make this into a comprehensive powerpoint presentation: CHAPTER 3 
Foundations of Individual Behavior 
CHAPTER OVERVIEW 
This chapter deals with some of the more important characteristics that differentiate people from one 
another in organizations. First, it describes the psychological nature of people in organizations. Then it 
explores some of the elements of people’s personalities that can influence behavior in organizations and 
considers individual attitudes and their role in organizations. Next, the chapter examines the role of 
perception in organizations. The chapter closes with an examination of various kinds of workplace 
behaviors that affect organizational performance. 
CHAPTER LEARNING OBJECTIVES 
After studying this chapter, you should be able to: 
1. 
Explain the nature of the individual-organization relationship. 
2. 
3. 
4. 
5. 
Define personality and describe personality attributes that affect behavior in organizations. 
Discuss individual attitudes in organizations and how they affect behavior. 
Describe basic perceptual processes and the role of attributions in organizations. 
Explain how workplace behaviors can directly or indirectly influence organizational effectiveness. 
LECTURE OUTLINE 
I. 
People in Organizations 
A. Psychological Contracts. A psychological contract is the overall set of expectations held by 
an individual with respect to what he or she will contribute to the organization and what the 
organization, in return, will provide to the individual. It is similar to a standard legal 
contract, except that it is usually less formal and less well defined. 
1. 
The individual makes several contributions to the organization, including effort, 
ability, loyalty, skills, time, and competencies, in return for the inducements offered by 
the organization. 
2. 
3. 
4. 
Inducements offered by the organization include pay, job security, benefits, career 
opportunities, status, and promotion opportunities. 
Either party may seek changes in the contract if an imbalance or inequity is felt. The 
task of management is to properly manage the psychological contracts with all 
employees. 
Increasing globalization of business also complicates the management of psychological 
contracts because the array of inducements that employees deem to be of value varies 
across cultures. Also, the psychological contract becomes even more complex for 
employees who take international assignments. 
B. The Person-Job Fit. Part of managing the psychological contract is making sure that the 
contributions made by the individual fit with the inducements offered by the organization. 
Hiring processes, training programs, performance appraisal systems, and other 
organizational processes are techniques that organizations can use to assist in helping the 
person fit the job. 
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part. 
. 
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Chapter 3: Foundations of Individual Behavior 
C. Individual Differences. Although people are similar to one another in many ways, there are 
significant differences. We all have a unique set of individual differences in the ways we 
think, interpret our environment, and respond to that environment. 
1. 
Individual differences are personal attributes that vary from one person to another and 
may be physical, psychological, and emotional. 
2. 
II. 
The basic categories of individual differences include personality, attitudes, perception, 
and creativity. The way these individual differences affect employee work behaviors 
depends on the work situation. 
Personality and Organizations. Personality is the relatively stable set of psychological attributes or 
traits that distinguish one person from another. Personality plays a major role in how a person 
perceives his or her work environment, evaluates it, and responds to it. A person’s personality 
starts forming at birth and continues through adolescence. By the time most people reach 
adulthood, their personalities are clearly defined and generally stable. Significant events can 
contribute to changes in an adult’s personality. 
A. The “Big Five” Personality Traits. Although psychologists have identified literally 
thousands of personality traits and dimensions that differentiate one person from another, in 
recent years researchers have identified five fundamental personality traits that are especially 
relevant to organizations:  
1. 
Agreeableness refers to a person’s ability to get along with others. It causes some 
people to be gentle, cooperative, forgiving, understanding, and good-natured in their 
dealings with others. But it may result in others being irritable, short-tempered, 
uncooperative, and generally antagonistic toward other people. 
2. 
3. 
4. 
5. 
Conscientiousness refers to the number of goals on which a person focuses. Research 
has found that more conscientious people tend to be higher performers than less 
conscientious people across a variety of different jobs. 
Neuroticism refers to people who experience unpleasant emotions such as anger, 
anxiety, depression, and feelings of vulnerability more often than do people who are 
relatively less neurotic. People who are more neurotic are more excitable, insecure, 
reactive, and subject to extreme mood swings.  
Extraversion refers to a person’s comfort level with relationships. People who are 
called extroverts are sociable, talkative, assertive, and open to establishing new 
relationships. Research suggests that extroverts tend to be attracted to jobs based on 
personal relationships like sales and marketing positions and tend to be higher overall 
job performers than introverts. 
Openness refers to a person’s rigidity of beliefs and range of interests. People with 
high levels of openness are willing to listen to new ideas and to change their own 
ideas, beliefs, and attitudes as a result of new information. They may also have broad 
interests and be curious, imaginative, and creative. Openness may also indicate more 
receptivity to change rather than resistance to change. 
B. The Myers-Briggs Framework. Based on the classical work of Carl Jung, this framework 
characterizes individuals in terms of four general dimensions: sensing, intuiting, judging, 
and perceiving. The Myers-Briggs Type Indicator (MBTI) is popular with some 
organizations to assess personality types. 
C. Emotional Intelligence. This concept, often referred to as EQ, has been identified in recent 
years. It refers to the extent to which a person has self-awareness (the basis for all the other 
components); the capacity to manage one’s emotions (balancing anxiety, fear, and anger); 
the capacity to motivate oneself (remain optimistic and continue to strive in the face of 
setbacks, barriers, and failure); empathy (understanding how others feel without necessarily 
being told); and social skills (the ability to get along with others and establish positive 
relationships). 
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in 
part. 
Chapter 3: Foundations of Individual Behavior 
23 
D. Other Personality Traits at Work. Several personality traits have been identified that are 
especially meaningful in work situations:  
1. 
Locus of control is the extent to which people believe that their behavior has a real 
affect on what happens to them. “Internals” believe they can control what happens to 
them. “Externals” tend to think that what happens to them is a function of luck or fate. 
2. 
3. 
4. 
5. 
6. 
III. 
Self-efficacy is a person’s beliefs about his or her capabilities to perform a task. People 
with high self-efficacy believe that they can perform well on a specific task. People 
with low self-efficacy are more prone to doubt their ability to perform a specific task. 
Authoritarianism is the extent to which a person believes there should be power and 
status differences within a social system such as an organization. The stronger the 
belief, the more authoritarian the individual is said to be. 
Machiavellianism is a trait that results in behavior directed at gaining power and 
controlling the behavior of others. More Machiavellian individuals tend to be rational 
and nonemotional, may be willing to lie to attain their personal goals, put little weight 
on loyalty and friendship, and enjoy manipulating others’ behavior. 
Self-esteem is the extent to which a person believes that she or he is a worthwhile and 
deserving individual. A person with high self-esteem may seek higher-status jobs, have 
more confidence, and experience greater intrinsic satisfaction. 
Risk propensity is the degree to which an individual is willing to take chances and 
make risky decisions. A manager with a high-risk propensity might experiment with 
new ideas and gamble on new products. 
Attitudes in Organizations. Attitudes are complex sets of beliefs and feelings that people have 
about specific ideas, situations, or other people, and are the primary mechanism through which 
most people express their feelings. 
A. How Attitudes Are Formed. Attitudes are formed by a variety of forces, including our 
personal values, our experiences, and our personality. 
1. 
Attitude structure. Attitudes are usually viewed as stable dispositions to behave toward 
objects in a certain way and have three components: affect, cognition, and behavioral 
intent.  
a) 
Cognition is the knowledge a person presumes to have about something and is 
based on perceptions of truth and reality. 
b)      Affect refers to the individual’s feelings toward something. 
b) Intention guides a person’s behavior and is not always translated into actual 
behavior. 
2. 
3. 
Cognitive Dissonance. Cognitive dissonance is the mental anxiety a person 
experiences when (1) two sets of knowledge or perceptions are contradictory or 
incongruent, or (2) the person behaves in a fashion that is inconsistent with his or her 
attitudes. Dissonance reduction is activity designed to reduce the dissonance. 
Attitude Change. Employees’ attitudes may be changed if management provides 
employees with information that supports the desired change. Another way to change 
attitudes is to take action that eliminates the cause of the undesired attitudes. Attitudes 
may also be changed through processes associated with dissonance reduction. 
B. Key Work-Related Attitudes.  
1. 
Job Satisfaction. Job satisfaction is the individual’s attitude toward his or her job and 
reflects the extent to which an individual is gratified by or fulfilled in his or her work. 
a) 
Causes of satisfaction and dissatisfaction include organizational factors, such as 
pay, opportunities for promotion, the nature of the work itself, organizational 
policies and procedures, and working conditions; group factors, such as 
coworkers and supervisors or managers; and personal factors, such as an 
individual’s needs and aspirations.