Higher Education Yields Higher Job Performance

May 6, 2009

Does education equal performance? I think this is a question that merits some examination. I know few parents or educators that would seriously suggest that education does not bear upon job performance. However, these individuals are not necessarily impartial. What do employers think? Just look at your biodata form (application blank). Near the top you ask applicants to provide details about their education. Look at the stack of resumes lurking in the HR office, all of them have a nice fat section devoted to telling you how well educated you applicants (supplicants?) are. Look at the descriptions of your vacancies; you frequently tell potential applicants that a bachelor’s is required, but a Master’s is preferred. Why exactly is that? By and large, organizations extend higher wages to individuals with more education. Some organizations go as far as to subsidize their employee’s higher education. Is all of this worth it? Where is the evidence demonstrating that this expense is worthwhile? The meta analysis I review today provides some of that evidence. The authors of this study (Thomas Ng and Daniel Feldman) examine the relationship between education and job performance. This study combined the results of 293 other studies containing 332 independent samples for analysis. The study reports on a number of variables, including:

  • Education level (grade school through graduate work)
  • Performance
    • Core task performance
    • Performance in training programs
    • Organizational citizenship behaviors
    • Creativity
    • General counterproductive work behaviors
    • Workplace aggression
    • On-the-job substance abuse
    • Tardiness
    • Absenteeism
  • Moderators
    • Overall work experience
    • Job tenure
    • Job level (manager vs. non-manager)
    • Job complexity (low vs. high)

Results

Basic Relationships

  • Education level was positively related to core job performance. As education levels rose, so did job performance
  • Education level was positively related to Organizational Citizenship Behaviors (OCB). Employees with more education were more likely to engage in OCB.
  • Education level was not related to performance in training programs. People with lower educational attainment were just as likely to succeed in training programs as employees with higher educational attainment.
  • Education level was positively related to creativity. Individuals with higher educational levels tended to be rated as more creative by their supervisors and peers.
  • Educational level was not related to general counterproductive behaviors. Employees with high educational attainment were just as likely to engage in general counterproductive behaviors as employees with lower educational attainment.
  • Education was negatively related to workplace aggression and on-the-job substance use. Employees with higher levels of education were less likely to engage in these specific counterproductive behaviors.
  • Education level was only weakly and negatively related to tardiness. Though employees weigh lower educational attainment were statistically more likely to be late to work, the difference was not very large.
  • Education levels were negatively related to objective measures of absence and health-related absence, such that individuals with more education tended to be absent less often.

Moderated Relationships The authors also tested a number of more complex relationships between the variables included in this study. Specifically, they wanted to see if certain variables (called moderators above) would change the basic relationship between the key variables in this study (education level and job performance). Authors report a number of interesting findings where moderation is concerned:

  • Neither work experience, nor job tenure changed the relationship between education level and job performance.  Authors expected that being on a job or career for longer would strengthen the impact that more education has on job performance. The data did not support this expectation.
  • The education to performance relationship was only moderated by job level (manager vs. non-manager) for organizational citizenship behaviors. Non managers with more education were more likely to engage in OCB than manager with more education.
  • The relationship between education and performance was stronger for more complex jobs. As expected, more complex jobs benefit to a higher extent from increased education levels than less complex jobs.

The” Take Home” Message

So what does all this mean for the human resources practitioner or the manager? Generally speaking, one may reasonably expect better performance and fewer problems from employees with more education. Of course, if you have ever read any of my blog posts, you already know it isn’t that simple. More education is thought to contribute to the various types of performance because more educated individuals have acquired and refined a myriad knowledge, skills and abilities (KSA). Each of these can be transferred to the workplace, perhaps any workplace. These KSA may include:

  • Intelligence
  • Abstract reasoning
  • Numerical reasoning
  • Verbal reasoning
  • Oral and written communication
  • Time management
  • Relationship building and maintenance
  • Impression management
  • Impulse control
  • Perseverance on difficult tasks
  • Goal setting
  • Growth needs strength
  • Conscientiousness
  • Team membership

It is important to understand, that in the context of this study, education levels serve as a proxy for all these skills in combination. This does not guarantee that someone with a college degree will have communication skills, or that someone with nearly a Ph.D. will have fantastic time management skills (just ask my boss). If the job in question requires high levels of mathematical reasoning, an advanced degree in underwater basket-weaving will probably not be the best predictor of job performance. In this case, education level is not a great predictor, but plenty of publishers will be happy to sell you some very good measures of mathematical reasoning. What we can say as a result of this study is that all things being equal, more education contributes to better performance. Is your educational reimbursement program worth the expense? Yes, so long as it is executed properly. Should one extend preference to college graduates when all other considerations are equal? Again, probably yes (if all other things are equal- seriously, this is an important point). Perhaps more importantly, when it comes time to cut those payroll checks (does anyone still use checks?) are all those college-boys (and girls) worth it? Yes… Probably.

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Posted by George Guajardo

Satisfied Employees Yield Satisfied Customers

April 24, 2009

A recent research brief by Satoris Culbertson in The Academy of Management Perspectives, summarized research findings concerning the relationship between employee job satisfaction and customer satisfaction (original article was published in the Journal of Retailing). Any of you familiar with this column probably realize that this is a bit of a departure from what I normally do on this blog; I normally review original work, not reviews of original work. However, I think this article is interesting enough to feature on this forum in its current form. Not to worry, this is not a permanent shift. The Research Question Does increased employee job satisfaction lead to satisfied customers? This is an important question for many industries, not just retailers. Common sense suggests that happier employees make happier customers. However, I am not the kind of person that is satisfied with common sense. When I recommend an organizational intervention, I insist that it be supported by hard numbers, not simply gut feelings. Organizational interventions are an investment and stakeholders are entitled to anticipate a return (if you do not need this kind of information before purchasing a service, please contact me immediately!). Further, if this relationship really was simply a question of common sense, then I fail to understand why employees with the most contact with customers are often the last considered for job satisfaction enhancement initiatives (profit-sharing, benefits, work-life balance programs, performance bonuses, etc.). This meta-analysis statistically combined the results of 28 independent research studies that simultaneously collected data on employee job satisfaction and customer satisfaction. Culbertson reports the following results:

  • Increased job satisfaction was positively related to both customer satisfaction and customer perceptions of service quality.
  • The link between employee job satisfaction and customer satisfaction was stronger when said services were rendered to the customers themselves, than when the service was provided to the customer’s possessions. So, when the service was rendered to the customer directly, employee job satisfaction had a greater impact on subsequent customer satisfaction. The same relationship was observed when predicting perceived service quality.
  • The link between employee job satisfaction and customer satisfaction was not moderated by the type of relationship they had. Employee to customer relationships can take a number of different forms. This study focused on two of these; the single-exchange relationship that is very often encountered in retail organizations and client-type relationships that tend to be longer in duration and feature a number of distinct exchanges. Common sense might suggest that the richer, more involved client relationship is more sensitive to employee job satisfaction, but the data does not support this line of reasoning (see why I am suspicious of “common sense”?). By contrast, the relationship between employee job satisfaction and perceived service quality was moderated by relationship type, but not in the expected manner. Employee job satisfaction was more important for single-service encounters than for client-type relationships.
  • The relationship between employee job satisfaction and customer satisfaction was mediated by perceived service quality. In other words, data reveals that employee job satisfaction seems to have its direct impact on perceived service quality. Service quality then has a direct impact on customer satisfaction. Data do not reveal a direct link between employee job satisfaction and customer satisfaction. [Note: this research brief does not mention whether this relationship was fully or partially mediated. If you are familiar with this article, I would appreciate clarification.]

Applied Implications This pattern of results is pretty self-explanatory. For the most part, it makes intuitive sense. If customer satisfaction is important to your industry (I can’t think of any that are immune to this concern, though it is probably more important to some than to others), then it is in your best interests to keep your employees satisfied with their jobs.   I can only speculate about the rationale behind the results concerning relationship type. My familiarity with social psychology suggests a number of reasons why the single-encounter relationship is more sensitive to employee satisfaction. I am interested in hearing speculations from my wonderful readers!

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Posted by George Guajardo

Turnover Contagion and Job Embeddedness

March 23, 2009

I honestly did not intend to address the topic of employee turnover so soon after my last blog post. Out of the dozens of articles I could have featured today, I was drawn to this article about turnover contagion soon to be published in the Academy of Management Journal. It is probably fair to assume that the current economic climate and the almost daily layoff announcements have made this topic particularly salient. So, let us blame this topic selection to what academics often call “MEsearch.”

This article examines turnover from a perspective we may not often think about, despite the fact that we probably see it pretty often. Turnover Contagion refers to the influence our co-worker’s turnover intentions and behaviors have on our own. The desires of a few people to leave an organization can spread to others, exposing companies to loss of rare talent, damage to valuable client relationships, displacement of key knowledge and employee replacement costs.

I recently saw a first-hand example of this curious, but not all together surprising, phenomenon. A colleague of mine, Trixy (I have changed names to protect the not-so-innocent) told me about some layoff rumors in her company. Not wanting to be caught off-guard, Trixy polished off her resume and went on the hunt for greener pastures. At some point, she apparently mentioned her search to one of her trusted co-workers who promptly asked Trixy if she should search too. Over the course of a few weeks about a dozen people jumped into the job search. [Note: I should mention that the layoff rumors were not true, nor has anyone been successful in finding alternate employment.]

Review
So why is it that one person’s desire to leave an organization “spills over” to others? As it turns out, this type of social influence is pretty prevalent, just not often framed in terms of employment decisions. People influence each other all the time, mostly without even meaning to (intentional persuasion is another beast entirely). Plenty of social psychology research confirms this human tendency and reveals that conditions under which social influence is most likely. The article I consider today focuses on just one of these conditions: uncertainty. When people are not sure how to behave, we look around us to see what others are doing. The general idea is that if other people are doing something, it is probably the right thing to do (see social proof for more information). I am sure we can all think of certain situations where this rule of thumb would be problematic (it turns out that if your friends jumped off a bridge, the likelihood of you jumping too rises quite a bit… sorry, mom), however, it works out pretty well in most situations. The authors of this study posit that a job search is precisely the kind of ambiguous situation where the behaviors of others can be influential.

Felps and colleagues throw job embeddedness into the mix. Briefly, job embeddedness refers to to the extent to which people are involved in their organizations and their corresponding communities. Employees with more friends at work, more ties with the communities in which they live and who’s skill sets are well-matched to their jobs are substantial less likely to leave an organization.

These two forces seem to be contradictory. On the one hand, turnover contagion can increase turnover intentions. On the other hand, job embededness can reduce it. So what do employees do when they are rate high on one scale and low on another? This is one of the questions posed by these researchers.

Findings

The study authors report a number of variables that predict voluntary turnover behaviors (involuntary turnover is not tracked). Specifically, results indicate that individual job satisfaction, organizational commitment and job embeddedness are negatively related to voluntary turnover behaviors. So, as each of the three predictors increase, voluntary turnover decreases. As for turnover contagion, analysis indicates that an employee is less likely to seek new employment if their co-workers also refrain from these activities. Indeed, these researchers indicate that turnover contagion is about as important as job embeddedness is in this decision.

Application

In applying these findings to our own organizations, we can focus on the two variables discussed in this study: Enhancing job embeddednesss and reducing the effects of turnover contagion.

Where job embeddedness is concerned, employers are in a great position to insure that employees feel like a vital part of the organization. Well-designed recruiting, selection and retention initiatives can promote a good match between employees and their jobs. Mentorship programs can promote strong ties among employees, as can other social programs (organizationally-sponsored groups, promotion of team-driven projects, etc.). Employers can even encourage employees to enhance ties to their communities by allowing time for community organizations or school programs.

Avoiding the negative effects of turnover contagion can be a bit more tricky. Employers may be tempted to prohibit job-search related communications, but this would be exceedingly difficult to enforce and would have a negative impact on job satisfaction and job embeddedness. Instead organizations can reward, or otherwise encourage close relationships between management and employees. These relationships can pay off in institutional awareness of employee concerns. If people are talking about layoff rumors or sufficient dissatisfaction than can lead to voluntary turnover, management can only address these if they are aware of what employees are talking about.

For my final reccommendationt, I focus on the uncertaintly related to the job search. People all over the world are concerned with being on the wrong side of a reduction in force. Even unfounded rumors can lead to otherwise satisfied employees looking for a new organization. Keeping quiet about this fact only hurts the organization. Layoff concerns must be addressed. If your organization is not planning to engage in layoffs, then be proactive and inform your people. If layoffs are a possibility, be honest and specific about the conditions under which layoffs may be necessary and how people can help prevent this.

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Posted by George Guajardo

Another Way of Looking at Absenteeism

February 23, 2009

Introduction

Some topics we study in organizational science are more abstract than others. Concepts such as organizational climate and psychological contract are important, are not always salient as we power through our workday. The same can not be said of employee absenteeism. People somehow seem to notice when half of your sales force mysteriously falls ill the day after the Super Bowl. Absenteeism is one of those facets of organizational life that is tangible, easily understood and just plain noticeable at any level of the organization.

 

Generally speaking, absenteeism is undesirable and we strive to reduce it as much as possible. It stands to reason that to reduce absenteeism, it is important to understand what drives it. A recent article published in the Academy of Management Journal helps us consider the antecedents of absenteeism from a slightly different perspective. Much of the research on this topic focuses on factors contributing to an individual’s absenteeism (job satisfaction, organizational commitment, personality and demographic characteristics, etc.). However, this article’s authors (John Hausknecht, Nathan Hiller and Robert Vance) point out that individual-level factors provide only a fraction of the total picture. These researchers suggest that a number of unit-level factors also contribute to overall absenteeism.

 

To illustrate the difference between individual-level and unit-level absenteeism, think of a small company with three departments: sales, production and accounting. Within the production department, some individuals miss more work than others. These differences are at the individual-level. It is only when we compare the average absenteeism rates of the production department as a whole against the same metric for the sales department that we are considering unit-level absenteeism.

 

Review

This article begins by explaining some key differences between individual and unit level of absenteeism. Below are a few key points:

§         Unit-level absenteeism is influenced by social experiences shared by the unit in question that may be unique to that group. Different work units adopt their own estimates of how much absenteeism is too much and what circumstances lead to legitimate absences.

o       I have had personal experience in some organizational units where a vigorous toe-stubbing was sufficient for a day of sick leave. By the same token, I have worked in others where a half-day is appropriate only if paramedics are involved.

§         Individuals adjust their absenteeism rates to conform to levels acceptable in their group.

§         Factors contributing to unit-level absenteeism do not replace factors influencing individual-unit absenteeism. These are distinct phenomenon, despite their similarity. As a result, both of these concepts contribute to overall levels of absenteeism. To understand (and control) absenteeism at your workplace, it is important to take both into account; they both matter.

 

Findings

So, what are some factors that contribute to unit-level absenteeism? These authors report some findings that should be pretty familiar to readers of organizational literature: Job satisfaction and organizational commitment predict unit-level absenteeism. These authors also found that prevailing labor market conditions also contributes to unit-level absenteeism.

 

Job Satisfaction. Much like individual-level job satisfaction, unit-level job satisfaction speaks to the “sense of enjoyment individuals derive from their experiences on the job…” The big difference here is that the focus is on the shared sense of satisfaction for the work-unit as a whole. This aggregation of individual job attitudes begins to make intuitive sense when we consider that a unit’s supervisor has a tremendous impact on job satisfaction of individuals; some supervisors are better than others, so we might expect some similarity in job satisfaction within their unit. More to the point, “average” job satisfaction of the workgroup may be remarkably different for another workgroup within the same organization.

 

Results of this study indicate that the relationship between job satisfaction and absenteeism is about what one would expect: As unit-level job satisfaction increases absenteeism decreases.

 

Organizational Commitment. Unit-level organizational commitment is also analogous to its individual-level counterpart. These authors defined this variable as the “collective affective or emotional attachment to an organization.” Results related to organizational commitment are also relatively straightforward: As unit-level organizational commitment increases, absenteeism decreases.

 

I should note that it is possible for work units to score high on job satisfaction and low on organizational commitment. This interaction between the variables was also important in predicting unit-level absenteeism. Work units with the least amount of absenteeism were high on both job satisfaction and organizational commitment. Work units with the highest rates of absenteeism were low on both of these predictors. Interestingly, organizational commitment seemed to be the more important of the two predictors of unit-level absenteeism.

 

Local Labor Market Conditions. This economic variable may be somewhat less familiar to readers of organizational science literature. It makes intuitive sense that availability of alternative job opportunities would influence employee’s absenteeism behavior. If jobs are hard to come by, it is in the best interest of employees to try to retain their current job. By the same token, employees maybe more liberal with their absences in a labor market where employees are in higher demand.

 

Analysis revealed that unemployment rates do influence absenteeism rates. Specifically, a high unemployment rate weakens the relationship between both predictors (job satisfaction and organizational commitment) and absenteeism. In other words, when the unemployment rate is low unsatisfied (or uncommitted) employees will be absent from work considerably more often than other employees. This situation changes in time of higher unemployment. When they have fewer alternatives, employees tend to be absent at about the same rate without regard to job satisfaction or commitment.

 

Applied Implications

After 22 pages of some pretty technical reading (I must admit, some of these analyses were less than familiar to me), what have we learned? How does this research help us add value to our organizations? Below are a few of the “take home” messages:

·        Job satisfaction and organizational commitment matter. These are not simply theoretical mumbo-jumbo that we see on a yearly employee survey. These numbers have real implications to how we run our business and how much it costs us to do so.

·        Employees know their worth. Employees know when they have economic alternatives and when they don’t. If employees do not feel valued by an organization they will act in ways that balance the scales… if they can.

·        Absenteeism is controllable. If your organization is having issues with absenteeism, you can do something about it. Increasing job satisfaction and organizational commitment is not always all that difficult. An investment of effort and capital towards improving employee attitudes can yield a substantial, measurable return on investment.

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Posted by George Guajardo

Stereotyping at Work: Discriminating Between What We Know and What We Think We Know

February 16, 2009

Stereotyping. The word itself has a distasteful ring to it. When we think about stereotyping in the workplace, this discomfort grows along with our awareness of the negative associations linked with that word: injustice, intolerance, prejudice, litigation. As unpleasant as it may be, stereotyping is an important facet of organizational life and it is our collective responsibility to understand it, least we unwittingly “invite it into our homes.”

 

Helping us understand this sometimes complex and frustrating phenomenon, the December 2008 issue of Industrial and Organizational Psychology: Perspectives on Science and Practice featured a vibrant exchange on the topic. For those unfamiliar with the format of this publication, I should point out that it is a bit different from other refereed journals. Each issue features two (2) focal articles on important organizational topics, as well as a substantial amount of commentary and reaction from a wide variety of researchers and practitioners. Debates on these pages can get “lively” and they really encourage diverse, critical analysis on these issues.

 

Review

The author of this focal article, Frank Landy, begins by explicitly linking stereotypes to personnel decisions. The reason stereotypes are of interest to organizational scientists and practitioners is their potential to impact decision-making in applied settings. Landy’s primary thesis is that empirical research has not effectively demonstrated that stereotypes actually impact personnel decisions (selection, promotion, compensation, retention, etc.). According to Landy, the strongest statement research can legitimately offer is that stereotyping might, under certain conditions, degrade the quality of real-life personnel decisions.

 

Landy offers a few lines of evidence in support of his argument:

1)     Current evidence for stereotype use in personnel decisions are almost exclusively from the laboratory. Since the lab context is so different from the real world, these findings do not generalize to applied settings.

2)     Stereotypes are only used by decision-makers when they experience a paucity of information about their target. Since the vast majority of personnel decisions are made in information-rich contexts, the impact of stereotypes is negligible.

 

Analysis

Given the format of this publication, the burden of providing analysis to Landy’s article has been lifted from my shoulders. This article generated a total of 13 responses and rebuttals from well-respected contributors. Some of these responses were quite “spirited” (I strongly recommend reading through a few of them) and largely disagreed with Landy’s evidence and the conclusions drawn from them. The rebuttals addressed a number of issues:

1)     Research setting (laboratory vs. field) is not sufficient consideration to draw conclusions about result generalizability. Laboratory findings can inform field settings. So long as the populations are similar in important ways, an argument can be made that what happens in one context can happen in another.

2)     Available field studies agree with laboratory studies, suggesting that stereotypes are used in personnel decisions in applied settings.

3)     Stereotypes have been shown to be resistant to information-rich contexts. So, even when decision makers have sufficient information to abandon stereotype use, they often use stereotypes anyway.

 

Applied Implications

The disagreement among these authors is unambiguous. So what should practitioners take away from this exchange? What have we learned? Perhaps the most comfortable conclusion we can draw from this debate is that stereotypes may potentially influence important personnel decisions. What is less clear is when this may happen and whether it happens at levels great enough to justify the expense of formal interventions. We must ask ourselves, “what are the costs and consequences of assuming stereotypes DO impact personnel decisions?” We can then compare these against the costs/consequences of assuming stereotypes DO NOT impact these decisions.

 

Another way of looking at this issue is to treat it, not as a dichotomous choice (yes it happens versus no it does not happen), rather examine the decision-space in-between. If stereotypes play a role in our decisions, how and when does it happen? More importantly, how can we reduce their influence? Thankfully, the research literature makes a clearer contribution here. Authors on both side of this debate point out a number of ways our organizations can minimize the potential influence of stereotypes on personnel decisions:

·        Enhance objectivity and transparency of personnel decision-making systems.

·        Identify and discourage organizational climates that are tolerant of stereotyping and bias.

·        Provide ample motivation and opportunity for decision-makers to make fair personnel decisions.

·        Increase the extent to which decision-makers are held accountable for their decisions.

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Posted by George Guajardo

An Introduction to the Blog

February 12, 2009

If you have found your way to this forum, you are probably a practitioner of organizational science. Maybe you are a manager, or a human resources representative. Perhaps you contribute to your organization’s training initiatives, leadership programs or change management systems. Whatever it is that you do on a daily basis, many of your decisions are informed by research findings from disciplines like Industrial/Organizational Psychology, Business Management and Strategic Human Resource Management. At least, they could be if only you had the time to read all the new research that pours out of the scientific community every month.

Let’s face it, we are very busy. Even in the best of times we are so pressed for time that reading the newest Academy of Management Review never seems to cross itself off of our to-do-lists; and these are NOT the best of times. This is the genesis of In Plain English. Every month, I will briefly review a recent research article, provide some analysis and most importantly share some insights on how you can leverage this knowledge to improve your organization. I will even moderate a discussion section for each of these blog entries, for those of you intrepid enough to jump into the fray.

My goal for In Plain English is the creation of an exciting, educational, potentially enlightening and even occasionally entertaining channel of discourse for practitioners of organizational science. If you have an idea on improving this forum, or if you wish to recommend an article for review, please send me an email. I look forward to hearing from each of you.

2 Comments | Human Resources, Management, Organizational Development, Training and Assessment, business management, industrial/organizational psychology, strategic human resource management | Tagged: | Permalink
Posted by George Guajardo