1. Study suggests middle managers sometimes turn to unethical behavior to face unrealistic expectations

    October 15, 2017 by Ashley

    From the Penn State press release:

    While unethical behavior in organizations is often portrayed as flowing down from top management, or creeping up from low-level positions, a team of researchers suggest that middle management also can play a key role in promoting wide-spread unethical behavior among their subordinates.

    In a study of a large telecommunications company, researchers found that middle managers used a range of tactics to inflate their subordinates’ performance and deceive top management, according to Linda Treviño, distinguished professor of organizational behavior and ethics, Smeal College of Business, Penn State. The managers may have been motivated to engage in this behavior because leadership instituted performance targets that were unrealizable, she added.

    When creating a new unit, a company’s top management usually also sketches out the unit’s performance routines — for example, they set goals, develop incentives and designate certain responsibilities, according to the researchers. Middle managers are then tasked with carrying out these new directives. But, in the company studied by the researchers, this turned out to be impossible.

    “What we found in this particular case — but I think it happens a lot — is that there were obstacles in the way of achieving these goals set by top management,” said Treviño. “For a variety of reasons, the goals were unrealistic and unachievable. The workers didn’t have enough training. They didn’t feel competent. They didn’t know the products well enough. There weren’t enough customers and there wasn’t even enough time to get all the work done.”

    Facing these obstacles, middle management enacted a series of moves designed to deceive top management into believing that teams were actually meeting their goals, according to Treviño, who worked with Niki A. den Nieuwenboer, assistant professor of organizational behavior and business ethics, University of Kansas; and Joa?o Viera da Cunha, associate professor, IESEG School of Management.

    “It became clear to middle managers that there was no way their people could meet these goals,” said Treviño. “They got really creative because their bonuses are tied to what their people do, or because they didn’t want to lose their jobs. Middle managers exploited vulnerabilities they identified in the organization to come up with ways to make it look like their workers were achieving goals when they weren’t.”

    According to the researchers, these strategies included coopting sales from another unit, portraying orders as actual sales and ensuring that the flow of sales data reported in the company’s IT system looked normal. Middle managers created some of these behaviors on their own, but they also learned tactics from other managers, according to the researchers, who report their findings in Organization Science, online now.

    Middle managers also used a range of tactics to coerce their subordinates to keep up the ruse, including rewards for unethical behavior and public shaming for those who were reluctant to engage in the unethical tactics.

    “Interestingly, what we didn’t see is managers speaking up, we didn’t see them pushing back against the unrealistic goals,” said Treviño. “We know a lot about what we refer to as ‘voice’ in an organization and people are fearful and they tend to keep quiet for the most part.”

    The researchers suggested that the findings could offer insights into other scandals, such as the Wells Fargo and the U.S. Veteran Administration hospital misconduct. They added that top management in organizations should do more in-depth work to institute realistic goals and incentives.

    “Everybody has goals and goals are motivating, but there are nuances,” said Treviño. “What goal-setting theory says is that if you’re not committed to the goal because you think it’s unachievable, you’ll just throw your hands up and give up. Most front-line employees wanted to do that. But the managers intervened, coercing them to engage in the unethical behaviors.”

    This type of deception can harm an organization in several ways, including its bottom line through the awarding of bonuses based on this deceptive performance, but also because upper management made strategic decisions and allocated resources based on the unit’s feigned success.

    “How can you lead a company if the performance information you get is fake? You end up making bad decisions,” den Nieuwenboer said.

    One of the researchers gathered data for over a year as part of an ethnographic study, a type of study that requires researchers to immerse themselves in the culture and the lives of their subjects. In this case, the ethnographer studied the implementation of a new unit in the telecom company. As part of the data collection, the researcher spent 273 days shadowing workers, 20 days observing middle managers, listened to approximately 15 to 22 informal — lunch or watercooler — breaks between workers per week and conducted 105 formal interviews. Interactions on the phone, through email and in face-to-face meetings were observed and documented.

    “One of the advantages that this kind of data affords you is the opportunity to observe what’s going on across hierarchical levels,” said Treviño. “The middle management role is largely an invisible role. As a researcher, you just don’t get to see that role very often.”


  2. Study links testosterone to stock market instability

    October 14, 2017 by Ashley

    From the Institute for Operations Research and the Management Sciences press release:

    In the U.S. today, the majority of professional stock market traders are young males and new evidence suggests biology strongly influences their trading behavior. According to a new study in the INFORMS journal Management Science, this could be a significant contributor to fluctuations in the market, as high testosterone levels can cause these traders to overestimate future stock values and change their trading behavior, leading to dangerous prices bubbles and subsequent crashes.

    The study, “The Bull of Wall Street: Experimental Analysis of Testosterone and Asset Trading,” was conducted by Amos Nadler of the Ivey Business School at Western University, Peiran Jiao of the University of Oxford, Paul Zak and Veronika Alexander of the Center for Neuroeconomics Studies at Claremont Graduate University, and Cameron Johnson at the Behavioral Health Institute at Loma Linda.

    The double blind study involved 140 young males, each of whom received a topical gel containing either testosterone or a placebo, prior to participating in an experimental asset market in which they were able to post bid and ask prices, as well as buy and sell financial assets to earn real money.

    The authors found that among groups that received testosterone relative to those who received a placebo, larger price bubbles formed, mispricing lasted longer, market dynamics changed to reflect increasing bidding and selling volume, and their perception of a stock’s value changed despite its being displayed throughout the study. While the traders who received the placebo displayed “buy low to sell high” behavior, those who had received testosterone adhered to “buy high to sell higher.”

    “This research suggests the need to consider hormonal influences on decision-making in professional settings, because biological factors can exacerbate capital risk,” said Nadler. “Perhaps the simplest recommendation is to implement ‘cool down’ periods to interrupt exceptionally positive feedback cycles and return the focus to assets’ fundamental valuations to reduce the possibility of biased decision-making.”

    “Based on our findings, professional traders, investment advisories, and hedge funds should limit the risk taken by young male traders,” continued Nadler. “This is the first study to have shown that testosterone changes the way the brain calculates value and returns in the stock market and therefore — testosterone’s neurologic influence will cause traders to make suboptimal decisions unless systems prevent them from occurring.”


  3. To kickstart creativity, offer money, not plaudits, study finds

    October 12, 2017 by Ashley

    From the University of Illinois at Urbana-Champaign press release:

    How should employers reward creative types for turning in fresh, inventive work: with a plaque or a party recognizing their achievement, or with cold, hard cash? According to new research co-written by a University of Illinois expert in product development and marketing, it’s all about the money, honey.

    In contexts where a premium is placed on being original, social recognition as a reward for an especially imaginative piece of work doesn’t necessarily enhance creativity, says published research co-written by Ravi Mehta, a professor of business administration at Illinois.

    “The general consensus in the research literature on creativity is that money hurts creativity,” Mehta said. “But most of that prior research was conducted with children as the test subjects, and the participants were not specifically told that the reward was for being creative. So what is it about the contingency of rewards that impacts creativity, and would adults respond to all types of creativity-contingent rewards the same way?”

    Across five experiments, Mehta and his co-authors examined the role of creativity-contingent monetary rewards versus creativity-contingent social-recognition rewards on creative performance, providing new insights into the underlying motivational processes through which these rewards affect creativity.

    The experiments demonstrated that, within the context of creativity contingency, monetary rewards induce “a performance focus,” while social-recognition rewards induce “a normative focus,” according to the paper. The researchers found that the former enhances one’s motivation to be original, thereby leading to more inventiveness in a creative task, while the latter hurts it.

    “We found that if you tell people to be creative and then give them monetary rewards, they will be more creative,” Mehta said. “But wouldn’t the same be true of all rewards? If you tell people to be creative and then give them a social-recognition reward instead of money, then they’ll be just as creative as those you reward with money, right? We found no empirical evidence for that.”

    Mehta said social recognition is “all about people knowing about you and your work, and thereby influencing one to act more in accordance with social norms,” whereas creativity means “coming up with something different, something novel, something that is not the norm.”

    “As adults, we don’t want to come up with something that’s too radical, too out-there, especially when we know that our peers will be judging us,” he said. “Most of our daily activities as working adults are about adhering to social norms. We don’t want to stand out too much.”

    But when a monetary reward is dangled, people amp up their performance and consciously try to “blow the doors off the competition” in terms of creativity, Mehta said.

    “When you ask someone to be creative, you’re asking them to be transgressive, to think beyond social norms and thought processes that are not automatic,” he said. “That’s why a social-recognition reward kills creativity, because it makes creators more risk-averse. It appeals to conformity, to not standing out, which drives you to the middle, not the edge. It compels you to fall in line with social norms, and there’s less motivation to be creative.

    “People who value creativity value the bizarre, the stuff that’s out there. Therefore, they’re less likely to care about the approval of others, or a sense of belonging with their peers.”

    The research has practical applications for how people generate creative ideas, and how to motivate creative-class employees.

    “There’s a trend among companies for crowdsourcing ideas or user-generated content,” Mehta said. “Virtually all social media is user- or consumer-driven. This ought to point them in the right direction: Money talks, but social recognition doesn’t.”

    The research also is applicable to people who work at ad agencies or in creative fields.

    “A little caveat, though: People in those fields are expected to be creative, so social recognition also would work for them,” Mehta said. “But more money certainly wouldn’t hurt them, either. In that case, both rewards would lead to more creativity.”

    The paper will be published in the Journal of Consumer Research.


  4. Coping with stressful organizational change

    October 4, 2017 by Ashley

    From the Inderscience press release:

    Stress is not a recent phenomenon, but the modern work environment seems to highlight its detrimental effects on employees. This is no more obvious than during times of organisational change. Research published in the International Journal of Work Organisation and Emotion, considers the impact of such changes on workers in a healthcare authority in New Zealand, highlighting the problems that any organization might face under such circumstances and pointing to possible methods to cope and remediate employee stress.

    Stress is present to some degree in any organizational context as employees, including managers, grapple with a host of work demands, suggests Roy Smollan of the Department of Management, at Auckland University of Technology. Individuals all have different coping strategies although ultimately not everyone copes. It all depends on the specific stressors, the individual’s personality, emotional intelligence, and their social identity. Moreover, specific stressors need tailored coping strategies, suggests Smollan. He reports that stress is exacerbated when processes such as organizational change exist in a cloud of ambiguity and uncertainty, when those processes are undertaken without consultation with employees, and when changes are either miscommunicated or not communicated at all.

    Smollan’s case study of a New Zealand healthcare authority undergoing major restructuring represents a quite unique qualitative examination of the stresses of work life as those involved are caught up in the tumultuous processes of organizational change. It focused on how individuals attempted to maintain their psychological wellbeing during these changes and learned to cope with the stress. Fundamentally, while many people involved eschewed help from others and relied more on their strengths, in part for fear of appearing weak, accessing support networks was critical for others. For all involved being proactive in problem solving and managing one’s thoughts and emotions during stressful times were nevertheless important for everyone involved.

    “Managers have a key role to play in anticipating when organizational change may elicit stress and in helping those affected to cope with it,” concludes Smollan.


  5. Study suggests abusive bosses may feel good – but only for a while

    October 3, 2017 by Ashley

    From the Michigan State University press release:

    Being a jerk to your employees may actually improve your well-being, but only for a short while, suggests new research on abusive bosses co-authored by a Michigan State University business scholar.

    Bullying and belittling employees starts to take its toll on a supervisor’s mental state after about a week, according to the study, which is published in the Academy of Management Journal.

    “The moral of the story is that although abuse may be helpful and even mentally restorative for supervisors in the short-term, over the long haul it will come back to haunt them,” said Russell Johnson, MSU associate professor of management and an expert on workplace psychology.

    While numerous studies have documented the negative effects of abusive supervision, some bosses nevertheless still act like jerks, meaning there must be some sort of benefit or reinforcement for them, Johnson said.

    Indeed, the researchers found that supervisors who were abusive felt a sense of recovery because their boorish behavior helped replenish their mental energy and resources. Johnson said it requires mental effort to suppress abusive behavior — which can lead to mental fatigue — but supervisors who act on that impulse “save” the mental energy that would otherwise have been depleted by refraining from abuse.

    Johnson and colleagues conducted multiple field and experiments on abusive bosses in the United States and China, verifying the results were not culture-specific. They collected daily survey data over a four-week period and studied workers and supervisors in a variety of industries including manufacturing, service and education.

    The benefits of abusive supervision appeared to be short-lived, lasting a week or less. After that, abusive supervisors started to experience decreased trust, support and productivity from employees — and these are critical resources for the bosses’ recovery and engagement.

    According to the study, although workers may not immediately confront their bosses following abusive behavior, over time they react in negative ways, such as engaging in counterproductive and aggressive behaviors and even quitting.

    To prevent abusive behavior, the researchers suggest supervisors take well-timed breaks, reduce their workloads and communicate more with their employees. Communicating with workers may help supervisors by releasing negative emotions through sharing, receiving social support and gaining relational energy from their coworkers.

    Co-authors are Xin Qin from Sun Yat-sen University, Mingpeng Huang from the University of International Business and Economics, Qiongjing Hu from Peking University and Dong Ju from Communication University of China.


  6. Study suggests groups lie more than individuals

    September 14, 2017 by Ashley

    From the Institute for Operations Research and the Management Sciences press release:

    Do you pride yourself on being an honest person? Even individuals who have a proven track record of honest behavior are no match for the potentially negative influences present in a group dynamic, especially when money is at stake, according to a new study, published in the INFORMS journal Management Science.

    When organizations are exposed for large-scale deceptive or corrupt behavior, often it is not the actions of one or two employees, but a coordinated effort of many individuals, to include upper level management. Prominent examples include the bankruptcies of WorldCom and Enron, and even more recently, the alleged issuance of faulty emissions certificates by German car manufacturer Volkswagen. The study, “I lie? We lie! Why? Experimental Evidence on a Dishonesty Shift in Groups,” explored what motivates a group of people, especially those who previously behaved honestly, to work together to deceive.

    The study authors, Martin G. Kocher, Simeon Schudy and Lisa Spantig, all of the Ludwig-Maximilians-University of Munich, studied 273 participants in both individual and group situations. Participants, who were paid for their role in the study, were shown video of dice rolls and asked to report the number shown on the die. The higher the reported die roll, the larger the monetary compensation. Participants were evaluated on an individual basis, and in two group settings: one in which all members of the group must report the same die roll to receive a payoff, and another in which members do not have to report the same die roll to receive a payoff. In the group settings, members are able to communicate with each other via a chat feature.

    “We observed that groups lie significantly more than individuals when group members face mutual financial gain and have to coordinate an action in order to realize that financial gain,” said Kocher.

    Of the 78 groups that participated in the study, arguments for dishonesty were explicitly mentioned in 51 percent of the group chats. In fact, of the messages that were exchanged among group members, 43.4 percent argued for dishonest reporting, while only 15.6 percent consisted of arguments for honesty. Interestingly, the authors found that the number of individuals in each group who had exhibited dishonest behavior in the individual portion of the study had no real impact on these results, as dishonesty occurred even in groups where all members had previously responded honestly.

    The ability for group members to exchange and discuss potential justifications for their dishonest behavior can create an overall shift in the group’s beliefs of what constitutes moral behavior,” said Spantig. “This allows them to establish a new norm regarding what does or does not constitute dishonest behavior,” according to Schudy.


  7. Gaining influence over others does not increase autonomy

    August 29, 2017 by Ashley

    From the University of Kent press release:

    Moving up the greasy pole in the office does not make people feel more personally free, new research has shown.

    The research, from the University of Kent, looked at whether exercising influence over others in social situations, such as at work, leads to a greater sense of personal freedom or ‘autonomy’.

    The study found that there was no correlation between elevated social influence, or ‘power’ and elevated personal freedom, suggesting that the relationship between influence and autonomy diminishes with increasing levels of power.

    However, the research, by Dr Mario Weick and Stefan Leach of the University’s School of Psychology and Dr Joris Lammers from the University of Cologne, Germany, did find that a lack of personal power correlates with a lack of social power.

    In one study 800 people from the US, UK, Germany and India were asked to recall events they thought of as either high or low in influence and high or low in autonomy. The researchers then asked participants how influential and autonomous they felt in these situations.

    A second study, asking 200 people to report how much influence and autonomy they experience in their everyday lives, confirmed that the relationship between influence and autonomy grows weaker with increasing levels of power.

    The research suggests that gaining influence over people does not lead to increased personal autonomy. Among the reasons for this, the researchers suggest, is that with every gain in discretionary abilities and control, for instance at work, individuals also gain additional responsibilities and often face an increase in scrutiny.


  8. Study suggests managers can help prevent employees from working while sick

    August 24, 2017 by Ashley

    From the Wiley press release:

    A new study indicates that managerial support can help prevent employees who work extremely hard out of an obsessive drive (‘workaholics’) from forcing themselves to attend work when feeling sick. Such support from managers can also help address work-family conflict in workaholics.

    Increasing the awareness of supervisors of the harmful consequences and costs associated with showing up to work while ill (presenteeism) could allow them to recognise the value of rest and recovery. This could help prevent employees from feeling unable to cope efficiently with obligations pertaining to work and family.

    Managers should be trained to develop supportive leadership skills that are able to function as a protective factor buffering the detrimental association between an overwhelming compulsion to work and presenteeism,” said Dr. Greta Mazzetti, lead author of the International Journal of Psychology study.


  9. Study suggests engaging in casual video game play during rest breaks can help restore mood in response to workplace stress

    August 19, 2017 by Ashley

    From the Human Factors and Ergonomics Society press release:

    More than half of Americans regularly experience cognitive fatigue related to stress, frustration, and anxiety while at work. Those in safety-critical fields, such as air traffic control and health care, are at an even greater risk for cognitive fatigue, which could lead to errors. Given the amount of time that people spend playing games on their smartphones and tablets, a team of human factors/ergonomics researchers decided to evaluate whether casual video game play is an effective way to combat workplace stress during rest breaks.

    In their Human Factors article (now online), “Searching for Affective and Cognitive Restoration: Examining the Restorative Effects of Casual Video Game Play,” Michael Rupp and coauthors used a computer-based task to induce cognitive fatigue in 66 participants, who were then given a five-minute rest break. During the break, participants either played a casual video game called Sushi Cat, participated in a guided relaxation activity, or sat quietly in the testing room without using a phone or computer. At various times throughout the experiment, the researchers measured participants’ affect (e.g., stress level, mood) and cognitive performance.

    Those who took a silent rest break reported that they felt less engaged with work and experienced worry as a result, whereas those who participated in the guided relaxation activity saw reductions in negative affect and distress. Only the video game players reported that they felt better after taking the break.

    Rupp, a doctoral student in human factors and cognitive psychology at the University of Central Florida, notes, “We often try to power through the day to get more work finished, which might not be as effective as taking some time to detach for a few minutes. People should plan short breaks to make time for an engaging and enjoyable activity, such as video games, that can help them recharge.”


  10. Study shows corporate wellness programs lead to increased worker productivity

    August 17, 2017 by Ashley

    From the University of California – Riverside press release:

    coworker, managerCorporate wellness programs have been shown to save companies money by reducing absenteeism and health insurance costs. Researchers at the University of California, Riverside, UCLA, and Washington University in Saint Louis, Mo., have now quantified an additional benefit to companies’ bottom line, showing that a wellness program they studied resulted in higher productivity for all participating employees. This improvement was dramatic: approximately equal to an additional productive work day per month for the average worker.

    Titled “Doing Well by Making Well: The Impact of Corporate Wellness Programs on Employee Productivity,” the study’s first author is Timothy Gubler, an assistant professor of management in the School of Business at UCR. It is forthcoming in the journal Management Science.

    Almost 90 percent of companies use some form of corporate wellness programs, with the most comprehensive offering biometric health screenings, nutritional programs, fitness classes, and educational seminars on topics ranging from smoking cessation to work-life balance. A recent meta-analysis found that each dollar spent on wellness programs saves $3.27 in health care costs and $2.73 in absenteeism costs.

    To quantify the additional benefit to companies through improved motivation and productivity, the current study examined individual productivity and medical data collected over a three-year period at five plants of an industrial laundry company in the Midwestern United States. The voluntary program was offered to workers, free of charge, at four of the five plants; the fifth did not participate because it used a different health insurance plan, providing a control group for the study.

    Employees who signed up for the program (about 85 percent of the staff) were offered access to a simple health exam that included drawing blood, taking blood pressure, and a health survey. Three weeks later, participants attended an educational seminar where a registered nurse presented them with a personalized health packet detailing their current health status and providing recommendations for improving their health. About two thirds of employees had a medical condition at the time of screening, according to an analysis by physicians hired by the researchers to evaluate the health data.

    After linking the medical data with individual worker productivity data, the authors found that participation in the wellness program increased average worker productivity by over 5 percent — roughly equivalent to adding one additional day of productive work per month for the average employee. By group, the results showed:

    Sick employees whose health improved during the program showed increased productivity levels that averaged 11 percent.

    Healthy workers whose health improved during the program showed increased productivity levels that averaged 10 percent.

    Healthy employees whose health did not improve during the program showed increased productivity levels that averaged 6 percent.

    Sick employees whose health did not improve did not show increased productivity levels.

    While unable to precisely identify the mechanisms driving improvements, Gubler said the increase in productivity was consistent with two factors: First, increased employee motivation that stemmed from higher job satisfaction and gratitude from those who discovered an undiagnosed illness; and second, improved capabilities due to improved physical and mental wellness. Employees who improved exercise and changed their diet saw the biggest increases in productivity.

    “By showing concern for workers, organizations can strengthen employees’ loyalty and commitment to the company. When workers discover unknown health problems through the program they may feel increased gratitude toward their employer and reciprocate that by increasing their efforts. Additionally, when programs help employees make healthy choices this can positively impact their wellness, mood, energy, and ultimately increase their productivity through increased capability,” Gubler said.

    Gubler said the findings add to a growing body of management research on the relationship between employee wellbeing and organizational performance. However, this is the first study to show a direct “causal link” for improvements in productivity through wellness programs, and employees improving their health.

    “Our research suggests that corporate wellness plans can boost employee satisfaction by offering a tangible benefit that empowers them to take care of their health in a way that’s integrated into their busy lives. The result is healthier and happier employees who are not only less expensive and less absent, but also more productive,” he said.