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.
What is Positive Organizational Behavior (POB)?
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.
Masten, A. S. (2001). Ordinary magic: Resilience process in development. AmericanPsychologist, 56, 227-239.
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.
Seligman, M. E. P., & Schulman, P. (1986). Explanatory style as a predictor of productivity and quitting among life insurance sales agents. Journal of Personality and Social Psychology, 50, 832-838.
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.
Timothy, my first job as a graduate engineer was to implement a program based on Demings’ work into Ford Australia. This involved going to the states to be trained by guru. Having met the man I would have to say that he might deserve the title of “father of positive psychology in business”.
When I read positive psychology research I am often struck by the thought “so what’s new?”. PP might be new in therapy, but it certainly isn’t in organisational psychology. I’d speculate this might explain why PP is slow to take off in business – because business has heard it all before.
This is an interesting speculation, Wayne. Assuming you are right, what’s taking so long for businesses to take action? Business leaders might have heard the PP ideas before, but apparently they weren’t convinced the first time around since management paradigms haven’t changed all that much in decades.
That being said, we’re just starting to make progress and I think the scientific validation is what’s helping. As more and more studies correlate well-being with bottom line results, PP’s popularity will increase and organizations will become better places to work. And then business leaders will say “we should have done this 20 years ago!”
There’s a quote that says “It’s not about where we are; it’s about where we are headed.” I think this is very true of PP.
Marie J – All good points. However I think there is a bigger question here.
Lets assume that my speculation is correct that PP is not new to business. The question really is why weren’t these interventions successful in the past and what can PP learn from this?
The research might get people interested but how do you make the intervention stick?
Thanks for another wonderful contribution. I find that the time is ripe for POB, especially during this time of economic shifting. I believe MarieJ also raises valuable points about slowly changing management paradigms and the correlation of well-being with bottom line results. Applying the scholarship of POB will ultimately result in helping work organizations and people reciprocally thrive.
Best to you,
I don’t think PP interventions weren’t successful in the past; I think they were never given a fair try. A lot of business people still discredit them as “overly touchy-feely crap” – something I’ve actually heard earlier this week!
PP is much like eating, sleeping and exercising: you have to keep doing it to get the benefits! 🙂
So you are right, Wayne, stickiness of the interventions isn’t anything to brag about yet. It is work. That’s why I think PP fits so well in organizations: people are at work. They expect to make efforts.
Many leave their natural personalities at home to wear their professional masks at the office. That’s effort too! If professionalism was defined in warmer terms and made more room for hope, gratitude, excitement and the like, effort level might be the same, but it would be more uplifting (and hence, more productive). It would have benefits on the personal side of things as well.
Hi Elaine –
Thanks for your nice words and encouragements as usual.
Economic recession leads us think about the other way round about happiness in life and work while PP offers a scientific method to understand and acquire happiness. The concept of 4 psychological resource capacities is only one of the many ways to apply POB, my another favorite is Authentic Leadership, what’s yours?
Besides, looking forward to seeing you in Philadelphia in summer.
Wayne, thanks for raising a great question.
To me, I have another speculation over W.E. Deming’s title as the ‘father of positive psychology in business’. No doubt Deming has offered many inspiring concepts in management, say the 14 points and 7 Wastes. However, by definition PP is the scientific study validated by empirical studies, in addition to the pure theoretical concepts suggested by Marty, and I think this applies to the application of PP in business as well.
So the new trend would be how those interventions in business are tested and validated and thus boosting business leaders confidence adopting them might be the shining point of PP in the result-oriented business community. Let evidence speaks!
Timothy, You might argue that the success of Japanese industry is a reasonable test of what were Demings theoretical models. But perhaps I’m just playing with words.
Good summary of what PP brings to the workplace. MJ and Wayne raise a very valid question: with all of the data available, why haven’t more organizations moved toward POB? My experience in both the for-profit and not-for-profit sectors is that they are resistant to what they believe is the “flavor of the week.” They were introduced to TQM, Six Sigma (now Human Sigma, Situational Leadership, etc, as the answer to their problems only to have the next leadership team, or next crisis sideline the initiative and eventually offer something in its place. For POB to become valid in the business context it has to be seen as more than a quick fix, or a program. It has to be presented as an entire organization paradigm shift toward productivity (one of the few words that really gets attention in the business context). Only then can the four resource capabilities you mentioned above be offered. However, we have to be careful to use the language of business, not too much psychology, and show the link to productivity and performance.
Thanks Tim. Fun article and interesting discussion.
Scott, Isn’t this the biggest challenge for PP – it really isn’t that differnt from all the other flavours of the month and as a consequence will be “tarred with the same brush”.
If the issue is about deployment, then won’t PP have the same problems as the other flavour of the month.
Exactly! When PP is presented as a program it will go the way of all the flavors of the month. As practitioners we have to be selective in our language and framing so organizations see PP as a shift in focus that affects any “program” they adopt and affects the entire organization not just one workgroup.
Scott – so unless there is a major shift in management then PP in business will go the way of the do-do?
Scott, I could not agree with you more! A shift in focus that affects any ‘program.’
Brilliant point Scott! I can’t agree more with you on trying to promote and adopt PP in business as an entire organization instead of organizing merely one or two workshop(s).
Besides, re the language of business, which is another insightful thought as from my experience in consultancy, you can never convince people from the commercial settings without stressing on productivity and performance. To apply PP to business, then, making sure that business leaders realize what advantages PP might bring instead of using psychological jargons might determine its success.
The language and paradigms being used are not likely to resonate with corporate Decisonmakers. Indeed, remmber that the decsionmaker might be at risk if there are no resultsd, so why take the risk? The language used is too academic and, frankly, “holistic.”
One needs to be able to say: “If you spend $45,000 on this program, it will result in $ 80,000 in productivity savings. At the same time, it will make your employees happier and more fulfilled, thus saving you x% on your health care and lost sick days. ” “We have the science to support those claims..this is not more hocus pocus from positive thinking academics or real world drop outs… ”
In short, you need to speak the decisonmakers language.
The rest is just mumbo jumbo for which no one has time… af6ter all, “I have a business to run, and they should find their happiness with their dogs, mistresses and wives….”
And that, too, raises a very interesting question. Most of us realize that the vast majority of people work better when they feel good. We’ve experienced it for ourselves, we’ve seen it in others and quite a few have also read about it somewhere (like on PPND maybe, or even in business magazines). Shouldn’t this knowledge help alleviate the perceived risk?
Yet, the attitude you are describing Leanrainmakingmachine, prevails. Too many heads of businesses still think that happiness is something we should care about at home, and not at work. They ignore a very basic fact of motivation, yet they think they are effective leaders!
Very interesting that businesses find pride in their objective decision-making ability, and disregard info that is both intuitively obvious and scientifically validated!
MarieJ, It is absolutely about language and results. That’;s why I use software that makes the intangible (positive emotions) tangible. Rather than talk happiness I talk positive emotional intelligence. From a business perspective, happiness is for the self help section of the bookshop.
Hi Timothy, I love that you connected Deming and PP! To me, positivity in business is at roughly the same place quality/TQM/Deming was in the late 1980s (U.S. & Eur). Companies were using 6 Sigma a decade before Jack Welsh made it popular.
For me, the good news is that senior leaders respond very well to the positive approach. I don’t have nearly the trouble explaining or influencing them to try it that I did with Deming-like ideas. Of course, as Marty said long ago, many successful people are optimists, so they tend to “get it.”
I agree with those who said don’t make it a program and don’t use jargon.
As you so aptly state, many were leading from a positive perspective long before PP was established, but the problem and weakness orientation is still an underpinning of organizations and it is truly nice to have data and specific approaches to support positive approaches now.
Thanks for a great article and disucssion,
It really is a communications issue and a “rate of return” decision. I’m not convinced that business decionsmakers actually “know” that happier workers will be sufficiently more productive to justify an investment in their happiness. Indeed, we all know folks who seem to flourish in a business sense who are otherwise miserable and miserable people. I have represented several people on the Forbes 400 List, and some of them have been just miserable people. Indeed, I believe an undercurrent in many organizations is that the meanest, most ruthless, least happy person winds up as CEO.
And, these decisonmakers do not react all that well to “happy workers will be more productive..” They would react well to ” there’s a proven program to increase your productivity by $50,000 per month and reduce your health care/ health related costs by $10,000 a month, and I’ll “give it to you” for, say, just one month’s savings. I have the proof from an external academic source of the productivity gains…
Unfortunately, I believe another factor is that some decisonmakers are miserable and the last thing they want is for everyone else to be happy…
PP knows well that “misery loves company…”
I do believe that as the scientific validation becomes more well known and well settled, organizations will pursue strategies thast take advantage of the results of that science, if they can correlate the studies with a clear change that will likely result in financial gain –either in productivity, health costs, absenteeism, cost of turnover, etc…
For those interested in more on Deming’s ideas, I have put together some thoughts on Deming’s Management philosophy. Also my Curious Cat Management Improvement blog Deming category includes many posts on the topic.
Successfully engaging business in applications of PP theory requires cultural changes and, as we all know, that demands the engagement of the CEO and can be a long process. Plus, if the culture supports my business, or at least I feel it does, then why bother with this long-term unproved strategy, and therein’s the crux, as noted above. However, the demographic profile is shifting and the new generations are less accepting of the old paradigms. I believe that there is a convergence of a critical mass of thinking, supported by empirical evidence, that is growing, and, a demographic shift that will enable its implementation. We need to be working on methodologies that provide the roadmaps for the corporate world to integrate business values with employee values and pilot them for showcasing. Thank you Timothy for your work.