A meta-analysis is a quantitative review of the

literature

• It estimates more accurately the true relationship between two variables by adjusting for such things as measurement and sampling error

• The “gold standard” in medicine (e.g., statin use and colorectal cancer)

• Upcoming Liu et al (2007) article is a meta-analysis

Culbertson (2009)• Higher job sat associated w/

higher customer satisfaction & ratings of service quality

• Surprisingly, the relationship between job sat and customer perceived quality was actually stronger in single encounter settings

• Job sat → Customer ratings of service quality → Customer satisfaction

• What implications or suggestions can be derived from the research?

Job satisfaction was more strongly related to customer

satisfaction in businesses where services are performed

on objects (e.g., car repair) or people (e.g., haircutting)?

Support Slides for Readings 7-10

Rynes et al. article• Value of the journal; Abstract

• Studies confirm that HR practices can improve org performance & profits, but a gap exists between what is known and practiced

• Why aren’t managers more knowledgeable about the latest evidence-based advances?

• How did authors determine a gap existed?

1. If a company feels it must downsize employees, the mostprofitable way to do it is through targeted cuts rather than attrition. True False Uncertain

2. Talking about salary issues during performance appraisalstends to hurt morale and future performance. True False Uncertain

3. On average, encouraging employees to participate in decisionmaking is more effective for improving organizational performancethan setting performance goals. True False Uncertain

4. Teams with members from different functional areas are likely toreach better solutions to complex problems than teams from a single area. True False Uncertain

5. Most people over-evaluate how well they perform on the job. True False Uncertain

6. Older adults learn more from training than younger adults. True False Uncertain

7. On average, conscientiousness is a better predictor of job performancethan intelligence. True False Uncertain

8. Most employees prefer to be paid on the basis of individual performancerather than on team or organizational performance. True False Uncertain

9. Merit pay systems cause so many problems that companies without themtend to have higher performance than companies with them. True False Uncertain

10. In order to be evaluated favorably by line managers, the most important competency for HR managers is the ability to manage change. True False Uncertain

Baseline Knowledge on Managing Employee Attitudes & Behaviors

1. If a company feels it must downsize employees, the mostprofitable way to do it is through targeted cuts rather than attrition. True False Uncertain

( ) ( ) ( )2. Talking about salary issues during performance appraisalstends to hurt morale and future performance. True False Uncertain

( ) ( ) ( )3. On average, encouraging employees to participate in decisionmaking is more effective for improving organizational performancethan setting performance goals. True False Uncertain

( ) ( ) ( )4. Teams with members from different functional areas are likely toreach better solutions to complex problems than teams from a single area. True False Uncertain

( ) ( ) ( )5. Most people over-evaluate how well they perform on the job. True False Uncertain

6. Older adults learn more from training than younger adults. True False Uncertain

7. On average, conscientiousness is a better predictor of job performancethan intelligence. True False Uncertain

8. Most employees prefer to be paid on the basis of individual performancerather than on team or organizational performance. True False Uncertain

9. Merit pay systems cause so many problems that companies without themtend to have higher performance than companies with them. True False Uncertain

10. In order to be evaluated favorably by line managers, the most important competency for HR managers is the ability to manage change. True False Uncertain

Baseline Knowledge on Managing Attitudes & Behaviors: Scientifically Correct Answers

• What do HR professionals read? (Table II)

• Does what you read make a difference? (Table V)

Implications• Practitioners beliefs lag science, especially

in selection. HR practices could be more effective if we just practiced what we know

• Researchers must communicate in more user-friendly ways. Managers need to read academic journals.

• Practitioner outlets pander to fads (graphology)

• Learn to love a meta-analysis (p. 166)

Koys article

A traditional “scientific” article

Koys’ Research QuestionMgmt practices HR outcomes Business outcomes (selection) (job perf., retention, (profits, customer sat.)

employee attitudes)

OR

Business outcomes Mgmt practices HR outcomes (profits, customer sat.) (selection) (job perf., retention)

• Few studies use true longitudinal designs. Always a snapshot, never a movie. Feedback loops certainly exist but what is the “prime mover”?

THE RESEARCH PROCESS

Org. Event Desire to Theoretical Operation-Phenomenon Explain Framework alizationProblem(high absenteeism)(low perf.) (curious, (consists of fame, $, concepts & solve a propositions) problem)

Derive Collect Analyze data Report Hypotheses the Data to test hypo- whether (statements of (where theses (where the data relationships sample & statistics support among variables) research enters) the hyp. design enter) or not

Discussion Questions

• What are the independent and dependent variables in this study? How are they operationalized?

• What is OCB and what does it entail?

• This is a traditional study using hypotheses. What are they?

OPERATIONALIZATION, DERIVING HYPOTHESES, AND COLLECTING THE DATA: KOYS APPLICATIONAbstract/Conceptual Level

[Concepts & props] x y HR Outcomes Business

Favorable Employee Success Outcomes T2

Attitudes & Behaviors T1

operationalizaton

Employee Org Satisfaction, P1 Profitability as % Sales, Org Citizenship (OCB), Profit,

Turnover measures P2 Customer Sat measuresEmpirical Level[Variables & hypotheses]

T1 actual score employee sat (+), T2 $ profit/sales, profit (H1) org citizenship (+) , turnover (-) customer satisfaction (H2)

among restaurant employees in 28 restaurants working in 28 restaurants

Discussion Questions

• What was the sample?

• Understand descriptive statistics and correlation matrix. Review Table 1.

• Were the hypotheses supported? Review Table 2.

• How did the authors eliminate the possibility of reverse causal ordering? Review Table 3.

Take-Aways

• OCB affects profitability• Employee (organizational) satisfaction

affects customer satisfaction• Turnover results in the right direction

but ns.• Employee attitudes & behaviors appear

to drive business outcomes more than business outcomes determine employee attitudes & behaviors.

Liu et al. (2007)

• Assert HRM (or managing employee attitudes and behaviors) makes a difference on firm performance (e.g., profits, ROA)

• Whole > sum of the parts: HR systems are more effective than specific practices

• Rely on technique known as meta-analysis

• What is a meta-analysis?

Liu et al. (2007)

• A meta-analysis is a quantitative review of the literature. Scientific results can only be important to managers when they are confident that acting in the ways suggested have a high probability of success. One way for managers to gain confidence is by looking at a body of research and not just a single study.

• It estimates more accurately the true relationship between two variables by adjusting for such things as measurement and sampling error

What Did The Researchers Do?

• Examined research associated with 13 HRM practices to see the extent to which each practice enhanced firm performance (e.g., profits, ROA, ↓turnover)

•Included this article to also show what managers need to DO differently in order to use their human resources more effectively.

•What three “channels” or areas of HR practice did they examine?

10 HRM practices affect firm performance via 3 channels

• Increasing employees’ KSAs

• Motivating employees to use their KSAs for the firm’s benefit

• Empowering employees to actually use the KSAs (org structure, job design, politics may block implementation)

Specific HRM practices• Increasing employees’ KSAs:

▲1. Selection: increase POJ fit (structured interviews, testing, recruiting sources) 15 studies

▲2. Compensation level: Higher levels of pay attract & retain 18 studies

▲3. Training: Formal instruction fosters perceptions of career development and POS

29 studies

Specific HRM practicesMotivating employees to use their KSAs for the firm’s benefit:

▲4. Incentive compensation: Most highly studied because it seeks to strengthen link between effort and rewards (e.g., merit pay)

31 studies

▲5. Internal promotion: Provide clear expectations a defined pathway (e.g., needed KSAs) to get there 12 studies

Specific HRM practices Empowering employees to actually use KSAs (org structure, job design, politics may block use)

▲6. Participation: Employees can influence decisions. More potent if highly skilled 15 studies ▲7. Flextime: Allow employees grater control over their schedules, work-life balance 8 studies

▲8. Grievance procedures: Provide voice and conflict resolution options short of quitting 8 studies

▲9. Employment security: Security foster org commitment 6 studies

Liu et al. (2007)

• What HRM practices did not relate to firm performance?

• What other factors affect the connection between HRM practices & org performance?

▲Vertical alignment

▲Horizontal alignment

▲Work context

• What are the top practices?

Harter et al. (2002) Article

• Have asserted that scientific evidence supports that employee attitudes and behaviors make a difference– Though individual sat.-perf. correlation may only be .3

– Time to “back it up”!

• Assesses true relations between business level outcomes (e.g., profitability, customer satisfaction) and (a) org. satisfaction and (b) employee engagement (job satisfaction)

• Another meta-analysis.

Harter et al. (2002) Article

• Quantitative review of the literature (e.g., Liu et al.)

• It estimates more accurately the true relationship between two variables by adjusting for:

Sampling error

Measure unreliability

Stat. sig. relationships trivial in magnitude

Restriction-in-range (recall central tendency

& leniency effects)

• What is the first hypothesis?

OPERATIONALIZATION, DERIVING HYPOTHESES, AND COLLECTING THE DATA: HARTER APPLICATION

Abstract/Conceptual Level

[Concepts & props] x y

1. Overall Org Satisfaction (OS) Business Unit Outcomes2. Employee Engagement (EE, Job Sat) Business Unit Outcomes

operationalizaton Gallup Workplace Audit (GWA) Customer satisfaction-loyalty, Profitability, Productivity, Turnover, & Safety

(and summed to form a composite)

Empirical Level[Variables & hypotheses] actual GWA scores, customer ratings, profit as % sales, revenue figures, ↓ turnover, ↓ accidents,

composite

Harter et al. (2002) Article

• What is the second hypothesis and why is it important?

• How were org. satisfaction and employee engagement measured? Table 1, DOT data

• What was the sample in this study? Tables 2 & 3

• Review dependent variables and findings. Table 4 & 5

Tables 4 and 5 Summarized

Table 4 Overall org sat. Employee engagement• Customer satisfaction .32 .33• Profitability .15 .17• Productivity .20 .25• Turnover -.36 -.30• Safety -.20 -.32

Table 5 • Composite performance .37 .38 (all but safety)

Should and can managers be held accountable for engagement levels of their direct reports?