Leadership Styles

How Psychology Can Transform Your Business Success

Professor Philip Corr asked:

Psychology can play a critical role in helping your organisation achieve its goals – real bottom-line benefits – by recognising and releasing the talent in your people. Whether you’re in the private sector, public sector or a charitable organisation, it’s an established fact that highly successful organisations have highly motivated, driven and happier staff. The key to unlocking this potential is through increasing people’s subjective well-being, which is known to be linked to a whole range of organisation-level outcomes (e.g., superior customer/client service, innovative problem-solving, and the other benefits that come with high levels of engagement and commitment, and ‘corporate citizenship’).

However, these desirable psychological qualities do not just emerge spontaneously; they need to be recognised, nurtured and properly managed. But, when achieved, the outcome for the organisation is greater competitive advantage and improved organisational effectiveness.

This short summary of how you can use psychology to transform your people and organisation is aimed at:

Greater staff commitment, engagement, motivation, and job satisfaction

More authentic leadership and strategic vision

Reduced absence, sickness and turnover

Superior customer service

Greater organisational effectiveness

Enhanced ‘bottom-line’ results



In this section the importance of well-being to a wide range of organisational outcomes is discussed.

What is Well-being?

Well-being is a term that is used in different ways by different people. In psychological terms, it reflects a cluster of work-related processes all tied together by an affective/emotional orientation either to: (a) engagement, motivation, satisfaction and commitment (high well-being); or (b) disengagement, withdrawal and lack of commitment (low well-being).

There’s many sources of well-being, but irrespective of the precise type, years of research show that strong sense of purpose and meaning are important for higher levels of effectiveness.

It’s interesting that being happy by itself is not enough; it is having this happiness directed to a specific purpose. Psychology reveals that the most content people have a ‘mission’ in life – something to believe in and to strive towards (psychologists often refer to be as ‘meaning’ in life). It’s difficult for people to work for any organisation if it does not provide them with this purpose and ‘meaning’.

Why does Well-being Matter so Much?

The more engaged and committed your employees, the harder they will work and the fewer sick days they will take. People with higher levels of psychological well-being are also better able to learn new things, are open to new ideas, are less threatened by change and uncertainty, and are better problem solvers. Additionally, they report higher levels of job satisfaction – it has been found that even a minimal increase in the satisfaction of employees can have a major positive impact on the ‘bottom-line’. Meanwhile, low levels of well-being leads to these cognitive processes closing down or being diverted to more interesting things for the employee (e.g., what they are planning to do outside work).

Well-being is not achieved simply by being nice to people; it is more fundamental than that: it’s about really engaging people in their work – what’s in it for them, and not only in monetary terms – and how their goals and those of the organisation are aligned. Well-being is not easy to achieve, and can, in fact, be lowered by some management initiatives that subsequently back-fire. In this regard, it’s especially important to manage the expectations of employees, because if their expectations are not fulfilled then they will quickly become frustrated and disillusioned, and revert to a negative and demotivated state – which also leads to skepticism towards future management initiatives.

Getting organisational and employee expectations and goals in harmony are key: if your people are not on your side, then you are fighting an uphill battle that you are never likely to win. So how can you achieve enhanced levels of well-being in your people? The first important thing is to provide sufficiently challenging goals in the workplace (people like to be stretched, but not too far!); and, secondly, people need to know that they are being supported and are in an environment were failure (within limits) is tolerated. To achieve these end states, it is vital that communication is clear and that employees know exactly what is expected of them and how they must go about achieving their goals. Never assume your employees can read your mind: if you do not communicate to them in clear and unambiguous language, you run the risk of confusing them and, then ultimately, frustrating their (incorrect) expectations of what you wanted (a vicious downward spiral can then develop).

But, Is Employee Well-being Really so Important?

Employee well-being needs to be at forefront of the effective manager’s mind because numerous scientific studies have revealed that it is a key ingredient in motivated, engaged and committed employees. Failing organisations have disgruntled staff, who take disproportionate amount of time off on sick leave, engage in more deviant behaviours, show persistent ‘presenteeism’ behaviour (i.e., they are at work, but not doing much effective work – indeed, they may be spending their time undermining the organisation!), and are much more likely either to go off on long-term absence or simply leave the organisations for more fulfilling positions elsewhere. The associated costs are enormous (e.g., lost productivity, recruitment and training costs, and litigation can reflect poorly on the public image of the organisation).

Below is a list of specific ‘bottom-line’ benefits from having well motivated staff.

Well-being and Productivity

It’s long been said that a “happy worker is a productive worker”. There’s a lot of truth in this statement, but it is easier to say than achieve. Along the way to improving employee well-being there’s many pitfalls awaiting. Also, just being happy does not lead to superior performance. It may be a necessary condition that must exist, but superior performance comes from this psychological state being connected to meaningful and engaging work goals that employees feel motivated to achieve: this is the sufficient condition.

Over many years and many scientific studies, research reveals a clear relationship between well-being and productivity. Organisations can, and are often, transformed by recruiting the right people and then ensuring that they are well motivated and have positive emotional reactions to what they are being asked to do: this is organisational commitment. Once set in process, enhanced individual performance leads to enhanced organisational performance, which then sets-up a virtuous cycle of further increases in well-being and productivity – not to mention a large decrease in costs associated with absence, sickness, resignation, etc.

Well-being and Customer/Client Service and Satisfaction

The key to any successful organisation is to provide first-class customer/client service, leading to high levels of customer/client satisfaction. Satisfied customers/clients are much more likely to be loyal in the future, and will be much more receptive to marketing or informational messages. But, this cannot be achieved if emp
loyees are not satisfied: disgruntled, or demotivated, employees are not likely to provide high levels of customer/client service. This is another reason why employee well-being is so crucial for organisational success.

Well-Being: Retainin
g and Motivating Staff

Retaining talented employees is one of the major challenges facing any organisations. They drive forward organisations, and offer the strategic vision, purpose and commitment needed in successful organisations. Talented people are likely to be head-hunted by rival organisations, or simply leave for better prospects elsewhere if their talents are not recognized and managed properly. High turnover can also lead to a major skill losses within an organization.

Leadership and Strategic Vision

Achieving high-performing leadership is another of the big challenges facing any organisation. This outcome can only be achieved with clear policies on Human Resources and Organisational Development. Leadership does not simply happen, and cannot be taken for granted; it must be nurtured and trained. This is important for sustained performance, and for being able to maintain an open-minded approach, based on high levels of well-being, to be able to meet challenges in a flexible and positive way. Often leaders can become disconnected from the impact that their natural style has on the organisation and it takes a structured intervention, such as a leadership development or a coaching programme, to bring this to their attention, and help them develop a more authentic and emotionally intelligent leadership style.

It’s important for organisations to know about the psychology of leadership; how to recognize and encourage it. There’s also the problem that sometimes charismatic people, who seem at first to have excellent leadership potential, have a ‘dark side’ to their personality, which can lead to their own derailment and subsequently ruin organisations through their narcissistic and psychopathic behaviour (e.g., as is often illustrated in the management literature with reference to the senior executives at Enron).

Wellbeing and Resilence

Management have a statutory responsibility for supporting their employee in a manner that promotes resilience when work load increases. However, employees also need to know how they should handle stress — they need to be given the tools to recognize the sources of stress and how to avoid its negative consequences. Once again, it comes down to education and knowledge. All too often work pressure comes ‘out of the blue’ (which adds to people feeling they are out of control), but usually, although not always, this is because there has been inadequate planning.

Providing employees with knowledge about the causes and effects of stress is vital. When combined with good working conditions, employees are then be required to manage the degree of pressure then can tolerate and to ask for additional support then they feel their workload is exceeding their ability to cope. It’s not just about management ‘making it easy’ for employees; employees too have to take responsibility, but they can only do this after they have been educated about the work-related pressure and stress.

Preventing stress is so much more preferable to treating its aftermath!

Well-being is the key to so many organisational outcomes and personal health and happiness. Therefore, dealing with stress in the workplace is not only about the need for employers to meet their statutory responsibilities, but it is also about making high-performing, successful organisations that are sustainable and where talented people want to work and where they thrive.

Professor Philip Corr

Dr Giles Burch

Psychology For You Limited




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