Effective Work Groups and Teams

Effective Work Groups and Teams
Understanding and Managing Organizational Behavior Chapter 11 Sixth Edition Jennifer M. George & Gareth R. Jones Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-1

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
Learning Objectives Describe the sources of process losses and gains and understand how they affect group or team potential performance Understand how social loafing can occur in groups and the steps that can be taken to prevent it Differentiate among three forms of task interdependence and discuss the team performance implications associated with them Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Understand the ways in which a group’s cohesiveness affects its performance and explain which level of cohesiveness results in the highest team performance Describe the nature of four important kinds of groups in organizations and how and why they help an organization achieve its goals Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

How Nokia Uses Teams to Increase Global Effectiveness
How can teams help increase performance? Teams are encouraged to be innovative. Employees that are most knowledgeable are given opportunity to make decisions- regardless of position. Good communication, mutual respect, and high regard for team members Nokia’s commitment to teams starts at the top of the organization, where managers work together intensively to plan Nokia’s most important business strategies.2 Then, the number of teams cascades down through the organization and almost all its employees are in one or more teams that mirror the model set by the company’s top managers. In what ways does Nokia’s extensive use of teams increase organizational effectiveness? Teams are given a high level of autonomy and encouraged to be innovative and take control of their activities to find ways to make better products and reduce cost. Managers place a major emphasis on allowing the employees that are the most knowledgeable about a problem or opportunity to make decisions concerning it—regardless of their position in the hierarchy (which Nokia keeps as flat as possible). At all levels, teams and their members take personal responsibility for decisions and believe that they are contributing in an important way to Nokia’s continuing success. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Group Performance What’s hurting group performance? Microsoft’s team approach was effective Performance evaluation emphasizing individual performance hindered team effectiveness In the past, much of Microsoft’s reward system was based on team performance; employees of successful teams that quickly developed innovative software received valuable stock options and other benefits. Microsoft’s team-based reward system encouraged team members to work together intensively and cooperate to meet team goals. At the same time, the contributions of exceptional team members were recognized, these individuals received rewards such as promotion to become the managers or leaders of new teams as the company grew. This reward system resulted in a continuous series of improved Windows operating and applications software such as Windows 95, 98, 2000, XP, and its Office, Money, and Internet Explorer suites. In 2006, however, Microsoft ran into serious problems with the development of Vista, its newest operating system. Some analysts believed it might even be later than that, and they blamed the delays on Microsoft’s current reward system which, because it was primarily based on individual performance contributions, was hurting team performance. As Microsoft has grown over time (it now employs more than 60,000 people) it has developed a rigid performance evaluation system that is increasingly based on evaluating individual performance. The manager of each team is expected to rate the performance of each team member on a scale of 2.5, 3.0, and so on to 5, the highest individual performance rating. Microsoft adopted this system to try to increase the perceived fairness of its evaluation system, however, employees still work principally in teams and the emphasis on individual performance hurts the way members of each team treat one another. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Potential Performance
Potential performance is the highest level of group performance possible; it reflects the work group’s capabilities Although potential performance is important because it reflects a work group’s capabilities, it is often difficult to know in advance and can change as conditions change. In order for an organization to achieve its goals, managers and work groups need to strive to ensure that a group’s actual performance comes as close as possible to its potential performance. In many situations, however, a group’s actual performance falls short of its potential performance, even though the group is capable of achieving its potential. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Performance, Process Losses, and Gains
Exhibit 11.1 Research has shown that process losses—performance difficulties that a group experiences because of coordination and motivation problems—are an important factor when a group’s actual performance falls short of its potential performance. Coordination problems occur when the organization’s activities are divided among the group’s members and their inputs are subsequently combined into a product or output. At Levi Strauss, for example, the move to make groups of workers jointly responsible for assembling complete pairs of jeans resulted in major problems of cooperation among group members. Exhibit 11.1 depicts the relationship between actual and potential performance and process losses. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 3

OB Today: The Rolling Stones
Initially functioned well as a group Suffered in the 1970s as group members emphasized individual rewards In the 1980s group refined approach By the 1980s, the Stones realized the lack of cooperation and teamwork was costing them millions of dollars in potential new revenues from concert tours and record sales. The change began with the Steel Wheels tour in 1989 when for the first time the Stones, working with a Canadian promoter named Michael Cohl, took total control over all aspects of their tour. In the past, the Stones, like most rock bands, put together a schedule of cities to tour. Cohl proposed that he would assume full responsibility for all 40-concert venues on the Steel Wheels Tour. All band members had to do was perform, and this would avoid the squabbling that took place when they had to make group decisions. After they had played the first several venues it became clear to Cohl that he was losing money on each one. To make the tour a success they would all have to work together to find new ways to cut costs and increase revenues. From this point on each of the Stones became directly involved in every decision concerning staging, music, advertising and promotion, and even the price of concert tickets—which have shot up in every tour since Steel Wheels. In the end, the Steel Wheels tour made more than $260 million and the Stones made far more than the $40 million they were promised. Since 1989, the Stones have earned more than $1.5 billion in revenues, about $500 million of these have come from royalties earned on the sales of their records and songs. But, the incredible success of their world tours generated the remaining $1 billion from the ticket sales, merchandising, and company sponsorship money associated with their tours, such as their most recent tour, the Bigger Bang tour that began in 2005. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Problems in Group Motivation and Performance
Social Loafing Sucker Effect Social loafing is the tendency for individuals to exert less effort when they work in a group than when they work alone. The sucker effect is a condition in which some group members, not wishing to be considered suckers, reduce their own efforts when they see social loafing by other group members. Both are common problems in group motivation and performance. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Causes of Social Loafing
Lack of connection between inputs and outcomes Perception that individual efforts are unnecessary or unimportant Large group size Motivation, effort, and performance are highest when outcomes are administered to employees contingent on their level of individual performance. If there is a lack of connection, individuals will not exert the same effort. Employees may also think that there efforts are not really needed. This belief lowers their level of motivation. Several studies have found that the tendency for group members to put forth less effort increases as the size of the group increases. This increase in social loafing occurs because larger numbers of people in a group increase the problems associated with identifying and evaluating each person’s individual performance. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Reducing Social Loafing
Make individual contributions identifiable Make individuals feel that they are making valuable contributions to a group Remind employees why they were initially chosen for the team Keep the group as small as possible Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Task Interdependence Task interdependence is the extent to which the work performed by one member affects what other group members do As task interdependence increases, the degree and intensity of the interactions among group members who are required to perform the tasks also increases To determine how to assign outcomes to the individual members in the group, the kinds of tasks it performs must be taken into account. James D. Thompson’s model of group tasks helps managers identify (1) task characteristics that can lead to process losses and (2) the most effective ways to distribute outcomes or rewards to group members to generate high motivation. Thompson’s model is based on the concept of task interdependence—the extent to which the work performed by one member affects what other group members do. Thompson identifies three types of task interdependence: pooled, sequential, and reciprocal. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of Task Interdependence
Exhibit 11.2a Pooled Task Interdependence Sequential Task Interdependence Pooled Task Interdependence: each member of a group makes separate and independent contributions to group performance. Sequential Task Interdependence: requires specific behaviors to be performed by group members in a predetermined order. Reciprocal Task Interdependence: the activities of all work group members are fully dependent on one another so that each member’s performance influences the performance of every other member of the group. Diagrams of each type of interdependence follow on the next three slides. Reciprocal Task Interdependence Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Pooled Task Interdependence
Exhibit 11.2b In this type of interdependence, each member’s contribution can be identified and evaluated. Group performance is determined by summing up the contributions of the individual members. Examples of tasks with pooled interdependence include work performed by the members of a typing pool, by waiters and waitresses in a restaurant, and by a group of physicians in a health maintenance organization. One common source of process losses on tasks with pooled interdependence is duplication of effort. This coordination problem can usually be solved by carefully and clearly assigning tasks to group members. Because pooled interdependence allows each member’s contribution to be measured and rewarded, the potential for process losses due to lack of motivation is relatively low. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 3

Sequential Task Interdependence
Exhibit 11.2c In this type of interdependence, the level of each member’s performance affects the performance of other members down the line. Examples include all types of assembly-line work from the production of cars to the production of Subway sandwiches. Sequential interdependence makes identifying individual performance of group members difficult because each member contributes to the same final product. An error made by a group member at the beginning of a work sequence can affect how well members later in the sequence perform their tasks. The performance level of the least capable or poorest-performing member of the group determines group performance (weakest link). The potential for process losses is higher with sequential interdependence than with pooled interdependence. Motivation and social loafing problems are also encountered more often because all of the group’s members work on the same product and it is hard to discern what individual performance levels are. Managers should consider close monitoring of these groups, forming groups on the basis of ability, and rewarding group members on the basis of group performance. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Sequential Task Interdependence
Examples of sequential interdependence include all types of assembly-line work—from the production of cars, to televisions, to Subway sandwiches—where the finished product is the result of the sequential inputs of group members. One company that failed to anticipate the problems the move from using pooled to sequential task interdependence would cause is Levi-Strauss. In the 1990s, Levi-Strauss’s competitors outsourced their manufacturing activities to low-cost Asian companies; Levi Strauss, being more committed to its employees, decided it would instead try to increase the productivity of its U.S. factory employees by moving to use work groups. The company abandoned its piece rate plan whereby each employee worked separately on a specific task and was paid according to how many tasks, or pieces he or she completed. Instead, employees were assigned to work groups of up to 35 people who were now jointly responsible for all the jean-making tasks such as sewing on pockets, zippers, and belt loops. They were paid according to the number of pairs of jeans the whole team made. But after the new team system was implemented, productivity plunged. In part, this was because employees weren’t used to the new issues and problems the groups created. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Reciprocal Task Interdependence
Exhibit 11.2d When the activities of all work group members are fully dependent upon one another so that each member’s performance influences the performance of every other member of the group, the group tasks are characterized by reciprocal task interdependence. Examples of work groups whose tasks are reciprocally interdependent include high-tech research and development teams, top management teams, emergency room personnel, and operating room teams. The potential for process loss is highest when tasks are reciprocally interdependent because motivation and coordination problems can be especially difficult. Motivation problems such as social loafing can ensue because it is difficult, if not impossible, to identify an individual’s level of performance when the final product is the result of the complex interplay of the contributions made by everyone. While the potential for process losses increases as task interdependence moves from pooled to sequential to reciprocal, the potential for process gains also increases. As the level and intensity of group members’ interactions increase and the expertise and skills of group members are brought to the task, the potential for synergy increases. Synergy is a type of process gain that occurs when members of a group acting together are able to produce more or better output than would have been produced by the combined efforts of each person acting alone. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Surgical Teams Have Reciprocal Task Interdependence
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Group Cohesiveness Group cohesiveness is the attractiveness of a group to its members High Low Groups high in cohesiveness are very appealing to their members; those low in cohesiveness are not appealing to their members and may even repulse them to the point where they try to leave the team. Group cohesiveness affects group performance and effectiveness. Exhibit 11.3 illustrates the five factors that influence a group’s level of cohesiveness. It is pictured on the next slide. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Determinants of Group Cohesiveness
Exhibit 11.3 As groups get bigger, their members tend to be less satisfied. Therefore, large groups do not tend to be cohesive. Groups between 3 and 15 people tend to promote cohesiveness. People generally like, get along with, and most easily communicate with others who are similar to themselves. Groups will be more cohesive when group members are homogeneous. Competition between groups in an organization increases group cohesiveness when it motivates members of each group to band together to achieve its goals. Some competition can be helpful, but too much competition can be dysfunctional. Nothing breeds success like success. When groups are successful, cohesiveness increases. A group’s exclusiveness is indicated by how difficult it is to become a member of the group, the extent to which outsiders look up to the group’s members, the group’s status within the organization, and the special rights and privileges accorded to its members. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 3

When Cohesiveness Is Low
Members are not motivated to participate in the group Members do not effectively communicate Group has difficulty influencing member behavior Group fails to meet goals A certain level of cohesiveness contributes to group effectiveness. When that level is insufficient (1) group members are not motivated to participate in the group, (2) do not effectively communicate with one another, (3) the group has difficulty influencing its members’ behavior, and (4) the group often fails to achieve its goals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

When Cohesiveness Is Excessive
Time is wasted by members socializing on the job Conformity is stressed at the expense of needed change Group goal accomplishment becomes more important than cooperation with other groups to achieve the organization’s goals When that level is excessive—when groups are too cohesive—(1) time is wasted by members socializing on the job, (2) conformity is stressed at the expense of needed change, and (3) group goal accomplishment becomes more important than cooperation with other groups to achieve the organization’s goals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

When Cohesiveness Is Moderate
There is an appropriate level of communication and participation among members The ability to influence members’ behavior to ensure conformity while still allowing for some deviation The capacity to stress the importance of the group’s accomplishments but not at the expense of other groups and the organization A moderate amount of group cohesiveness results in the most favorable group and organizational outcome. A moderately cohesive group has (1) the appropriate level of communication and participation among members, (2) the ability to influence members’ behavior to ensure conformity while still allowing for some deviation, and (3) the capacity to stress the importance of the group’s accomplishments but not at the expense of other groups and the organization. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Signs of Cohesiveness Low cohesiveness: Information flows slowly; group has little influence; group tends not to achieve its goals Moderate cohesiveness: Group members work well together; there is good communication and participation; group is able to influence its members’ behavior; group tends to achieve its goals Very high cohesiveness: Group members socialize excessively; high level of conformity; group achieves its goals at expense of other groups Managers should strive for a moderate level of cohesiveness. This is the level that results in the most favorable group and organizational outcomes. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Consequences of High Cohesiveness When Group Goals Are Aligned with Organizational Goals Exhibit 11.4 Exhibit 11.4 describes the consequences when group goals are aligned with organizational goals. Note that cohesiveness results in advantages and disadvantages at high levels. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Disadvantages of High Cohesiveness When Group Goals Are Not Aligned with Organizational Goals Exhibit 11.5 Exhibit 11.5 describes what happens when group goals are not aligned with organizational goals and the group has a high level of cohesiveness. In this case, the group members are loyal to the group and not the organization. There are no advantages to high cohesiveness when the group goals are not aligned with the organization. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Important Organizational Groups
Top management teams Self-managed Work teams Research and development teams Virtual teams The top management team is the team of managers who report to the chief executive officer (CEO). The quality of decision making in the top management team is a function of the personal characteristics and backgrounds of team members. Self-managed work teams are teams in which team members have the autonomy to lead and manage themselves and determine how the team will perform its tasks. The job characteristics model of job design provides a good framework for understanding why the use of self-managed work teams can lead to higher levels of motivation, performance, and satisfaction. Research and development teams are usually cross-functional teams that are formed to develop new products. An R&D team that is created to expedite new product designs and promote innovation in an organization is known as a skunk works. Virtual teams are teams in which a significant amount of communication and interaction occurs electronically rather than face to face. Organizations use virtual teams to help people in different places or time zones work together. Organizations will increase their reliance on virtual teams because of increasing levels of globalization. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Effectiveness in Self-Managed Teams
Team is truly self-managing Work is complex Work results in finished end product Managers are supportive of teams Members are carefully selected Members want to be part of the team These conditions must be present for self-managed work teams to be effective. More research is needed to explain why self-managed teams are successful as well as why they are sometimes not successful. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

A Cross-Functional R&D Team
Exhibit 11.6 This Exhibit illustrates a cross-functional research and development team. Team members represent each of the different functions or departments necessary to develop and launch a product. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 3

Ford’s Mustang Developed by a Skunk Works
An R&D team that is created to expedite new product designs and promote innovation in an organization is known as a skunk works. The group consists of members of the engineering and research departments and other support functions such as finance and marketing. Skunk works often meet and work in facilities that are separated from the rest of the organization. Having their own facilities gives group members the opportunity for the intensive interactions necessary for innovation (or other process gains) and ensures the group will not be interrupted or distracted by the day-to-day problems of the organization. Members of skunk works often become very possessive of the products they are developing and feel completely responsible for the success or failure of them. Ford Motor Company established a skunk works to develop a new Mustang coupe and convertible. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning Dissemination or sale of any part of this work (including on the WorldWideWeb) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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