Test 2

Question 1

Major Leadership Theories. What is situational leadership

Answer 1

Always ask 3 questions before choosing how to act:

1. 1.How much control do I have in this situation?
2. 2.How able and willing are my followers to follow?
3. 3.How urgent is the situation?

Then use the continum in the picture to know what to do

**this is also know as contingency leadership

Question 2

Lessons from Home Depot (2)

Answer 2

Calculation of turnover costs. If you can decrease this, it can be a lot of savings

Don’t need to calculate, but understand the information that you need to do that:

1. # of Employees (around 300,000)
2. Replacement cost (1:1)
3. average Salary (30K)

= (300,000*.14)*30,000 = $1.26 Billion

Customer satisfaction

They had less employees, which is why it was low

Solution: “more aprons on the floor” = more people there (who are well trained) to help out

Question 3

Main causes of faulty reward systems (4)

&

How to Fix Faulty Reward Systems (Kerr Article)

Answer 3

Causes:

1. Fascination with Objective Criterion = simple, quantifiable standards and metrics work in work with highly predictable outcomes, but this can be “faulty” when applied elsewhere
2. Overemphasis on Visible Behaviors = whoever scores the goal gets the recognition, but the person who passed her the ball. Same in that team-building and creativity may be underemphasized because it isn’t “visible” to managers
3. Hypocrisy (what behaviors are really desired?) = the rewarder may have been getting the desired outcome, in spite of claims that the behavior was not actually desired.
4. Emphasis on Other Ends like morality or equity (instead of efficiency) = the 1994 Clinton health plan was a system that rewarded inefficiency, while arguing that this was for some “higher objective”

How to fix = Our reward systems need to align with the right outcomes. Example: we usually ask “did you visit”, but do we want to reward for just a visit? We need to change.

Question 4

ESSAY: 5 Types (or Sources) of Power*

Answer 4

1. Expert [PERSONAL] = Based upon an individual’s special knowledge and/or skills
2. Referent [PERSONAL] = Based upon admired personal qualities and reputation
3. Legitimate [ORGANIZATIONAL] = Based upon an individual’s position in the formal hierarchy
4. Reward [ORGANIZATIONAL] = Based upon the capacity to control distribution of valued rewards
5. Coercive [ORGANIZATIONAL] = Based upon fear, intimidation, and the capacity to control punishment

Essay: briefly explain any 3 or 4 of those 5 sources of power, and what could you do to increase in those things. Or what types of power do you think each person holds in this situation, and what would you do if you’re participant A in order to increase your power.

Question 5

Major Leadership Theories. What is a behavioral leader?

Answer 5

• = do as I’m doing (e.g., in remember the Titans, Gary wanted team-focused behaviors, but Julius isn’t seeing that from Gary. Bottom line:be the EXAMPLE! The things you say matter, so you better embody those (be consistent) )
  
  • These leaders are:
    
    • People-oriented (Consideration) = look out for employee’s welfare
    • Task-oriented = assign specific tasks and push employees to reach performance

Question 6

ESSAY: Daniel Pink What Motivates us? Key Takeaways

Answer 6

Key motivators:

1. Autonomy – one day of autonomy produces something that would’ve never emerged (get out of their way)
2. Mastery – we care about mastery (this can be hard b/c we aren’t there long enough to be a master) - this can be done on or off the clock
3. Purpose – organizations want to have a transcendent purpose (how does their role fit in with the purpose)

if it’s a more complex tasks, higher incentives leads to poorer performance. But incentives can increase performance in mechanical tasks

Pay just enough to take money off the table as an issue

Question 7

Customer Outcomes – SRR (p. 134) = this is a measure that tells you if you got “what’s right” for the customer

Answer 7

S - satisfaction

R - repurchase

R- recommend

Question 8

Manage by Exception (2 main things)

Answer 8

1. BREAK THE GOLDEN RULE - everyone is different:
   
   1. Becca likes beating others. Adam likes beating himself
2. Ask your people:
   
   1. Ask your employee about his/her goals
   2. How does she like recognition (was is most meaningful recognition)
   3. Ask about past mentors. How did they help?

Question 9

Major Leadership Theories. What are 4 characteristics of a transformational leader?

Answer 9

Charisma + the 3 I’s:

1. Charisma – higher than average
2. Individual consideration = customize behaviors and message to individual followers, based on their needs
3. Intellectual stimulation = Steve Jobs good = trying to cause others to think differently and push them beyond
4. Inspirational motivation = hold people to a higher bar, but they express confidence that they can hit those marks

Question 10

Define the Right Outcomes – Chapter 4

Rules of Thumb for When to Focus on Steps (not Autonomy for Employees) (3 points) and when to not (1 point)

Answer 10

• Activities involving Accuracy and Safety - don’t break the bank
• Following External Standards -
• The Steps don’t obscure the Outcomes - don’t let the creed overshadow the message - Airlines letting on-time numbers overrule customer satisfaction.
• Don’t try this with Customer Satisfaction

Question 11

Major Leadership Theories. What is transformational leadership (4 things)

Answer 11

• 1.Create vision – going to the moon
• 2.Communicate vision – JFK communication to the nation tha he would put money into the space program, cause his vision was to get to the moon
• 3.Modeling the Vision – (Kotter doesn’t talk about this much) if you’re going to transform a team, you better live it. Be the model!
  
  • 1.Julius and Gary
• 4.Building Commitment – because there is a compelling vision and we see a vision in the leader, it builds commitment. They’re energized by what they see happening.

**NOTE that #3 and #4 are what differentiates a transformational leader from others

Question 12

Focus on Strengths (First Break All the Rules)

Main Ideas (2)

& Reasons Behind why we don’t focus on strengths(4)

Answer 12

1. It’s tempting to try to fix people
2. Each person is different and shouldn’t be changed

Reasons:

1. Universal Potential? (We think we all have the same potential)
2. Persistence Will Always Pay Off? (not everyone will be the best at calculus if they try hard enough)
3. Relationships Preoccupied with Weaknesses? (stop trying tofocus on fixing your spouse)
4. Who is to Blame for Failure?

Question 13

Equity Theory

Answer 13

Motivation Theory

individuals are motivated by a sense of fairness in their interactions. Moreover, our sense of fairness is a result of the social comparisons we make. Specifically, we compare our inputs to outcomes with other people’s inputs to outcomes

If underrewarded, then you’re try to grow outcomes by talking to boss or stealing from company. Or shrink inputs by lowering intensity

If overrewareded, grow inputs through more high-quality work

Question 14

2 Types of Dimensions of Organizational Justice and which one do people care more about?

Answer 14

Distributive Justice – fairness of allocated outcomes (pay raises, promotions, layoffs, other rewards)

Procedural Justice – fairness of the processes that lead to the decisions about employment outcomes

People want a VOICE and CONSISTENCY

if we aren’t happy with the reward we got, then we care a lot more about procedural justice. If we’re happy, I don’t care if the process was fair

Question 15

(OB) Chapter 6.5 Rewarding Employees: Individual Reward Types (5)

Answer 15

piece rate- employees are paid on the basis of individual output they produce.

bonuses- one-time rewards that follow specific accomplishments of employees.

merit pay- involves giving employees a permanent pay raise based on past performance

commissions- involves rewarding sales employees with a percentage of sales volume or profits generated.

Awards-methods that motivate employees through awards, plaques, or other symbolic methods of recognition by conveying sincere appreciation for employee contributions.

Question 16

ESSAY: Decision-Making Approaches*

Answer 16

Rational (6 Steps)

(4th step is most challenging and leads to most failures)

&

Satisficing = how is it different than rational? Not first alternative. Imperfect information, but it’s the first alternative that meets the criteria that you have set in your mind (more of a “good-enough” decision

• = bounded rationality model

Question 17

ESSAY Expectancy Theory*

Answer 17

Will my effort lead to desired performance level?

Will my performance give me the valued outcome that I want?

E –> P –> VO

E = Do i believe that my effort will lead to the desired performance level?

P = if I perform at that level, is that what is rewarded in this organization

VO = do I care about the rewards

Question 18

Spend the most time with your best people

Answer 18

Most managers think they are supposed to be CONTROLLING AND INSTRUCTING, but the core is actually the CATALYST role

Managers do 3 things:

1. create “stretch” expectations
2. Perfect unique style
3. Remove obstacles

Investing in your BEST people is:

1. Fair
2. The best way to learn
3. the only way to reach excellence

Question 19

Motivation Definition (3 things)

Answer 19

Motivation is an individual’s …

1. direction
2. intensity
3. and persistence of effort

Question 20

Negotiation Principles (4 major ideas)

Answer 20

BATNA = Best Alternative to a Negotiated Agreement =

getting good bargains doesn’t mean you’re a good negotiator! It just means you’re a good researcher…however that is a prerequisite for being a good negotiator b/c it means you search out your BATNAs and you have concrete information about your alternatives—not merely guessing.

RP = your bottom line, never reveal your RP.

Anchoring = aggressive first offer - this determines where your offer will be

last slide in decision-making slide deck. THere are the ones we focused on the most:

• know what you are worth
• examine beyond base pay

4 tactics to remember:

1. BATNA = best alternative to a negotiated agreement
2. Define & commit to your reservation price (don’t reveal it)
3. Aggressive 1st offers wherever possible (anchoring)
4. Focus on goal during negotiation & RP after

Question 21

Perception Attribution Theory:

Answer 21

Attribution theory helps us answer the question: “Why is this person behaving that way?” We will make significantly different decisions based on whether we attribute others’ behaviors to internal factors (that is just how that person is) or to external factors (something in that employee’s environment is causing this behavior).

Question 22

Consequences of Sources of Power

Answer 22

Note that Expert and referent are personal, so you can get a lot of power that way (i.e., engagement is best)

Question 23

Manage around weaknesses (4 things)

Answer 23

1. Divising a support system - Glasses for a person with bad eyes
2. Find a Complementary Partner - Managers should always look at how one employee’s valleys can be offset by another person’s peaks
3. How companies prevent partnerships - Strong I’s are the building blocks of great teams
4. Find an alternative role - sometimes the only way to cure poor performance is to get that person out of that role

Question 24

3 Questions to Define the Right Outcomes* (p.133-137)

Answer 24

1. What’s right for customer = these are the 4 customer expectations above
2. What’s right for company = make sure that the outcomes you define for your people are in line with your company’s current strategy.
3. What’s right for the individual (employee) = identify a person’s strengths, then define outcomes that play to those strengths, and find a way to rate or rank those outcomes, then let the person go to work (e.g., dennis rodman example from book)

Question 25

Job Characteristics Model

Answer 25

When do you care about this model? This one isn’t just about poor performance. You may want to use it if someone is performing well Matters when you have high turnover in a particular role because its either too stressful too boring This model can help you redesign the job so that it’s more motivation in the future What do you need to know? Left Hand column [meaningfulness] Skill variety = [meaningfulness] task identity = do I do something from start to finish? Am I involved in the whole process and not just a part? [meaningfulness] task significance = do we think this task is meaningful [responsibility] autonomy [knowledge of results] feedback = do i get feedback on how well I’m performing from either my boss or technology feedback

Question 26

Decision-Making Traps (5)

Answer 26

1. Escalation of commitment = keep throwing more in because you can’t get over the cost you’ve already put it 2. Overconfidence bias = example = falling asleep at the wheel 3. Hindsight Bias = Reconstructing past predictions? - used a lot when looking at others’ mistakes (Apple firing and rehiring Steve jobs) 4. Framing Bias = Glass half-full or half-empty = customers will let go of a discount instead of taking a surcharge (85% lean beaf vs. 15% fat) 5. Failure to Audit Decisions =What worked? What didn’t? Do differently next time?

Question 27

4 Levels of Customer Expectations (p. 129-132)

Answer 27

First, it's good to remember that "there are no steps leading to customer satisfaction." Required steps only prevent dissatisfaction. They cannot drive customer satisfaction. Here are the 4 expectations from customers: 1. Accuracy = (e.g., Learning Suite = you assume that is accurate. If not, it frustrates us) 2. Availability = (e.g., customers expect their preferred hotel chain to offer locations in a variety of different cities) 3. Advocacy (Partnership) = want someone who doesn’t view us as a transaction, someone who listens, someone who is responsive, etc. 4. Advice = customers feel a close bond to organizations that have helped them learn (e.g., colleges have strong alumni associations, or home depot having on-site experts)

Question 28

Influence Tactics (Big 3)

Answer 28

1. •Rational persuasion = data and logic 2. •Credibility = this strengthens the other 2; it strengthens the influence capacity that you have 1. _Credibility comes from:_ 1. Trustworthiness 2. Performance 3. •Inspirational appeals = can help when it’s tough change or when data isn’t available

Question 29

4 Ways Managers Develop Strengths of Employees

Answer 29

1. **Cast people in the right roles -** denis rodman 2. **Manage by Exception -** break golden rule/ask 3. **Spend the most time with your best people -** catalyst 4. **Manage around weaknesses -** a non-talent becomes a weakness when you're in a role that needs that talent

Question 30

Reinforcement (Methods)

Answer 30

**Methods:** Think of the Ikea example. If they go back to the usual way of rewarding sales, will they work as hard as they worked on that day when they gave all the revenue to the employees? Negative reinforcement = •Pop quizzes? When we read and he sees us comment, then he would take away the quizzes

Question 31

Attribution Biases (2)

Answer 31

**Fundamental Attr. Error** OTHER PEOPLE: when we try to understand someone else, we overestimate the internal factors rather than the external factors. We think it’s their characteristics (e.g., not motivated, etc.) and not other external factors **Self-Serving Bias** attribute good things that happen to what you DID (internal characteristics) , and bad things to something else (external factors)

Question 32

ESSAY: Big 5 Model ## Footnote **Potential Essay Q's :** name the different dimensions Assess your own personality or someone else, and give examples as to why you would select certain ones tha are more important Which of these dimensions matter to certain career paths -- be familiar with them

Answer 32

Personalitiy Traits- OCEAN: ## Footnote everyone has some degree of one of these traits **Openness** = curious, intellectual, creative Types of jobs: creative components artistic jobs like to learn new skills - would do well in training settings learning give them an advantage when they enter into new organizations **Conscientiousness** = biggest indicator of success of these five this person is organized, punctual, achievement-oriented, dependable highly desirable in to businesses and recruiters Types of jobs: entrepreneurs **Extraversion - typcially happier at work** Types of jobs: sales effective managers effective in job interviews Do well at adjusting to new jobs **Agreeableness** - higher right people into a premium hotel **Neuroticism** - tempermental (the only negative one) people typically don’t form relationships with nor trust someone like this

Question 33

Major Predictors of Job Performance & Turnover (just know the top row)

Answer 33

know the top row of the chart = these are the major predictors * Job performance = General mental ability = kind of like IQ * Turnover = poor job performance

Question 34

Perception Errors (PHeCeS)

Answer 34

**Projection** – we project our way of looking at the world to make judgments about the behaviors of others We project what matters to us onto others to help us understand why they do what they do * **Halo Effect** – we focus on an observable characteristic of someone else to make inferences about other characteristics we cannot (or have yet to) observe * You focus on one characteristics that you CAN observe, and because of that you make assumptions about others things that you CAN’T observe * **Contrast Effect** – we perceive an event or individual based on comparisons to similar events/individual before or after the current interaction * We compare with others – we want to do better than others * **Stereotyping** – see the text (group characteristics ascribed to an individual)

Question 35

Indra Nooyi Takeaways

Answer 35

**5 C’s of leadership:** Competency Courage & Confidence Communication Skills Consistency Compass - integrity **3 Pillars of Performance with Purp**ose Human Sustainability Environmental Sustainability Talent Sustainability

Question 36

4 Major Leadership Theories

Answer 36

1. Behavioral 2. Situational Leadership 3. Transformational 4. Leader-member exchange (LMX)

Question 37

Heart of Leadership (From Prof. Nielson’s research and his own view, and what the Savior has done) (3 things)

Answer 37

**1.Vision** = Passion with a plan (not like most politicians—they don’t usually have a plan) **2.Integrity** = Do what you say you will do—make fewer commitments, but live up to the ones that you do make, especially as parents **3.Service** = Develop and encourage others

Question 38

ESSAY: Goal-Setting Theory\*

Answer 38

if you set good goals, people will be more focused and be more persistent toward the goal outcome SMART Goals Specific, Measurable, Aggresive, Realistic, Time-Based * You want goals that are ***_accepted_*** by employees (set them with employees) * you use SMART framework to get past general goals (go from general to SMART) * you want ***feedback***

Question 39

Reinforcement Schedule

Answer 39

**Schedule:** Behaviors: * Continuous * IKEA couldn’t do this with their example, b/c they’d lose out (rats that go through the maze, and they get cheese at the end, everytime) * Problems: costs, and entitlement that no longer motivates (you assume that you’ll get it) * Fixed ratio: * You know when the reinforcement will come. Frequent purchase card (every 10th sub you’ll get a free sub) * Variable Ratio – better from a motivational standpoint = don’t know when the reinforcement will come (vegas slot machine) Time (days): Problem with interval, it doesn’t really motivate you. Fixed interval This is your paycheck – this just encourages you to do just enough to keep your job (exception could be commission based) Variable Interval Ikea doing it a day of the month, w/o telling them Someone from headquarters showing up for the day as positive reinforcement

Question 40

Leader-Member Exchange (LMX)’

Answer 40

* Leader can have an in group and an out group * Upper left corner of picture = these are characteristics that will be more likely to get you into the in group * your performance always gives you a better chance to be in the “in-group” * You want to be in the “in group” -- assume this when you go into an organization * When it’s high-stakes, the leader will turn to the in group

Question 41

What do you need to calculate Employee Turnover Cost? (3 things)

Answer 41

of employees replacement Cost average salary