Category Archives: Book Review

Book Review: Applied Psychology in Talent Management (8th ed.) by Wayne Cascio and Herman Aguinis

NOTE: I am reviewing this I/O psychology textbook from a reader’s perspective (i.e., the student’s/learner’s point of view) and not from an instructor’s perspective.

Applied Psychology in Talent Management (8th ed.) is the newest edition of the Applied Psychology in Human Resource Management textbook by Wayne Cascio and Herman Aguinis. The title has changed with “Talent Management” replacing “Human Resource Management.” But make no mistake, this is an I/O psychology textbook written by two authors with PhDs in industrial and organizational psychology.

Like the 7th edition (published in 2011), Applied Psychology in Talent Management (8th ed.) maintains the same 18-chapter layout and continues to be written and designed for an academic/graduate-level audience. The textbook is very “academic” and “technical” — much more so than any of the other I/O psychology textbooks I have reviewed.

As a matter of fact, the authors wrote this in the book’s preface:

“In writing this book, we make two assumptions about our readers: (1) They are familiar with the general problems of HRM or I/O psychology, and (2) they have some background in fundamental statistics—at least enough to understand statistical procedures on a conceptual level, and preferably enough to compute and interpret tests of statistical significance [italics added]. As in earlier editions, our goals are (a) to challenge the field to advance rather than simply to document past practice, (b) to present a model toward which professionals should aim, and (c) to present scientific procedure and fundamental theory so that the serious student can develop a solid foundation on which to build a broad base of knowledge” (2019, p. xxviii).

Depending on your reading preference, you may either appreciate the technical writing style and scientific details of this textbook (i.e., contents are presented in a very theoretical, statistical, and psychometric nature) or not care much for it. Please understand that this is not a reflection on the substance and quality of the book itself, but it is important to point out.

I examined five topics: (1) the 80 percent rule or four-fifths rule used to determine adverse impact in employee selection [Ch. 8]; (2) recruitment [Ch. 11]; (3) cognitive ability tests in personnel selection [Ch. 13]; (4) job analysis [Ch. 9]; and (5) performance appraisal and management [Ch. 5].

The first topic, well-covered in many I/O psychology textbooks, is adverse impact and the 80 percent rule (or four-fifths rule) used to make an adverse impact determination in employee selection.

The explanation for the 80 percent rule was difficult to follow and the book did not clearly explain what the 80 percent rule actually is. Here’s the explanation (Cascio & Aguinis, 2019, 181):

“[A]ssume that the applicant pool consists of 300 ethnic minorities and 500 nonminorities. Further, assume that 30 minorities are hired, for a selection ratio of SR1 = 30/300 = 10, and that 100 nonminorities are hired, for a selection ratio of SR2 = 100/500 = 20. The adverse impact ratio is SR1/SR2 = .10/.20 = .50, which is substantially smaller than the suggested .80 ratio.”

At the beginning of the book, the authors provided this confusing definition of adverse impact:

“Adverse impact (unintentional) discrimination occurs when identical standards or procedures are applied to everyone, even though they lead to a substantial difference in employment outcomes (e.g., selection, promotion, and layoffs) for the members of a particular group and they are unrelated to success on a job” (Cascio & Aguinis, 2019, p. 19).

Later, in Chapter 8 (Fairness in Employment Decisions), the book provides another definition:

“[A]dverse impact means that members of one group are selected at substantially greater rates than members of another group” (Cascio & Aguinis, 2019, p. 181).

The authors then spend the next few pages showing readers how to assess “differential validity,” without ever clearly explaining what it is. I know this goes back to one of the assumptions of this book about its readers, which is that they have a “background in fundamental statistics—at least enough to understand statistical procedures on a conceptual level.

In comparison, when I looked in the Aamodt (2013) I/O psychology textbook, only half a page was devoted to differential validity and the author explained the concept in one sentence!

In Applied Psychology in Talent Management (8th ed.), the authors zoomed in on differential validity (a test of fairness), and went into extreme details. Unfortunately, by going so deep into the minutiae of equations, sample size, confidence interval, and statistical power, rather than covering fairness in employment decisions more broadly, readers are left asking, “So what is the 80 percent rule in determining adverse impact, and what are all the statistics about?”

I actually found a nice explanation — in another I/O psychology textbook:

“The 80 percent rule is crude and can be affected substantially by sample sizes. With small sample sizes, a difference of one or two people might swing the conclusion from one of adverse impact to one of no adverse impact, or vice versa. As a result, most cases also include a determination of whether the challenged practice had a statistically significant impact on the plaintiff group. If the difference between the majority and minority groups is likely to
occur only 5 times out of 100 as a result of chance alone . . . then one could claim that adverse impact had been demonstrated” (Landy & Conte, 2013, p. 270).

The second topic is recruitment.

“Whenever human resources must be expanded or replenished, a recruiting system of some kind must be established. Advances in technology, coupled with the growing intensity of competition in domestic and international markets, have made recruitment a top priority as organizations struggle continually to gain competitive advantage through people” (Cascio & Aguinis, 2019, p. 256).

“Organizations recruit periodically in order to add to, maintain, or readjust their total workforces in accordance with HR requirements” (Cascio & Aguinis, 2019, p. 257).

“Recruitment is not a ‘one-shot’ activity. It is important to recognize three contextual/environmental features that affect all recruitment efforts: (a) Characteristics of the firm—the value of its ‘brand’ and its ‘personality’ (make the effort to learn how customers and the public perceive it); (b) Characteristics of the vacancy itself (is it mission critical?)—these affect not only the resources expended on the search but also the labor markets from which to recruit; and (c) Characteristics of the labor markets in which an organization recruits (tight versus loose)” (Cascio & Aguinis, 2019, p. 275).

“Three sequential stages characterize recruitment efforts: generating a pool of viable candidates, maintaining the status (or interest) of viable candidates, and ‘getting to yes’ after making a job offer (postoffer closure)” (Cascio & Aguinis, 2019, p. 275).

Overall, I like Cascio and Aguinis’ coverage of recruitment.

The third topic is cognitive ability tests in personnel selection. Cognitive ability tests was placed in Ch. 13 “Managerial Selection Methods.” This is odd because cognitive ability tests are administered to prospective employees at any role or level in an organization, not just those in managerial roles.

The authors explained that, “although the emphasis of this chapter is managerial selection, many of the instruments of prediction described (most notably cognitive ability tests and personality inventories) are also useful for selecting employees at lower organizational levels” (Cascio & Aguinis, 2019, p. 312).

“General cognitive ability is a powerful predictor of job performance” (Cascio & Aguinis, 2019, p. 314). In fact, among researchers, there’s considerable agreement regarding the validity of cognitive ability tests. Although general cognitive ability is a powerful predictor of job performance, use of cognitive ability tests are also likely to lead to adverse impact (Cascio & Aguinis, 2019).

It is recommended that cognitive ability tests be combined with other instruments, such as structured interviews, biodata, and personality inventories (Cascio & Aguinis, 2019).

Despite it being awkwardly placed under a chapter titled, “Managerial Selection Methods,” Cascio and Aguinis did a good job in their coverage of cognitive ability tests.

The fourth topic is job analysis (the book used work analysis instead of job analysis). Curiously, in the 7th edition of the book, Cascio and Aguinis used “job analysis.” The authors defined “work analysis” as follows:

“Work analysis is a broad term that refers to any systematic process for gathering, documenting, and analyzing three features of work: (1) its content (tasks, responsibilities, or outputs); (2) worker attributes related to its performance (knowledge, skills, abilities, or other personal characteristics, or KSAOs); and (3) the context in which work is performed (e.g., physical and psychological conditions)” (Cascio & Aguinis, 2019, p. 210).

I much prefer the definitions by Riggio or Levy:

“Job analysis is the systematic study of the tasks, duties, and responsibilities of a job and the knowledge, skills, and abilities needed to perform it” (Riggio, 2018, p. 65).

“Job analysis is the process of defining a job in terms of its component tasks or duties and the knowledge or skills required to perform them” (Levy, 2017, p. 73).

“It is difficult to overstate the importance of job or work analysis to employment research and practice. . . [W]e see the tools and techniques developed under ‘job or work analysis’ as applicable to changing structures of work, and the use of either term is not meant to convey a focus on rigidly prescribed jobs. If conducted thoroughly and competently, job or work analysis provides a deeper understanding of individual jobs and their behavioral requirements and, therefore, creates a firm basis on which to make employment decisions” (Cascio & Aguinis, 2019, p. 210).

No single type of job analysis data can support all talent management activities (Cascio & Aguinis, 2019). “When collecting work-related information, a variety of choices confront the analyst. Begin by defining clearly the purpose for collecting such information. Since the many methods for collecting such data have offsetting advantages and disadvantages, choose multiple methods that best suit the purpose identified” (Cascio & Aguinis, 2019, p. 234).

As a whole, Cascio and Aguinis did a fine job discussing job/work analysis.

The fifth and final topic is performance appraisal and management.

One of the highlights of Applied Psychology in Talent Management is its outstanding coverage of performance management.

Performance management is the ongoing process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the organization’s strategic goals (Cascio & Aguinis, 2019). It is not a one-time event that takes place during the annual performance-review period. Rather, performance is assessed at regular intervals, and feedback is provided so that performance is improved on an ongoing basis. Performance appraisal is the systematic description of job-relevant strengths and weaknesses within and between employees or groups. It is a critical component of all performance management systems (Cascio & Aguinis, 2019).

“Performance management has both technical and interpersonal components. Focusing on the measurement and technical issues to the exclusion of interpersonal and emotional ones is likely to lead to a system that does not produce the intended positive results of improving performance and aligning individual and team performance with organizational goals” (Cascio & Aguinis, 2019, p. 117).

“Good performance management systems are congruent with the organization’s strategic goals; they are thorough, practical, meaningful, and specific; they discriminate between good and poor performance; and they are reliable and valid, inclusive, and fair and acceptable (Cascio & Aguinis, 2019, p. 117).

360-degree feedback systems broaden the base of appraisals by including input from self, peers, subordinates, and even clients. There are four advantages to 360-degree feedback systems: (1) 360-degree feedback result in improved reliability of information on an employee’s performance because it comes from multiple sources; (2) 360-degree feedback takes into consideration a wider range of information about performance; (3) 360-degree feedback often include information about task performance as well as contextual performance and even counterproductive work behaviors; and (4) 360-degree feedback can decrease biases since it comes from multiple sources (Cascio & Aguinis, 2019).

“There is no such thing as a ‘silver bullet’ in measuring the complex construct of performance, so consider carefully the advantages and disadvantages of each measurement approach in a given organizational context” (Cascio & Aguinis, 2019, p. 117).

What I like: I like the “Evidence-Based Implications For Practice” section at the end of each chapter. There is a lot of great information in this textbook, but you must spend time looking for and carefully study the information because it is very, very easy to miss.

One chapter that I did not review, but appreciate is Ch. 10 Strategic Workforce Planning (SWP). SWP is “an effort to anticipate future business and environmental demands on an organization and to meet the talent requirements dictated by these conditions” (Cascio & Aguinis, 2019, p. 237).

SWP systems include several interrelated activities: Talent inventories to assess current resources (skills, abilities, promotional potential, assignment histories, etc.); and Workforce forecasts to predict future HR requirements (numbers, skills mix, internal vs. external labor supply). Combined, talent inventories and workforce forecasts help identify workforce needs that provide operational meaning and direction for action plans in many different areas (including recruitment, selection, training, placement, transfer, promotion, development, and compensation). Finally, control and evaluation to provide feedback to the workforce planning system and monitor the degree of attainment of HR goals and objectives (Cascio & Aguinis, 2011, 2019).

What I didn’t like: I have two major gripes about Applied Psychology in Talent Management. The first and biggest gripe is the verbose writing style. The authors took an inordinately long time to explain even basic concepts and somehow manages, in the end, to still confuse this reader. Simple explanations or definitions sound as though a lawyer had written them.

My second gripe, related to the first, about Applied Psychology in Talent Management is its tendency to delve too often and too deep into elaborate, scientific explanations for every single topic, which can cause readers to have trouble seeing the forest for the trees. The book often took readers so deep into tiny details of a topic that it failed to help readers see the bigger picture.

A great example illustrating this is the book’s in-depth coverage of utility analysis. Cascio and Aguinis (2019) devoted half of Ch. 14 and several pages in Ch. 16 delving into the complex details (including formulas and equations) of utility analysis. Despite the intense coverage, I was still unsure (1) what utility analysis is, and (2) why it’s important/applicable to I/O psychology.

In the Landy and Conte textbook, on one page and in 4 sentences, I found the answers to my questions of what utility analysis is and why it’s applicable (or not) to I/O psychology:

Utility analysis is a “technique that assesses the economic return on investment of human resource interventions such as staffing and training” (Landy & Conte, 2013, p. 300).

“Utility analysis uses accounting procedures to measure the costs and benefits of training programs (Landy & Conte, 2013, p. 300).

“A utility analysis can provide training evaluators and organizational decision makers with an overall dollar value of the training program” (Landy & Conte, 2013, p. 300).

And here’s why most of the I/O psychology textbooks only briefly mention utility analysis: “To perform utility analysis, training evaluators use complex formulas that are beyond the scope of this book” (Landy & Conte, 2013, p. 300).

Furthermore, Cascio and Aguinis’ decision to devote an exorbitant amount of time and attention to covering utility analysis while completely ignoring and neglecting coverage of motivation is a huge misstep. Why? Motivation is one of the most widely researched and thoroughly explored topics in I/O psychology (Levy, 2017; Riggio, 2018). Every I/O psychology textbook I examined — seven in all [Aamodt, 2013; Landy & Conte, 2013; Levy, 2017; Muchinsky, 2006; Riggio, 2018; Spector, 2017; Truxillo, Bauer, & Erdogan, 2016] — had a chapter dedicated to motivation.

Finally, another glaring omission is the lack of a glossary or at least definitions of terms on the side of the page. I have never seen an I/O psychology textbook not include either a glossary or definitions of terms on the side of the page, until now. Applied Psychology in Talent Management (8th ed.) had neither.

Takeaway: Without question, Applied Psychology in Talent Management (8th ed.) is a useful industrial/organizational psychology resource to have. However, be warned, the book’s contents and writing style are geared toward a decidedly academic audience.

The book is not fun to read, but it is helpful when you’re doing research. To be fair, the publisher’s website did state that this textbook takes “a rigorous, evidence-based approach” and the authors did write that one of the assumptions of this book is that readers possess a decent grasp of statistics.

My two biggest criticisms of this book are: (1) that it is too verbose (when simple, clear, and direct are more effective), and (2) that it often takes readers so deep into tiny, irrelevant details of a topic that it fails to help readers see the bigger picture.

Because the book follows the traditional academic writing style, it is “heavy” and makes reading and locating information difficult and tiring. If the goal of a textbook is to get students interested in a subject, doesn’t it make sense to use a writing style that is readable and not long-winded?

I/O psychology textbooks contain identical or very similar information (e.g., training and development, job analysis, employee selection, performance management, etc.), but the manner in which the material is presented can make the choice to go with one textbook over another an easy and obvious one.

For the reasons stated above, when I want to learn about any I/O psychology topic, my first choice is to turn to Paul Levy’s Industrial/Organizational Psychology: Understanding The Workplace or Ronald Riggio’s Introduction to Industrial/Organizational Psychology because of the extremely readable writing style of either textbook. If I need to conduct further research, I would then turn to more research-intensive, academically-written resources like the Applied Psychology in Talent Management (8th ed.) book for a deeper dive. There’s no doubt in my mind that Applied Psychology in Talent Management (8th ed.) is a useful tool to have in my I/O psychology toolbox. It’s just not my favorite or preferred tool.

Written By: Steve Nguyen, Ph.D.
Leadership + Talent Development Advisor

References

Aamodt, M. G. (2013). Industrial/organizational psychology: An applied approach (7th ed.). Belmont, CA: Wadsworth.

Cascio, W. F., & Aguinis, H. (2011). Applied psychology in human resources management (7th ed.). Upper Saddle River, NJ: Prentice-Hall.

Cascio, W. F., & Aguinis, H. (2019). Applied psychology in talent management (8th ed.). Thousand Oaks, CA: Sage.

Landy, F. J. & Conte, J. M. (2013). Work in the 21st century: An introduction to industrial and organizational psychology (4th ed.). Hoboken, NJ: Wiley.

Levy, P. E. (2017). Industrial/organizational psychology: Understanding the workplace (5th ed.). New York, NY: Worth Publishers.

Muchinsky, P. M. (2006). Psychology applied to work (8th ed.). Belmont, CA: Thomson Wadsworth.

Riggio, R. E. (2018). Introduction to Industrial/Organizational Psychology (7th ed.). New York: Routledge.

Spector, P. E. (2017). Industrial and organizational psychology: Research and practice (7th ed.). Hoboken, NJ: John Wiley & Sons.

Truxillo, D. M., Bauer, T. N., & Erdogan, B. (2016). Psychology and work: Perspectives on industrial and organizational psychology. New York: Routledge.

Disclosure: I received a print copy of Applied Psychology in Talent Management (8th ed.) as a complimentary gift, but my book review was written as though I had purchased it.

Book Review – Industrial/Organizational Psychology: Understanding the Workplace (5th ed.) by Paul E. Levy

Note: I initially received the textbook in an ebook format, accessible via the VitalSource website or VitalSource Bookshelf software program that you download and install. The VitalSource Bookshelf ebook platform (website and software program) was so frustrating and clumsy to use that I almost didn’t review this book. Luckily, the program manager for psychology at Macmillan Learning (publisher of Industrial/Organizational Psychology: Understanding the Workplace [5th ed.]) sent me a hard/print copy. Indeed, there’s evidence supporting the use of print over digital textbooks (Alexander & Singer, 2017; Baron, 2016; Crum, 2015).

Book Review of the hard copy of Industrial/Organizational Psychology: Understanding the Workplace (5th ed.):

Industrial/Organizational Psychology: Understanding the Workplace (5th ed.) is the fifth edition of Dr. Paul E. Levy’s I/O psychology textbook. Professor Levy explained that the fifth edition is a “substantial revision with some major in-chapter structural changes and significant content-related updates, adjustments, and additions” (2017, p. xv).

Dr. Levy wrote that he “held fast to the same overriding principles in the design and writing of the fifth edition—to develop interesting, reader-friendly, current, research-based coverage of I/O psychology” (2017, p. xv).

I examined five topics: (1) training and development [Ch. 8]; (2) the 80 percent rule or four-fifths rule used to determine adverse impact in employee selection [Ch. 7]; (3) predictors used to make employee selections [Ch. 6]; (4) job analysis [Ch. 3], and (5) motivation [Ch. 9].

The first topic is training and development. Training and development is my passion and an area I’m always interested in, especially as it relates to I/O psychology and any evidence-based resources (journal articles, research studies, etc.). I really like Levy’s explanation of transfer of training: “Transfer of training is the extent to which the material, skills, or procedures learned in training are taken back to the job and used by the employee in some regular fashion. From the organization’s perspective, this principle is integral to the success of the training program” (Levy, 2017, p. 254). This is a fantastic explanation of a key component of training!

I was also pleased with the sections on training delivery and training evaluation. I was happy to see that professor Levy included a discussion about orientation training or onboarding in this chapter, under the training delivery section. “The socialization process for new employees can be very important in that it determines their first impression of the organization, supervisors, and coworkers. This is also the time when new employees learn the formal and informal rules, procedures, and expectations of the organization or work group” (Levy, 2017, p. 263).

I was delighted to find the topic of coaching also included. Levy explained that although “coaching is not considered as a training technique in many classic treatments of organizational training. [He is] discussing it in this chapter because its focus is on developing employees and helping them to get better at their jobs, which is, in large part, what training is all about. When [Levy] talk[s] to I/O practitioners about the really big issues in their organizations, [he] invariably find[s] that coaching is one of the first things they mention” (Levy, 2017, p. 264).

Another surprising gem was the mention of corporate universities. “As organizations continue to become more focused on continuous learning and the management of knowledge within the company, corporate universities should grow in importance” (Levy, 2017, p. 267).

The second topic is the 80 percent rule (or four-fifths rule) used to make an adverse impact determination in employee selection. Levy does an exceptional job explaining and covering the four-fifths rule:

“To appreciate the intricacies of employment law as it applies to I/O psychology, you need to understand adverse impact. This concept, defined in the Guidelines as the ‘80% rule of thumb,’ is the common practical operationalization of discrimination according to the courts. A selection procedure is said to exhibit adverse impact (i.e., to discriminate) against a group if the selection rate (i.e., the percentage of applicants hired) for that group is less than 80% of the selection rate for the group with the highest selection rate” (Levy, 2017, p. 223).

Professor Levy followed this great overview by explaining the 80% rule using a table showing two cases, one in which there is no adverse impact and one in which adverse impact is present. No other I/O psychology textbooks (I looked at five) provided as great an overview of adverse impact and explained the absence or presence of adverse impact using numbers and percentages in a table as well and as clearly and effectively as the Levy textbook! Only one of the textbooks, out of the five I looked at, used a table with two cases and numbers and percentages, but it was not as easy to comprehend as professor Levy’s textbook. Dr. Levy also outlined the role the four-fifths rule plays in an employment discrimination case.

At the end of Ch. 7, in a section called “Taking It to the Field,” Levy presents the readers with a scenario that requires them to recall what they’ve learned about the four-fifths rule in determining adverse impact in employee selection. This careful, and yet succinctly clear, treatment of such a critical topic in I/O psychology is to be applauded. Absolutely outstanding!

The third topic is predictors (Ch. 6) used to make employee selections. I love that Levy used the title “predictors” for the chapter. As he explained:

“Predictors are of great importance because we place so much trust in their ability to model criteria. Just as faulty criteria can result in bad organizational decisions such as firing or promoting the wrong employee, faulty predictors can result in hiring the wrong person or not hiring the right person” (Levy, 2017, p. 168).

I like that Dr. Levy divided the chapter into two major subheadings: Testing Formats (under which are Computer Adaptive Testing; Speed Versus Power Tests; Individual Versus Group Tests; Paper-and-Pencil Versus Performance Tests) and Predictors (under which are Cognitive Ability; Psychomotor Tests; Personality Tests; Integrity Tests; Work Samples; Assessment Centers).

Professor Levy did a great job discussing the importance of validity coefficient to employee selection. Validity coefficient (r) is an index of the relationship between a predictor and a criterion. Researchers and practitioners use it as evidence that a test is a good predictor of job performance (Levy, 2017).

In Table 6.5 on p. 195, Levy provides a fantastic table showing the validity coefficients for common predictors for employee selection. In that table, we can see how the different types of predictors (e.g., general cognitive ability, emotional intelligence, personality test, etc.) rank in predicting job performance. For instance, we can see right away that structured interviews are extremely effective (r=0.71) compared to unstructured interviews (r=0.20) and even cognitive ability (r=0.53 and r=0.48). We can also see that predictors such as work samples, personality tests, and emotional intelligence tests are better at predicting job performance than unstructured interviews.

The fourth topic is job analysis or “the process of defining a job in terms of its component tasks or duties and the knowledge or skills required to perform them” (Levy, 2017, p. 73).

“Although job analysis tends to receive little empirical attention, it is among the most important areas of I/O psychology, providing the foundation on which all other HR processes are built” (Levy, 2017, p. 95).

Professor Levy explained that job analysis experts categorize job analysis methods as either task-oriented or worker-oriented. “Task-oriented techniques focus on describing the various tasks that are performed on the job. Worker-oriented techniques examine broad human behaviors involved in work activities” (Levy, 2017, p. 74). Levy pointed out that “one approach is not necessarily better than the other; as a job analyst, you can choose a hybrid approach or any combination of pieces from different job-analytic techniques” (Levy, 2017, p. 74).

Levy did a nice job covering job analysis and I appreciated the outstanding figures and diagrams that provided a great visual and bird’s-eye view so readers can have a better understanding of the topic. For instance, in Figure 3.1 (p. 73), Levy provided a clear and easy-to-understand diagram showing that job analysis is comprised of job evaluation, job description, and job specifications, and how job analysis is related to other human resources functions (e.g., compensation, training, performance appraisal, selection, etc.). Another great diagram is the O*NET Content Model (Fig. 3.5, p. 79), which actually looks cleaner and better than the original O*NET Content Model found on the O*NET website!

The fifth (and final) topic is motivation, one of the most thoroughly explored topics in I/O psychology (Levy, 2017). I really like how Dr. Levy shares his own experience about what he tells companies or senior leaders when they ask him for tips to motivate their workers:

“As an I/O psychologist, I am often asked by organizational managers and executives about what can be done to improve the motivation of their workforce. One theme that I have emphasized throughout this book is the complexity of human behavior at work. This complexity explains why we need to use multiple tests (i.e., a selection battery) for employee selection and why we are fortunate if our battery accounts for 30% of the variance in performance. It also explains why even the most skilled and competent professionals are not always the best performers. Ability is an important predictor of individual performance, but so is motivation. The brightest and most skilled workers in the world will not be successful if they are not motivated to be successful” (Levy, 2017, p. 283).

Levy provided a great definition of work motivation: “A force that drives people to behave in a way that energizes, directs, and sustains their work behavior” (Levy, 2017, p. 283). I also like how professor Levy explained that motivation is an abstract concept: “Motivation is an abstract internal concept that cannot be seen, touched, or measured directly. We infer motivation from employees’ behaviors; we operationalize it by measuring behavior choice, intensity, and persistence” (Levy, 2017, p. 283). In the “Taking It to the Field” section for Ch. 9 [Motivation], Levy asks readers to apply what they’ve learned about theories of motivation in responding to an email inquiry from a client.

What I Really Like:

There are I/O Today boxes, one for each chapter in the book, that I really enjoy. The I/O Today boxes “present cutting-edge practices, current controversies, and developing theories that practitioners and researchers are grappling with now and that will continue to influence the field in the coming years” (Levy, 2017, p. xviii).

Here are the titles of all I/O Today boxes: Scientist/Practitioner Gap; Big Data; Future of Job Analysis; Performance & Disability; Technology, Performance Measurement, & Privacy; Remote Assessment for Selection; Religion in the Workplace; Gamification in Job Training; Results-Only Work Environment (ROWE); Relationship Between Unions & Job Satisfaction; PTSD [post-traumatic stress disorder] and STSD [secondary traumatic stress disorder]; Age Diversity in Teams; Romance of Leadership; and Holacracy.

I found these boxes/sections to be very refreshing since the general public and students don’t always see the connection between how psychology is applied in the workplace and/or what connection this has with the real workplace.

For instance, in the I/O Today box/section on Big Data, Levy wrote: “One of the most important developments in I/O psychology in the past decade has been the emergence of something known as ‘Big Data,’ which refers to massive data sets (potentially millions or even billions of data points) that are rapidly accumulated and contain information on a wide assortment of variables” (Levy, 2017, p. 65).

“[B]ecause this field is so new, most graduate programs have not had time to adapt their training to help students learn how to work with Big Data. Because these data sets are so large, conventional statistical packages such as SPSS, SAS, or Excel are unable to handle the calculations. Students need to focus more heavily on programming languages such as Python and Javascript, and must think more strategically about how to present data in a way that makes sense to a lay audience” (Levy, 2017, p. 65-66).

Another interesting I/O Today box/section is titled, “Gamification in Job Training.” Professor Levy wrote: “gamification refers to the use of gaming mechanics (such as virtual worlds, leaderboards, and unlocking achievements) to train employees, and it represents an exciting new trend within the training realm. Arguably, this technique appeals to computer savvy workers and can help to motivate employees to complete training and hone their skills. Gamification as a concept is not new; for decades, academic and military institutions have often found ways to incorporate game components such as badges, achievements, and points to encourage certain learning behaviors” (Levy, 2017, p. 260).

“Gamification holds many potential benefits for employers and employees by making learning and practicing fun, but trainers must be thoughtful about when gamification is appropriate and how best to implement it” (Levy, 2017, p. 260).

Levy poses two or three thought-provoking discussion questions to engage students/learners at the bottom of each I/O Today section. He also provides references and suggestions for additional readings on the topic. These I/O Today sections are relevant, practical, and bring I/O psychology to life. Well done!

Another feature I really like is the Taking It to the Field section which follows the Summary section at the end of each chapter. These are detailed scenarios or consulting situations that require the reader/learner to analyze, evaluate, and solve a realistic I/O problem. For instance, the Taking It to the Field section for Ch. 3 is on job analysis. Levy provided some great tips for writing effective worker-oriented job descriptions and for designing possible interview questions. In the Taking It to the Field section for Ch. 7, Levy asked readers to imagine that they are responding to an email inquiry about the legality of a hiring process. More specifically, in composing their email response, they would need to recall what they had learned about the use of the four-fifths rule to determine adverse impact in employee selection. In another Taking It to the Field section for Ch. 13, readers are asked to address gender and leadership in an email inquiry from a female founder of a company which is experiencing a higher level of turnover as well as complaints from exit interviews about the lack of leadership. These scenarios are a wonderful way to engage students and get them to imagine a real-world application!

Summary: The print copy of Industrial/Organizational Psychology: Understanding the Workplace (5th ed.) by Paul E. Levy is a terrific I/O psychology textbook. The fifth edition lives up to Dr. Levy’s goal of producing a textbook that engages, excites, and instructs. The student-friendly writing style combined with fantastic charts and graphics make this book accessible and engaging. The I/O Today and Taking It to the Field sections are outstanding. They present cutting-edge practices (I/O Today) and really engage readers in analyzing, evaluating, and problem-solving realistic I/O scenarios (Taking It to the Field), helping to bring I/O psychology to real life! Industrial/Organizational Psychology: Understanding the Workplace (5th ed.) is an excellent and important resource in the field of I/O psychology and I highly recommend it.

Written By: Steve Nguyen, Ph.D.
Leadership + Talent Development Advisor

References

Alexander, P. A., & Singer, L. M. (2017, October 15). A new study shows that students learn way more effectively from print textbooks than screens. http://www.businessinsider.com/students-learning-education-print-textbooks-screens-study-2017-10

Baron, N. (2016, July 20). Do students lose depth in digital reading? https://theconversation.com/do-students-lose-depth-in-digital-reading-61897

Crum, M. (2015, February 27). Sorry, Ebooks. These 9 Studies Show Why Print Is Better. https://www.huffingtonpost.com/2015/02/27/print-ebooks-studies_n_6762674.html

Levy, P. E. (2017). Industrial/organizational psychology: Understanding the workplace (5th ed.). New York, NY: Worth Publishers.

Disclosure: I received a print copy of Industrial/Organizational Psychology: Understanding the Workplace (5th ed.) as a complimentary gift, but my book review was written as though I had purchased it.

Book Review: Straight Talk for Startups by Randy Komisar and Jantoon Reigersman

NOTE: For this book review, I intentionally and excessively quoted the authors throughout the post. I do this for two reasons: (1) I prefer to have the authors’ words speak for themselves rather than me interpreting, generalizing, or inadvertently misinterpreting their intent, and (2) It helps you, the readers, see the quality of the authors’ work/writing.

In Straight Talk for Startups, venture capitalist Randy Komisar and finance executive Jantoon Reigersman shared the “secrets” they’ve gathered “from decades of being on both sides of the table—originally as entrepreneurs looking for advice and more recently as mentors” (p. xix). As they caution, “You must be fluent in all issues facing entrepreneurs if you hope to win” (p. xx).

From the publisher’s website for the book: Komisar and Reigersman walk budding entrepreneurs through 100 essential rules—from pitching your idea to selecting investors to managing your board to deciding how and when to achieve liquidity. Culled from their own decades of experience, as well as the experiences of their many successful colleagues and friends, the rules are organized under broad topics, from “Mastering the Fundamentals” and “Selecting the Right Investors,” to “The Ideal Fundraise,” “Building and Managing Effective Boards,” and “Achieving Liquidity.”

“From the outside, starting a company looks easy. Just wake up with an idea, tell your friends, and convince one or two people to partner up; take your pick of top-tier venture capital investors, build a product, get swarmed by offers, and sell to the highest bidder. But we know it isn’t really like that” (Komisar & Reigersman, 2018, p. 269-270).

The Review: It’s actually the last sentence describing the book (for those “curious about what makes high-potential ventures tick”) that got my attention and piqued my interest. You see, I do not run, work for or have any plans for creating a startup. The closest I’ve ever come to a startup is watching entrepreneurs on TV’s Shark Tank, a reality TV show about entrepreneurship in America; the “Sharks” – tough, self-made, multi-millionaire and billionaire tycoons – invest in the best businesses and products that America has to offer.

I’m writing this review from the perspective of someone who’s simply curious about how startups work.

Investopedia.com (2018) has succint and clear definitions for entrepreneur and startup.

Here’s the verbatim definition of startup from Investopedia.com: A startup is a company that is in the first stage of its operations. These companies are often initially bankrolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small-scale operations are not sustainable in the long term without additional funding from venture capitalists.

Because Straight Talk for Startups is written as a list, it doesn’t “flow” like when reading a standard/usual business book. And since it uses a list (100 insider rules), it’s only fitting that I select a handful (one or two from each of the five parts that the book is divided into), and quote and talk about them below.

Part 1: Mastering the Fundamentals
Rule #5 (p. 13): Most failures result from poor execution, not unsuccessful innovation.

“Timimg is critical. If you are right about the market but wrong about the timing, you will fail just the same” (Komisar & Reigersman, 2018, p. 13).

Komisar and Reigersman said that Steve Jobs’ underappreciated strength was his “unnancy ability to never ship a product before its time” (p. 14). They talked about how Jobs killed off the Newton project (which had been struggling for years), but kept the talented people working in the area and redirected them to target digital music, eventually leading to the iPod.

“It was a decade later that Apple introduced the iPhone, a quantum leap from the Newton. The technology and batteries were finally cost-effective, the market had been primed to carry [Apple’s] entertainment in their pocket, and, by adding a cellular radio and a clever touch interface, Jobs finally had what he needed to deliver on the promise of a connected online communicator” (Komisar & Reigersman, 2018, p. 14).

Rule #18 (p. 45): Know your financial numbers and their interdependencies by heart. You might think that these rules are generic advice, but you would be wrong. Rule #18 offers a prime example of the detail-oriented wisdom shared. The authors offered a quick primer on how the financial numbers (e.g., income statement, cash flow statement, balance sheet, working capital schedule, debt & cash schedule) work together.

Komisar and Reigersman (2018) said that as an entrepreneur, you need “to be able to drill down into the components of each element [in the financial numbers] so you understand, for instance, why revenues have increased rapidly (more customers) but your operating margins have shrunk (discounts to accelerate sales, customers not as profitable as expected, etc.)” (p. 49).

Part 2: Selecting the Right Investors
Rule #31 (p. 80): Avoid venture capital unless you absolutely need it.

“Remember: venture capital comes at a price, in the form of a meaningful percentage of your company. . . So you have to be prepared to part with a significant portion of your company to even attract a good venture capitalist” (Komisar & Reigersman, 2018, p. 80).

“Venture capitalists will impose certain controls on what you can and cannot do without their approval, such as sell the company or issue new shares” (Komisar & Reigersman, 2018, p. 81).

Part 3: The Ideal Fundraise
Rule #42 (p. 110): Raise capital in stages as you remove risk.

Raise money in stages because “if you raise more money than you need in an attempt to remove the leap-of-faith risks too early, you will pay a big price. Given everything that you still have to prove and accomplish, on a risk-adjusted basis, your valuation will be too low to provide you and your team with a compelling upside after you absorb all the dilution a ‘one-and-done’ round would entail. Simply stated, you are too risky at the start to raise all the capital you need at an attractive price” (Komisar & Reigersman, 2018, p. 110).

Part 4: Building & Managing Effective Boards
Rule #65 (p. 175): Your board should be operational rather than administrative.

“You want businesspeople, not bureaucrats. You want a board of strategic thinkers with strong operating backgrounds, who are willing to work hard to make your venture a success. . . They need to be informed, available, knowledgeable, and engaged” (Komisar & Reigersman, 2018, p. 175).

Part 5: Achieving Liquidity
Rule #87 (p. 231): Investors’ and management’s interests in liquidity often conflict.

“Investors may argue against the sale of a venture below a certain price—even when it would provide a resctable outcome for all. They [the investors] expect a larger multiple and return on their investment and are willing to roll the dice to get more” (Komisar & Reigersman, 2018, p. 231).

At the end of the book, in the Epilogue, Komisar and Reigersman shared their “Cardinal Rule” which is “Always Ask Why?”

“Know why this venture is important to you. Why it should be important to others. And, given the low probability of success for any venture, why it is nevertheless worth failing at. Of course you don’t want to fail; success is always preferable to failure. But if you fail, will you feel you wasted your time, or that you fought the good fight?” (Komisar & Reigersman, 2018, p. 271-272).

I love this part:

“You don’t just dream up a company; you sweat the details and manage operations. You watch every nickel and are strategic about whom you raise it from. You lead through good times and bad. You assemble trusted advisers, coaches, and boards to keep you on track. You don’t dream it; you work it—hard” (Komisar & Reigersman, 2018, p. 270).

Summary: Reading about what it takes to start and run a company, in particular the know-how and experience needed to get the job done, and gleaning from the sage advice distilled in the 100 rules, was an extraordinarily informative experience. Based on the wisdom shared by Komisar and Reigersman, anyone—not only entrepreneurs—can benefit from the tips and guidance in the rules from Straight Talk for Startups. Even if you’re not an entrepreneur or know anything about startups, if you’re just curious about what makes a startup venture work, then I think you’ll find Straight Talk for Startups to be a fascinating read.

Written By: Steve Nguyen, Ph.D.
Leadership + Talent Development Advisor

References

Investopedia.com. (2018). Entrepreneur. https://www.investopedia.com/terms/e/entrepreneur.asp

Investopedia.com. (2018). Startup. https://www.investopedia.com/terms/s/startup.asp

Komisar, R., & Reigersman, J. (2018). Straight Talk for Startups. New York, NY: HarperCollins Publishers.

Disclosure: I received Straight Talk for Startups as a complimentary gift, but my book review was written as though I had purchased it.