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As a science, psychology has a variety of fields that range from, but are not limited to clinical, abnormal, child development, and even industrial psychology. In light of all these, industrial/organizational psychology (I/O psychology) does not only deal with an individual being, but goes ahead also to deal with organizations that individuals may be employed at. The theory of I/O psychology is greatly theorized and has its roots back in 1885. In the current age, recruitment and eventual training of employees is deemed as being one of the most vital aspects of an organization. Many organizations and institutions have adopted the use of industrial or organizational psychology in their processes of recruitment and training of employees.

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The science of industrial or organizational psychology has been approached through the use of different methods and approaches by different organizations. Notably, knowledge sharing has been credited as one of the most effective means through which sharing knowledge within organizations and management in a contemporary business environment happens. It entails sharing professional knowledge and experiences via close cooperation while inherently saving most corporations in terms of training as knowledge sharing management saves them from having to organize specialized training courses for their employees.

Industrial organization psychology as a branch of the science of psychology examines the physical and mental well-being of the employees within the workplace. The science is meant to look into the employee’s attitudes and their behavior at the workplace and then evaluate the company’s leadership and training profiles. Such developments and continued application of industrial organization psychology has been out of the push by modern businesses to maintain a happy and contented workforce and ensure a good workplace environment in order to enhance employee productivity.


Zara, a subsidiary of the parent company Inditex, has had a long history. Started as a small outfit by Amanico Ortega Gaona in 1975 in Spain, it has grown immensely and has become an international brand – one with not only regional branches, but with market across the globe. The company’s first store was in A Caruna where the headquarters are situated nowadays. The company featured lower priced lookalikes of high end that were popular products among women, men, and children. In the early nineteen eighties, Zara began carry out the experiments. It was achieved by differentiating the design coupled by distributing and manufacturing progression. It was done in order to condense the lead times while at the same time to respond faster to new trends. The founder and CEO, Gaona considered this to be “instant fashion.” Unlike most of its competitors who based designs upon individuals, Zara made use of information technologies as well as groups of designers as the bases to make improvements in fashion. In the year 1988, Zara began its international development. It was initially through the Portugal’s second city Porto entering the United Stated by 1989, and by 1990 the company entered France. The franchise, Zara has soared in success to open stores globally to a point they had stores in about seventy countries. It is inclusive of the more than 500 stores in Spain alone, over 100 stores in France, about 87 stores in Italy, and about 45 stores in the United States.

Without a doubt, Zara has had an immense growth since its inception. However, there was observable high employee turnover that was noted from the human resource records. Over the recent years, employee turnover mostly in the supervisory and higher positions has been at its highest since Zara was inaugurated. There has also been a reportedly high level of employee dissatisfaction. Notably, threats of industrial actions were rive and the labor unions had in most cases to intervene for settlements. The sales volumes also show a continued drop with a clear sign of a decrease in the public confidence in Zara’s future profitability. Further, the company’s employees were known to be an integral part of the business. They were involved in all processes and as such knew all the products. The current sales people are in most cases hired and left to only deal with product sales. After talking to one of the sales representative employees in one of the shops, I learnt that they are not involved in the development of the company’s products. In most cases also, the employee seem ill fit to serve in their capacity. Some seem to lack the basic sales training and once recruited by the company, have to learn from the other employees on how to work in their departments. This can be arguably claimed as one of the core causes of the steady decline in the company’s profitability and customer loyalty. The sales personnel, at times failed to even know the latest productions by the company, their prices and even the different models that were for sale. In some instances, they did not know even the location of the other outlets where they could refer the customers for specific orders. In breaking such traditions, the employees lacked the former chances to advice in developing trends in fashion as well as lost touch with the top management of the company. The line managers on their part have lacked adequate training in managing the employees and this was observable from the way the employees failed to respond to their instruction, whilst at the same time, the line mangers gave instructions that were ambiguous and seemingly did not know or shrugged off when the employees disobeyed their instructions.

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Diagnosis and Prescription

Job Analysis:


The cornerstone of any meaningful employee selection lies mainly in ensuring that the proper job analysis is carried out. This factor not only serves in the process of employee selection, but also in ensuring that an organization enjoys optimum performance management initiatives. As Landy and Conte (2010) point out, the process of job analysis entails the collection of information that deems to be filled in a systematic manner. Two approaches have widely been used in the description of job-analytic methods. The first approach is the task-oriented job analysis one that principally entails the examination of the duties, the tasks and/or the competencies that are to be required in the job in question. The second approach applied in the job-analytic methods is the worker-oriented job analysis approach that in principle entails the examination of the knowledge, skills, abilities as well as other characteristics (KSAOS) that would be essential for one to perform successfully the work at hand. It is to be noted, however, that two afore-mentioned approaches are not mutually exclusive. There are various adaptations to job-analytics. Amongst them is competency modeling that entails the examination of large groups of duties and tasks connected to some common goal or process, and also practice analysis that seeks to examine the way a specific work is performed in an occupation across different jobs.


With the above information at hand, job analysis can thus be deemed as one of the main requirements in turning around Zara. The company should apply the quantitative and qualitative methods necessary in collecting the necessary job-analytic data needed for them to ensure that they hire only the best employees that would steer Zara to its optimum performance. By hiring the right personnel, Zara would be assured that it will achieve maximum production as well as an all-round optimum performance. Further, this would enable the company to employ job redesign, which would also assist it to achieve its peak performance. The company can also seek to make use of the O*NET system or the Position Analysis Questionnaire (PAQ), as was developed and described by McCormick, Jeanneret, and Mecham (1972) to perform efficient job analysis.

Performance Appraisal:


The process of performance appraisal or performance evaluation involves the determinations of the individual work behaviors and their outcomes when collated against what is expected of the job they do. In most instances, performance appraisals are used for the determination of promotions and compensation as well as for the assistance in designing and validating the personnel selection procedures, and in utilizing the performance management. The performance management is the process through which feedback is attained concerning expectations and improvement information.

Despite the noted importance of performance appraisals, they are notably unpopular, but on the flipside, most employees are known to enjoy them (Murphy, 2006). As noted by Ashford (1986), research shows that most employees wish to have feedback from their supervisors about their performance. In the same light, Waung and Highhause (1997) note that managers who dislike the process are in most cases known to invoke some form of negative reactions from the employees they supervise.

The importance placed upon the results appraisal cannot be ignored because the systems that govern the performance appraisals are considered to be undoubtedly the “hub” of many human resource practices. It is to the least mean that performance appraisals are central to such roles that the human resource would wish to be involved into. Information gathered in the process is also vital in the determination of pay raises. Such an importance can thus not be overlooked as it touches on some of the core decisions that affect employees. Performance appraisals are however a multi-faceted process involving activities like training program evaluation, employment as well as compensation system, and further decision pertaining to promotions. Safe for these, information from performance appraisals is also utilized in other activities that are in most cases developmental in nature. This latter role is witnessed by the fact that they provide employees with individual feedback to aid them in strengthening any notable weak areas.

Some of the most relied upon systems of appraisals are; graphic rating scales, ranking, forced distribution and paired comparison. Appreciating the fact that in most cases the scale points that are mostly used are, unacceptable, acceptable, needs improvement, commendable and outstanding. Notably, these can lead to ambiguities thus render the appraisal unreliable and invalid as they are difficult to define. To mitigate this, a newer and more related technique can be relied upon; the behaviorally anchored rating scales (BARS).


Basing arguments on the above facts, Zara should thus ensure that performance appraisals are not only deemed to be done, but executed efficiently if they are to improve their current failing status. The noted low employee morale and high turnover can thus be mitigated considerably through the performance appraisal system as it would help the employees to feel that they are fairly treated and that the company has in its possession credible information upon which to make vital decisions not only concerning Zara, but even concerning the employees themselves. The company should however take note of known flaws within the performance appraisal system. These vary from factors like errors, biases, and memory lapses. These are some of the simplest flaws common in the process. The company should thus ensure that the supervisors do not fall prey to errors like leniency when the supervisor usually gives an employee higher ratings than his/her actual performance. It would thus provide the company with a clear indicator of the performance of its employees in order to develop mechanisms to improve the performance of Zara that is noted earlier as dwindling. The error of severity that Zara should be wary of is closely connected to leniency. This error is experienced when the supervisor gives the employee lower ratings than expected. It has been known as one of the greatest causes of job dissatisfaction as the employee feels unappreciated and could be one of the reasons why Zara has a noted high employee turnover. Zara should also ensure that there is diligence by the supervisors. Where the said diligence is not observed, Zara can in some cases note to the supervisor giving appraisals that he /she tends to error. This error happens when the ratings tend to hover around a certain average (Lynch & Finkelstein, 2006). Another error is halo when ratings present some employees as “angels” who have exceptional performance. This in most cases happens when some employees are presented as having no flaws whilst there is evidence of the contrary. Zara should thus stay guard, so that the supervisors do not present performance appraisals that belong to favoritism by nature as it would create discontent amongst the employees and also present wrong data of Zara’s status quo. Where the former happens, the employees would be dissatisfied whilst the latter would create a blind upon Zara, thus hindering it from developing appropriate mechanisms to improve employee performance.

From the perspective of all these factors, it is important that Zara comes up with ways to ensure that the rating errors are reduced to the lowest possible level. One of the ways how this can be achieved is by Zara developing appraisals that are unambiguous in nature. However, the same should be framed in such a way as to address all the vital factors of the job performance that the appraisal is aimed at. Zara can, nevertheless, achieve the most in such efforts if it understands the complex and in most cases the competing motives and goals that the supervisors may have regarding the appraisal process. It is a factor seconded by Murphy et al. (2004). Zara should also provide the supervisors with adequate time for their making observations of their subordinates in order to reduce chances of having rating errors. Zara’s appraisal system should also appreciate the limitations that are presented by the human memory and as such should have the ability to factor in such issues. With such regards, Zara can develop a system through which supervisors can keep constant and periodical records of their subordinates that can serve as vital retrieval cues. Another way out is to have the appraisals done on a semi-annual basis instead of the epic annual appraisals.

Zara should also seek the services of an I-O psychologist who can be able to analyze the information from the job analysis and determine the company’s dimensions of different jobs. The company should thus try to invoke performance management to seek to know what improvements the employees need. These could amongst others include coaching and mentoring that would go a long way to ensure improved performance. Zara should also have its personnel, mostly those in supervisory roles, instructed on how to make use of the performance appraisal instruments. Moreover, the company’s personnel should also be trained on how to reduce bias when using the rating scale and most importantly how to give effective and effective performance feedbacks. Zara should thus endeavor to seek means through which the information gathered from the performance appraisals can be utilized to effect broader initiatives in performance management.

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For any organization to ensure that it has selected the most appropriate person for any job, it ought to go back and look at the job specifications that have been stipulated as well as at the accountability statements. It is only upon such reflection that it can have a clear view of the person they wish to select. An organization has also to take into consideration all information that has been provided and gathered on the applicant with reference to the position he or she seeks to fill. The last issue is that there is always a need to be wary of any probable prejudices as they have a high likelihood of clouding the ultimate decision (Landy & Conte, 2010).


With the reference to the problems faced by Zara, the company should keep in mind some queries while seeking to hire its personnel. Amongst the main queries, there are the questions whether or not the applicant has been dependable and productive, and what attitude he/she has demonstrated to work, his/her fellow workers, and supervision. It is also vital to seek to know whether he/she has had the necessary experience in the position Zara seeks to hire him/her for. The company should ensure that it does not hire over qualified employees. It also should seek to know the strengths and weaknesses of all new hires and whether they would get along with the existing employees. These factors would ensure that Zara hires only qualified employees who would also enhance the current status of the company.

Zara has a noted case of high turnover. It can be curbed if the company ensures that the new hires meet the required job specifications. If they meet such specifications, there will be a higher probability of job satisfaction. The company can achieve this by seeking the new applicants to prove that they fulfill the requirements demanded of the duties they are to attend to. In its attempt to revamp the company’s performance, Zara should also ensure that people it hires are of the right temperament and are suitable. It is obvious from the references they provide.



It is without doubt that most businesses do not advocate for on-the-job training in order to cut costs. They rather prefer to hire experienced personnel to cut on the costs associated with on-the-job training. Despite this fact, there has been an increase in the cost of developing training programs that are sophisticated, which has been caused by the increase in effectiveness and efficiency of trainings. It is, however, an unfortunate turn of events that there is still little development in advancing in the need to train professionals. Zara would thus be faced by the skeptical option possessed by most managers who are in most cases prompted with the decision whether to bear the cost of doing nothing as opposed to that of the unpredictable results emanating from high-cost formal trainings.


Zara should however appreciate the fact that the hands-on training is in fact low-cost as opposed to common belief and that the same ends in achieving high returns that the company currently needs if it is to remain afloat. The company should embark on training in order to assist new hires to get started, to support the continuing employees whilst also providing fresh insights and refresher courses to the old employees to keep up with the new developments. The company should also realize that through such trainings employees would be given a chance to learn others experiences while also acting as venues for them to unleash their full potentials.


Through individual assessment, individual differences are discovered. The company can seek the services of an I-O psychologist to perform individual assessments in order to evaluate the differences exhibited by potential candidates for employment as well as the existing employees. Carrying out the assessments, job performance becomes the main construct. The company seeking to affect this function should integrate the process into the personnel’s selection process. The assessment can happen in different forms and can also include a number of forms, some of which include written tests, personality tests, work samples, psychomotor tests, physical tests, and assessment centers. On the other hand, psychometrics is a science through which the company can be able to measure the psychological variables of its employees. These can include but are not limited to knowledge, their skills, and abilities. Zara can thus apply psychometrics to ensure that it has the most preferred selection.

It is one of the most vital factors in ensuring employee satisfaction. Compensation could include mainly wages or salary as well as other forms like bonuses, pension/retirement contributions, and in some cases perquisites that can in the end be converted into cash and/or substitute living expenses (Landy & Conte, 2010). Zara should thus ensure that it undertakes appropriate job evaluation procedures to effectively determine the expected and sufficient compensation levels of its employees.

As mentioned above, training is necessary for any company despite the common belief against it. The company should appreciate the fact that, in most cases, new employees are not adequately versed with the tasks at hand. The company should thus ensure that it has developed an elaborate training program augmented along the principles of instructional design. The program should have a summative evaluation at the end. It is meant to ensure that all those who undergo the training have adequately met the objectives set up for the training and that they can also further meet the acceptable target work levels. Apart from the summative evaluation, Zara should also incorporate formative evaluations within the training program. These are meant to evaluate the impact of the training on those who are undergoing the training as the training is on-going.

It is an important ingredient in turning Zara around as it enables people within the company to achieve their set goals. Managers and supervisors within the company should thus be in a position to identify the factors that drive an individual in order to motivate him/her accordingly. It can also be enhanced by ensuring that when an employee has done a good job or through his/her efforts there is an increase in production he/she is rewarded for the efforts.

As Pinder (2008) points out, innovation is the scenario whereby an employee is able to come up with a novel idea that inherently promotes the goals and objectives of the organization, whether directly or indirectly. Jex and Britt (2008) note that when innovation happens at an individual level, it is achieved by depending on skills that are task-relevant (the general mental ability as well as specific knowledge of the job), creativity-relevant skills (entailing the ability to concentrate on a specific problem for lengthy periods of time, abandoning the searches that have proved unproductive, and also to set aside the problem that is stubborn temporarily), and lastly task motivation (entails the internal desire to perform a certain task with a certain level of enjoyment). The company should thus come up with ideas that promote innovation in the workplace. It can be achieved by invoking things like training in creativity, having leaders who will encourage the employees to being innovative, allowing processes through which the employees can be able to question the existing procedures and rules, ensuring that there are real consequences emanating from the implementation of any innovation, ensuring that any innovation is professionally documented, promoting autonomy of the employees as well as ensuring there is a sense of freedom within their job roles, and reducing the obstacles that would hinder any innovative idea as well ensuring that the employees have access to the available resources that would promote innovation).

As described by Deckers (2010), job performance is the behaviors that are presented by employees while they are at work and that are eventually reflected on the organization’s goals. The said employee behaviors are then evaluated by an organization as being part of the responsibilities of the employees. The company should be precise in defining this term if it is to understand and, in the ultimate end, to be able to predict job performance. To realize this, Zara needs to understand that job performance reflects the behaviors that are within its employees’ control and that are not about the results (effectiveness), the costs that are needed to achieve the results (productivity), the achievable goals within a stipulated period of time (efficiency), or the values upon which Zara has placed specified levels of its employees performance, their effectiveness, productivity, and also efficiency (utility). The company needs to model dimensions that are common amongst all jobs if it wants to apply the principles of the job performance effectively. It would assist the company in developing a consistent basis upon which it can then assess performance and enable the comparison of performance across jobs. Precisely, the company can determine job performance based upon two categories, namely: in-role (these are the technical aspects of the job) and the extra role (these being the non-technical abilities of its employees). The company also needs to establish reliable and valid measures to assess job performance. It can be achieved if it rates its employee’s performance on specific tasks as well on the overall job performance. Furthermore, Zara can reduce the known high levels of errors associated with performance ratings if it induces those supposed to carry them through proper training and also by relying upon behaviorally anchored rating scales. These steps can form a more reliable benchmark for determining behavior that is poor, average, and/or of superior performance.

Organizational culture comprises of the assumptions that are set upon the individuals within an organization and influence their interpretations and their actions as they define which behavior is appropriate facing different situations. Organizational culture is further subdivided into three different levels, namely: artifact, shared values, and basic beliefs and assumptions. Artifacts include mainly physical components upon which the company does relay its cultural meaning. Shared values are individual preferences regarding specific aspects characteristic of the Zara’s culture. Lastly, basic beliefs and assumptions include views of the trustworthiness and the supportiveness that Zara exhibits, this being a factor that is highly ingrained within any organization’s culture. In order for Zara to have a turnaround in its performance, it needs to re-evaluate its organizational culture. Most notably, Zara’s clientele has to enjoy tens of thousands of new items yearly. It has been able to increase its profits, even without having to invest in marketing due to the high turnover. Its diversity in products has been an integral part of its shared values. These cultures should also be supported by subcultures that could include the ones like their corporate culture, departmental cultures, local cultures as well as the issue-related cultures to augment the support of Zara’s employees in developing the company’s culture. Through Zara embracing its long-standing organizational culture, the company would realize its impact on some of its vital organizational outcomes. Amongst those that would be highly reflective is its performance, attraction, the company’s recruitment, a higher retention level, improved employee satisfaction as well as greatly improved employees’ well-being. It is thus vital for Zara to ensure that it develops an adaptive culture as it would assure it of better performance as compared to the one if they embraced a culture that is un-adaptive.

Leadership entails all the process like influencing and motivating the employees to work with enthusiasm and to achieve organization’s goals and objectives. It is thus apparent that the leader should act as the catalyst who is supposed to identify the potential by employees and exploit his/her skills to implement this potential. The influence exhibited by the Zara’s leadership should be engineered to be stemmed from two main sources; firstly, from personal characteristics as well as their positions within the company, and secondly, from personal. This power has two main factors: the expert power and the referent power. The latter source is garnered from certain elements like the individual’s personality, the knowledge base he/she possesses, how she/he can effectively interact with other people as well as the level of effort that she/he exhibits. On the other hand, positional power that many refer to as the legitimate power is the power that is gained from the position that a leader occupies in the company as well as the authority to offer reward or sanctions for performance that has been imbued upon him/her either directly or indirectly by the parties that control the company, which is noted by Campbell (1990). Zara leadership should thus be felt not only in its headquarters, but across all of its subsidiary outlets across the globe. Like its founder, Ortega Gaona, the leader should be a symbol of leadership and legitimately be perceived this way. As proposed by Morrison (1994), Zara’s leadership needs to influence those that are within the company to focus their efforts towards the success and attainment of the company’s goals. The leader should understand where a distinct difference between management and leadership lays. Whilst the former processes administrative tasks meant to organize a working environment, the latter goes further to motivate and inspire the workforce he/she oversees. Another classic distinction is that managers are meant to cope with complexity whilst leaders have to cope with change. As such, it is apparent that Zara, being in the dire need of change and revamp of its global position, is in a need of leadership. The needed leadership should develop the business through setting a vision for the company, developing a proper communication mechanism within the company, and also act as the main source of motivation and inspiration for the company.

In attempts to make these dire changes, Zara would however be faced by diverse and multiple challenges. One of the greatest challenges in achieving such goals is the multiple stores that the company has. As such the company would not be able to initiate the needed changes as speedily as is needed as they would have to roll out the plans to all their stores. Another factor is the diversity of the cultures and procedures presenting themselves in the company as the stores are distributed within differing geographical demographics. Further, some of the current employees could resist any changes as they would prefer to retain the status quo, further stifling the relationship that exists between the management and the employees. The greatest hurdle however would be financial attributes of affecting the proposed changes. All these processes require financial support and as such, the company would have to re-evaluate their budget so as to allocate funds to implementing the proposed changes. However this is a challenge as the company is already facing financial issues as their current operations are operating under losses.

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