The "Ugliness Factor" when Making Hiring Decisions

If you’re good looking great! If not, well then you could face numerous challenges as you navigate future employment opportunities. According to Daniel Hamermesh who wrote the NY Times article attached, more attractive people made ON AVERAGE $230,000 MORE over the course of their lifetime. Finally, the author of this NY Times article suggests that attractiveness should be added into The Civil Rights Act under disparate treatment as research suggests employers discriminate on the basis of looks.

But the main question is why on earth should people care what someone looks like? Do we really think ugly people aren’t capable of producing new innovative ideas that lead to rapid business development? Or that attractiveness is in some way statistically predictive of a company’s success?

There are many explanations that social psychologists and behavioral economists yield to support explanations about why we discriminate against unattractive individuals. When making decisions, we as human develop generic frames to “size up” an individual. If we’re approached by an attractive person, we attribute overly positive qualities such as success, wealth and happiness. Daniel S. Hamermesh points out that as people we are influenced more by better looking people. This fundamental attribution error could cost millions to billions of dollars in opportunity costs, not to mention its discrimination.

So what’s the answer? Should we include attractiveness under Title VII of the Civil Rights Act?

Since I don’t think legislation like this would ever pass in Congress (especially this one), this research goes to show how valuable structured, behavioral interviews are for employers. The answer to this problem, interviewers and hiring managers should be solely focused on the candidate’s ability to perform the necessary job functions. Either way, it looks like I’m not cancelling my gym membership anytime soon.


Related Article

http://www.nytimes.com/2011/08/28/opinion/sunday/ugly-you-may-have-a-case.html?_r=1


By: Jonathan Konstan-Pines
Business Psychology Psy D Candidate

Understanding the Role of Organizational Culture in Mergers and Acquisition It’s Not Just a Human Resources Issue

Business psychologists understand how important organizational culture is to the success of integrating two organizations going through M&A. In Watson Wyatt’s study of 190 business leaders, they cited culture clash as being one of the greatest barriers to a successful M&A. Additionally, business leaders also said that organizational cultural compatibility is one of the least likely factors to be measured in M&A due diligence. This is a daunting problem, especially when the greatest barrier for success the least likely topic to be measured.

Many business leaders do not recognize organizational culture as a realistic issue in mergers and acquisitions, partly because of how abstract it is. Many organizational members describe culture as “the way things get done around here”. The fact of is, culture can have a substantial impact on an organizations performance (Kotter and Haskett, 1992). In their ground breaking research Kotter and Haskett found several key indices linking organizational culture that is embodied by all levels of management and economic performance over an 11 year period.
• Revenues were up 682% versus 166%.
• Expansion of workforce by 282% versus 36%.
• Stock price increases of 901% versus 74%.
• Net Income increases of 756% versus 1%

Now that we understand the value culture has in organizations, it is equally important to make sure it is included in M&A due diligence models. Most M&A due diligence focuses on the systems and operations integrations, one of the main problems is business leaders think of organizational culture as being one of the system components. The main issue is organizational culture is not a component of the system, but rather a result of the system (Carleton and Lineberry, 2004). When determining organizational compatibility between two organizations, it is essential to evaluate at the overall system in both organizations specifically:
• Strategy: Does our organization gain competitive advantage from competitors through cost leadership or differentiation of product.
• Technology: Does the organizations use of technology match our strategic goals of gaining competitive advantage.
• Culture: Is “the way we do things” as members of organization related to the organizations strategic goals and how technology is used in the organization.

Jonathan Konstan-Pines
2013 Business Psychology Psy D Candidate

Surviving the Statistics of Small Business Failure

Noted business author Peter Senge once stated that the corporate life cycle is less than half that of a human being. He believed that, on average, even large well-established firms fail to stay in business for more than 35 years.

Failure of large corporations can destroy billions of dollars of shareholder wealth, trigger significant job loss, and can have devastating effects on host communities.  For smaller firms the corporate mortality rate is even more staggering. 

For every successful small business that survives the first few treacherous years of existence—there are many more that never reach their full potential or worse--fail entirely.

According to Dun and Bradstreet--small businesses, firms with less than 100 employees, have a 37% chance of surviving during their first four years of existence.  The US Small Business Administration recently placed the failure rate of small firm at 40% during the first two years and at 55% during the first five years.  Business researcher Robert Hisrich found that all new businesses face an 80% chance of failure within the first five years.

These smaller corporations represent approximately 35% of the total number of enterprises in the United States, but as a result of their growth, generate more that 75% of the net new jobs each year. 

In addition--small businesses introduce thousands of new products and services into the market, create stunning innovation that can transform any industry and give our economy a global competitive advantage. 

My dissertation project will explore potential correlation relationships between the strategic orientation of the firm’s executives and its impact on corporate performance—specifically its role in regard to success or failure of smaller corporations.

Dino Signore

2013 Business Psychology Psy D Candidate

Why Study Risk?

Humans are not the cool calculators that classical behavior theories assumed we were.  Research demonstrates that we are susceptible to systematic errors in information processing that lead us to behave irrationally when making decisions.  A risk-decision framework helps researches to witness and measure where bias creeps into the process.  Despite explicit information regarding option value and probability, we edit choices causing us to subjectively weight both outcome value and probability. Changing option forms and not the outcomes therefore led to reversals of preference in subjects.  This result and the subsequent behavioral model of decision under risk called Prospect Theory, earned Daniel Kahneman the Nobel Prize in Economics (Kahneman’s co-author, Amos Tversky passed away before the prize was awarded).

The subjective weighting discovered by Kahneman and Tversky was measured using predominately financial prospecting scenarios.  Subjects chose between two financial outcomes involving gains, losses or a mix or gains and losses with either certainty or some explicit probability.  The researches expected that the individual subjective weighting they discovered and therefore risk-preference was stable across all contexts.  What was reported in subsequent experiments however, was that risk preference varied across contexts.  Research into context variation has provided a number of good leads into the source of the variation, but to date no complete explanation exists.

I decided to investigate the source of context-specific risk-variance because all decisions we make involve some level of risk evaluation.  Identifying the source of the variance will help us to account for errors in the processing of all decisions.  Despite our best intentions to make good decisions for ourselves, our families, at our jobs and even public policy, we are still subject to forces that we do not completely understand and cannot entirely explain.  My research has pointed me to a potential source of risk-preference variance.
Borrowing from the Theory of Human Evolution, Optimal Foraging Theory posits that a risk strategy that responds to environmental cues would be advantageous and therefore “selected for” as a trait to be passed on.  For instance, if an individual was predominately risk-seeking, s/he would select an unknown environment over one that provides sustainability, potentially leading to death; a risk-averse individual would avoid an unknown environment even when the current one is inadequate to survive leading to certain demise.  However the best-adapted individual will be risk-seeking when the current environment is scarce and risk-adverse when the current environment is abundant.

My hypothesis is that the perceived scarcity or abundance of resources available in a given context should explain context-specific risk-variance. Individuals that report a perceived scarcity of resources will likely report higher levels of risk taking in that context.  I plan to test my theory with a measure I developed to identify a subject’s perceived level or scarcity of resources available in each of four context.  The contexts I chose came from a literature review and have demonstrated the greatest amount of variance within subjects.  They are financial, health/safety, social and ethical contexts.  Additionally subjects will then rate the level of risk, the value of the outcome and the likelihood of taking the risk as provided in risk scenario.  Each context will have four risk scenarios.

Joe Cacciotolo

2013 Business Psychology Doctoral Candidate

Change Management

Ever wonder what REALLY keeps Chief Executive Officers (CEOs) up at night? According to a biennial Global CEO survey conducted by IBM, coping with change has ranked as the top business challenge for CEOs since 2004. How serious is the issue for CEOs and the organizations they lead? Serious enough that 31% of boards of directors cite the failure to effectively manage change as the top reason for firing CEOs. What are CEOs and their organizations to do considering that 70% oforganizational change initiatives fail 70% of the time regardless of the type, size and scale of the change and the change management model used? This high failure rate suggests that change management models and approaches are fundamentally flawed and missing something.

After pouring over hundreds of articles and a variety of books exploring this issue, I have noticed that existing change management models view change as a rationally controlled and orderly process that evolves over discrete steps and stages. As a result, they fail to account for and consider the psychological implications experienced by individuals and groups during an organizational change event. Failing to account for these psychological considerations from the perspective of those who are directly affected by the change seems like a considerable omission which may explain why change fails more than it succeeds. Organizational change, whether it’s intended purpose is to maximize economic value or develop organizational capabilities, is dependent upon those who are directly affected by the change experience it and their resulting feelings, beliefs and behaviors. Therefore, my current study investigates the relationship between the psychological construct of beliefs (behavioral, normative, control and organizational beliefs) and whether those beliefs are positively related to individual behavioral performance associated with an organizational change event.

If beliefs are indeed found to have a strong, positive relationship to individual performance, organizations would have a method for predicting whether or not an organizational change event will be successful. In addition, it also provides organizations with a method for assessing change readiness and capturing employee insights regarding the behavior associated with the change event that can be leveraged during the planning and implementation stages of the change.

Scott Leuchter

2013 Business Psychology Doctoral Candidate

Psychographics Influence on Online Decision Making

Have you ever wondered how a website's design influences your purchasing decisions? Have you thought about what subconscious cues are used to prompt you to purchase more online? My dissertation assesses how the aesthetics and interactivity elements of a website influence customer's purchasing decisions. In addition, I am also exploring how a customer's psychographic group membership consciously and subconsciously affects what products they purchase.

The Elaboration Likelihood Model (ELM) serves as my theoretical framework. Developed by Petty and Cacioppo (1986), it explains how attitudes are developed and changed through two routes of persuasion: central and peripheral. The central route of persuasion allows the person to evaluate the logical and rational arguments, provided the person has the ability and motivation to do so.

The interactivity, or functional element, of a website is considered to be a central route of persuasion. Interactivity includes online customer service, product reviews, technical support, etc. Customers typically use this cue to assess the quality of the company they are ordering from and the quality of the product they will receive.

A person can also use a peripheral route to process an argument. This route looks at the irrelevant parts of an argument like characteristics of the message, number of arguments, or attractiveness of the source. Customers who use peripheral information to make decisions will typically make irrational choices that do not maximize their utility.

Website aesthetics is considered to be a peripheral cue. This includes color, layout, and font. The appearance of a website is not predictive of the quality of the company or product. Customers will spend more time looking at products on an aesthetic website than one that is not. This time investment influences their decision to purchase from said website.

Attitudes that are formed under the peripheral route are considered less stable than those formed under the central route. This means that central route persuasion is more stable over time and is less susceptible to decay or any type of counter-persuasion. A given variable can serve as an argument, a biasing factor, self-validation role, or a peripheral cue depending on what route it is processed through.

ELM does not fully explain customer's online decision making. Psychographic group membership is used to continue to explain how customers make online purchases. Psychographic groups are segment customer's by their resources, risk orientation, motivation, and demographics. Most customers are not aware of the psychographic group they fall into. Therefore, I was interested in how customer's decision would be altered based on what psychographic group I told them that they belonged to.

Lee Derryberry
2013 Business Psychology Psy D Candidate
The Chicago School of Professional Psychology

Obsessed with Winning

The 2011 Super Bowl between the Pittsburgh Steelers and the Green Bay Packers was a game between two relatively small market teams. You would think that interest would be stifled for a game like this. But the game has eclipsed last year’s Super Bowl as the most watched television program in history. Everyone loves for their team to win; but in this case, most people watching don’t have their team in the game. Why are they watching? Why do they gamble on a game so distant?

Americans are consumed by competition and this results in negative consequences for us. But, we are not aware of the consequences. Even worse, we are not aware of why we need competition so essentially. The impact of wining and losing is not only destructive but also invisible.

America is an intensely driven, dynamic culture that is hollow at its core. Our relentless pursuit on winning comes from a preoccupation to find meaning. Competition is the means that we have devised to help us find our purpose and predictability. The lure of competition is quite great, but we have remarkably little understanding about what it means. This creates an inherent problem with Americans obsession on winning.

Victory has rewards. But the nature of competition goes beyond the titles and trophies that we win. It opens the gateway to more socially substantial rewards. It is the risk of loss that we are drawn to, the more uncertainty of risk, the larger the thrill. The inherent pleasure of winning does not come from the absence of doubt, but its presence.

Americans enjoy winning because it allows them to differentiate themselves from their peers. This fits our implicit belief that differences are natural and status is justified. Winning allows us to ultimately discover if our competitor is superior. There is tension then relief. The possibility of failure captures our attention.

For spectators, a close competitive event provides the chance to experience the sense of freedom possibility that is missing from much of our lives. The experience is uplifting as we get energized by the competitor’s action and throw off our normal passivity. But there is also a sadistic side; competition allows us to watch the pain, joy, and ultimate disappointment of others. We identify with the winners and use their superior performance as a signal of our own superior abilities. We derive a sense of vicarious differentiation.

Winners also can assert the power of worldview; “I win therefore I am right.” Winning gives an affirmation of truth of one’s worldview from winning. We can also over-generalize from the losing position. Defeat informs losers that they are wrong; therefore, they must engage in some type of soul searching because they have weaknesses and limitations that require improvement. Loss leads to simplistic explanations and attributions.

When our society evaluates losers, it considers more than just the outcome; the competitor’s attitude is also weighted because there are different levels of losers. We evaluate competitors partly on how they pursued their objectives and on their mental approach to the competition. If they had goal clarity, uncompromising effort, relentless optimism, or a willingness to learn we tend to improve our evaluation of them. All these affect how a competitor is evaluated upon losing because society believes that mental attitudes impact victory, and victory is not enough to declare one a “winner”.

But the victory is more than the final score. We inject additional value into the competitive outcome. Americans can take a simple competitive event like winning an election and detrimentally turn it into an indicator of prestige, honor, and power. Victory is not an endpoint; it is a gateway to higher values we want. The author illustrates this with a “prize ladder” that shows how prizes are abstracted from the competitive event as one moves up the ladder. The prizes become more nebulous notions; they tell us about our worthiness, not only when it comes to the competitive realm but also generally about us as persons in general.
As Americans, we live in competitions web, snared in its silk, striving to escape but doomed in our efforts. We do not live through experiences. Instead, we interpret and attach meaning to make sense of events. Competition and its consequences stem from our mind-set.