Table Of ContentHow People Work
How People Work
Psychological Approaches to
Management Problems
Saul W. Gellerman
QUORUM BOOKS
Westport, Connecticut • London
Library of Congress Cataloging-in-Publication Data
Gellerman, Saul W.
How people work : psychological approaches to management problems /
Saul W. Gellerman.
p. cm.
Includes bibliographical references and index.
ISBN 1–56720–146–6 (alk. paper)
1. Industrial psychology. I. Title.
HF5548.8.G397 1998
158.7—dc21 98–10826
British Library Cataloguing in Publication Data is available.
Copyright 1998 by Saul W. Gellerman
All rights reserved. No portion of this book may be
reproduced, by any process or technique, without
the express written consent of the publisher.
Library of Congress Catalog Card Number: 98–10826
ISBN: 1–56720–146–6
First published in 1998
Quorum Books, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
Printed in the United States of America
The paper used in this book complies with the
Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
Copyright Acknowledgments
Several of these cases have been reported briefly elsewhere:
The Lederle case was summarized in the May–June 1988 issue of the Harvard Business Review
(“Cyanamid’s New Take on Performance Appraisal,” pages 36–41).
The Schering-Plough case was discussed in the spring 1990 issue of Organizational Dynamics
(“In Organizations, As in Architecture, Form Follows Function,” pages 57–68).
The hearings of the Joint Economic Committee regarding the U.S.R.A. case are reported
in documents listed in the 1976 Index of the Congressional Information Service (Bethesda,
Maryland) as J841-35, J841-35.1, J841-35.2, J841-35.3, and J841-35.4.
The Würth case was discussed in the May–June 1990 issue of the Harvard Business Review
(“The Tests of a Good Salesperson,” pages 64–71).
The “Shop Floor Strategists” case was reviewed in the May–June 1986 issue of the Harvard
Business Review (“Supervision: Substance and Style,” pages 89–99).
The “Bad Boss” case was summarized in the June 1985 issue of Personnel (“A Way to Save
an Executive: On-Site Counseling,” pages 55–60).
All other cases in this book are published here for the first time.
for Pat
who makes it all worthwhile
Contents
Preface ix
Chapter One Lederle Laboratories: Appraising
Performance Appraisal 1
Chapter Two How IBM Did It Right 21
Chapter Three Schering Reorganizes Its World 43
Chapter Four U.S. Railway Association: Motivation Meets
Politics 67
Chapter Five Würth Fastener: How to Excel at Selling 85
Chapter Six Baffling Behavior in the Beverage Business 103
Chapter Seven Caterpillar: The Anatomy of a Strike 121
Chapter Eight Shop Floor Strategists 141
Chapter Nine U.S. Home: A Motivational Pressure Cooker 161
Chapter Ten The Bad Boss Problem 181
Chapter Eleven Lessons Learned by Listening 199
Recommended Readings 207
Index 211
Preface
It was my good fortune to work for clients who never let me stop learning.
They kept offering assignments that forced me to probe deeply into
managerial issues that I initially knew little or nothing about. The only
way to handle those assignments was to put myself through a series of
self-taught crash courses on topics that were quite remote from my early
psychological training. To serve my clients’ needs properly, I had to learn
about organization structure, labor relations, managerial decision making,
the finer points of selling, and the art of factory foremanship—to mention
only a few of those topics.
Fortunately, I had the best possible mentors: managers who had devoted
their careers to grappling with those problems. The most valuable of all the
lessons I learned from them is that one can learn a great deal more by
listening than by lecturing. Whatever skills I have acquired as a consulting
industrial psychologist I owe to the privilege of having worked with them.
They not only enriched my understanding of management, but deepened
my understanding of psychology.
Ten of those assignments are recounted here. My purpose in presenting
them is to demonstrate what my clients understood before I did: that the
skills of a psychologist can be usefully applied well beyond their usual scope.
In particular: listening in a disciplined way, making sense of clashing
comments, paying attention not just to what people say, but to how they
say it, and to what they don’t say—all these tricks of the psychologist’s trade
can help bring otherwise baffling managerial problems into sharper focus.
x Preface
That makes sound decisions easier for managers to reach. That’s why good
psychologists make good management consultants.
All ten of these cases came to me unsolicited. Managers decided by
themselves that their problem called for skills I either had or could acquire.
They pushed me beyond what I had thought of as my limits. By doing that,
they eventually caused me to question the very existence of psychological
limits. Although I will probably spend the rest of my life trying to sort that
out, I am deeply grateful for having been pushed into contemplating it.
Meanwhile, if this book increases the awareness of both psychologists and
managers of the extent to which they can learn from each other, it will
have served its main purpose.
I selected these cases because they help to illuminate three important
aspects of management. The first four cases concern the process of mana-
gerial work itself. The next two deal with two key components of the
marketing process: sales and distribution. The final four explore various
aspects of motivation—that is, of why people behave as they do at work.
It is from those closing chapters that the title of this book, How People
Work, is derived.
The Lederle case (Chapter 1) explores two important issues. The first is
the ubiquitous, endlessly controversial process of performance appraisal—
the annual ritual that most companies force on their managers and the
people who report to them. The second issue is also ubiquitous: the role of
company politics in influencing decisions and policies.
The IBM case (Chapter 2) looks into decision making at the executive
level. Although there was no “manual” of how, when, and whether to
commit the company to a course of action, it turns out that there was an
at least implicit set of rules that the best executives followed. Those who
were not guided by those unwritten rules were less likely to rise to IBM’s
highest ranks. Arguably, those were the rules that propelled IBM to the top
of its industry and kept it there for more than thirty years.
The Schering case (Chapter 3) also has two facets. On the one hand, it
deals with questions of organization design: how a worldwide enterprise
should be staffed and controlled. But it also deals with some very human
issues: the tendency of managers to advocate policies that may be self-serv-
ing and the reluctance of other managers to make decisions that might
harm the interests of their colleagues.
The United States Railway Association case (Chapter 4) addresses the
relationship between ownership and productivity. An attempt was made
to reorganize then-bankrupt railroads under an Employee Stock Ownership
