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Study finds widespread misconceptions about employees

May 1, 2003

For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com

Study finds widespread misconceptions about employees among those supposed to know the most about them

With organizations of all stripes seeking to tighten their belts these days, there is cause for a bemusement in a study recently conducted by three scholars at the University of Iowa.

At a time when business and government are desperate to get the most out of employees, the research found widespread misconceptions about worker performance among the group that ought to be most knowledgeable about the subject - namely, managers in the human-resources field.

According to Sara Rynes, chairman of the department of management and organizations at Iowa, HR managers these days can draw upon research that is better than ever. Statistical techniques developed in the past several decades permit aggregation of many studies to bolster conclusions and researchers have greatly improved their ability to tease out the effects of HR practices on firms' financial performance.

Yet, when Profs. Rynes, Kenneth Brown, and Amy Colbert sent a questionnaire to 5,000 members of the Society for Human Resource Management probing their knowledge of basic aspects of employee performance, they found serious lacks, even though the 959 managers and executives who responded had an average of 14 years' experience in HR.

In a recent article in the Academy of Management Executive, Profs. Rynes, Brown, and Colbert discussed the managers' seven most common misconceptions. Here is an abbreviated rundown.

-- Conscientiousness is a better predictor of employee performance than intelligence. Although 72 percent of participants agreed with this statement, it is almost surely incorrect. A recent analysis of 85 years of research findings revealed that, on average, general mental ability (GMA) explains 25 percent of the variance in employee performance, while conscientiousness explains only 9 percent. One study estimated that the use of rank-ordered ability scores in the federal government would increase productivity by more than $13 billion relative to simply using a minimum cutoff score at the 20th percentile.

-- Companies that screen job applicants for values have higher performance than those that screen for intelligence. Granted there is far less research on the effects of selecting for values than there is about selecting for GMA or personality. Still, a very large body of evidence suggests that selecting for GMA leads to higher performance, while the scant evidence on values is mixed.

-- "Integrity tests" that try to predict whether someone will take advantage of an employer don't work well in practice because so many people lie on them. Only 32 percent of our responding HR managers realized this was inaccurate. Although research suggests that applicants do distort answers to some extent, the tests have a respectable record of validity, particularly in predicting counterproductive behaviors, such as theft, absenteeism, and violence.

-- Integrity tests have a disproportionate effect in eliminating minorities from consideration. Although nearly 70 percent of our sample believed this, recent large-scale research reveals that differences in integrity-test scores across racial and ethnic groups are trivial.

-- When it comes to improving organizational performance, encouraging employees to participate in decision-making is more effective than setting performance goals. Only 17 percent of our respondents disagreed with this, even though considerable research has shown it to be false, For example, research by Ed Locke and his colleagues at the University of Maryland, based on dozens of studies, suggests that, on average, performance improves by 16 percent from goal-setting but only one percent from efforts to improve employee participation. Admittedly, this is surprising in view of all the corporate success stories about employee participation, such as those of Southwest Airlines, Rosenbluth Travel, and Springfield Remanufacturing. Research suggests, however, that the success of such programs requires that goal-setting precede participation.

-- Most errors in performance appraisals can be eliminated by providing training that describes the kinds of appraisal errors managers tend to make and suggesting ways to avoid them. Seventy percent of our respondents agreed, but research clearly shows performance appraisal to be one of the problematic HR practices and one of the most difficult to improve. Getting rid of leniency is a particular problem. General Electric found that it was unable to eliminate excessive leniency from performance appraisals until it began to insist that managers rank employees on a bell curve and attached substantial penalties to managers for failure to do so.

-- Surveys that directly ask employees how important pay is to them are likely to overestimate pay's true importance. Fifty-six percent of our respondents agreed. But as far back as 1966 researchers cautioned that self-reports of pay importance are likely to provide underestimates due to people's tendency to answer surveys in socially desirable ways. In the largest study of this phenomenon, a Midwestern utility assessed the relative importance of 10 job characteristics, including pay, to 50,000 applicants over a 30-year period. Based on applicants' self-reports, pay appeared to be the fifth most important characteristic to men and seventh to women. But when applicants were asked to rate the importance of those same 10 attributes to "someone just like yourself - same age, education, and gender," pay jumped to first place among both men and women. In other words, people seem to believe that pay is the most important motivator to everyone except themselves.

How to account for the widespread misconceptions the questionnaire uncovered? Comments Prof. Rynes: "Academics and practitioners have put forward a variety of reasons for the failure of research findings to be implemented by organizations. Our survey of HR managers suggests a simple one -- unfamiliarity with the current scholarly literature, which many HR practitioners view as overly technical or irrelevant to their needs."

While conceding that much of the research meets those descriptions, Prof. Rynes says that "too much is at stake to argue over blame. People on both sides of the scholar-practitioner divide need to explore ways to bridge the gap. The prevalence and basic nature of the misconceptions seen in our study document the urgency of that task."

Media Coverage:
Chicago Tribune. Money matters, although few will admit it. (Sunday, October 19, 2003).
Gannett News Service. Kudos or cash?. (Monday, May 05, 2003).
The Des Moines Register. Kudos or cash?. (Monday, May 05, 2003).
The Washington Post. Dilbert would be proud. (Sunday, April 04, 2004).

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