May 2022 - on hiring for cultural fit, equal pay, myths about work culture, and admitting when you're wrong
All of humanity's problems stem from man's inability to sit quietly in a room alone
The May issue offers a broad spectrum of topics:
Admitting when you’re wrong § Collaborative robots in the workplace § Sitting quietly § Equal pay and the message it sends § Lost wallets § Common myths about work culture § Hiring for cultural fit § Thinking before you speak § By the numbers § Misha plays a chess Grandmaster.
This month last year, the most viewed entry was about how difficult we find it to subtract.
If “less is more”, why do we overdo so much?
Leidy Klotz from his book Subtract: The Untapped Science of Less:
In one study, recently published in Nature, we challenged participants to modify a sandwich-like structure made from Legos so that it was strong enough and high enough to hold a masonry brick above the head of a stormtrooper figurine. Each participant received a structure consisting of parallel horizontal Lego panels connected by a vertical column that narrowed to only one block wide where it connected to the top panel. We asked participants to: “Improve this project so that it can hold a brick above the storm trooper’s head without collapsing.”
And we offered an incentive: “You will earn one dollar if you successfully complete this task. Each piece you add costs ten cents.”
The best solution is to remove the single block forming the thin part of the column. The top panel can then be attached to the larger section of the column, which stabilizes the structure and still leaves enough clearance to avoid the storm trooper getting squashed by the masonry brick.
Subtracting one block was the fastest way to solve the problem. Plus, only subtracting allowed participants to earn the full dollar. And yet participants were still more likely to add than subtract. This was evidence that people add to their detriment—at least when trying to modify a Lego structure so that it can hold a brick safely above the head of a stormtrooper.
To try to override the greater accessibility of adding, we also gave some participants subtle reminders, or cues, that subtraction was an option. If those who received the cue subtracted more often, then that would indicate that those who didn’t receive the cue were overlooking subtraction.
The experimenter said to all participants, “You will earn one dollar if you successfully complete this task. Each piece that you add costs ten cents.” Participants randomly assigned to the cue condition heard one more instruction from the experimenter: “but removing pieces is free and costs nothing.”
In the no-cue group, 41 percent subtracted a block. In the cue group, 61 percent subtracted. Those who were cued took home an average of eighty-eight cents, 10 percent more than those who didn’t get the cue.
The simple and subtle eight-word cue showed people a profitable solution that they had otherwise been missing. It sure seemed like people who didn’t receive the cue were missing the subtractive option not by choice but because they couldn’t see it.
“I made a mistake. I was wrong.”
She is a graduate of Brown and Yale. She taught at Harvard, LSE, and University of California, Berkeley. Her scholarly production is abundant and it includes several papers with Nobel Prize laureate George Akerlof (their work on efficiency wage theory is fascinating1). She is the first person in American history to have led the White House Council of Economic Advisors, the Federal Reserve, and the Treasury Department. No one questions that she is smart, accomplished, and at the top of her game. Someone who worked with her at the Fed told me that she is also a genuinely nice person.
So here’s what impresses me most about Janet Yellen: She acknowledges her mistakes. In public.
"I think I was wrong then about the path that inflation would take," Yellen told CNN's Wolf Blitzer on "The Situation Room" when asked about her comments from 2021 that inflation posed only a "small risk." (…)
"As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn't -- at the time -- didn't fully understand, but we recognize that now," she said.
No one should be expected to be right all the time. Managers shouldn’t expect that of the people on their team nor should they expect that of themselves. Team members become cynical when they never hear their manager acknowledge a mistake. You can’t blame them.
Known as co-bots (collaborative robots), this new form of robot can slow down or stop completely to prevent humans from getting injured, but they also enable companies to develop new human-robot workflows that automate previously manual methods. In essence, they aim to focus on the “collaborative” aspect of the term, rather than the “robot”.
French philosopher Blaise Pascal:
All of humanity's problems stem from man's inability to sit quietly in a room alone.
In 11 studies, we found that participants typically did not enjoy spending 6 to 15 minutes in room by themselves with nothing to do but think, that they enjoyed doing mundane external activities much more, and that many preferred to administer electric shocks to themselves instead of being left alone with their thoughts.
U.S. Soccer did it and you should too
Digital access to every possible bit of information about employees;
Record profits, and
More and more and greater and greater share buybacks,
Put that money to fair use: equal pay for work of equal value. Now.
Establish pay brackets;
Search, find, and make pay adjustments;
Repeat every quarter.
The same principle applies to existing employees: if recruiting new employees requires that you pay new candidates more than existing employees, the latter get a boost. Otherwise, existing employees end up paying a “loyalty tax”.2
The lost wallet
Hi, I found this on the street around the corner. Somebody must have lost it. I’m in a hurry and have to go. Can you please take care of it?
The wallet is clear (you can see the contents without opening it): a grocery list, a key, three business cards, an e-mail address, and some cash.
What do you think happens to the wallet?
A researcher and his team dropped 17,303 wallets in 355 cities across 40 countries to find out.
In virtually all countries, citizens were more likely to return wallets that contained more money. On average, 40 percent of wallets with no money were reported found, compared with 51 percent of wallets with some money.
The results varied by country: It was far better to lose a wallet in Denmark, where 82 percent of wallets holding $13.45 were turned in, than in Kenya, where the return rate was just under 20 percent. In the United States, 57 percent of wallets with money were given back.
The results fly in the face of rationalist assumptions that people value their own interests over the interests of strangers.
Myth #1: Culture only matters for employee engagement. Over a 5-year period, 21 of the companies identified as “culture champions” earned twice the returns of Nasdaq and nearly four times the returns of the S&P 500.
Myth #2: It’s OK to be all talk, no walk with cultural values. 75% of the companies have a published list of core values; employees, however, disagree on whether their companies have upheld those values.
Myth#3: For enough money, any employee will stay in a toxic culture. Among the companies’ attrition rates for the first six months of the Great Resignation, toxic culture was 10 times more powerful than compensation in predicting attrition.
Hiring for cultural fit
A topic that we often discuss in my workshops for managers is their concern with how well new hires will “fit” with the current team as well as the organization in general.
A study reports that, in addition to skills sorting, hiring
is also a process of cultural matching between candidates, evaluators, and firms. Employers sought candidates who were not only competent but also culturally similar to themselves in terms of leisure pursuits, experiences, and self-presentation styles. Concerns about shared culture were highly salient to employers and often outweighed concerns about absolute productivity.
Hiring for cultural fit is tantamount to hiring yourself;
Unstructured interviews more easily lead to asking questions that seek similarity;
As reported in last month’s issue, the way to prevent groupthink and unchallenged assumptions is to work with people who are different than oneself.
Think before you speak
For all the talk about authenticity, it’s still not always a good idea to say the first thing that comes to mind. For the sake of civility or politeness, and the fact that you have to work with people every day, it is often worth pausing to think about
What you might feel like saying v. What you can prefer to say instead.
This site offers some suggestions. You might not agree with all of them (I certainly don’t). And some are tongue-in-cheek. But they all serve as a reminder that we should think before we speak.
By the numbers
Investors today hold about 70% of their wealth in the stock market. Prior to 2000, that number was 58% - research paper.
More than half of American workers are planning to look for a new job, according to an analysis from Qualtrics; the figure is even higher for department managers (62%) and managers of multiple departments (72%).
Misha is three years old and he plays chess. Anatoly Karpov was the 12th world champion, from 1975 to 1985, and is considered to be one of the greatest players of all time. He was the highest-rated player in the world for over 100 months. In this video they play a timed game. I marvel at Karpov’s comments on Misha’s play. Skip a minute or so after the game with Karpov and Misha finishes a few games on a board. Remember: Misha is three years old!
Before you go
The Gun Violence Archive defines mass shootings as
a minimum of four victims shot, either injured or killed, not including any shooter who may also have been killed or injured in the incident.
According to this definition, in the month of May 2022 alone there were 63 mass shootings in the United States of America that had 74 persons killed and 307 persons injured.
I’ll see you next month.
Keep it on the one,
Akerlof’s paper “The Market for "Lemons": Quality Uncertainty and the Market Mechanism" is a great read.
The assumptions in this article are from 2014 and therefore the end number would be different under current circumstances. However, the math still holds. And more important than those numbers is the signal that management sends by giving a financial reward to new rather than loyal employees.