A systems framework

As argued by Schneider and Pulakos (Reference Schneider and Pulakos2022), developing an organizational mindset in industrial-organizational (I-O) psychology requires systems thinking that treats the workforce rather than individuals as the target of intervention. They also argue that although many workforce practices are implemented with individuals, it is the collective effects of these practices applied across a workforce that should produce a sustainable organizational benefit.

Shifting to a systems framework should focus research on assessing the structure and effectiveness of a workforce development system. Although individual practices may affect organizational performance, it is the ensemble of integrated practices that should in theory have the greatest effect. For instance, just selecting superior talent may not produce differentiating results if they are not developed and given frequent feedback on how their performance translates into organizational outcomes.

Within a systems framework, workforce practices become a system of interacting processes that continually improve the capability of the workforce. Such a system would stretch from practices affecting recruitment to retirement. One intermediate measure between the implementation of workforce practices and organizational performance would be a profile of workforce capabilities measured at least in part as the collective knowledge, skills, abilities, and other characteristics (KSAOs). This suggests a structural equation model that in its simplest form has workforce practices affecting workforce capabilities and performance, which affect various business performance criteria, and ultimately translate into business outcomes.

For instance, although the level of talent selected into the workforce sets a foundation for organizational performance, hypothetically it requires a system of workforce practices to develop, motivate, lead, coach, and organize the talent into a high-performing workforce that improves organizational performance and outcomes. Schneider and Pulakos (Reference Schneider and Pulakos2022) cite several studies of “bundled practices” producing differentiating performance. However, full adoption of an organizational mindset would have I-O psychologists study their full domain of practices as an integrated system constituting a workforce intervention.

An evolutionary systems paradigm

The research paradigm that Schneider and Pulakos (Reference Schneider and Pulakos2022) recommend is a cross-sectional comparison of how workforce practices affect organizational performance in multiple organizations. They recommend “conducting more research to study organizational differences using the same basic approach that we have used so successfully to study individual differences” (p. X). An alternate approach to studying the effects of workforce practices across organizations takes an evolutionary perspective often used in studying interventions. The research question is whether outcomes improve over time when an intervention or its successive stages are implemented. Executives are concerned not only with their competitive status compared with that of other organizations, but also with demonstrating continuing improvement in their own capability and resulting performance.

Sophisticated systems of practices are difficult to implement in big-bang interventions. Rather they should be implemented and studied as an evolutionary program that progresses at a pace that the organization can absorb and institutionalize. One instantiation of the evolutionary approach, often referred to as organizational maturity, implements increasingly sophisticated practices in stages. Such programs are evaluated by successive improvements in performance over time. When improvements in workforce practices correlate with successive organizational performance improvements, a return-on-investment argument can be developed for continuing investment in the next stage of the intervention.

Originally formulated by Philip Crosby (Reference Crosby1979), the maturity framework proposed five levels of maturity that organizations evolve through when implementing and improving business practices. Crosby’s approach was process based in that each process or practice could be evaluated for its own level of maturity. This framework was reformulated by Watts Humphrey (Reference Humphrey1989) into its modern form where a collection of processes was implemented as a system for improving the organization’s performance. Thus, Humphrey shifted the target of intervention in maturity models from individual practices to the organization. In theory, each maturity level represents a new plateau of organizational capability and performance.

Working in the Software Engineering Institute (SEI) at Carnegie Mellon University, Humphrey originally applied this framework to the maturation of software development processes. The capability maturity model (CMM, Paulk etal., Reference Paulk, Weber, Curtis and Chrissis1995) quickly became a de facto global standard for evaluating the capability of a software organization based on the completeness and discipline of its development practices.

Herbsleb etal. (Reference Herbsleb, Zubrow, Goldenson, Hayes and Paulk1997) published a summary of 14 case studies from organizations that had implemented the CMM. They reported steady annual gains in several areas of organizational performance such as productivity and quality. Their observations along with other case studies suggested that maturity growth is best measured with a balanced score card (Kaplan & Norton, Reference Kaplan and Norton1996) because the performance factors affected by maturity growth expanded at succeeding maturity levels. Informal observations from formal assessments of organizational maturity have reported that, in addition to performance, the culture and climate are transformed at each succeeding maturity level. Since publication of the original CMM, maturity models have been developed for over a hundred domains, including a recent model applied to the adoption of automated clinical pathways in health care (Organizational Adoption and Change Management Working Group, 2021).

Maturing workforce practices

Numerous requests were received by SEI from organizations that had successfully implemented the CMM to apply its improvement framework to their workforce challenges. Consequently, an I-O psychologist led development of the people capability maturity model (P-CMM; Curtis etal., Reference Curtis, Hefley and Miller2001), which applied the maturity framework to workforce practices. The P-CMM provided one proposal of an evolutionary roadmap for implementing a system of workforce practices. This roadmap was based on the maturity framework’s evolutionary principles, which can be summarized as stabilize, standardize, optimize, innovate.

• • Level 1: Workforce practices are inconsistently applied, and some may not have been implemented. There is little foundation for organizational improvement.

• • Level 2: In this first improvement step, managers, supervisors, team leaders, and others responsible for work unit performance take responsibility to ensure the skill and performance needs of their work units are stabilized so that the unit can meet its commitments and performance expectations. Basic workforce practices are implemented at the work unit level for selection and staffing, work environment and resources, training and development, communication and coordination, performance feedback and discussion, and compensation. These practices provide a foundation of basic workforce disciplines atop which the organization can implement organization-wide capabilities.

• • Level 3: With a stable foundation of basic workforce practices at the work unit level, the organization identifies and plans for providing the workforce competencies (KSAOs) needed to execute its mission or business strategy. Workforce practices are standardized across the organization to continually develop these competencies and provide career growth. Team structures are standardized with tailoring guidelines around the competency-based work processes required to execute the organization’s value chain. These competencies and standardized workforce practices provide one pillar of the organization’s architecture.

• • Level 4: The system of standardized workforce practices and competency-based work processes is improved and optimized through continual empirical analysis of their influence on performance goals at various organizational levels. The foundation provided by Level-3 capabilities enables work teams to be empowered with greater self-management. Work processes are redesigned where appropriate to promote multidisciplinary work and teams.

• • Level 5: Where optimized workforce practices are unable to achieve or sustain organizational performance objectives, the organization continually reviews, evaluates, and adopts innovative workforce practices to enhance performance and organizational outcomes. It also empowers individuals and work units to explore innovative work processes and workforce practices that, if successful, can be adopted across the organization.

The P-CMM was most heavily adopted in India, originally in outsourcing organizations but later in diverse business areas such as hospitality. Curtis etal. (Reference Curtis, Hefley and Miller2003) summarized case study findings reporting the benefits of implementing increasingly sophisticated workforce practices guided by the P-CMM. For instance, Boeing BRS, Novo Nordisk, and GDE Systems reported reductions in annual turnover rates after achieving Level 2. When they attained Level 4, Infosys reported a correlation of -.45 (p ≤ .05) between the cost of corrective maintenance and improvements in the competencies of their software development teams. Similarly, when they achieved Level 4, Tata Consultancy Services reported strong correlations across several of its development sites between the amount of software training delivered and criteria such as defects per person-hour, code review efficiency, development effort, and corrective maintenance.

The P-CMM represents one example of applying an organizational mindset to traditional I-O practices and research. Systems such as the P-CMM should be studied to determine whether the evolutionary principles underlying the organizational maturity framework produce an effective workforce development strategy and whether the ordering of practices within this framework is optimal. In addition, the changes in culture and organizational climate observed in maturity assessments should be studied to see whether they are verifiable and whether techniques for their evolutionary improvement can be supported with empirical evidence. The mindset shift proposed by Schneider and Pulakos (Reference Schneider and Pulakos2022) argues a transition from psychological to organizational science. This shift opens new opportunities for theory, research, and contribution from I-O psychologists.