Want to know more about organizational behavior management?

Organizational behavior management (OBM) is a sub-division of Applied Behavior Analysis (ABA) that focuses on uses our behavioral principles to influence employee and manager behaviors in the workplace. These strategies are likely to help companies reach their organizational goal, as well as have the employees achieve their personal professional development goals as well. This is likely to lead to an increase in productivity. OBM strategies can also be useful in training employees to engage in leadership behaviors, as well as creating an enriched, fun work environment for everyone (OBM Network).

So why did ABA start applying our principles such as positive reinforcement, objective performance measures, and self-management strategies to the behavior at an organizational level in the first place?

To answer this question, let’s take a few minutes to talk about the conventional pay system and the history of organizations in our country. In 1776, the idea of Capitalism was born when Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. This drastically changed productivity through the 19th century, as shopkeepers, artisans, and farmers became more prevalent occupations and the notion that anyone could improve their living conditions swept the country (Abernathy, 2011, p. 2).

During this same time, however, Abernathy (2011, pp. 2-6) identifies five particular developments that contributed to the demise of this individual enterprise:

  1. Mass production. Eli Whitney’s invention of the mass production factory process “transferred the skill from the man to the machine” (Cook, 1977). Man did not need an individualized skill to succeed in mass production factory job. Rather, just about anyone could fit into the standardized system.
  2. Wages. Henry Ford started hourly page wages on a large company-wide scale. This fixed-time pay schedule has become the standard wage system in organizations.
  3. Information Age. According to Abernathy (2011, p. 3), only about 17% of Americans worked in “information jobs” in 1950 (an information job here meaning a position that requires some sort of specialty knowledge, such as a programmer, manager, insurance agent, broker, lawyer, etc.). However, as of 2011, at least 60% of Americans work in information jobs. That is more than a 350% increase in 61 years! Our nation has shifted from a system where the notion existed that individuals can change their living conditions through the work they produce, to a system where we are essentially mass producing information. Because of this, a lot of the ambition to perform well that existed when we created our own futures has been lost, and this separation between the worker and the result produced by his labor increased.
  4. Bureaucratic organization. Abernathy explains that as the implementation of the assembly line became more popular, the sizes of organizations increased and the notion developed that the worker was just another part of the assembly line’s machinery. This started the rise of bureaucratic organizations in our country. Max Weber described six characteristics of bureaucratic organizations, many of which served as the basis for the development of our modern corporate bureaucracy. He says that large organizations promote division of labor, utilize a chain of command for decision making, separate ownership from management, function with management as a distinct and full-time activity, and allow managers to apply standardized and unemotional decision-making across different cases (Treuathan & Newport, 1976).
  5. A loss of connectedness in the workplace. The development of the mass production system, use of the fixed-time wage system, increase in information jobs, and bureaucratic corporate system have all contributed to the decrease in the connection between work performance and rewards within the workplace. Abernathy asserts that this loss of connectedness “has eroded worker initiative and job satisfaction” (2011, p. 6).

On top of this, Abernathy discusses the pay crisis that is occurring in our country. He says that the conventional pay system utilized by most corporations in America is characterized by “guaranteed wages and salaries, annual merit evaluations and merit pay increases, annual cost-of-living pay increases, and market-based pay set by a market survey” (2011, p. 7). This way of pay became popular after World War II when there was an increase in demand for products worldwide and a shortage of labor, and corporations have continued to implement such wage systems since then.

In The Sin of Wages, Abernathy (2011, pp. 8-10) addresses the seven sins of this conventional pay system:

  1. Fixed-cost pay. The general way of thinking in corporations today is that as an employee, you are entitled to your salary and for a raise each year. This is problematic for (at least) two reasons. First, because of this way of thinking, a company’s payroll remains a stable (or, a fixed-cost) and grows at a compound rate over time. Then, when profits decrease, the most utilized solution is to layoff employees. Essentially, this sense of entitlement creates the sense of job insecurity that is prevalent in America today. Secondly, with the notion that pay is guaranteed for life, employers may be reluctant to hire new employees or increase pay when profits are high, so entitlement pay decreases the number of people who are hired and the amount of pay that is being provided.
  2. Pay for time. This one is pretty self-explanatory when you think about it, yet everyone on an hourly wage system is getting paid on this fixed-time system. Abernathy puts this very simply by saying, “When you pay for time, you get time. When you pay for results, you get results” (2011, p. 8). This is so incredibly detrimental to productivity. Employees will tend to stretch their work to fit the time that is available, especially since finishing a task early typically results in more assignments or criticism for not doing something. Therefore, if I can type this blog post in 1 hour and I am I get paid hourly to do so, I may stretch this process into a 3 hours by working slower, taking breaks, etc. to avoid having another task assigned to me. If I were on a $10/hour wage system, I would increase my wages from $10 to $30 by taking longer on the post. Compare this now to paying $20 per post. Regardless of how long I take to write the post, I earn $20 for each post of a specified minimum word length. That is what Abernathy means by paying for results.
  3. Corporate Socialism. With entitlement pay, good performers are getting paid the same as everyone else. Thus, over time, this high performance tends to drop to a mediocre performance as it is extinguished (i.e., unrewarded) by peers and management.
  4. Performancebased promotions. Companies using this conventional pay system typically don’t have extra money in their budget lying around to immediately reinforce (i.e., reward) employees for their work. Thus, these companies turn to promotions as a reinforcer (i.e., reward) instead. However, this pulls the best performers out of their job and into a management position, resulting in the loss of a good performer and the addition of an ineffective manager. This employee will then likely reach a point where their performance does not warrant a promotion anymore, and they will no longer contact this reinforcer. With the reward being withheld, extinction is likely to occur and various dimensions (i.e., frequency, duration or time, intensity, etc.) of their productive behaviors will decrease.
  5. Management by perception. The conventional wage system promotes lazy management strategies, in that time-orient pay does not require continuous measurement and recording of behaviors in the workplace. Therefore, managers use their subjective opinions to identify which employees are performing well and which ones are not.
  6. Management by exception. In addition to relying on subjective perceptions, managers also recognize employees based on exceptions since there tend to be few objective performance measures (as just discussed in management by perception). “In this system, employees don’t work to earn their pay, they work to avoid losing it” (Abernathy, 2011, p. 10).
  7. Entitlement thinking. Finally, the perpetuation of this entitlement pay has created an entitlement culture. Here, employees believe that they deserve their pay regardless of their own performance or the company’s performance. This conventional pay system has produced a culture in the workplace that has shifted from working to make a living, to being paid for simply going to work. The modern day employee does not accept the very simple notion: there cannot be any pay without a successful business.

If you’re like me the first time I was reading this stuff, you’re probably thinking, “Okay, all this is great, but what does it mean?” The take home point is that these “advancements” and the conventional pay system have shifted the emphasis of our modern day corporations away from the behaviors of the individual employee. It just so happens that the field of ABA focuses on predicting and influencing individual behavior based on current variables that precede and follow the behavior. Thus, ABA principles have been successfully applied to the behavior at an organizational level to address some of the problems that have arisen within our modern corporations.

However, since the bureaucratic corporation is the only thing most managers have been exposed to, OBM strategies are not widely implemented correctly, or at all, in American corporations. In his book Oops! 13 Management Practices that Waste Time and Money (and what to do instead), Daniels (2009) outlines 13 strategies that are commonly used in the modern day workplace that are actually detrimental to the success of the company, as well as the happiness and productivity of the employees. The practices that he discusses are employee of the month, stretch goals, performance appraisals, rankings, rewarding the absence of behaviors (i.e., no absences, no errors, etc.), salary and hourly pay, performance feedback strategies (such as, “You did a good job, but…” and the sandwich feedback method), overvaluing smart and talented employees, the budgeting process, promoting people no one likes, downsizing, and forms of reorganizing (i.e., mergers, acquisitions, etc.).

Through this blog series, I will dissect each of the principles proposed by Daniels (2009) and discuss the problems they create, as well as propose different practices based on ABA principles that we can use instead to promote productivity, obtain company and employee goals, and create a more enriched and fun work environment. Please feel free to contact me at dstone@gbcaba.com with questions, comments, or topics you’d like to learn more about.

References

Abernathy, W. B. (2011). The sin of wages. Atlanta, GA: Performance Management Publications.

Cooke, A. (1977). America. NY: Alfred A. Knoph.

Daniels, A. C. (2009). Oops! 13 management practices that waste time and money (and what to do instead). Atlanta, GA: Performance Management Publications.

OBM Network. “What is OBM?” Retrieved April 19, 2015, from http://www.obmnetwork.com/what_is_obm.

Treuathan, R. L., & Newport, M. G. (1976). Management functions and behaviors. Dallas, TX: Business Publications.