Anthony Rucci wonders why so many organizations don’t seem to understand that treating employees and customers with dignity and respect leads to better organizational performance.
It’s a simple enough concept: both people and organizations seem to win when civility and dignity are hallmarks of an enterprise and I-O psychology can, and does, play a key role in focusing on this concept which causes organizations to be successful.
Rucci, a senior lecturer at The Ohio State University’s Fisher College of Business, was the keynote speaker at the closing plenary session of SIOP’s 23rd annual conference in San Francisco earlier this month.
He spoke about the “core purpose of I-O psychology” and pointed out that it is only where science and practice converge that I-O psychology really makes it full contribution to organizations.
A large part of an organization’s market value is driven by the ideas and innovations of people within the organizations, he said. “If it’s the ideas and intellectual capital of people that create value, then companies that treat employees the right way should get better customer outcomes, and that in turn should lead to better financial and value creation outcomes,” he maintained.
Yet many boards and senior executives don’t to get it. “They don’t seem to understand or they are unwilling to accept that successful organizations are not about profits, they are about people.”
I-O psychologists share some of the blame because they have done a “conspicuously poor job of demonstrating the power of that simple idea to organizational leaders and boards,” Rucci said, suggesting that perhaps the greatest obstacle I-O psychologists face is their lack of business literacy.
“I-O psychologists’ inability or unwillingness to embrace or even understand business and enterprise has been a severe limiter in our profession’s ability to be more influential at the leadership and board level of major organizations,” he said.
“As a profession, we simply must do a better job of influencing organizational leaders as to why they should be concerned abut what we know about people in organizations. We must do a better job of showing them how our work influences value creation outcomes that are important to them, not us. Outcomes like customer satisfaction, band reputation, expense levels and, yes, earning.”
Rucci has spent a considerable part of his career proving that his model of “treating people right” leads to business success. It turned out he was partly right. It’s more than happy and satisfied employees.
As he examined organizations, Rucci’s empirical data and experience revealed the critical factor that triggers value creation in an organizations is employee commitment; that is employees’ sense of involvement, the intrinsic value of the work they do, and the degree to which they see a clear line of sight between their job and the organization’s goal.
So, given this model, the core purpose of I-O psychology is to enhance the dignity and performance of human beings, and the organizations they work in, by advancing the science and knowledge of human behavior: a blending of science and practice.
“This, it seems to me, is a rather balanced equation that holds out that the performance and positive experience of individuals at work is equally as important as the organization’s overall performance,” Rucci said.
He outlined three critical concepts in his core purpose statement: the dignity and performance of human beings, the performance of organizations and advancing the science of human behavior.
The dignity an performance of human beings is maximized when employees are given meaningful work where they can see a direct connection between their efforts and the organization’s overall goal; when personal accountability exists where the employee feels that what he or she does matters; and when supervisors and leaders treat people with respect in order to achieve a positive climate of dignity in organizations.
By enhancing organizational performance, Rucci said he was referring to “value creation,” which includes more than economic profit. The science and practice of I-O psychology needs to transcend the economic factor to add true value to an organization, whether it is a government agency, a for-profit company or a non-profit.
And, yes, an academic department like I-O psychology needs to create value, as well. If I-O departments stop creating value, their very existence will be threatened, he warned.
High performance organizations tend to define value creation in terms of several constituencies: employees, customers, shareholder owners and communities. “I-O psychologists need to concern themselves with how their work, their research and their teaching addresses value creation outcomes for all of those constituents, not just employees,” he said.
While other disciplines are concerned with the performance of people and organizations, it is I-O psychologists who bring the science of human behavior to these concerns. It is a significant distinction and one that separates I-O psychologists from other disciplines, enabling them to advance the science and knowledge of human behavior in the workplace, which is the third and final concept in Rucci’s core purpose of I-O psychology.
He also listed six compelling contributions I-O psychologists can make toward the core purpose.
I-O psychologists primarily in research and academic venues drive three of the six contributions, he said. Those include job satisfaction research and measurement, the literature on motivation and goal setting in the workplace, and the psychometrics of human capability, where the ability to validly and reliably assess human potential has been a huge contribution.
Major contributions of organization-based I-O practitioners are in the areas of leadership development and effectiveness, which have had a profound effect upon organizations; team effectiveness, and the design of incentive and compensation systems.
In summing up his message, Rucci said he believed “the core purpose of I-O psychology is to help people breathe human energy into organizations and the central point of the core purpose is the critical, but rather simple notion of the dignity of human beings.”