1

University of Notre Dame

EMBA 60616

Leadership and Decision-Making

Timothy A. Judge

South Bend – Cincinnati EMBA Program August 16, 2013 (800 AM – 230 PM)

2

University of Notre Dame

EMBA 60616

Leadership and Decision-Making

Please turn in your

Readings Summary for today

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1. Case Discussions: “Clayton” and “Engstrom”

2. Making Decisions About People and Motivating

Them

3. Exercises: “Lost” and “The Player”

4. Assessment: Wonderlic Test

5. Leadership Feedback Reports

CLASS #4

Note--Course materials are posted on website:

http://www.timothy-judge.com/

4

1. July 25 Understanding Yourself and Others

2. July 26 Individual Decision-Making

3. July 27 AM Group Decision-Making

3. July 27 PM Group Decision-Making (cont.)

4. August 16 AM Making Decisions About People…

4. August 16 PM And Motivating Them

5. August 17 AM Leadership

6. August 17 PM Leading the Dark Side

7. Sept 12 In-Class Essay

5

Course Requirements Significant Dates This Week

August 16 Due: Readings Summaries

August 17 Due: Readings Summaries

Graded Exercise (in class)

200-220 Discussion on Engstrom case

6

1045-1110 Wonderlic Personnel Test

1200-115 Break

1110-1200 Human Resource Decision-Making (cont’d)

115-200 Exercise: The Player

1005-1045 Leadership Feedback Reports

945-1005 Discussion on Clayton case

900-945 Leading Decision-Making Groups (Lost)

815-900 Human Resource Decision-Making

Toda

y’s S

chedul

e

220-230 Wrap-Up

800-815 Review, Q&A, and Team Evaluation Forms

7

Class #4

Section 1

Review with Motivation Feedback

Reports, Final Essay Extra Credit,

Team Evaluation Forms

8

Class #4

Section 2

Human Resource Decision-Making

9

I think about this in hiring,

because our business all

comes down to people… in

fact, when I’m interviewing a

senior job candidate, my

biggest worry is how good

they are at hiring. I spend at

least half the interview on

that. – Jeff Bezos, CEO,

Amazon

– Do you agree? Why?

Importance of Staffing

10

Importance of Staffing

• If you hire the wrong people, the best human

resource system in the world won’t solve the

problem

• Most organizations hire poorly!

– Wrong methods

• Standard process: application, reference check,

unstructured interview

– Wrong evaluation

• Vast majority of evaluation in selection process is

subjective and unsystematic

11

• Validity Utility

– Correlation between scores on selection

measures and relation between scores on

selection measure and job performance

• Equal employment opportunity

• Utility

– Cost-benefit analysis

• Applicant reactions

Evaluation of Staffing

12

Validity

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 10 20 30 40 50

Job P

erf

orm

ance

Wonderlic Test Scores

r=+.41

Hired Rejected

Poor

(bel

ow

ave

rag

e)

per

form

ers

Good (

above

ave

rag

e)

per

form

ers

13

Validity

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 10 20 30 40 50

false negatives

false positives

“hits”

“hits”

Job P

erf

orm

ance

Wonderlic Test Scores

r=+.41

Poor

(bel

ow

ave

rag

e)

per

form

ers

Good (

above

ave

rag

e)

per

form

ers

Rejected Hired

14

• This seems straightforward, BUT

– Vast majority of organizations never validate

their selection processes

• If staffing is so important, why is this so?

Validity

15

16

Disparate Treatment

• Treating protected classes unequally

– Refusing to hire blacks, women, older workers, etc., or

purposely subjecting them to a different standard that

has the effect of making it harder for them to be hired

• Examples of ‘intentional discrimination’

– Overt statements or actions

– Applying different standards to different groups

• Refusing to allow female applicants of child-bearing age to

apply for higher paying but dangerous work

• Asking female applicants what arrangements they intend to

make for child care

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Disparate or Adverse Impact

• Hiring standards applied uniformly to all

groups, but the net effect of the practice is

that a smaller proportion of the protected

class is hired

• Examples

– Using high school diploma as a requirement (adverse

impact against black applicants)

– Using height and weight requirements (adverse impact

against females and Asians)

– Asking applicants if they are the primary care-givers of

their children

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Burden of Proof Adverse Impact

• Plaintiff must demonstrate statistically that

the selection procedure affects protected

classes adversely relative to their

distribution in the labor market

• Defendant can rebut prima-facie in the

following ways:

1. Business necessity (risk to customers, employees

[not profits])

2. Bona fide seniority system

3. Validation data

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Statistics and Adverse Impact

Stock Statistics

(1)

# in protected class in organization/job

total # of employees in organization/job

v.

(2)

# of protected class in qualified labor force

total # members in qualified labor force

If (1) is less than (2), prima-facie case of adverse impact

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Flow Statistics

(1)

# protected class selected

# applicants from protected class

(2)

# non-protected class selected

# applicants from non-protected class

If (1) is less than (2), prima-facie case of adverse impact

Why might one prefer one (flow or stock) over the other?

Statistics and Adverse Impact

21

Example

• Assume we opened a restaurant

• We had 216 applicants

– 184 were Caucasian

– 32 were African American

• We hired 54 of these 216 applicants

– 49 were Caucasian

– 5 were African American

• We are sued for discrimination in hiring

– How do we know if our selection process had

adverse impact?

22

Statistics and Adverse Impact

Two major ways of establishing adverse impact using statistics:

Four-Fifths Rule

• The selection rate for any racial, ethnic, or sex subgroup

which is less than four-fifths of the rate for the group with

the highest rate will generally be regarded as evidence of

adverse impact

• Example (applicant flow data):

Flow(B)=5/32=.16 Flow(W)=49/184=.27

The selection ratio for blacks is less than 4/5ths (80%)

of the selection ratio for whites, so adverse impact is inferred

(80% of .27 is .21, which is greater than .16)

Tests of Statistical Significance

Do this using a t-test

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Costs of Discrimination

• This is big business

– Event studies suggest that when a discrimination

suit becomes a new story, company’s stock

drops 8.9% within one week and does not

recover after six months

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Costs of Discrimination

• Wal-Mart was sued by the 1.2 million

present and former female workers

– Largest class action suit in history

– 2,000+ claimants now suing individually

Of course,

being sued

does not

mean one

is guilty of

discrimination

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Selection Process

Initial

Substantive

Contingent

Applicants

Candidates

Finalists

New Hires

Résumés, Applications

Tests, Interviews

Drug Tests, References

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Résumés and Application Blanks

• Résumés

– Used for professional positions

– Increasingly, organizations use screening

software

• Application blanks

– Used for all positions

– One of most common selection methods

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Application Blanks

• Not particularly valid on own (r=.10 to .20)

– Most valid items

– GPA (r=.23)—less valid as years from degree increase

– Experience (r=.27)—curvilinear, quality and quantity

• Best used for only rough cuts

• Verify accuracy of information that is used

– Two studies suggest significant distortion

1: 43% of résumés have at least one inaccuracy

2: 56% of résumés contain “falsehoods of some kind”

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Reference Checks

• Commonly used, commonly useless

– Slander or defamation • Applicant's reputation is harmed through the

publication of an injurious falsehood

• 80% check but 63% refuse to provide information

– Negligent hiring • Employer knew or should have known about

employee unfitness (incompetence, violent history)

that caused injuries to employees or customers

• Reference providers can be sued too!

• How to respond

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References: Information Checked

74%

73%

59%

58%

49%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Dates of employment

Reasons for leaving

Salary and position

Prof. references

Supervisor evaluation

% of all companies

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1. Is it wrong to “pad” one’s résumé with

information that, while not an outright lie, is

an enhancement?

2. Do you think employers have a right to

check into applicants’ backgrounds? Even if

there is no suspicion of misbehavior? Even

if the job poses no security risks? Even if

the background check includes driving

offenses and credit histories?

Applications and References Ethical Issues

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The

George O’Leary

Case

December 9, 2001 George O’Leary is hired as football coach at Notre Dame.

He was the ACC coach of the year in 1998 and 2000.

December 13, 2001 Manchester Union Leader cannot verify that O’Leary was a 3-year letter

winner at UNH. Subsequent checks fail to verify a master’s degree from

NYU.

December 14, 2001 O’Leary resigns as head coach. Notre Dame assumed Georgia Tech had

conducted background check, who assumed…

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Post-graduate (if applicable)

N.Y.U-Stony Brook University

Athletic background

College – Univ. of New Hampshire

Where is he now?

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• Yahoo CEO Scott Thompson claimed he had

a computer science degree

• Radio Shack CEO fired for claiming to have

two degrees (one MBA) when he had none

• Bausch & Lomb rescinded a bonus to CEO

Ron Zarrella, and Symantec fired CEO Ken

Lonchar, for falsely claiming they had MBA

degrees

• Upshot: Assumed fact checking

Applications/Résumés

On March 18, 2008, running back Ereck

Plancher died after conditioning drills. According

to four UCF football players interviewed by the

Orlando Sentinel, Coach O'Leary verbally

abused Plancher throughout the workout, and

continued to push the young man to perform

despite what they reported to be obvious

physical signs that Plancher was in no shape to

continue. According to the four players, O'Leary

cursed at Plancher in a post-workout huddle.

Plancher collapsed shortly after the workout. He

was then transported to a nearby hospital where

he died approximately one hour later.

Subsequent to the Orlando Sentinel article,

ESPN's "Outside The Lines" program interviewed

players who were at the training session at which

Plancher became ill and after which he died;

they stated that the session was longer and far

more rigorous than O'Leary admitted to publicly.

They also alleged that O'Leary and other

coaches had initially warned players against

providing assistance to Plancher when he

became visibly distressed. UCF medical records

indicate that UCF coaches and trainers knew that

Plancher had a sickle-cell trait which could lead

to problems, and even death, during high-

intensity workouts.

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0

8

4

10

4

8

11

5

10

0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010 2011 2012

UCF Wins by Season

35

Class #4

Section 3

Exercise: Lost

36

Group Decision-Making Exercise: Lost

• Complete blue The Situation alone (15 minutes),

responding with Your Answer to each scenario

• Break into groups and develop Group’s Answer to

15 questions; record on blue form (15 minutes)

• Pick up an envelope with gold list of answers

• Score Correct Answers on blue form (10 minutes)

• Transfer score totals to the pink Group’s Task form;

please write your name and your group name on

this form. Complete the questions on the pink form

and hand it in, one per person

• Note: Please do not consult any outside sources

37

Corbett, Tim

Day, George

Morales, Jackie

Conley, Chris

Talarico, Nick

Grim, Rob

Green, Rebecca

Davis, Jodi

Sanchez, Hipolito

Rousseve, Dan

Bryant, Jeremy

Morales, Seth

Iglesias, Leslie

Gomes, Cecilia

Bush, Cathy

Yuran, Mark

Fitzgibbon, Joshua

Purdy, Matt

Speckman, Jason

Telman, Ji

Greiner-Quiett, Eli

Manica, Joe

Davis, Glen

Ray, Chip

Bronk, Meredith

Kraus, Tom

Doyle, Tim

Venugopal, Venu

Lazenga, Nate

Eyler, Cory

Ziss, John

O'Donnell, John

Kuhlmann, Chris

Baerlocher, Anthony

Holguin, Martin

Sullivan, Scott

Vitale, Brian

Zulich, Tim

Webster, Daniel

Mathieson, Mark

Fogarty, Danny

Pranke, MaryAnn

Brothers, Kris

Frey, Mike

Wieckowski, Kara

Schoenig , Demetra

Reynolds, Natalie

DiDonna, Mike

Schad, Matt

Hudson, Michelle

Zimmerman, Andy

Grzegorzewski, Ron

Malenich, Greg

Peaker, Jerome

Reed, Mo

Wyatt, Jeff

Carman, Joe

Yellow GREEN PINK

AQUA

WHITE

PURPLE

BLUE BLACK

GREY

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Group

Ave.

Indiv.

Score

Highest

Indiv.

Score

Group

Score

Gain

Over

Ave.

Gain

Over

Highest

Yellow 5.7 7 7 +1.3 0

Green 6.5 8 8 +1.5 0

Pink 6.6 8 6 -0.6 -2

Purple 4.0 6 5 +1.0 -1

Aqua 4.83 7 7 +2.17 0

Grey 4.83 8 6 +1.17 -2

Blue 5 9 6 +1.0 -3

White 5.2 8 6 +0.8 -2

Black 5.1 7 7 +1.9 0

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• How did the group discover and use its information

resources? Were these resources fully utilized?

• For groups that experienced synergy, what

occurred during deliberations that facilitated this

outcome?

• For groups that did not experience synergy, what

happened that may have inhibited its occurrence?

• In what kinds of situations would consensus

decision-making be most effective?

• What are the implications?

Leading Decision-Making Groups Exercise: Lost

40

• Teams typically outperform (slightly)

average individual member but often

(vastly) underperform best member

• This does not include

– Process losses

– Commitment to decision

• Implications

– Rather than facilitating best decisions, groups

may instead impede them

– So what to do?

Leading Decision-Making Groups Research Literature

41

Recommendations Effective Group Leadership

• Shoulder your share of the responsibility for the group's

success

• Express your own opinions and explain yourself fully

• Present organizing/process ideas

• Move group forward; redirect discussion when group is “off

track”

• Use flexible patterns of communication so that all members

of your group will be able to participate equally

• Minority opinions should be encouraged

• Listen to others and be ready to modify your own position

on the basis of logic and understanding

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Recommendations Effective Group Leadership (Continued)

• Avoid arguing for your own position in order to "win"

• View disagreements or conflict as helping to clarify the

issue, rather than as hindering the process; do not "give in"

if you have serious reservations; instead, work toward

resolution.

• Refrain from conflict-reducing techniques such as voting,

averaging, trading, compromising, or giving in to keep the

peace

• Do not assume that an answer is correct just because there

is agreement initially—discuss reasons and explore all

possibilities

43

Class #4

Section 4

Clayton Case

44

1. How would you grade Peter Arnell’s first two months as subsidiary general manager in Clayton SpA? What were his key problems and constraints? Do you think Arnell understood them?

2. Do you see Arnell as having caused problems or inherited problems? Which ones and why? 3. What plan of action should Arnell recommend to Briggs and Buis? To be effective, what of their

motivations and biases should he take into consideration? 4. Does the option of collaborating with the Spanish company to produce absorption chillers offer a

more promising, lower risk strategy? And how would that best be structured? 5. What do you think Buis believed Arnell would bring to the job of general manager of Clayton? Do

you think he would have panned out in an objective selection process? 6. After having learned about “state of the art” selection processes, if you were staffing the Country

Manager, Italy position, what methods would you use? How would you make a decision? How would you evaluate effectiveness?

7. Do you think Buis, Briggs, and Arnell would make the best decisions as a team? Why or why not?

Should there be others involved, and how should the division of power be exercised if they did elect a team approach?

8. Describe how you would convince your bosses to back your recommendation. 9. Was Arnell the right choice for the job? Is he still?

45

Class #4

Section 5

Leadership Feedback Reports

46

EMBA 60616: Leadership and Decision-Making

Fall 2013

Leadership Feedback Report

I. M. Irish

Professor Timothy A. Judge August 16, 2013

Vision Charisma

Transc-endence

Courage

47

SLOW FAST

Confr

on

t

Collabora

te

48

Transformational Dimensions From COVET Model

• Vision

– A vivid image of a future imagined direction or goal

• Charisma

– Magnetic appeal through personal charm and power,

interpersonal communication

• Courage

– Overcoming fear, danger, or cost to achieve important

outcome

• Transcendence

– Change from present state toward idealized state

49

• COVET is a non-proprietary measure of

transformational leadership, the best-

supported and most studied model of

leadership

• Transformational leadership has been

studied with hundreds of thousands of

employees, in thousands of organizations, in

more than 100 countries, at all levels of

leadership

Transformational Leadership COVET

50

• Vision – Shares his/her values and beliefs with others

• Charisma – Communicates in powerful and captivating way

• Transcendence – Looks for trends and suggest new ways of

doing things

• Courage – Stands up for what s/he believes

• Effectiveness – Leads an effective group or unit

Transformational Leadership COVET Dimensions

51

• You and others evaluated 30 statements: 6

for each COVET dimension

– Range: 1=strongly disagree to 5=strongly

agree

• Scores are normed for class and population

– Your score is standardized meaning that: 0 = average relative to norm

+100 = one standard deviation above norm

-100 = one standard deviation below norm

Transformational Leadership COVET Measure

52

Transformational Leadership COVET: Your Self-Reported Scores

Raw

Score

2011

EMBA

Norm

2012

EMBA

Norm

2013

(Class)

Norm

Vision 3.83 13.15 -14.14 -41.10

Charisma 4.50 147.53 122.83 151.34

Transcendence 3.67 -34.82 -34.82 -49.88

Courage 3.00 -185.82 -152.02 -164.73

Effectiveness 3.00 -47.88 -52.74 -84.13

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Transformational Leadership COVET: Your Other-Reported Scores

Raw

Score

2011

EMBA

Norm

2012

EMBA

Norm

2013

(Class)

Norm

Vision 3.33 -211.73 -142.81 -193.04

Charisma 4.00 4.83 32.29 40.72

Transcendence 2.83 -262.18 -177.58 -230.63

Courage 4.50 109.20 123.40 99.91

Effectiveness 3.00 -190.73 -141.16 -180.53

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• Consideration and Initiating Structure were

measured with Leader Behavior Description

Questionnaire (LBDQ), developed at Ohio

State and the most carefully validated

measure of leader behavior approach

• Ethical leadership measured with Ethical

Leadership Scale, developed by Penn State

researchers and the most validated measure

of ethical leadership

Behavioral/Ethical Leadership The Measures

55

• Consideration – Backs up the members in their actions

– Treats all group members as his equals

• Initiating Structure – Emphasizes the meeting of deadlines

– Lets group members know what is expected of

them

• Ethical Leadership – Disciplines employees who violate ethical

standards

– When making decisions, asks “what is the right

thing to do?”

Behavioral/Ethical Leadership The Measures

56

• You and others evaluated 34 statements: 12

for consideration, 12 for initiating structure,

10 for ethical leadership

– Range: 1=strongly disagree to 5=strongly

agree

• Scores are normed for class and population

– Your score is standardized meaning that: 0 = average relative to norm

+100 = one standard deviation above norm

-100 = one standard deviation below norm

Transformational Leadership The Measures

57

Behavioral/Ethical Leadership Your Self-Reported Scores

Raw Score

2011 EMBA Norm

2012 EMBA Norm

2013 (Class)

EMBA Norm

Consideration 4.00 49.43 33.18 0.40

Initiating Structure 3.33 -112.38 -122.84 -147.11

Ethical Leadership 4.20 -25.46 -14.92 -57.51

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Behavioral/Ethical Leadership Your Other-Reported Scores

Raw Score

Population Norm

Last Year EMBA

Norm

This Year EMBA

Norm

Consideration 4.50 151.24 124.35 130.11

Initiating Structure 3.75 -64.67 -65.06 -64.96

Ethical Leadership 4.70 110.98 127.90 105.80

59

Self vs. Other Ratings

3.83

4.50

3.00

3.67

3.00

3.33

4.00

4.50

2.83 3.00

2.50

3.00

3.50

4.00

4.50

5.00

Vision Charisma Courage Transcendance Effectiveness

60

Self vs. Other Ratings

4.00

3.33

4.20

4.50

3.75

4.70

2.50

3.00

3.50

4.00

4.50

5.00

Consideration Structure Ethical

61

COVET Leadership Self v. Other Averages (This Year’s Class)

4.06

3.51

3.93 3.84

3.50

4.10

3.81 3.86 4.08

3.84

3.00

3.50

4.00

4.50

Vision Charisma Transcendence Courage Effectiveness

Self Other

62

COVET Leadership Self v. Other Averages (Last Year’s Class)

3.92

3.58

3.90 3.90

3.34

3.96 3.79 3.82

3.98 3.77

3.00

3.50

4.00

4.50

Vision Charisma Transcendence Courage Effectiveness

Self Other

63

Behavioral/Ethical Leadership Self v. Other Averages (This Year’s Class)

4.00 3.92

4.42 4.09 3.97

4.41

2.50

3.00

3.50

4.00

4.50

5.00

Consideration Structure Ethical

Self Other

64

Behavioral/Ethical Leadership Self v. Other Averages (Last Year’s Class)

3.89 3.87 4.27

3.97 3.95 4.26

2.50

3.00

3.50

4.00

4.50

5.00

Consideration Structure Ethical

Self Other

• This is a scatterplot where

every dot is a class member

who had personality and

leadership reports completed

on him/her

• The figure shows that there is a

strong relationship between

extraversion and charismatic

leadership

• Implication? To be more

charismatic, act more

extraverted

• Result is impressive because

both personality and

leadership were evaluated by

others

r=+.64

r=.64

Extraversion and Leadership

2

2.5

3

3.5

4

4.5

5

2.5 3 3.5 4 4.5 5

Chari

sma

tic

Leaders

hip

Extraversion

r=.64

Dependent Variable=Other Rating of Leadership

Effectiveness

Beta T-Value

Class (1=2013, 0=2012) .07 -0.02

Vision (other-report) .31 2.87**

Transcendence (other-report) .30 3.13**

Consideration (other-report) .34 4.38**

• When predicting other-

reported ratings of

leadership effectiveness

with other-reported

leadership behaviors, three

leadership behaviors stood

out:

• vision (COVET)

• transcendence (COVET)

• consideration (Ohio State)

• When predicting other-

reported ratings of

leadership effectiveness

with self-reports of these

behaviors, only vision

emerged as important

Dependent Variable=Other Rating of Leadership

Effectiveness

Beta T-Value

Class (1=2013, 0=2012) .03 0.30

Vision (self-report) .36 3.07**

Transcendence (self-report) .00 0.02

Consideration (self-report) .01 4.04

Predicting Leadership Effectiveness

• Predict leadership

effectiveness (other-rated)

with other ratings of:

• vision (COVET)

• transcendence (COVET)

• consideration (Ohio

State)

• Save predicted values from

regression, and plot these

predicted values against

leadership effectiveness

• Again, every dot in the

scatterplot is a class member

who has a corresponding score

on job satisfaction and

general motivation

Predictions of Leadership

Effectiveness

1.5

2

2.5

3

3.5

4

4.5

5

1.5 2 2.5 3 3.5 4 4.5 5

Leaders

hip

eff

ect

iveness

(oth

er)

Predicted effectiveness from regression

r = .78 r2 = .60

Leadership Dimension and

Leader Effectiveness

Self-Other

Correlation

Vision .60**

Charisma .46**

Transcendence .35**

Courage .39**

Effectiveness .60**

Consideration .44**

Initiating Structure .37**

Ethical Leadership .27**

68

Leadership Dimensions/Effectiveness Correlations Between Self and Others

Note: Self Self-reported

Other Other-reported

Table entries are correlation coefficients.

Item Analysis

69

Mean

rating other

SD rating

other

Agreement

others

Self- report

rating

Other - self

diff. Item

5.00 . Medium 3 2.00 Stands up for what s/he believes (COURAGE)

5.00 . Medium 3 2.00 Holds true to his/her convictions, even if they are unpopular (COURAGE)

5.00 . Medium 3 2.00 Is willing to put him- or herself “on the line” for the good of the group (COURAGE)

5.00 . Medium 4 1.00 Backs up the members in their actions (CONSIDERATION)

5.00 . Medium 4 1.00 Makes group members feel at ease when talking with them (CONSIDERATION)

5.00 . Medium 4 1.00 Looks out for the personal welfare of individual group members (CONSIDERATION)

5.00 . Medium 4 1.00 Conducts his/her personal life in an ethical manner (ETHICAL)

5.00 . Medium 4 1.00 Listens to what employees have to say (ETHICAL)

5.00 . Medium 4 1.00 Makes fair and balanced decisions (ETHICAL)

5.00 . Medium 4 1.00 Can be trusted (ETHICAL)

5.00 . Medium 4 1.00 Sets an example of how to do things the right way in terms of ethics (ETHICAL)

5.00 . Medium 4 1.00 Has the best interests of employees in mind (ETHICAL)

5.00 . Medium 5 .00 Has a magnetic presence; draws others toward him/her (CHARISMA)

70

Class #4

Section 6

Wonderlic Personnel Test

71

Exercise

• Take the Wonderlic

• You have 12 minutes

• I will give you the method for your scoring

later

• After taking the test, what do you think?

• Do you think such a test is racially biased?

Exercise

72

Class #4

Section 7

Human Resource Decision-Making

(cont’d)

73

Cognitive Ability Tests

• Cost: inexpensive – Wonderlic: As low as $2/applicant

• Validity: very high (rxy=.50) – Valid for all job types and all organizations

• Use: relatively low (10-20%)

• Applicant reactions: generally negative—

test is controversial

• EEO: highest adverse impact

74

Cognitive Ability Tests

• Every candidate for NFL draft takes the

Wonderlic: http://www.wonderlic.com/NFL-

video

• NFL quarterbacks are intelligent—the

average QB is at about the 80th percentile

Former Cincinnati Bengals

Punter Pat McInally reportedly

scored a perfect 50 on the test –

if true, he is alone in that top

spot among NFL players

75

Ryan Fitzpatrick 48 Alex Smith 40

Eli Manning 39 Matthew Stafford 38

Tony Romo 37 Sam Bradford 36

Aaron Rodgers 35 Tom Brady 33

Matt Ryan 32 Brian Brohm 32

Matt Schaub 30 Philip Rivers 30

Matt Hasselbeck 29 Marc Bulger 29

Peyton Manning 28 Drew Brees 28

Mark Sanchez 28 Joe Flacco 27

Jason Campbell 27 Josh Freeman 27

Jay Cutler 26 Carson Palmer 26

Kyle Orton 26 Colt McCoy 25

Shaun Hill 25 Ben Roethlisberger 25

Jimmy Clausen 23 Chad Henne 22

Brett Favre 22 Tim Tebow 22

Michael Vick 20 Derek Anderson 19

Bruce Gradkowski 19 Vince Young 16

Donovan McNabb 16 David Garrard 14

Very

Inte

lligent

Inte

lligent

Ave

rage

or

belo

w

76

Testing Wonderlic and the NFL Combine

50

60

70

80

90

100

110

120

0 10 20 30 40 50

Rating

Wonderlic Test Score

201

0 Q

uart

erb

ack

Ra

ting

Is there a

correlation

here?

Yes…

r=+.25

Without Fitz-

patrick, r=+.30

95

75

77

Testing Wonderlic and the NFL Combine

• Does the correlation between Wonderlic

scores of NFL QBs’ performance prove that

intelligence is important to job performance? – Why or why not?

• Do you think more organizations should use

testing in hiring decisions? – Why or why not?

78

Cognitive Ability Tests Racial Differences

0%

5%

10%

15%

20%

25%

30%

0 10 15 20 25 30 35 40 45 50

White

Black

Ability Test Score

Fre

quency

of

Sco

res

79

Fairness of Cognitive Ability Tests

Job

Performance

Test Score

Black applicants

White applicants

Mw

Mb Mw

Mb

Conclusions: Tests are basically fair

•Predict performance for both groups

•Predictor differences are accompanied

by criterion differences

80

Personality Tests

• Overall correlation in .40 range – Most predictive Big Five traits tend to be

conscientiousness, neuroticism, extraversion

• Still a minority of companies use them

• Best measures for use in selection – Personal Characteristics Inventory

http://www.wonderlic.com/assessments/personality/five-factor-

personality-profile

– Hogan Personality Inventory http://www.hoganassessments.com/hogan-personality-inventory

– Some very good measures are free

81

Personality Tests

• Bigger users: Dell, PepsiCo, Bank of America

• Smaller users – Aquarium of the Pacific (Long Beach, CA)

• One of largest aquariums in world

• “I see people who treat each guest like the first

guest of the day. They’re thriving in this environment

instead of being burned out by it.”

82

• Most widely used selection measure (90%+)

• One of the most expensive substantive

methods to use

• Applicants see interview as valid

• Interview has not been as scrutinized by

courts as other methods despite prevalence

of inappropriate questions

Interview

83

Interview

• Historically, one of the least valid methods of

selection

• Why the poor validity?

1. Primacy effects: role of prior information

2. Poor recall

3. Negative information

4. Poor reliability among interviewers

5. Role of physical appearance

84

Improving the Interview

1. Panel interviews

2. Train interviews

3. Interviewer selection

4. Structured interview

5. Focus on fit

85

Structured Interviews

TYPES OF STRUCTURED INTERVIEWS

Future-Oriented (Situational)

• Suppose you had an idea for a change in work procedures

to enhance quality, but there was a problem in that some

members of your work team were against any type of

change. What would you do in this situation?

(5) Excellent answer (top third of candidates)--Explain the change and

try to show the benefits. Discuss it openly in a meeting.

(3) Good answer (middle third)--Ask them why they are against the

change. Try to convince them.

(1) Marginal answer (bottom third)--Tell the supervisor.

86

Structured Interviews (cont’d)

TYPES OF STRUCTURED INTERVIEWS

Past-Oriented (Behavioral Description)

• What is the biggest difference of opinion you ever had

with a co-worker? How did it get resolved?

(5) Excellent answer (top third of candidates)--We looked into the

situation, found the problem, and resolved the difference. Had an

honest conversation with the person.

(3) Good answer (middle third)--Compromised. Resolved the problem

by taking turns, or I explained the problem (or my side) carefully.

(1) Marginal answer (bottom third)--I got mad and told the co-worker

off, or we got the supervisor to resolve the situation.

87

Drug Tests

• Use – 85% of Fortune 500

– 49% of Fortune 1000

• Reasons for use

• Validity (accuracy)=high if proper

procedures are followed

• Utility: U.S. Postal Service study

• Testing process: Eastman Kodak

88

Applicant

hired by

EKC

EKC

drug

screen

Applicant’s

urine

collected

Hirer

requests

drug test

EKC makes

offer to

applicant

Applicant

hired by

EKC

Sample

tested by

ind. lab

Applicant

not hired

by EKC

Applicant

hired by

EKC

EKC CMO

reviews

use

Note: EKC=Eastman-Kodak Company. CMO=Chief Medical Officer.

positive

test legal

use

positive

test

illegal

use

N=negative

test

N

N

Drug Tests Kodak’s Drug Testing Program

89

Drug Tests

• Applicant reactions

• EEO/adverse impact

• Recommendations for use – Limit testing to jobs with safety implications or

other pressing needs

– Do not use screening tests in isolation

– Get consent from applicants

– Apply testing uniformly

– Review program/validate

90

Putting It All Together A

pp

lican

t #

Ap

plic

atio

n

GM

A T

est

Un

likel

y V

irtu

es

Per

son

alit

y C

OR

E

CO

RE

Ad

just

ed

CO

RE

TO

TAL

CO

RE

Ad

just

ed T

OTA

L

Wo

rk S

amp

le-W

riti

ng

Wo

rk S

amp

le-E

-Mai

l

In

terv

iew

TO

TAL

Wei

gh

ted

*

PE

RC

EN

TIL

E W

eig

hte

d

TO

TAL

Z W

eig

hte

d

1 81.67 53.38 4.63 7.50 2.87 83.33 63.78 90.36 47.25 82.50 71.43 75.64 0.86

2 70.00 76.54 5.58 6.91 1.33 76.78 29.56 85.71 74.00 79.75 73.37 82.92 1.27

3 67.50 44.51 3.37 6.88 3.51 76.44 78.00 55.00 75.75 73.63 65.42 46.20 -0.47

4 63.33 45.92 6.53 7.25 0.72 80.56 16.00 13.93 68.75 69.38 52.67 3.81 -1.56

5 53.33 64.38 5.74 6.95 1.21 77.22 26.89 65.65 63.75 75.25 63.30 35.38 -0.36

6 60.00 58.34 5.47 7.50 2.03 83.33 45.11 64.29 48.00 75.15 62.68 32.40 -0.53

7 76.67 65.33 4.11 7.35 3.24 81.67 72.00 84.64 68.75 75.13 74.16 85.41 0.79

Application .25

GMA Test .35

Personality CORE .15

CORE Adjusted .15

Work Sample 1 .25

Work Sample 2 .25

Interview .40

91

Applicant # 1 7

Wonderlic Intelligence Test

Raw Score 29 31

TOTAL (Percentile) 88 93

Editing Work Sample

Returned 2/28/2012 4:35 PM 3/1/2012 10:42 PM

Error ID Score 96 107

Subjective Rating 88 88

TOTAL 92 97.5

EOB Work Sample

Returned Sunday, March 04, 2012 3:15 PM

Accuracy (Error-Free) 92 95

Quality 92 94

TOTAL 92 94.5

Letters of Reference

Favorability 9.17 9.25

Relevance 9.67 7.50

Credibility 9.00 7.00

TOTAL 92.78 79.17

92

Putting It All Together

Applicant # 1 7

Application 81.67 76.67

GMA (IQ) Test 53.38 65.33

CORE TOTAL 83.33 81.67

CORE Adjusted TOTAL 63.78 72.00

Work Sample-Writing 90.36 84.64

Work Sample-E-Mail 47.25 68.75

Interview 82.50 75.13

TOTAL--Including Latest Information

TOTAL Weighted 80.57 82.94

TOTAL Z Weighted 0.20 0.49

Percentile Weighted 57.93 68.79

93

94

Putting It All Together The Importance of the Right Fit

• People who like their jobs are

much more likely to feel that they

identify with (are affectively

committed to) their employer

• Every dot in the scatterplot is a

class member who has a

corresponding score on job

satisfaction and affective

commitment

1

1.5

2

2.5

3

3.5

4

4.5

5

1 2 3 4 5

Aff

ect

ive c

om

mitm

ent

Job satisfaction composite

95

Putting It All Together The Importance of the Right Fit • Result shows that perception that

one has considerable discretion

and latitude in how work gets

done has a strong bearing on

overall job satisfaction

• Both autonomy and job

satisfaction were self-reported

• Every dot in the scatterplot is a

class member who has a

corresponding score on autonomy

and job satisfaction

1

1.5

2

2.5

3

3.5

4

4.5

5

1 2 3 4 5

Job

sa

tisf

act

ion

com

posi

te

Autonomy

96

Putting It All Together The Importance of the Right Fit • Feedback (from the work itself)

also had a strong correlation with

overall job satisfaction

• Note that this is feedback from

the work rather than from others

• Thus, feedback is the degree to

which one can tell how well one is

doing from the work itself

• Every dot in the scatterplot is a

class member who has a

corresponding score on feedback

and job satisfaction

1

1.5

2

2.5

3

3.5

4

4.5

5

1 2 3 4 5

Job

sa

tisf

act

ion

com

posi

te

Feedback

97

Putting It All Together The Importance of the Right Fit • People who like their jobs are

much more likely to report a high

degree of work motivation

• Every dot in the scatterplot is a

class member who has a

corresponding score on job

satisfaction and general

motivation

1.5

2

2.5

3

3.5

4

4.5

5

1.5 2.5 3.5 4.5

Genera

l m

otiva

tion

Job satisfaction composite

98

Recommendations

• The right fit is important

• Use tests in selection, particularly cognitive

ability, conscientiousness, core self-

evaluations

• Realize value of interview for what it’s worth

• Be objective in decision-making, including

quantifying and weighting information

99

Class #4

Section 8

Break

100

Class #4

Section 9

Exercise: The Player

Resolving Differences: Fixed Pie Perceptions

• Assuming your interests and other party’s

interests are opposed

– 80% of negotiators have this perception

– Leads to information availability errors (Pinkley,

Griffith, & Northcraft, 1995)

• More prevalent in individualist cultures like

U.S. due to focus on self (vs. other) interests

(Gelfand & Christakopulou, 1999)

• Fixed pie perceptions made worse under

high time pressure (De Dreu, 2003)

• Why is fixed pie perception a problem? 101

Resolving Differences: Why Are Fixed Pie Perceptions A Problem?

102

• Fixed pie perceptions are “bad” because

they bias

– Information search: Fail to ask for information

about other’s preferences because they assume

they are in opposition

– Information processing: Distort or ignore

information about other’s preferences even

when it is available

• Key: Differences aren’t always ‘bad’

Resolving Differences: The Faults of Pie-Splitting

Your area is more, even though your share is less,

in B than A

A B

Other You Other You

103

Other

You

Resolving Differences: Telltale Signs of Win-Win Potential

• Does negotiation contain more than one issue?

– Allows for possibility of trading off to achieve joint gain

• Though increased # issues results in lower negotiator satisfaction

due to counterfactual thinking (Naquin, 2003)

• Can other issues be brought in?

– Bring in issues that were not previously considered

• Can side deals be made?

– Example: logrolling, etc.

• Do parties have different preferences across negotiation

issues?

– By definition this is win-win potential!

104

Pareto-Optimal

Utility for Party B

Utilit

y f

or

Part

y A

105

Resolving Differences: The Player

• Read instructions (15 min)

• Receive roles and form assigned dyads

• Negotiate (20 min)

• Complete and turn in

• 1-green “Settlement Form” – one from each

person and signed

• Discussion

106

Dyad Director Points Producer Points Total

1 Venugopal, Venu Wieckowski, Kara

2 Brothers, Kris Schad, Matt

3 Greiner-Quiett, Eli Fitzgibbon, Joshua

4 Webster, Daniel Speckman, Jason

5 DiDonna, Mike Kraus, Tom

6 Rousseve, Dan Frey, Mike

7 Vitale, Brian Bronk, Meredith

8 Ray, Chip Schoenig, Demetra

9 Telman, Ji Davis, Glen

10 Conley, Chris Holguin, Martin

11 Yuran, Mark Green, Rebecca

12 Iglesias, Leslie Morales, Jackie

13 Davis, Jodi Day, George

14 Corbett, Tim Bush, Cathy

The P

layer

Dyad Director Points Producer Points Total

15 Talarico, Nick Pranke, MaryAnn

16 Zulich, Tim Morales, Seth

17 Purdy, Matt Doyle, Tim

18 O’Donnell, John Sullivan, Scott

19 Grim, Grim Mathieson, Mark

20 Hudson, Michelle Zimmerman, Andy

21 Manica, Joe Ziss, John

22 Kuhlmann, Chris Bryant, Jeremy

23 Baerlocher, Anthony Fogarty, Danny

24 Lazenga, Nate Sanchez, Hipolito

25 Reynolds, Natalie Eyler, Cory

26 Malenich, Greg Peaker, Jerome

27 Carman, Joe Grzegorzewski, Ron

28 Reed, Mo Wyatt, Jeff

The P

layer

The Player Discussion Questions

• Score your performance on two dimensions

• Distributive performance: Your individual points

• Integrative performance: Combined dyad points

• Are both important? Why?

• Was a more integrative agreement

possible?

– Did anyone bluff? Did you share information?

– Did you negotiate using packages?

– Did you set an aspiration point? Was it helpful?

109

110

Class #4

Section 10

Case Discussion: Engstrom

111

1. Describe the Scanlon Plan from four perspectives -- that of the company, the managers, the union leaders, and the workers – in terms of pros and cons. What are the understood goals of the Plan from each viewpoint? What are the understood pitfalls?

2. What are the three components of the Scanlon Plan? How well were each of these executed?

Where were opportunities missed to capitalize on the framework? 3. Why do you think enthusiasm waned and dissatisfaction grew at Engstrom? Is the root the Scanlon

plan, or what other factors do you see as directly impacting the workers’ experience? Could the situation have been avoided or do you see it as the natural life cycle of an initiative?

4. From your textbook reading, what do you see as the probable and/or potential impact factors of

these formerly extrinsically satisfied but now dissatisfied workers on the future of Engstrom? What type of behaviors do you consider as likely to be linked to employees’ dissatisfaction with the Scanlon plan?

5. What could Bent have done in answer to the employees’ grievances about Scanlon? Be specific in

your recommendations. 6. How may the Scanlon plan’s bonus calculations have been streamlined for better employee

understanding and/or communicated in a more transparent manner to increase the perception of equitability?

7. Drawing from the textbook and class, what are your recommendations for motivating a workforce

such as Engstrom’s? Do you feel employee incentive plans work, and are they enough? What value do you place on extrinsic versus intrinsic motivators?

8. One of the troubling aspects to the consideration of continuing the Scanlon Plan is the decrease in

employee engagement as evidenced by fewer employee suggestions. Describe the pros and cons of the current suggestion plan process. Do you see anything in the structure or implementation of the current suggestion plan process that may explain the drop off in suggestion rates, from an OB perspective, or do you see the decrease as indicative of another company problem altogether?

9. How does this conflict with or support what we have learned from the text about the key drivers of

job satisfaction? What does this suggest in terms of increasing job satisfaction? 10. From a personality standpoint, what type of employee would excel in the 2007 environment at

Engstrom as a sales person? A production worker? A manager? An executive?

112

Class #4

Section 11

Wrap-Up

113

• Readings summaries for Chapters 12, 13,

and (optional) 14 due

• “Campbell & Bailyn”, “Thomas Green” case

discussions

• To Do List

– Read textbook chapters write ½ page/each

– Read cases and prepare answers

– Your Personal Development Plan is due

August 24

Next Class Leadership and Leading the Dark Side