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Effective Managers Understand Psychology

Written by: Leslie Allan

Article Overview: Novice managers often struggle to get the best out of their people because they labor under a one-dimensional view of what motivates their employees. In this article, Leslie Allan illustrates how a little psychology can return huge dividends.

Effective Managers Understand Psychology

Many managers and supervisors struggle to get the best out of their employees. Do you have difficulty understanding why your workers behave the way they do? Sometimes this is because managers mistakenly assume that everyone is like them: “I like a lot of detail, so everyone else must as well”. And when an employee turns in a report that looks like an executive summary, this type of manager stresses to find out what went “wrong” with the employee.

In other cases, the manager works on the assumption that their employees’ preferences are the opposite of their own. This type of manager, for example, believes that employees are motivated primarily by their paycheck whilst they themselves are motivated by a stiff challenge.

What both these types of managers share is that they are both one-dimensional; seeking to explain all or most of their employees’ behaviors by a single cause. People are much more complex than this. Being able to appreciate some of this complexity will help make otherwise unintelligible behaviors understandable. Using this knowledge to then shape employee behavior will not only take some of the stress out of managing people, it will lead to greater rewards as employees begin to work with you and not against you.

Without wading through a lot of theory, let me illustrate the power of psychology with a real-life example. In one computer production facility, the production manager wanted to lift production levels. To do this, she implemented a new incentive scheme in which production workers would receive a 5% increase in their take home wage if they increased the number of units produced by 30%. This did require some effort on the part of the employees as the productivity gains could only eventuate if each of them learned how to use the new microprocessor-controlled cutting machine.

The production manager was absolutely bamboozled that after going to some considerable length to explain the new compensation scheme the employees’ productivity had not budged at all. The production manager quickly put her lack of success down to the employees being “stupid”. How could this manager have got a better result?

Consider first other reasons for why the employees may not have worked more productively, in spite of the new incentive scheme. Perhaps a bonus was something that they wanted, but they thought that a 5% increase was not enough to make a noticeable change to their living standards. So, we could say that the proposed outcome was not of sufficient value to the employees for them to change their behavior.

A second reason could be that although the workers thought the bonus to be of enough value, they believed it unlikely that they would get the bonus even if their productivity increased. Managers may have promised extra rewards for the employees on previous occasions without actually fulfilling their promises. In this case, the workers believed that there is only a very weak link between their improved performance and the promised outcome.

There is yet a third possible reason for them not acting on the reward. The employees may have valued the bonus and believed that they would have received it if they worked more productively. However, they did not think that they had the capacity to work 30% more efficiently. For example, it may be that none of them had used computers before and they believed that the company would not devote enough time and money to having them properly trained to use the new equipment. In this case, the workers believed that even if they did make the effort to attend the training sessions, they still would not have been able to achieve the 30% increase in productivity.

What lesson can we learn from this scenario? We could say that for an employee to change their behavior, they will need to believe that:

a) the outcome is of sufficient value, and
b) they probably would receive the outcome if they performed a certain way, and
c) they probably would perform to the standard required if they expended the effort.

The interconnections between these three factors – value, performance and effort – largely determine whether an employee will work towards achieving a particular outcome. Psychologists have named this way of looking at human motivation Expectancy Theory. By using this lens to look at why the workers did not behave as expected, the production manager would have gotten a much richer insight into why the workers did not change their behavior. This understanding then would have allowed her to modify her incentive strategy, something that simply labeling the workers actions as stupid could not.

So, how do you use this psychological appreciation to probe the underlying causes of your workers’ behaviors? Expectancy Theory provides the structure for the questions you need to ask when people are not behaving as you expect. Starting from the left hand side of the equation and working forward, pose yourself these questions:

Is the outcome (reward) of sufficient value to them?
Find out whether the proposed outcome is of any value to the employee, and if so, how much. Where at all possible, try to rely on intrinsic rewards. These are rewards that do not rely on people outside of the employee to come to fruition and can include the satisfaction that comes from doing a good job and solving a challenging problem. Extrinsic rewards depend on others giving them and include bonuses, promotions, company car, certificates and praise.

Does the person expect to enjoy the outcome if they perform as required?
There are two important aspects to consider here. Firstly, evaluate the reliability of your organization’s systems and processes in delivering outcomes. And secondly, gauge the amount of trust between people in your organization at all layers. Both these factors weigh heavily on an employee’s perception of the utility of their actions.

Does the person expect to perform to the standard required if they expend the effort?
Possible impediments to performance include both personal roadblocks and organizational roadblocks. Think about each as you enquire into employee motivations. Personal impediments include low self-esteem, poor skill level and low tolerance to frustration. Organizational impediments include no or ineffective performance feedback, variable processes, poorly defined goals, inadequate resources and lack of support from peers and managers.

How do you as a manager answer these guiding questions? The short answer is to open the lines of genuine two-way communication with your employees. Build bridges of trust so that employees feel comfortable about confiding in you with their true feelings. The long answer involves using tactics such as these: leaving your door open, walking around your workplace, conducting focus group sessions and one-on-one interviews, running employee engagement surveys and scheduling frequent and regular team meetings.

By using some of these tactics, the manager in our example was able to discover that the weakness lay in the link between effort and performance. The employees believed that their low English literacy skills would impede them from learning what they needed to know about the new machine. With this insight, their manager quickly organized an in-house literacy program for all and within three months productivity had soured.

As you go about talking to employees and gathering information, be ever mindful that what drives an employee’s behavior is not the objectively calculated probabilities that their effort will lead to performance and that their performance will lead to the reward, but the person’s belief about these probabilities. Remember the old adage, “Perception is nine tenths of the law”.

Use the knowledge that you have gained to modify your management strategies and practices for motivating your workers. Do not be fooled into thinking that by using psychology that you are somehow manipulating your employees. Nothing could be further from the truth. See it as a way of truly understanding your employees to arrive at real win-win outcomes. You will reduce your frustration and stress levels as well as enhance your team’s performance. At the same time, your team will enjoy a much more rewarding working life, will appreciate your efforts to understand them as people and will pay you greater respect.

Where to from here? Use this as starting point to learn more about Expectancy Theory. This psychological theory is not the end of the story when it comes to understanding employee motivation. Employee behavior is also modified by how they perceive the fairness of the distributed rewards. Another theory, named Equity Theory, gives us insights into how employees use considerations of fairness in deciding how to behave. Use the references below to find out more about Expectancy Theory and Equity Theory and to become an even more effective manager.


Further Reading:

Organizational Behavior: Foundations, Reality and Challenges by Debra L. Nelson and James Campbell Quick, Chapter 5, ISBN 0324224702
http://www.enotes.com/business-finance-encyclopedia/motivation
http://en.wikipedia.org/wiki/Victor_Vroom
http://en.wikipedia.org/wiki/Equity_theory
http://www.arrod.co.uk/archive/concept_vroom.php

© Leslie Allan. All rights reserved.

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Article Tags: behavior, bonus, employee, equity, expectancy, incentive, manager, motivation, performance, productivity, psychology, reward, theory, trust, value
Referred by: http://www.businessperform.com



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