As an occupational psychologist and a Ph.D candidate in management, I am fascinated by the application of positive psychology in organizations. There has been a widespread discussion on whether or not positive psychology is effective from a business perspective (see discussions from Business Week (here and here) and The Economist (here).
In response to the PPND monthly theme, I’d like to focus on positive psychology and organizational performance, and share the main points of my article “Positive Organizational Behavior (POB) in Managerial Decision Mahttp://www.ticonzero.info/articolo.asp?art_id=3344king” (Giachetti & So 2009), first published on Ticonzero, a European management and business journal.
A case study
Mr. Deming had a theory of management based on optimism, hope, motivation and positive way of being. During the 50’s, he went to the top three U.S. automakers with a plan for changing their manner of doing business. Instead of maintaining an archaic hierarchical system of management, Deming developed a system of management basing on collaboration, team-building, positive encouragement and reinforcement of employees. He felt that a shift in the management style would give the American automakers a needed edge in dealing with foreign competition from Europe and Japan. The CEO’s of American automakers could not understand the vision and the implications of Deming’s theory on the strategy and performance of their firms. On the other hand, competitors from Japan used William Deming’s “collaborative management” style and began producing vehicles that were significantly superior in quality to American counterparts. Because the workers were granted a vested interest in corporate goals and were positively reinforced for their efforts, they were motivated to produce quality products. Most of the managers that adopted Deming’s theory were able to transfer to their employees a number of “capacities”, such as hope, optimism, self-efficacy and resiliency. In turn employees’ new way of perceiving firm goals positively influenced firm strategic behavior and performance.
The case study above, written by Walton 20 years ago, is still a good illustration of POB and its influence on firms’ strategy and performance. POB is defined by Luthans (2002) as “the study and application of positively-oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace” (p.52). Luthans and Youssef (2007), define Self-efficacy, Hope, Optimism, and Resiliency as four key psychological resource capacities that best meet the inclusion criteria for POB, which enhances managing effectiveness and organizational performance.
The four POB psychological capacities
Self-efficacy, defined by Bandura as the belief that one has the capabilities to “execute the courses of actions required to manage prospective situations,” represents the best fit with all the criteria of POB among all the four capacities. Self-efficacy belief appears to determine how much effort people will spend on a task and how long they will persist with it.
Hope is defined by Snyder, Irving, and Anderson as “a positive motivational state that is based on an interactively derived sense of successful (1) agency (goal-directed energy) and (2) pathways (planning to meet goals).” With the hope to achieve certain goals, employees have the sense of agency or internalized control that creates the determination and motivation (willpower) to accomplish their goals. They would also be able to create and use alternative pathways and contingency plans to achieve their goals and overcome obstacles (waypower).
Optimism is defined by positive psychologists as a cognitive characteristic in terms of an expectancy of positive outcome and/or a positive causal attribution. However, Christopher Peterson, the Science Director of the VIA Institute on Character, has once noted that managers should keep in mind that “Optimism is not simply cold cognition, and if we forget the emotional flavor that pervades optimism, we can make little sense of the fact that optimism is both motivated and motivating.”
Resiliency is defined by Luthans (2002) as “the capacity to rebound or bounce back from adversity, conflict, failure, or even positive events, progress, and increased responsibility.” Unlike traditional conceptualizations of resiliency as an extraordinary capacity that can only be observed and admired in highly unique individuals, the positive psychology perspective in management on resilience is that it is a learnable capacity that can be developed in the most ordinary of people and measured as state like. Luthans and Youssef proposed that resiliency in workplace embraces a proactive dimension that promotes discrepancy creation even in the absence of external threats.
Why is POB special?
First, instead of focusing on people’s weaknesses, POB encourages managers and leaders to build on peoples’ strengths, rather than just focusing on fixing weaknesses.
Second, the four key POB capacities are state-like, not trait-like, which means they can be learned and developed. This implies that performance can be improved by focusing on self-efficacy, hope, optimism, and resiliency — more effective than trying to change fundamental personality traits.
Third, POB not only improves performance and management effectiveness, it results in positive behaviors such as altruism, conscientiousness, civic virtue, sportsmanship, and courtesy. POB encourages principled actions and appropriate whistle-blowing.
Examples of practicing POBs in workplace
With such promising impact on work performance and employee well-being, how is POB actually practiced in the workplace? Examples include:
- Empowering employees and encouraging them to express their opinions on the firm’s issues. Companies like Starbucks and Virgin are among the best examples of employee empowerment.
- Developing and maintaining optimism in workplace, especially during adverse times. American Express Financial Advisors once used optimism in developing its associates. Such optimism training follows specific guidelines leading to significant enhancements of work outcomes (Luthans, 2002).
- Developing a more comprehensive recruitment or appraisal system, analyzing strengths rather than weaknesses. Bandura’s work suggests strength-based systems would enhance employees’ self-efficacy. The experience of Norwich Union (here) might offer you some insights.
Peter Drucker, the father of “modern management,” claimed that ‘the basic assumptions underlying much of what is taught and practiced in the name of management are hopelessly out of date and wrong’ in his publication, In Management’s New Paradigms. With the positive psychology movement, as well as the application of positive management or POB, it is very likely that we are on the right track adding value to modern management.
Bandura, A. (1982). Self-efficacy mechanism in human agency. American Psychologist, 37, 122-147.
Giachetti, C., & So, T. (2009) Positive Organizational Behavior (POB) in Managerial Decision Making. Ticonzero, 96, 212-219
Luthans, F. (2002). Positive organizational behavior: Developing and managing psychological strengths. Academy of Management Executive, 16, 57-72.
Luthans, F., & Youssef, C. M. (2007). Emerging positive organizational behavior. Journal of Management, 33, 321-349.
Luthans, F., Youssef, C. & Avolio, B. (2006). Psychological Capital: Developing the Human Competitive Edge. Oxford University Press.
Luthans, F., Zhu, W., & Avolio, B. J. (2006). The impact of efficacy on work attitudes across cultures. Journal of World Business, 41, 121-132.
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Nelson, D. L. & Cooper, C. L., Eds. (2007). Positive Organizational Behavior. London: Sage Publications.
Peterson, C. (2000). The future of optimism. American Psychologist, 55, 45.
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Snyder, C. R., Irving, L., & Anderson, J. (1991). Hope and health: Measuring the will and the ways. In C. R. Snyder & D. R. Forsyth (Eds.), Handbook of Social and Clinical Psychology (Pergamon general psychology series)(pp.285-305). Elmsford, NY: Pergamon.
Walton, M. (1988). The Deming Management Method. Perigee Trade.
Walton, M. (1991). Deming Management at Work. Perigee Trade.
Youssef, C. M., & Luthans, F. (2007). Positive organizational behavior in the workplace: The impact of hope, optimism, and resilience. Journal of Management, 33, 774-800.