Meaningfully Embedding Core Values in Organizations: A Pragmatic Guide for Practitioners

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Short Description

This discussion will explore six critical factors, identified through an analysis of research and best practices, associated with meaningfully embedding core values throughout an organization. A guide for developing a core values initiative and a core values initiative logic model will be introduced.

Detailed Abstract

Four broad clusters of related research literature proved invaluable for an analysis of the research and best practices associated with meaningfully embedding core values throughout an organization in the service and hospitality industries: 1) core values/values/value-based leadership; 2) service/service quality/service-profit chain/hospitality management; 3) human resources/performance management; and 4) competency/competency-based human resource management. The results of the analysis identified six critical factors for meaningfully embedding core values throughout an organization. The six critical factors serve as the foundation for developing a core values initiative. The following are the six critical factors along with the associated sources:
1. Core values integrated throughout all human resources plans, especially performance appraisals and compensation plans: Lencioni (2012); Argandoña (2003); Viinamäki (2012); Grojean, Resick, Dickson, & Smith (2004); Hinkin & Tracey (2010); Liao & Chung (2004); Yee, Yeung, Cheng (2010); Yee, Yeung, Cheng (2011); Suttapong, Srimai, & Pitchayadol (2014); Weatherly (2004); Lahti (1999); Lado & Wilson (1994);
2. Performance appraisals linked to compensation plans and incorporate explicit and clear behavioral expectations: Grojean, Resick, Dickson, & Smith (2004); Hinkin & Tracey (2010); Ueno (2010); Liao & Chung (2004); Yee, Yeung, Cheng (2010); Yee, Yeung, Cheng (2011); Sun, Hsu, Wang (2012); Sergeant & Frenkel (2000); Bitner, Booms, Tetreault (1990); Suttapong, Srimai, & Pitchayadol (2014); Weatherly (2004); Montague (2007); Tziner &kopelman (2002); Posthuma & Campion (2008); Lahti (1999); Lado & Wilson (1994); Lado (1992);
3. Core values meaningfully weighted in both the performance appraisals and compensation plans: Hinkin & Tracey (2010); Ueno (2010); Yee, Yeung, Cheng (2010); Yee, Yeung, Cheng (2011); Sun, Hsu, Wang (2012); Sun, Hsu, Wang (2012); Suttapong, Srimai, & Pitchayadol (2014); Weatherly (2004); Lado & Wilson (1994); Lado (1992);
4. Employees involved in defining the behaviors associated with the core values relative to their level in the organization (core values manifest differently at various organizational levels): Argandoña (2003); Viinamäki (2012); Pruzan (1998); Buchko (2007); Liao & Chung (2004); Yee, Yeung, Cheng (2010); Yee, Yeung, Cheng (2011); Suttapong, Srimai, & Pitchayadol (2014); Tziner & Kopelman (2002); Posthuma & Campion (2008); Charan, Drotter, & Noel (2011); Lahti (1999);
5. Adopt a hybrid behavioral observation scale (B.O.S.) method for identifying the core value behaviors at each organizational level and for frequency rating system used in performance appraisals (involves employees): Buchko (2007); Liao & Chung (2004); Tziner & Kopelman (2002); Drotter (2011); Grote (1996);
6. Continual improvement: Argandoña (2003); Suttapong, Srimai, & Pitchayadol (2014); Weatherly (2004).
These critical factors for meaningfully embedding core values point toward the importance of including core values in both performance appraisals and compensation plans (critical factors one, two, and three). The research clearly points toward using behaviors to evaluate performance, and by synthesizing the research, employee involvement in defining the behaviors associated with the core values for their level in the organization (critical factor four). Research on rating systems for performance appraisals favor the use of behavioral systems, but the two approaches supported by the Industrial/Organizational Psychology, Behavioral Anchored Rating System (B.A.R.S.) and Behavioral Observation Scale (B.O.S.) have not been widely adopted by organizations because of the time and cost associated with developing them (Grote, 1996; Tziner & Kopelman, 2002; Weatherly, 2004). Therefore, a hybrid process emerged for developing and using a behavioral frequency scale for performance appraisals that reduces the time and cost associated with developing the behavioral frequency scale (critical factor five) (Buchko, 2007; Drotter 2011; Grote,1996). Due to the nature of the changing workforce and the rapid developments and fluctuating business environment, the behaviors associated with the core values need continual assessment and improvement (critical factor six). The six critical factors for meaningfully embedding core values throughout organizations serve as the foundation for producing a guide and logic model for designing a core values initiative.
The following core values initiative guide provides recommended steps for practitioners tasked with designing such an initiative:
1. Identify the behaviors representative of the core values for each organizational level (behaviors of excellence) using the hybrid B.O.S. method;
2. Incorporate the behaviors of excellence into the performance appraisal using a behavioral frequency scale as the rating system;
3. The pay-for-performance plan links directly to the performance appraisal and includes two broad buckets: business results (the right results) and core values (the right way);
4. Behaviors of excellence incorporated into other relevant human resources systems; and
5. The behaviors of excellence, performance appraisal, and pay-for-performance plan need to be monitored and assessed, making improvements resulting from the assessments.
Finally, producing a logic model (Kellogg Foundation, 2004) to explicitly illustrate the holistic picture of a core values initiative, connecting the inputs to the long-term outcomes, proves invaluable for the members of the executive team (Berger, 2016). The logic model parallels the connections between loyal employees and increased revenue and profit, the critical connections of the service-profit chain (Heskett, Jones, Loveman, Sasser, & Schlesinger, 1994). It also follows the tenets of a leadership framework to help organizations realize sustainable validity, an established direction, alignment, and commitment for achieving long-term superior organizational performance (Barney, 1991; Bowman & Ambrosini, 2000; Magretta, 2012; Monette, Sullivan, & DeJong, 2011; Porter, 2008; Veslor, McCauley, & Ruderman, 2010).
NOTE: This presentation proposal comes directly from Berger (2016).

Participants

• Travis A. Berger, Business, Alvernia University

• John A Anderson, Indiana University of Pennsylvania