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LOB – LEADERSHIP & ORG BEHAVIOUR

Organizational behavior is a field of study that investigates the impact that individuals,
groups, and structure have on behavior within organizations, for the purpose of applying
such knowledge toward improving an organization’s effectiveness.
It studies three determinants of behavior in organizations: individuals, groups, and
structure.
In addition, OB applies the knowledge gained about individuals, groups, and the effect
of structure on behavior to make organizations work more effectively. OB is the study of
what people do in an organization and how their behavior affects the organization’s
performance.
OB includes the core topics of motivation, leader behavior and power, interpersonal
communication, group structure and processes, learning, attitude development and
perception, change processes, conflict, work design, and
work stress.

BASIC OB MODEL

The basic OB model is a simplified framework for understanding organizational

behavior. It consists of three interrelated levels: individual, group, and organizational.

Individual Level

At the individual level, OB focuses on the behavior of individual employees within the
organization. This includes factors such as:

 Personality: An individual's unique set of traits, attitudes, and behaviors.

 Motivation: The driving force behind an individual's actions.
 Perceptions: How an individual interprets and understands information from the
environment.
 Emotions: An individual's feelings and reactions to events and situations.
 Stress: The negative physiological and psychological response to demands or
challenges.
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Group Level

At the group level, OB focuses on the behavior of groups of employees within the
organization. This includes factors such as:

 Group dynamics: The interactions and relationships between group members.

 Group norms: The shared beliefs and values that guide group behavior.
 Group cohesiveness: The degree to which group members feel connected to
each other.
 Group leadership: The role of individuals who influence and direct group
behavior.
 Group decision-making: How groups make decisions and solve problems.
Organizational Level

At the organizational level, OB focuses on the behavior of the organization as a whole.

This includes factors such as:

 Organizational structure: The formal arrangement of roles, responsibilities, and

reporting relationships within the organization.
 Organizational culture: The shared values, beliefs, and norms that characterize
the organization.
 Organizational climate: The overall mood or atmosphere of the organization.
 Organizational change: The process of adapting to new challenges or
opportunities.
 Organizational effectiveness: The degree to which the organization achieves
its goals.
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Inputs
Inputs are the variables like personality, group structure, and organizational culture that
lead to processes. These variables set the stage for what will occur in an organization
later.

Processes
If inputs are like the nouns in organizational behavior, processes are like verbs.
Processes are actions that individuals, groups, and organizations engage in as
a result of inputs and that lead to certain outcomes.

Outcomes
Outcomes are the key variables that you want to explain or predict, and that are
affected by some other variables.
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BEHAVIOR

Behavior is our actions which may be positive or negative. It is the way in which an
individual or group acts or conducts themselves. It is the outward expression of what is
happening within a person or group on an emotional, psychological, or social level.
Behavior can be influenced by a variety of factors, including genetics, environment, and
personal experiences.

Behavior can be either adaptive or maladaptive. Adaptive behavior is behavior that

helps us to meet our needs and achieve our goals. Maladaptive behavior is behavior
that interferes with our ability to meet our needs and achieve our goals.

There are several different theories of behavior. Some of the most well-known theories
include:

 Classical conditioning: This theory was developed by Ivan Pavlov and explains
how we learn associations between stimuli.
 Operant conditioning: This theory was developed by B.F. Skinner and explains
how we learn to behave based on the consequences of our actions.
 Social learning theory: This theory was developed by Albert Bandura and
explains how we learn from observing the behavior of others.

Examples of Behavior in organization: -

 Absenteeism: When employees are not at work, it can lead to a decrease in

productivity and a higher workload for other employees.
 Productivity: When employees are productive, they are able to get more work
done in a shorter amount of time. This can lead to increased profits for the
organization.
 Turnover: When employees leave the organization, it can be costly to replace
them. It can also lead to a loss of knowledge and experience.
 OCB (Organizational Citizenship Behavior): This is when employees go above
and beyond their job duties to help the organization. This can include things like
helping colleagues, being polite to customers, and following safety rules.
 OWB (Organizational Work Behavior): This is when employees do their job
according to their job description. This includes things like showing up for work
on time, completing tasks on time, and following instructions.
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Learning Any relatively permanent change in behavior that occurs as a result of

experience is called learning. This experience maybe positive and negative.

Social learning theory, also known as observational learning theory, is a psychological

theory that proposes that people learn new behaviors, attitudes, and values by
observing the behavior of others. This theory was developed by psychologist Albert
Bandura in the 1960s.

Bandura proposed that social learning occurs through four key processes:

1. Attention: In order to learn from others, people must first pay attention to them.
This means that the model must be salient, or noticeable, and that the observer
must be motivated to pay attention to them.
2. Retention: Once an observer has paid attention to a model, they must be able to
retain the information they have learned. This means that they must be able to
remember what they have seen and heard.
3. Reproduction: Once an observer has retained the information they have
learned, they must be able to reproduce it. This means that they must be able to
perform the behavior that they have observed.
4. Reinforcement: The final step in the social learning process is reinforcement.
Reinforcement is any event that increases the likelihood that a behavior will be
repeated. Reinforcement can be positive or negative. Positive reinforcement
occurs when a person is rewarded for a behavior, while negative reinforcement
occurs when a person is relieved of an unpleasant stimulus.

Classical conditioning Theory is a way of learning that happens when you associate
two things together. For example, if you hear a bell every time you get food, you will
eventually learn to associate the bell with food. This means that you will start to salivate
(drool) when you hear the bell, even if there is no food present.

There are four main parts to classical conditioning:

1. The unconditioned stimulus (US) is something that naturally causes a

response. For example, food is an unconditioned stimulus because it naturally
causes salivation.
2. The unconditioned response (UR) is the natural response to the unconditioned
stimulus. For example, salivation is the unconditioned response to food.
3. The conditioned stimulus (CS) is something that is paired with the
unconditioned stimulus. For example, a bell is a conditioned stimulus if it is
paired with food.
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4. The conditioned response (CR) is the response that the organism learns to
associate with the conditioned stimulus. For example, salivation is a conditioned
response to a bell if the bell has been paired with food.

Classical conditioning can be used to explain a wide variety of behaviors, including

phobias, addictions, and marketing strategies.

Operant conditioning theory is a way of learning that happens when we associate our
actions with their consequences. If our actions are followed by something good, we are
more likely to repeat them. If our actions are followed by something bad, we are less
likely to repeat them.

In the workplace, organizations can use operant conditioning to encourage employees

to do things that benefit the company, and discourage them from doing things that hurt
the company.

Positive reinforcement is when we get something good after we do something good.

For example, if an employee meets their sales target, they might get a bonus.
Negative reinforcement is when we get rid of something bad after we do something
good. For example, if an employee is always late for work, they might get a warning. If
they start coming to work on time, the warning might be removed.
Positive punishment is when we get something bad after we do something bad. For
example, if an employee steals money from the company, they might get fired.
Negative punishment is when we take away something good after we do something
bad. For example, if an employee is rude to customers, they might lose their privilege of
using the company car.
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ATTITUDE

Evaluative statements or judgement regarding objects, people or events is called

attitude.

An attitude is an evaluation of an object, person, or event that is accompanied by a

specific emotional feeling, a relatively enduring belief about the object, and a
predisposition to act in a particular way in relation to the object. Attitudes are often
expressed through opinions, which are statements that reflect a person's attitude.

Attitudes are thought to have three components:

 Cognitive component: This is the belief or thought component of an attitude. It

refers to what people think about an object or issue. For example, someone who
believes that smoking is harmful to their health has a negative cognitive
component toward smoking.
 Affective component: This is the emotional component of an attitude. It refers to
how people feel about an object or issue. For example, someone who feels
disgusted by smoking has a negative affective component toward smoking.
 Behavioral component: This is the action component of an attitude. It refers to
what people do in relation to an object or issue. For example, someone who
avoids smoking because they believe it is harmful to their health has a negative
behavioral component toward smoking.

Attitudes are complex and can be influenced by a variety of factors, including personal
experiences, social influences, and cultural norms. They can be difficult to change, but
they can be influenced through persuasion, education, and exposure to new
information.
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Job attitudes are the feelings, beliefs, and opinions that employees hold about their
jobs. They are an important factor in determining employee satisfaction, productivity,
and turnover. There are many different job attitudes, but some of the most important
include:

1. Job satisfaction

Job satisfaction is a general feeling of contentment or dissatisfaction with one's job. It is

influenced by a variety of factors, including work environment, job security, pay, and
benefits. Employees who are satisfied with their jobs are more likely to be productive,
engaged, and loyal to their employers.

2. Job involvement

Job involvement is the degree to which an employee is psychologically identified with

their job. It is characterized by a high level of interest, enthusiasm, and energy in one's
work. Employees who are highly involved in their jobs are more likely to be creative,
innovative, and motivated to perform well.

3. Organizational commitment

Organizational commitment is the degree to which an employee is identified with and

committed to their organization. It is characterized by a strong belief in the
organization's goals and values, and a desire to remain a member of the organization.
Employees who are highly committed to their organizations are more likely to be loyal,
supportive, and willing to go the extra mile.

4. Employee engagement

Employee engagement is the degree to which an employee is actively involved in their

work and feels connected to their organization. It is characterized by a high level of
energy, enthusiasm, and commitment. Employees who are highly engaged are more
likely to be productive, creative, and innovative.

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MODERATING VARIABLES OF THE ATTITUDE-BEHAVIOR RELATIONSHIP

1. Importance of the Attitude: When an attitude is important to us, it's more likely to
influence our behavior. For example, if we strongly believe in recycling, we're more
likely to recycle our trash.
2. Correspondence to Behavior: When an attitude is similar to our behavior, it's more
likely to influence our behavior. For example, if we believe in being honest, we're more
likely to be honest with others.
3. Accessibility of the Attitude: When an attitude is easy to remember, it's more likely
to influence our behavior. For example, if we're constantly reminded of the importance
of exercise, we're more likely to exercise regularly.
4. Social Pressures: When there's pressure to conform to an attitude, it's more likely to
influence our behavior. For example, if everyone in our social circle smokes, we may be
more likely to smoke as well.
5. Direct Experience: When we have direct experience with an attitude, it's more likely
to influence our behavior. For example, if we've seen the negative effects of smoking,
we may be less likely to smoke ourselves.

By understanding these moderating variables, we can better understand how our

attitudes influence our behavior and how we can change our behavior by changing our
attitudes.
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JOB SATISFACTION
Job satisfaction is the extent to which an employee is happy with their job. It is a
complex concept that is influenced by a variety of factors, including the nature of the
work, the work environment, the employee's relationship with their colleagues and
supervisors, and the employee's personal values and goals.
Main factors affecting job satisfaction:
 Pay and benefits: Employees who are fairly compensated for their work and
who have access to good benefits are more likely to be satisfied with their jobs.
 Work-life balance: Employees who have a good work-life balance and who feel
that they have enough time for their personal lives are more likely to be satisfied
with their jobs.
 Job security: Employees who feel that their jobs are secure are more likely to be
satisfied with their jobs.
 Opportunities for advancement: Employees who feel that they have
opportunities to advance their careers are more likely to be satisfied with their
jobs.
 Recognition and appreciation: Employees who feel that their work is
appreciated and that they are recognized for their contributions are more likely to
be satisfied with their jobs.
 Positive work environment: Employees who work in a positive and supportive
environment are more likely to be satisfied with their jobs.
 Good relationships with colleagues and supervisors: Employees who have
good relationships with their colleagues and supervisors are more likely to be
satisfied with their jobs.
 Meaningful work: Employees who feel that their work is meaningful and that it
makes a difference are more likely to be satisfied with their jobs.
Impact of job satisfaction on employee performance and retention:

Job satisfaction has a significant impact on employee performance and retention.

Satisfied employees are more likely to be productive, engaged, and innovative. They
are also more likely to stay with their companies for the long term.

According to a study by Gallup, engaged employees are 22% more productive and 17%
more profitable than their disengaged counterparts. Additionally, a study by the Society
for Human Resource Management found that the cost of replacing an employee is 6 to
9 months of salary.
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What can employers do to improve job satisfaction:

Employers can take a number of steps to improve job satisfaction, such as:

 Pay employees fairly and provide them with good benefits. This includes offering
competitive salaries, health insurance, retirement benefits, and other perks.
 Create a positive and supportive work environment. This means fostering a
culture of respect, collaboration, and open communication. It also means
providing employees with the resources and support they need to be successful.
 Provide employees with opportunities for advancement. This could include
offering training and development programs, as well as opportunities for
employees to take on new challenges and responsibilities.
 Recognize and appreciate employees for their contributions. This could involve
giving employees regular feedback, public recognition, and rewards.
 Encourage employees to have a good work-life balance. This could involve
offering flexible work arrangements, such as telecommuting and compressed
workweeks. It could also involve offering employees paid time off for vacations,
sick days, and personal days.
What can employees do to improve their own job satisfaction:

Employees can also take a number of steps to improve their own job satisfaction,
such as:

 Find a job that is a good fit for their skills and interests. This means taking the
time to learn about themselves and what they are passionate about. It also
means researching different companies and industries to find a job that is a good
match.
 Set realistic goals for themselves. This means setting goals that are challenging
but achievable. It also means communicating their goals to their managers and
supervisors.
 Build positive relationships with their colleagues and supervisors. This means
being respectful, supportive, and helpful. It also means being willing to go the
extra mile.
 Take advantage of opportunities for professional development. This could involve
attending training programs, reading industry publications, or networking with
other professionals.
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 Maintain a healthy work-life balance. This means setting boundaries between

work and personal time. It also means taking time for themselves to relax and
recharge.

By taking steps to improve job satisfaction, employers and employees can create a
more positive and productive work environment.
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MASLOW'S THEORY OF NEEDS

Maslow's hierarchy of needs theory is a motivational theory that suggests that human
behavior is driven by a hierarchy of needs. The hierarchy is arranged in a pyramid, with
the most basic needs at the bottom and the most complex needs at the top.

The five levels of Maslow's hierarchy of needs are:

1. Physiological needs: These are the most basic needs, such as food, water,
shelter, and sleep.
2. Safety needs: These needs include security, stability, and protection from harm.
3. Social needs: These needs include love, belonging, and acceptance.
4. Self Esteem: These needs include respect, recognition, and status.
5. Self-actualization: These needs include the desire to reach one's full potential
and to live a meaningful life.

Maslow believed that people are motivated to satisfy their needs in a hierarchical order,
starting with the most basic needs and moving up the pyramid. Once a need is met, it is
no longer a motivator. People are only motivated to satisfy the next level of need once
the lower level need has been met.

Maslow's hierarchy of needs theory has been influential in the field of management and
has been used by many organizations to improve employee satisfaction and motivation.
For example, organizations can provide employees with competitive salaries and
benefits to meet their physiological and safety needs. They can also create a supportive
and inclusive work environment to meet employees' social needs. And they can offer
opportunities for growth and development to meet employees' esteem and self-
actualization needs.

Here are some examples of how organizations can use Maslow's hierarchy of needs
theory to improve employee satisfaction and motivation:
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Physiological needs: Provide employees with competitive salaries and benefits, such as
health insurance, paid time off, and retirement savings plans.
Safety needs: Create a safe and secure work environment, with clear safety policies
and procedures. Also, provide employees with job security and opportunities for
advancement.
Social needs: Create a supportive and inclusive work environment where employees
feel valued and respected. Encourage employees to socialize and collaborate with each
other.
Esteem needs: Provide employees with opportunities for recognition and advancement.
Also, give employees challenging and meaningful work to do.
Self-actualization needs: Provide employees with opportunities to learn and grow. Also,
encourage employees to set and achieve goals.

ERG THEORY

ERG theory, also known as Alderfer's theory of needs, is a theory of human motivation
developed by Clayton Alderfer in the 1960s. It is a three-level hierarchy of needs, with
the three levels being:

 Existence Needs: This level refers to the basic needs for survival, such as food,
water, shelter, and safety.
 Relatedness Needs: This level refers to the need for belonging, love, and
acceptance.
 Growth Needs: This level refers to the need for personal development,
achievement, and mastery.

Alderfer's theory differs from Maslow's hierarchy of needs in two ways. First, ERG
theory collapses Maslow's five levels of needs into three. Second, ERG theory proposes
that people can be motivated by needs from multiple levels at the same time, and that
the need that is most important to a person at a given time can change.
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ERG theory also proposes a frustration-regression principle, which states that if a

person is frustrated in their attempts to satisfy a higher-level need, they will regress to
satisfying a lower-level need. For example, if a person is frustrated in their attempts to
achieve a goal at work (growth need), they may focus more on their relationships with
their coworkers (relatedness need).

Here are some examples of how ERG theory can be applied in the real world:

 A student who is struggling to pay for tuition may become less motivated to study
and more motivated to find a job (existence needs).

 An employee who is feeling undervalued and unappreciated may become less

motivated to work hard and more motivated to seek out a new job (relatedness
needs).

 A person who is feeling bored and unchallenged in their job may become less
motivated to work hard and more motivated to pursue hobbies or activities that
they find more stimulating (growth needs).

ERG theory has a number of implications for understanding and motivating people in
the workplace. For example, managers can use ERG theory to:

 Set realistic goals and expectations for employees. This can help employees to
feel that they have a chance of achieving their goals, which can increase their
motivation.
 Provide employees with opportunities for personal development and growth. This
can help employees to satisfy their growth needs, which can increase their
motivation.
 Create a positive and supportive work environment. This can help employees to
satisfy their relatedness needs, which can increase their motivation.

By understanding and applying ERG theory, managers can create a more motivated
and productive workforce.
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THEORY X AND THEORY Y

Theory X and Theory Y are two contrasting theories of human work motivation and
management. They were created by Douglas McGregor while he was working at the
MIT Sloan School of Management in the 1950s and developed further in the 1960s.
Theory X is a negative view of human nature and assumes that employees are:
 Lazy and dislike work

 Lack ambition and avoid responsibility.

 Need to be compelled and controlled.

 Are motivated by money and other external rewards.

Theory Y, on the other hand, is a positive view of human nature and assumes that
employees are:
 Creative and resourceful

 Enjoy work and challenge.

 Seek responsibility and want to contribute to the organization.

 Are motivated by internal factors such as self-actualization and personal growth.

McGregor believed that Theory Y was a more accurate and effective approach to
management. He argued that when managers treat employees with trust and respect,
employees are more likely to be motivated and productive.
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Here is a table that summarizes the key differences between Theory X and Theory Y:

Characteristic Theory X Theory Y

View of human
Pessimistic Optimistic
nature

External (money, Internal (self-actualization, personal

Motivation
rewards) growth)

Management style Dominating, controlling Helpful, supportive

In today's workplace, Theory Y is generally considered to be a more effective approach

to management. Many organizations are moving away from the authoritarian,
command-and-control style of management that is associated with Theory X. Instead,
they are focusing on creating a more supportive and empowering work environment
where employees feel valued and respected.

However, it is important to note that Theory Y is not a one-size-fits-all solution. There

are some situations where a more authoritarian approach may be necessary, such as
when dealing with employees who are not meeting performance expectations.
Ultimately, the best approach to management will vary depending on the individual
employee and the specific situation.

TWO-FACTOR THEORY
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The two-factor theory, also known as Herzberg's motivation-hygiene theory, is a theory

of job satisfaction that was developed by Frederick Herzberg in the 1950s. The theory
states that there are two sets of factors that affect job satisfaction: hygiene factors and
motivational factors.
Hygiene factors are those factors that prevent dissatisfaction, but do not necessarily
lead to satisfaction. They are related to the external context of the job, such as salary,
benefits, working conditions, and company policies. When hygiene factors are
adequate, employees will be "not dissatisfied," but they will not be motivated to perform
at their best.
Motivational factors are those factors that lead to satisfaction and motivation. They are
related to the internal content of the job, such as the work itself, the opportunity for
achievement and recognition, and the responsibility and growth that the job offers.
When motivational factors are present, employees are more likely to be satisfied with
their jobs and to perform at a higher level.

Here are some examples of hygiene factors and motivational factors:

Hygiene factors:
 Salary

 Benefits

 Working conditions

 Company policies

 Job security

 Supervision

 Interpersonal relationships

Motivational factors:
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 The work itself

 The opportunity for achievement and recognition

 The responsibility and growth that the job offers

 Advancement opportunities

 Personal development

Managers can use Herzberg's two-factor theory to improve job satisfaction and
motivation by:

 Ensuring that hygiene factors are adequate. This includes providing fair pay and
benefits, creating a safe and comfortable work environment, and having fair and
consistent company policies.

 Focusing on motivational factors. This includes giving employees challenging

and meaningful work, opportunities for achievement and recognition, and
responsibility and growth.

 Creating a culture of feedback and recognition. This will help employees feel
valued and appreciated, and it will motivate them to perform at their best.

It is important to note that the two-factor theory is not a one-size-fits-all solution.

Different employees will have different needs and motivations. Managers should take
the time to understand the needs of their employees and to develop personalized job
enrichment strategies.

GOAL SETTING THEORY

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Goal Setting Theory is a motivational theory that suggests that specific, challenging,
and achievable goals lead to higher performance. The theory was developed by Edwin
Locke and Gary Latham in the 1960s, and it has been extensively researched and
supported by empirical evidence.

Goal Setting Theory is based on the following four principles:

1. Specific goals are more motivating than general goals. For example, the goal
"to improve my sales performance" is less motivating than the goal "to increase
my sales by 10% this quarter."
2. Challenging goals are more motivating than easy goals. However, goals
should also be achievable, otherwise they will be discouraging.
3. Committed goals are more motivating than non-committed goals.
Commitment can be increased by setting goals that are aligned with personal
values and goals.
4. Feedback on goal progress is essential. Feedback helps people stay
motivated and on track to achieve their goals.

Goal Setting Theory has been used by individuals and organizations to improve
performance in a wide range of settings, including business, sports, education, and
personal development.

Here are some tips for setting effective goals:

 Make sure your goals are specific, measurable, achievable, relevant, and time-
bound.

 Set challenging goals, but make sure they are also achievable.

 Commit to your goals and make a plan for how you will achieve them.

 Seek feedback on your progress and make adjustments to your plan as needed.
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Here are some examples of effective goals:

 Increase sales by 10% this quarter.

 Launch a new product by the end of the year.

 Improve customer satisfaction by 5% by next year.

 Reduce employee turnover by 2% by the end of the year.

 Get promoted to manager within the next two years.

 Lose 10 pounds in the next six months.

 Run a marathon next year.

 Learn a new language in the next two years.

SELF-EFFICACY THEORY

Self-efficacy theory is a theory of motivation that was developed by Albert Bandura in

the 1970s. The theory states that people's beliefs in their abilities to achieve their
goals is a major factor of their motivation, behavior, and performance.

Bandura argued that self-efficacy is not simply a measure of one's confidence in their
ability to perform a specific task. Rather, it is a more general belief in one's ability to
succeed in a variety of situations. People with high self-efficacy are more likely to set
challenging goals, persist in the face of setbacks, and recover from failures.

Self-efficacy is influenced by a number of factors, including:

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 Mastery experiences: Mastery experiences are the most powerful way to

develop self-efficacy. When people successfully complete a challenging task,
their self-efficacy for that task is increased.
 Vicarious experiences: Vicarious experiences are experiences that people
learn from by observing others. When people see others succeed at a task, their
self-efficacy for that task is increased.
 Social persuasion: Social persuasion is the process of influencing people's self-
efficacy through verbal encouragement and support. When people receive
positive feedback and support from others, their self-efficacy is increased.
 Physiological and emotional states: Physiological and emotional states can
also influence self-efficacy. For example, people who are feeling anxious or
stressed may have lower self-efficacy than people who are feeling calm and
confident.

Self-efficacy theory has been applied to a wide range of settings, including education,
business, sports, and health. For example, self-efficacy has been shown to predict
student achievement, employee performance, and athletic performance.

Here are some tips for increasing self-efficacy:

 Set challenging but achievable goals.

 Set specific and measurable goals.

 Break down large goals into smaller, more manageable goals.

 Focus on your successes and learn from your failures.

 Observe others who are successful at the task you want to achieve.

 Seek feedback and support from others.

 Manage your stress and anxiety levels.

EQUITY THEORY
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Equity theory is a theory of motivation that was developed by John Stacey Adams in the
1960s. The theory states that people are motivated to maintain a fair balance between
the inputs they put into their job and the outputs they receive in return.

Equity theory is based on the following principles:

 People compare their inputs and outputs to the inputs and outputs of others who
they perceive to be like them (referents).

 If people perceive that their inputs and outputs are in balance, they will be
satisfied and motivated.

 If people perceive that their inputs and outputs are out of balance, they will be
dissatisfied and demotivated.

There are these types of equity imbalances that can occur:

 Overpayment inequity: This occurs when people perceive that they are
receiving more outputs than they deserve, given their inputs.
 Underpayment inequity: This occurs when people perceive that they are
receiving fewer outputs than they deserve, given their inputs.
 Over reward inequity: This occurs when people perceive that their referents are
receiving more outputs than they deserve, given their inputs.
 Under reward inequity: This occurs when people perceive that their referents
are receiving fewer outputs than they deserve, given their inputs.

When there is an equity imbalance, people will try to restore equity. There are a number
of ways that people can do this, including:

 Changing their inputs or outputs

 Changing their referents

 Changing their perceptions of their inputs and outputs

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 Leaving the situation

Equity theory is an important theory of motivation because it helps to explain why

people are motivated to work hard and why they are dissatisfied when they feel that
they are being treated unfairly.

Here are some examples of how equity theory can be applied to the workplace:

 An employee who is paid less than their peers for doing the same job may feel
underpaid and demotivated.

 An employee who is given more work than their peers may feel overworked and
demotivated.

 An employee who is promoted to a new position may feel overpaid and

uncomfortable if they do not feel that they have the skills and experience
necessary for the position.

 An employee who sees a peer being promoted to a more senior position without
deserving it may feel under rewarded and demotivated.

Managers can use equity theory to improve employee motivation and satisfaction
by:

 Paying employees fairly for their work.

 Distributing work evenly among employees.

 Providing employees with opportunities for advancement and development.

 Promoting employees based on merit, not on favoritism.

 Creating a culture of fairness and respect.

EXPECTANCY THEORY
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Expectancy theory is a theory of motivation that was developed by Victor Vroom in the
1960s.

The expectancy theory of motivation, or the expectancy theory, is the belief that an
individual chooses their behaviors based on what they believe leads to the most
beneficial outcome. This theory is dependent on how much value a person places on
different motivations. This results in a decision they expect to give them the highest
return for their efforts.

OR

Expectancy theory argues that the strength of our tendency to act a certain way
depends on the strength of our expectation of a given outcome and its attractiveness. In
more practical terms, employees will be motivated to exert a high level of effort when
they believe it will lead to a good performance appraisal; that a good appraisal will lead
to organizational rewards such as bonuses, salary increases, or promotions; and that
the rewards will satisfy the employees’ personal goals.
The theory states that motivation is determined by three factors:

 Expectancy (Effort–performance relationship).: Expectancy is the belief that

effort will lead to performance. For example, a student who believes that they are
studying hard will be more likely to expect to get good grades on their exams.
 Instrumentality (Performance–reward relationship): Instrumentality is the
belief that performance will lead to rewards. For example, a student who believes
that getting good grades on their exams will lead to getting into a good college
will be more likely to expect to be rewarded for their performance.
 Valence (Rewards–personal goals relationship): Valence is the value that the
individual places on the rewards. For example, a student who values getting into
a good college will be more motivated to study hard in order to get good grades.

Expectancy theory can be represented by the following equation:

 27

Motivation = Expectancy * Instrumentality * Valence

M=ExIxV

If any of these factors is low, then motivation will also be low.

Expectancy theory has been applied to a wide range of settings, including the
workplace, education, and sports. For example, managers can use expectancy theory
to motivate their employees by:

 Setting clear and achievable goals.

 Providing employees with the resources and support they need to achieve their
goals.

 Linking performance to rewards.

 Making sure that employees value the rewards that are offered.

Here are some examples of how expectancy theory can be applied in the real world:

 A student who believes that they are good at math and that studying hard will
lead to good grades is more likely to be motivated to study math.

 An employee who believes that they are capable of doing a good job and that
their manager will recognize and reward their good work is more likely to be
motivated to work hard.

 An athlete who believes that they can win a competition and that the victory will
lead to fame and fortune is more likely to be motivated to train hard and perform
at their best.

In each of these examples, the individual's expectancy, instrumentality, and valence are
all high. This results in high motivation and high performance.

McCLELLAND's THEORY OF NEEDS

 28

McClelland's Theory of Needs is a theory of motivation that was developed by David

McClelland in the 1960s. The theory states that people are motivated by three primary
needs:

 Need for achievement (nAch): The need to achieve, to excel, and to do things
better. People with a high need for achievement are motivated to set challenging
goals for themselves and to achieve them. They are also motivated to learn new
things and to improve their skills.
 Need for power (nPow): The need to influence others, to have control, and to be
responsible. People with a high need for power are motivated to influence others
and to have control over their environment. They are also motivated to be
responsible for others and to achieve success.
 Need for affiliation (nAff): The need to be liked, to have close relationships, and
to be part of a group. People with a high need for affiliation are motivated to be
liked by others and to have close relationships. They are also motivated to be
part of a group and to feel connected to others.

McClelland believed that these needs are acquired through life experiences and that
they are not fixed. However, he also believed that people have a dominant need that
motivates them the most.

McClelland's Theory of Needs has been applied to a variety of settings, including the
workplace, education, and sports. For example, managers can use McClelland's theory
to motivate their employees by:

 Giving employees challenging and achievable goals.

 Providing employees with opportunities for advancement and leadership.

 Creating a supportive and collaborative work environment.

The Job Characteristics Model (JCM)

 29

The Job Characteristics Model (JCM) is a theory of work design that was developed by
Richard Hackman and Greg Oldham in the 1970s. The model states that five core job
characteristics contribute to an employee's meaningful work experience and job
satisfaction:

 Skill variety: The degree to which the job requires a variety of different skills and
talents.

 Task identity: The degree to which the job allows the employee to complete a
whole and identifiable piece of work.

 Task significance: The degree to which the job has a substantial impact on the
lives or work of other people.

 Autonomy: The degree to which the employee has discretion and control over
their work.

 Feedback: The degree to which the employee receives clear and direct
information about the performance of their work.

The JCM proposes that these five core job characteristics lead to three critical
psychological states:

 Experienced meaningfulness: The degree to which the employee perceives

their work as being meaningful and valuable.

 Experienced responsibility for outcomes: The degree to which the employee

feels personally responsible for the results of their work.

 Knowledge of the actual results of the work activities: The degree to which
the employee knows how well they are performing their job.

These three critical psychological states, in turn, lead to two work outcomes:
 30

 Job satisfaction: The employee's overall feeling of satisfaction with their job.

 Motivation: The employee's level of motivation to perform their job well.

Here are some examples of how the JCM can be applied in the workplace:

 A manager can enrich a job by giving the employee more skill variety, task
identity, and autonomy. For example, a manager could give an assembly line
worker the responsibility of assembling a whole product, rather than just a small
part of it.

 A company can provide employees with more feedback by giving them regular
performance reviews and by allowing them to track their own progress towards
goals.

 A company can create a more meaningful work environment by giving

employees opportunities to work on projects that are important to them and that
have a positive impact on the company or the community.

PERCEPTION
Perception is the process of selecting, organizing, and interpreting sensory information
to produce a meaningful experience of the world. It is a complex process that involves
both our senses and our brains.
Factors that influence perception:
 The perceiver: The characteristics of the perceiver influences their perception.
For example, an individual's age, gender, culture, emotions, motives,
expectations and personal experiences can all affect how they perceive the
world.
 The target: The characteristics of the target also affect perception. For example,
the size, color, and shape of an object can all affect how it is perceived.
 The situation: The context in which perception takes place can also influence it.
For example, the time of day, the level of noise, and the presence of other people
can all affect how we perceive things.
 31

Here are some examples of how these factors can influence perception:

 A person who is afraid of spiders may perceive a small spider as being larger
and more threatening than it is.

 A person who is hungry may be more likely to notice food-related stimuli in their
environment.

 A person who is in a hurry may be more likely to make perceptual errors, such as
failing to see an object that is in their path.

ATTRIBUTION THEORY
Attribution theory is a theory of social cognition that explains how people make
inferences about the causes of events. It was developed by Fritz Heider in the 1940s
and later expanded upon by Harold Kelley in the 1960s.
 32

Attribution theory tries to explain the ways in which we judge people differently,
depending on the meaning we attribute to a given behavior. It suggests that when we
observe an individual’s behavior, we attempt to determine whether it was internally or
externally caused.

Internally caused behaviors are those we believe to be under the personal

control of the individual.

Externally caused behavior is what we imagine the situation forced the individual to
do.

For example: If one of your employees is late for work, you might attribute that to his
partying into the week hours and then oversleeping. This is an internal attribution. But if
you attribute lateness to an automobile accident that tied up traffic, you are making an
external attribution.

The three factors of attribution are:

 Consensus: How many other people would behave the same way in the same
situation? Consensus refers to the extent to which other people would behave
the same way in the same situation. If there is high consensus, then the person
is more likely to attribute the cause of the event to external factors. If there is low
consensus, then the person is more likely to attribute the cause of the event to
internal factors.
 Distinctiveness: Distinctiveness refers to how often the person behaves the
same way in different situations. If the person behaves the same way in many
different situations, then the person is more likely to attribute the cause of the
event to internal factors. If the person only behaves the same way in certain
situations, then the person is more likely to attribute the cause of the event to
external factors.
1. Consistency: Consistency refers to how often the person behaves the same
way in the same situation. If the person consistently behaves the same way in
the same situation, then the person is more likely to attribute the cause of the
 33

event to stable factors. If the person does not consistently behave the same way
in the same situation, then the person is more likely to attribute the cause of the
event to unstable factors.
Here are some examples of how attribution theory can be applied in the real world:
 A teacher might use attribution theory to help students understand the reasons
for their success and failure. For example, the teacher might help students to
attribute their success to their own hard work and effort, rather than to luck or the
difficulty of the assignment.
 A manager might use attribution theory to motivate employees. For example, the
manager might provide feedback that focuses on employees' internal, stable, and
controllable factors, such as their effort, skill, and dedication.
 A therapist might use attribution theory to help clients overcome depression and
anxiety. For example, the therapist might help clients to attribute their negative
emotions to external factors, such as stressful life events, rather than to internal
factors, such as their own worthlessness.

SHORTCUTS IN MAKING JUDGMENTS ABOUT OTHERS

Individuals use a number of shortcuts in making judgments about others. These

shortcuts are mental rules of thumb that help us to make quick and efficient decisions.
However, these shortcuts can also lead to errors in judgment.
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Some of the most common shortcuts that individuals use in making judgments about
others include:

 Stereotyping: Stereotyping is the process of generalizing people based on their

membership in a particular group. For example, we may stereotype all lawyers as
being aggressive or all doctors as being highly intelligent.
 Halo effect: The halo effect is a cognitive bias in which our overall impression of
a person influences how we feel and think about them. For example, if we find
someone to be physically attractive, we are more likely to perceive them as being
intelligent, competent, and trustworthy.
 Horn effect: The horn effect is the opposite of the halo effect. It is the tendency
to allow one negative trait about a person to influence our overall perception of
them. For example, if we think someone is rude, we are more likely to think that
they are also unintelligent and unkind.

 Contrast effect: The contrast effect is a cognitive bias in which our judgment of
a person is influenced by the people or things they are compared to. For
example, if we interview a job candidate after interviewing a series of highly
qualified candidates, we are more likely to perceive the candidate as being less
qualified than they actually are.
 Selective perception: Selective perception is the tendency to focus on
information that confirms our existing beliefs and to ignore information that
contradicts them. For example, if we believe that someone is dishonest, we are
more likely to notice their dishonest behaviors and to ignore their honest
behaviors.

 Confirmation bias: Confirmation bias is the tendency to seek out and interpret
information in a way that confirms our existing beliefs. For example, if we believe
that a new product is better than the old product, we are more likely to seek out
information that supports this belief and to ignore information that contradicts it.

 Primacy effect: The primacy effect is a cognitive bias in which we give more
weight to information that we receive first. For example, if we form a negative first
 35

impression of someone, it can be difficult to change our opinion of them, even if

we receive new information that contradicts our initial impression.
 Recency effect: The recency effect is a cognitive bias in which we give more
weight to information that we receive most recently. For example, if we are asked
to list the names of our favorite fruits, we are more likely to list the fruits that we
thought of most recently.

It is important to be aware of these shortcuts so that we can avoid making inaccurate

judgments about others. We can do this by being critical of our own thoughts and by
seeking out as much information as possible before forming an opinion.

Here are some tips for avoiding errors in judgment:

 Be aware of your own biases.

 Consider all of the evidence before forming an opinion.

 Be open to new information that contradicts your initial impression.

 Be willing to admit when you are wrong.

By following these tips, we can make more accurate and fair judgments about others.

RATIONAL MODEL OF DECISION MAKING

Decision making is the process of selecting one option from a set of alternatives. It is a
cognitive process that involves weighing the pros and cons of each option and choosing
the option that is most likely to achieve the desired outcome.
The rational model of decision making is a step-by-step process that can be used to
make informed decisions. The steps in the rational model are:
 36

Step 1: Define the problem

The first step is to clearly define the problem or opportunity that you need to make a
decision about. This will help you to focus your efforts on the most important aspects of
the decision.

Step 2: Identify the decision criteria

Once you have defined the problem, you need to identify the criteria that you will use to
evaluate the different alternatives. These criteria could include factors such as cost,
time, quality, risk, and return on investment.

Step 3: Allocate weights to the criteria

Not all of the decision criteria will be equally important to you. Therefore, you need to
allocate weights to the different criteria to reflect their relative importance. This will help
you to make a more informed decision.

Step 4: Develop the alternatives

Once you have identified and weighted the decision criteria, you need to develop a list
of all of the possible solutions to the problem or opportunity. This list should include both
realistic and unrealistic alternatives, as well as both creative and conventional
alternatives.

Step 5: Evaluate the alternatives

The next step is to evaluate each of the alternatives against the decision criteria. This
will help you to identify the pros and cons of each alternative and to compare the
alternatives to each other.

Step 6: Select the best alternative

The final step is to select the best alternative based on the evaluation results. This may
involve making a trade-off between different criteria or selecting the alternative that is
most likely to achieve your desired outcome.

Here are some examples of the rational model of decision making in action:
 37

 A company is deciding whether to launch a new product. The company would

first identify the problem or opportunity (i.e., the potential to launch a new
product). Then, the company would gather information about the market, the
competition, and the costs and benefits of launching the new product. Next, the
company would generate alternatives (i.e., different product features, marketing
strategies, etc.). Then, the company would evaluate the alternatives and choose
the option that is most likely to be successful. Finally, the company would
implement the decision and evaluate the results.

 A person is deciding whether to buy a new house. The person would first identify
the problem or opportunity (i.e., the need for a new house). Then, the person
would gather information about the housing market, different types of houses,
and the costs and benefits of buying a new house. Next, the person would
generate alternatives (i.e., different houses in different locations with different
features). Then, the person would evaluate the alternatives and choose the
house that is most likely to meet their needs. Finally, the person would buy the
house and evaluate their decision after living in the house for a while.

COMMON DECISION BIASES OR ERRORS

 Anchoring bias: The tendency to rely too heavily on the first piece of information
received when making a decision. For example, if you are negotiating a salary
and the other party starts by offering you a low salary, you may be more likely to
accept a lower salary than you would have if they had started by offering you a
higher salary.
 38

 Availability bias: The tendency to give more weight to information that is readily
available or easily recalled. For example, if you are deciding whether to invest in
a new company, you may be more likely to invest if you have recently heard a lot
of positive news about the company, even if there is also a lot of negative news
about the company that you are not aware of.
 Confirmation bias: The tendency to seek out and interpret information in a way
that confirms our existing beliefs. For example, if you believe that a new product
is better than the old product, you may be more likely to seek out information that
supports this belief and to ignore information that contradicts it.
 Framing effect: The way that information is presented can influence our
decisions. For example, if you are asked to choose between two medical
treatments, one that has a 90% survival rate and one that has a 10% death rate,
you may be more likely to choose the first treatment. However, if you are asked
to choose between two medical treatments, one that has a 10% chance of failure
and one that has a 90% chance of success, you may be more likely to choose
the second treatment.
 Sunk cost fallacy: The tendency to continue investing in a project or course of
action even when it is clear that the project or course of action is not going to be
successful. For example, if you have already invested a lot of time and money
into a project, you may be more likely to continue investing in the project even if it
is clear that the project is not going to be successful.
 Overconfidence bias: The tendency to be overconfident in our own abilities and
judgments. For example, we may believe that we are more likely to be successful
at a task than we actually are.
 Groupthink: The tendency of groups to make decisions that are less than
optimal because the group members are afraid to disagree with each other. For
example, a group of managers may be less likely to make a difficult decision if
they are all afraid of disagreeing with the CEO.
 39

These are just a few of the many common decision biases or errors. It is important to be
aware of these biases so that you can avoid making them when you are making
important decisions.

Here are some tips for avoiding decision biases:

 Be aware of your own biases. Everyone has biases, but it is important to be

aware of them so that you can try to control them.

 Be open to new information. Don't just focus on the information that confirms
your existing beliefs. Be willing to consider information that contradicts your
beliefs as well.

 Get feedback from others. If you are unsure about your decision, ask for
feedback from someone you trust.

 Take your time. Don't rush into making important decisions. Give yourself time to
gather information and to consider all of the options.

PERSONALITY

Personality is the sum total of ways in which an individual reacts to and interacts with
others. Personality traits are relatively stable over time, but they can also be influenced
by life experiences and personal growth.

THE BIG FIVE PERSONALITY MODEL

The Big Five personality model is a psychological theory that identifies five broad
personality traits:

 Openness to experience: People who are high in openness to experience are

typically curious, creative, and imaginative. They are also more likely to be
interested in new experiences and cultures.
 40

 Conscientiousness: People who are high in conscientiousness are typically

organized, efficient, and reliable. They are also more likely to be goal-oriented
and to set high standards for themselves.
 Extraversion: People who are high in extraversion are typically outgoing,
sociable, and energetic. They enjoy being around other people and often seek
out social interaction.
 Agreeableness: People who are high in agreeableness are typically trusting,
cooperative, and kind. They are also more likely to be avoidant of conflict and to
put the needs of others before their own.
 Emotional instability: People who are high in neuroticism are typically more
emotionally unstable and prone to anxiety and worry. They may also be more
sensitive to criticism and rejection.

It is important to note that everyone has a unique blend of these five personality traits.
There is no one "ideal" personality type. However, understanding the Big Five
personality model can help us to better understand ourselves and others.

THE MYERS-BRIGGS TYPE INDICATOR (MBTI)

The Myers-Briggs Type Indicator (MBTI) is a self-report personality test that measures
an individual's preferences for four dichotomies:

 Introversion (I) vs. Extraversion (E): This dichotomy measures how individuals
focus their energy and how they interact with the world around them. Introverts
tend to focus on their inner thoughts and feelings, while extroverts tend to focus
on the external world and social interactions.
 Sensing (S) vs. Intuition (N): This dichotomy measures how individuals take in
information and make decisions. Sensing individuals prefer to focus on concrete
details and information that they can gather through their five senses, while
intuitive individuals prefer to focus on patterns, big-picture ideas, and abstract
concepts.
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 Thinking (T) vs. Feeling (F): This dichotomy measures how individuals make
decisions and evaluate information. Thinking individuals prefer to make decisions
based on logic and rationality, while feeling individuals prefer to make decisions
based on emotions and values.
 Judging (J) vs. Perceiving (P): This dichotomy measures how individuals
structure their lives and approach tasks. Judging individuals prefer to have things
planned out and deadlines met, while perceiving individuals prefer to be flexible
and adaptable to change.

The MBTI combines these four dichotomies into 16 personality types, each with its own
unique set of characteristics. For example, an ISTJ (Introverted, Sensing, Thinking,
Judging) is typically described as a serious, organized, and responsible individual who
values facts and data. An ENFP (Extraverted, Intuitive, Feeling, Perceiving) is typically
described as an enthusiastic, creative, and optimistic individual who values personal
expression and connection.

The MBTI has been widely used in various settings, including education, business, and
personal development. However, it has also been the subject of criticism, primarily for
its lack of scientific rigor and its potential to create stereotypes. Despite these criticisms,
the MBTI remains a popular tool for self-reflection and understanding individual
differences.

THE DIFFERENT PERSONALITY TYPES

Type A vs. Type B

 Type A: Type A personalities are typically characterized by being highly
ambitious, competitive, and driven. They are often high-achievers who are
constantly striving for success. Type A personalities may also be impatient,
perfectionistic, and workaholics.
 Type B: Type B personalities are typically characterized by being more relaxed,
easygoing, and laid-back. They are often more interested in enjoying life than in
 42

achieving success. Type B personalities may also be creative, spontaneous, and

flexible.
Proactive vs. Reactive
 Proactive: Proactive people are typically characterized by being self-motivated,
action-oriented, and solution-focused. They are often proactive in taking charge
of their lives and their careers. Proactive people may also be risk-takers,
innovators, and leaders.
 Reactive: Reactive people are typically characterized by being reactive,
responsive, and adaptive. They are often more focused on following instructions
and meeting expectations than on taking charge and being proactive. Reactive
people may also be detail-oriented, reliable, and team players.
Highflyer vs. Lowflyer
 Highflyer: Highflyer is a term used to describe someone who is exceptionally
successful in their career. Highflyers are typically highly intelligent, motivated,
and driven. They are also often ambitious, competitive, and results-oriented.
Highflyers may also be well-educated, well-connected, and well-respected.
 Lowflyer: Lowflyer is a term used to describe someone who is less successful in
their career. Lowflyers may be less motivated, driven, or ambitious than
highflyers. They may also lack the skills, education, or experience that is
necessary to succeed in their chosen field.

Extraverted vs Introverted

 Extraverted: Individuals who are extroverted are energized by being around

other people. They enjoy talking, socializing, and being the center of attention.
 Introverted: Individuals who are introverted are energized by solitude. They
prefer to spend time alone thinking, reading, and reflecting.

Sensing vs Intuitive
 43

 Sensing: Individuals who are sensing focus on the present moment and on
concrete details. They are good at observing and remembering facts, and they
prefer to make decisions based on what is real and tangible.
 Intuitive: Individuals who are intuitive focus on the future and on abstract
concepts. They are good at seeing patterns and connections, and they prefer to
make decisions based on their gut feelings and insights.

Thinking vs Feeling

 Thinking: Individuals who are thinking make decisions based on logic and
reason. They are good at analyzing data and solving problems.
 Feeling: Individuals who are feeling make decisions based on their emotions and
values. They are good at understanding the needs of others and building
relationships.

Judging vs Perceiving

 Judging: Individuals who are judging prefer to have things planned and
organized. They like to make decisions and stick to them.
 Perceiving: Individuals who are perceiving prefer to be flexible and open-
minded. They don't mind making decisions at the last minute, and they are often
good at adapting to change.
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Here is a table summarizing the personality types and their opposites:

Personality Type Opposite Personality Type

Type A: Ambitious, competitive,

Type B: Relaxed, easygoing, laid-back
driven

Proactive: Self-motivated, action-

Reactive: Responsive, adaptive, follower
oriented, solution-focused

Highflyer: Exceptionally Lowflyer: Less successful, less ambitious,

successful, high-achieving, driven more comfortable with mediocrity

Extraverted: Outgoing, sociable, Introverted: Reserved, independent,

energized by others energized by solitude

Sensing: Focused on the present, Intuitive: Focused on the future, abstract

concrete details concepts

Thinking: Makes decisions based Feeling: Makes decisions based on

on logic and reason emotions and values

Judging: Prefers to have things Perceiving: Prefers to be flexible and

planned and organized open-minded