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April of last year marked a new era for public sector services in the UK as the government seeks to address the deficit and reduce the cost of its public sector workforce. Traditional entitlements for public servants have been heavily scrutinised in a way not seen in the last decade with the announcements of job losses, pay freezes and reduced pension provision.

The traditional lure of job and financial security within the civil service is a focal point of public sector worker discontent and is at the heart of what is known as the psychological contract. This is best explained as a series of unwritten and unconscious reciprocal expectations that the employee and employer have of each other.

For example, an implied (though unofficial) agreement may exist whereby in exchange for diligence and loyalty, an employee may feel assured in his or her job and financial security. It has been suggested that public sector workers often have stronger psychological contracts, placing greater emphasis on long-term involvement and fair treatment, than their private sector counterparts.

But what happens when the employer does not fulfil its end of the bargain? If an employee recognises that the employer’s actions are inconsistent with its obligations, then this breach of the psychological contract has a severely detrimental effect on the employee’s attitudes and behaviour. Research has shown that violating the psychological contract can lead to a lack of trust in the employer, lower performance levels, reduced desire to remain in the organisation and decreased employee satisfaction.

These types of reactions, however, can be moderated by how much procedural justice employees perceive there to be in the organisational restructuring. That is to say, they will be less likely to react negatively to changes in psychological contracts if they are able to attribute the breach to a legitimate need and that the process of implementing the changes was fair. So, the extent to which employers consult with their staff and not simply communicate the changes in employment arrangements will, in large part, influence their employees’ morale and behaviour following any restructuring process.

Unfortunately, of the 330,000 jobs expected to be cut in the public sector, one key area of staff reductions is likely to be managerial posts and in particular senior managers. Potentially it could be an over-stretched and under-qualified pool of public service managers, with little experience dealing with the costs of cuts and redundancies that will be left with the task of delivering to a high standard, whist morale is low.

It will be vital for public service employers to effectively manage change within their organisations. In the long term, reduced commitment to the employer, resulting from a breach of the psychological contract, could lead to difficulty in retaining skilled employees internally. Further difficulties will lie in recruiting talented individuals externally. Bear in mind, these changes are occurring within a wider series of austerity measures such as the substantial increases in university tuition fees. I suspect young people’s career intentions to be further shaped unfavourably against opting for work in the civil service as graduates abstain from low paying public service jobs for higher paying positions in the private sector.

A psychologist specialising in innovation told me recently that he had seen an upsurge in work in the last couple of years as organisations realised that by being more systematic and thoughtful in the way they did things they could become more creative and innovative than they had been. The constraints that managers are working under in other words had led them to appreciate the benefits of applying psychology.

You have no doubt attended sessions at conferences where psychologists discuss firstly what we have to offer and secondly how we can persuade people to take some of it. In a neat inversion of that formula the DOP conference organisers asked me to form (the slightly younger, less wise but more handsome) half of duo with Professor Chris Clegg to lead a discussion at the 2012 DOP conference on the top five business issues that occupational psychologists can confidently make a contribution to, like the psychologist in the example above.

For my part I saw the top 5 issues as:

  1. Diversity – this is a topic that is becoming more and more important. Psychological theory and research offers explanations and guidance, much of it counter to prevailing management wisdom.

  2. Doing more with less – at a time when organisations’ budgets are being cut psychology shows how through humanistic management practice we can obtain the results that are desired.

  3. Remote team working – in large organisations teams are becoming dispersed. Developing trust and cultural intelligence are just two ways psychologists can make a difference.

  4. Managing performance and motivation – keeping people motivated and performance maintained if not enhanced during times of change is something all organisations want. Who better to help them.

  5. Decision-making – the most recent research shows that we are not as rational in our decision-making as we like to think. Learning more about our biases as well as ways of countering them is something that will grow in interest within organisations. Let’s not leave this to the economists.

My esteemed colleague took a different tack, examining the role of psychologists. Chris’s view was that we should not under-estimate or de-value the rich theoretical, research and academic base on which all of our practice should be built. This is our heritage, if you like, and what makes us able to bring a very different perspective to the challenges faced by organisations. In order to do this we need to be bolder and braver – being prepared to comment on the issues that enterprises of all kinds are facing. In particular, organisational change, innovation and resilience are hugely significant issues, all of which play to strengths that psychologists possess.

From the ensuing discussion with the 50 plus psychologists in the room four themes emerged – three related to business issues and the fourth to us as a profession.

  1. More with less – organisations are under pressure, individuals are under pressure, there is constant change, in an environment which demands results in shorter and shorter time periods. Resilience, change management, employee health and well-being are all ways we can add value. We can assist in introducing better methods and processes for innovation, improved job design as well as being able to get individuals and teams to get individuals and teams to see others’ perspectives better.

  2. Decision-making – we are being bombarded with information but how can we manage its flow and processing to ensure better decision-making?

  3. The changing workforce – the population is ageing and we can assist organisations in supporting their employees in the working life. The workforce is also changing the way it works – greater flexibility for example brings some benefits but also greater demands- managing these processes is something we are knowledgeable in.

Finally there was a discussion of our knowledge and skill set. We need to keep abreast of new developments, be encouraged to develop new expertise including using technology to solve problems in innovative ways. But we also need to develop our skills, from the language that we used to being more challenging. Clearly, the DOP has an important strategic role to play here.

The consensus amongst the group was very noticeable and striking. There was a clear view about the contribution we can make, the way we can do it and what we need to do to achieve it.

Today, along with millions of others, I have listened to the news that two of the murderers of Stephen Lawrence have finally been convicted of his death, more than 18 years after the unprovoked racist attack in south-east London.

Stephen Lawrence’s murder has brought about some fundamental changes in our understanding, reaction to, and management of racism in our society.

Firstly, the Macpherson Inquiry into the handling of the initial investigation by the Metropolitan Police shone a spotlight on how prejudice can thrive in groups and how people in professional roles can turn a judicious blind eye when something is not particularly important to them. The term “institutional racism” used in the report of the Macpherson Inquiry has subsequently become a well recognised, if somewhat miss-used, term in today’s vernacular.

Secondly, the Race Equality Duty, was introduced in 2001 in direct response to the findings of the Macpherson Inquiry. Leading the introduction of these new legal duties on the public sector, Jack Straw indicated that his ambition was for public sector bodies such as the police to become the leading light on taking proactive, positive steps to foster good relations between different groups and tackle discrimination.

Thirdly, Recommendation 11 of the Macpherson Inquiry amplified the responsibility of race relations legislation, and in particular the responsibility of all police officers to uphold their legal duties. The fact that Chief Police Officers can be held vicariously liable for the acts and omissions of their officers relevant to the legislation is just one of the reasons that police forces and constabularies take issues of racism so much more seriously now than previously.

Fourthly, Stephen Lawrence’s murder played a significant role in the ending the double jeopardy principle, whereby no one could be tried twice for the same crime. The abolition of this legal principle in 2005 meant that one of Stephen’s murderers could be successfully tried again.

So the death of Stephen Lawrence has brought about some fundamental changes in the way that racism is dealt with in this country. However, I realise with some resignation it is not Stephen’s death that has brought about these changes. It is not even the fact that the attack was racially motivated that brought about these changes. In fact, the thing that ensured Stephen’s murder did not simply go recorded as an unsolved crime was just how stupendously badly the Metropolitan Police bungled the initial investigation, combined with the tenacity of Stephen’s mother and other supporters.

So can individuals make a difference in tackling issues as big as racism? Without a doubt. I also strongly believe organisations can, and do, have a significant impact on cultural change, including on issues as significant as tackling racism in society. Hopefully your organisation will be doing this in a positive, proactive way, and not in the negative mishandling impact that the Met Police had.

One of the most common mistakes I come across in business today is people who try to manage their remote teams using pretty much the same tactics as they use for managing their face-to-face teams.

On the face of it, managing a remote team doesn't sound like it should be that much harder than managing a face-to-face team. After all, we have a whole industry of modern technology to assist us - mobile phones, teleconferencing, videoconferencing and webcams. Yet the very fact that we feel the need to create even more sophisticated technologies such as tele-presence (where you can almost believe you're in the same room as the person you're seeing) should tell us something about how strong our desire is to feel we're in the same vicinity as the other person.

Not surprising, then, that research has found that it takes something like four times as long to communicate a message electronically as it does to communicate it face-to-face. So every time you reach for your email, be prepared to wait a little longer and work a little harder before the message is accurately received the other end. And it's not just communication effectiveness that is impaired by remote working - it also takes a bit longer for us to establish trust with someone we can't see. This is OK in long-term teams, but when quick turn-around is needed in a new team, trust is a tricky issue. Not only does it take us two weeks longer to establish trust with someone we can't see, but that trust is also more fragile - we're more likely to lose our faith in remote team members than people we see in the flesh.

It's not all doom-and-gloom though. There are things that you can do in order to manage your remote team more effectively.

Our five top tips are:

1. Use the 'information-richest' form of media available to communicate - face-to-face where possible, followed by tele-presence or video conference, then telephone. Ideally, email should only be used to convey sizeable amounts of information, specific data, or as a last resort.

2. Encourage spontaneous, informal communication between your team members. The use of tools such as Skype helps people to feel more in touch with their colleagues and makes it easier for them to reach out to each other with quick questions.

3. Make time for socialising during remote discussions. Time for small talk becomes much more important when people don't get to catch up with each simply by wandering past the other person's desk.

4. Overtly discuss the skills a new member of the team is bringing, as well as the latest achievements and successes of current team members. This will help to strengthen trust between remote team members.

5. Avoid 'virtual silence'. Encourage the team to acknowledge messages they have received from one another when they don't have time to deal with it there and then. Misinterpretation of virtual silence can result in people assuming the other person isn't working as hard as they should or that they don't care about the message that has just been sent.

Globalisation. It's hard to pick up any business related-read nowadays without being told how the workplace is increasingly globalised, how we are facing increased global competition or to read about people banging on about the global war for talent.

In fact, we've been talking about globalisation for some time now. Just flicking through some of the papers in my ever-increasing 'to read' pile, I see references to business globalisation as 21st Century phenomenon; others describe it as a 20th Century invention; while some refer to it as being introduced in the 19th Century along with the Gold Standard.

In fact there are references to globalisation all the way back to approximately 400 BC when Herodotus recorded the 'strangeness' of doing business with the ancient Egyptians.

So we may not be able to agree when globalisation started, but started it has. Yet despite having talked about globalisation for so long, it seems to me that the vast majority of organisations, including those that pride themselves on being 'genuinely' multinational and multicultural, have not yet grappled with what this means for them in reality.

What is cultural intelligence?

I am struck by how many leaders within multinational organisations are embarrassed by how little their organisation does to ensure it is operating with cultural intelligence. People shuffle their feet and talk about cursory expat training, which might cover how to hand over a business card without offence, but does little to equip expats with the skills they genuinely need to work effectively in a different cultural climate.

How many people in your company, for example, know when 'yes' means 'yes' in a different culture, and when it actually means 'no'? How many people know in which cultures it is entirely expected to openly voice either assent or dissent with what is being discussed?

If organisations are genuinely looking to do business in a culturally intelligent way, then two levels of cultural intelligence need to be examined. The first level is an individual level of cultural intelligence. That is, helping the employees, managers and expats who are at the coalface having to make globalisation work, to demonstrate cultural intelligence. There are three key elements to individual cultural intelligence:

1. Knowing the cultural values of the other party.

2. Being mindful of the impact of your own cultural values.

3. Adapting your behavior to demonstrate cultural intelligence.

Cultural faux pas

Sadly, many organisations simply put their employees through cultural training programmes that are supposed to increase the knowledge element of cultural intelligence, but instead simply reinforce stereotypes and assumptions, and can be wildly inaccurate. According to one of these programmes, for example, men should never wear striped ties to do business in the UK.

The second level of cultural intelligence concerns the amount of cultural intelligence embedded within the organisational processes themselves. For example, expatriate failure rates vary between 20 and 75% yet organisations often do very little to select the right people for an expatriate role or provide the appropriate support when people are in these roles. Or think about those organisations that only equip their teams with basic communication media - and then wonder why their global teams seem to experience communication and trust issues.

So, the question is, how culturally intelligent is your organisation? How many cultural faux pas are committed each day in your offices? The conclusion that I have come to is that while our economies may be in a state of globalisation, all too often, our businesses and people are not. What do you think?

Time for a rant...

For the last eight weeks - and come to think of it, for the last several years - I have been watching the Apprentice and getting increasingly irritated with the prevailing view amongst the potential apprentices that it is "OK to be a git/b*****d/'s only business". Why?! Why is it seemingly acceptable to step on the throat of those around you as long as it is in the name of business success (and by "business success", read "making a quick profit")?

Well, paradoxically it seems as though we like them. Despite being self absorbed, arrogant, manipulative and having a grandiose sense of entitlement, we seem programmed to find such people fascinating - but only for a short time. Even though we know that they are self-centred, excessively dominant and potentially hostile, we are drawn to them like moths to a flame.

Psychological research in the Journal of Personality and Social Psychology (Jan 2010) backs this up with some interesting findings. It seems as though those individuals with narcissistic traits (ego, vanity, conceit and selfishness - i.e. your archetypal apprentice wannabe) make excellent first impressions. Their sense of entitlement is admired and their charm, confidence, verbal fluency and ruthlessness win people over.

However, such traits will eventually be uncovered for what they are - style over substance. The power to influence, inspire and motivate others to follow your lead is a far more powerful trait and one that leads to lasting success. Consider the new slant to The Apprentice this year in which Lord Sugar is seeking a partner to start up a new business venture. Being nasty, selfish and manipulative may be the norm in larger corporations but they will certainly not help smaller businesses to grow. In fact, building close, caring relationships with your colleagues and customer base can be the deciding factor between long-term success and failure.

Lord Sugar would do well to consider whether he is in it for the 'quick buck' - in which case his narcissistic cronies will probably be ideal; or whether he wants to employ a leader who can win the hearts and minds of customers and staff alike. Time will tell, I guess.

Click here to read the original blog in full on the Management Today website - Psychology at Work Blog, a blog page about the psychology of business,management and leadership written by Pearn Kandola.

Even those people who like to be known for their outspoken comments are aware that there is a fine line between getting attention and getting sacked. Top Gear presenter Richard Hammond judged this to near perfection recently with his comments about Mexicans. His crude comments certainly got him talked about but overall many found what he had to say amusing, including his bosses at the BBC. Hammond knew that by choosing Mexicans he would be on safer ground than if he remarked about, say, Indians or Pakistanis. Make offensive observations about the first and he is being humorous but make them about the latter and he'd be racist. He gauged this very well, showing us where the public's tolerance of such views lies.

I mention this because I have just returned from a trip to the US.Arriving at my hotel I switched on the TV to see Michael O'Leary, the CEO of Ryanair, being interviewed on Bloomberg by Francine Lacqua. One of her first questions was whether O'Leary flew on the budget airline himself? He said that he did and passengers seeing him queue up like everyone would think 'Jew'. I couldn't really believe what I'd heard especially since the interviewer let it pass without remark.

Should he be allowed to get away with this? As far as I am aware there's been no reaction to what he said by anyone? Does this demonstrate again the public's lack of concern about certain groups of people being derogated and stereotyped in this way? I am always suspicious about people being described as 'colourful' or 'outspoken' as if this can forgive any utterance they make. The same applies here and it is worse that it is a senior, successful businessman making it. The lack of response may mean that no-one was watching in the first place or more worryingly that many find his remarks acceptable? Leaders have to recognise that they are role models if not outside of their organisations then certainly within them and they have a responsibility to display behavior that is not offensive.

Click here to read the original blog in full on the Management Today website - Psychology at Work Blog, a blog page about the psychology of business,management and leadership written by Pearn Kandola.

Click here to read the original blog in full on the Management Today website - Psychology at Work Blog, a blog page about the psychology of business,management and leadership written by Pearn Kandola.

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