Business Psychology - Latest Findings

Article No. 318
Business Practice Findings, by James Larsen, Ph.D.

Strengthening the Core

Recent findings offer a new way to stimulate performance.

Imagine that you owned a major league baseball team with a budget of 32 million dollars for player salaries. Twenty-five players, thirty-two million dollars. How would you spend it? Divide it equally? Pay for experience, position skill, or past performance? Allocate 50% for 3 or 4 stars and divide the leftovers with everyone else?

Pay schemes for major league baseball teams are wide open, and until 1985, they were secret. Since 1985, player salaries have been public record, and that allowed Stephen Humphrey from Pennsylvania State University to examine the variety of pay schemes in use and to factor in the success of the teams. He hoped to find some patterns, and he gained some valuable insights that we can use.

Humphrey began with an observation made many years ago: some positions are more valuable than others and contribute more to overall team success. In baseball, the pitcher begins every play, and the catcher catches all pitches that aren�t hit. Thus, these two players contribute more to the success of the team than outfielders who may do nothing at all for several innings.

Humphrey used a logical process to define the core roles on a baseball team, and his definition is one we can use in our businesses. It has three components: 1) Core roles encounter more of the problems that need to be overcome; 2) They have greater exposure to the tasks the team completes; and 3) They are central to the workflow of the team. For example, in a print shop, the press operator occupies a core role while the people who load paper, change cutting blades, and control quality do not. In a surgical team, the surgeon occupies a core role. The anesthesiologist and other support personnel do not.

After collecting a mountain of data on player performance and team success, Humphrey examined this question: If team owners put their best people in core positions and paid them the most, did their teams win more games? He had a lot of data to digest, but when he finished, he had the answer he believed he would find.

Rich teams who paid large salaries had great success, but when he factored in strengthening core roles, he found a significant improvement in team success. The conclusion was heartening. You don�t have to be rich, even though it helps. You need to strengthen your core roles by putting your best people in them and compensating them well. Humphrey believes that this formula will work in any business setting in which core roles can be identified and individual abilities can be measured, and he has several suggestions on how we might implement these ideas.

First, you must determine if core roles exist in your business. Examine your organization. Look for groupings of people in which roles are distinct. Notice if people perform different tasks with their work combining to form a team output, like the printing team or the surgical team described above.

Next, consider each role on the team using Humphrey�s 3-part definition: encountering many problems, completing many tasks, and centrality to the flow of work. Your goal is to identify a few core roles.

Next, measure individual competence. Humphrey suggests three criteria: 1) career experience, the length of time of individuals in this occupation, 2) team experience, the length of time in this particular group doing this job, and 3) the results of objective skill tests that you periodically administer to determine relative skill, speed, and overall proficiency in completing work tasks. These aren�t pass/fail tests. It�s a competition, like a race, to determine who has the greatest task skill at this time in this group. On the basis of these measurements, assign your best people to core roles.

Finally, pay people in core roles more than non-core roles. Pay enough so that people with these jobs will feel happy, and people who don�t have them will want them. Make continued occupancy in core roles depend upon the outcome of periodic objective skill tests.

You have some work to do.

So . . . will such a system create animosity and obstruct teamwork? Maybe. Will it shake things up and focus attention on successful performance rather than protecting privileges? Hopefully.

In a recent labor contract, the UAW agreed to the formation of a 2-tier pay system which identified as core roles anyone who touched a car in the assembly process. They get more pay. Humphrey calls this leveraging the core, and clearly, his findings and suggestions warrant serious consideration.

Reference: Humphrey, Stephen, Frederick Morgenson, and Michael Mannor. (2009) Developing a Theory of the Strategic Core of Teams: A Role Composition Model of Team Performance. Journal of Applied Psychology, 94(1), 48-61.

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