The current issue and full text archive of this journal is available at

http://www.emerald-library.com

Eupsychian management and Eupsychian

management and
the millennium the millennium
Roy L. Payne
Curtin University of Technology, Perth, W. Australia 219
Keywords Self-actualization, Human resource management, Organizational performance,
Motivation
Abstract The article introduces the Utopian vision of managing people at work described in
Abraham Maslow's book Eupsychian Management. This essentially foresees a time when
organizations are managed by self-actualising people along lines which would encourage the self-
actualisation of people from all levels of the organization. Maslow's vision was that this would lead
to really effective organizations and a much improved society. The article considers how far such
movements as quality of working life, TQM, empowerment and autonomous working groups
have moved us towards this sort of management practice. There are definite moves in this
direction but considerable constraints on making the practice universal, even though there is
growing empirical evidence that positive human resource practices lead to improved efficiency and
effectiveness.

The invitation to write something about management in the millennium

inevitably led me to make connections with novelty and idealism. Abraham
Maslow's book Eupsychian Management quickly came to mind (Maslow, 1965).
Eupsychia was coined by Maslow and defined as, ``the culture that would be
generated by 1,000 self-actualising people on some sheltered island where they
would not be interfered with''. Eupsychian Management was about what it
would mean if business and other large organizations took seriously Maslow's
hierarchy of needs and organised around the key notion that, if conditions are
right, then undamaged human beings naturally strive to become ``self-
actualising''. Despite the fact that Maslow's hierarchy of needs forms part of
every textbook dealing with work motivation, Eupsychian Management itself
hardly sold its first printing and never again appeared in the management titles
list. It was what Carl Jung would call an example of synchronicity that, having
opted to write this piece, I came across an advert for a book called Maslow on
Management, published in 1998. This turned out to be a reissue of Eupsychian
Management with the addition of extracts of interviews with CEOs, academics
and management gurus who have been influenced by Maslow's works.
In this essay I describe the key implications of Maslow's ideas on managing
people and organizations. I then consider how far they have been implemented,
and ask whether things are likely to be different in the first years of the
millennium.

The hierarchy of needs and the practice of management

Turning the approach of clinical psychology/psychiatry on its head, Maslow
set out to research and understand people who were abnormally normal, i.e. Journal of Managerial Psychology,
Vol. 15 No. 3, 2000, pp. 219-226.
super healthy in a psychological sense. He sought out people who were # MCB University Press, 0268-3946
Journal of achieving a lot, were happy with themselves and their lives, and who were
Managerial ``fully functioning''. From studying such people he proposed that human needs
Psychology had a hierarchical structure with the most basic need being to satisfy one's
physiological requirements for food, drink etc. Once these are adequately
15,3 satisfied the next set of needs become the motivating force: needs for safety/
security. Once a person feels secure then they become more interested in their
220 social needs and strive to become accepted by those around them. Once socially
accepted, people strive to be esteemed within the eyes of other people, and
when these needs have been satisfied they become more concerned with being
esteemed by themselves and strive to become self-actualising. The amount of
satisfaction of any of the needs varies across individuals, so some people never
feel secure enough to want to enter a social group whilst others require quite
minimal levels of security, and the same applies to all the needs. Maslow
observed that many people spend their lives struggling to satisfy the lower
order needs and never get the opportunity to satisfy their higher order needs
for self-esteem and self-actualisation.
Eupsychian Management was written as a journal in the summer of 1962,
having spent that summer in a high tech Californian organization at the
invitation of the CEO who was interested in Maslow's work. What excited
Maslow was the realisation that employment potentially provided people with
the opportunity to become self-actualising: an even greater opportunity than
the education system itself ± ``a Utopian or revolutionary technique'' (Maslow,
1998, p. 1). The technique is perhaps both utopian and revolutionary for it
requires getting managers of organizations to answer ``yes'' to the following
questions and then to manage people, design their organization, use their
technology and their human resource systems in accordance with the beliefs:
. Do you believe people are trustworthy?
. Do you believe that people seek responsibility and accountability?
. Do you believe that people seek meaning in their work?
. Do you believe that people naturally want to learn?
. Do you believe that people don't resist change but they resist being
changed?
. Do you believe that people prefer work to being idle?
Maslow was, of course, influenced by McGregor (1960), but he elaborates on
these principles in a chapter entitled ``Enlightened economics and
management'' where he lists 36 assumptions that enlightened managers need to
make. All are consistent with the above values but Maslow's ultimate vision is
encapsulated in the last two assumptions, which are combined here:
We must assume at the highest theoretical levels of enlightened management theory, a
preference or a tendency to identify with more and more of the world, moving toward the
ultimate of mysticism, a fusion with the world, or peak experience, cosmic consciousness etc.
a yearning for truth, beauty, justice, perfection and so on (Maslow, 1998, p. 42).
It was Maslow's belief that organizing in accordance with these assumptions Eupsychian
was not just good for improving people's health and well-being, but good for management and
the financial success of the organisation, and for the society as a whole. the millennium
Although these ideas are Utopian, Maslow was enough of a pragmatist,
acknowledging the influence of John Dewey on his thinking, to recognise the
barriers that exist in organisations: he talks about the importance of ``fitting to
the objective requirements of the objective situation'' (Maslow, 1998, p. 91). 221
Maslow sees the lack of self-actualisation in many managers as being a barrier
to achieving this fit, because authoritarianism and lack of openness make it
difficult to truly identify what the objective requirements of the objective
situation are. His more comprehensive list of barriers includes: scarcity of
goods/rewards; failure to satisfy basic needs; antisynergic organizational
regulations/laws; things that increase anxiety; loss or separation of any kind;
forcing change on the fearful; bad communication; suspicion; denial of truth;
dishonesty, untruth, lying, vulgarization of the truth, confusion of the lines
between truth and falsehood; loss of freedom, self-esteem, status, respect, love
objects, being loved, belonging, safety, physiological needs, value systems,
truth, beauty etc. The solution to removing these barriers is to have self-
actualising managers: ``I would expect that if the management policy were truly
growth fostering, and truly better personality producing, that these individuals
would, for instance, become more philanthropic in their communities, more
ready to help, more unselfish and altruistic, more indignant at injustice, more
ready to fight for what they thought to be true and good etc.'' (Maslow, 1998, p.
107).
An increase in a person's self-actualisation increases the chances of
enhancing another's self-actualisation in a virtuous circle, but this depends on
providing satisfaction of their physical, safety and social needs for the
development of the higher order needs to occur. This development will not
occur if organizations create lousy jobs and Maslow recognised that large
organizations in particular end up with many lousy jobs. This problem is never
really solved by Maslow but his hope is that its worst effects will be alleviated
by people volunteering themselves for such jobs, and also the increased
recognition of their contribution due to the increase in colleaguehood that
enlightened management would bring, so that we could all be affectionately
grateful to ``the morons in the world, people who are willing to do the garbage
collecting, the dirty work, the repetitive work etc.'' (Maslow, 1998, p 287). As
Warren Bennis notes in his Foreword to Maslow on Management, Abe is not
always politically correct, but is always bold. For Maslow's ``Very superior
boss'' to exist in Eupsychia, ``it seems very clear that, the ability to admire, the
ability to follow, the ability to choose the most efficient leader, the ability to
detect factual superiority, all these are needed in order for any culture to work,
and they must all go together with a minimum of antagonism and hostility to
the superiors'' (Maslow, 1998, p. 182).
Journal of While these sentiments may seem less than totally democratic Maslow was
Managerial convinced of their fundamental truth, and in 1962 he predicted that the end to
Psychology the Cold War would come about when it was clear to all that America turns out
a better average citizen than Russia.
15,3
Eupsychian management at the millennium
222 Well the Cold War is over and capitalism at least seems to have been widely
accepted as having played an important part, though its deficiencies are
currently being probed in such books as Lester Thurow's The Future of
Capitalism (1996) and Charles Handy's The Hungry Spirit (1997). While Handy
does not refer to Eupsychian management, his concept of proper selfishness as
a basis for achieving spirituality in society is very similar to Maslow's notion of
synergy where the selfish pursuit of one's own ends ultimately serves the ends
of others through the commitment to brotherhood or colleaguehood. In
recognising the economic progress derived from free market economics Handy
highlights its limitations in a very Maslow-like way: ``Utlimately, we need a
new understanding of life, one that gives money its due, but no more than its
due'' (Handy, 1997, p. 60).
Handy sets the achievements against a background of increasing part-time
employment which is up from 21 per cent in 1985 to 24 per cent in 1995, self-
employment which is up from 11 per cent to 13 per cent in the same decade, and
permanent employment which is down from 84 per cent to 82 per cent (Great
Britain). The trends are predicted to continue. Unscheduled absenteeism in the
USA reached the highest level for seven years in 1998, up to 2.9 per cent from
2.3 per cent in 1997, with absences due to family problems accounting for 26
per cent, and stress 16 per cent, which is almost three times the rate in 1995. At
the same time, a survey of 646 North American vice presidents showed that
over half of the companies they managed were understaffed and that both
absence and turnover had increased as a result (McShulskis, 1997). In response
to these staffing shortages, 57 per cent are hiring temporary employees, up
from 53 per cent the previous year; 51 per cent have redistributed work and 40
per cent have increased overtime. A total of 61 per cent report a lack of
applicants with proper skills. In Canada a survey by the Canadian Health
Monitor found that white-collar workers reported greater work stress than their
blue collar counterparts though the latter are more likely to be absent from
stress. Over 50 per cent of the blue-collar workers said they had lost more than
13 days of work in the previous year whilst the percentage for white-collar
workers was 33 per cent (Fernberg, 1998). In a survey of over 18,000 workers
from all levels, the Australian Industrial Relations Workplace Survey found
that between 40 per cent and 65 per cent all levels of employee reported
increases in the pace of work, the effort they had to expend to do the work, and
their stress from work during the last year (Morehead et al., 1997). These
outcomes seem more the result of economic rationalism than Eupsychian
management, though some popular trends in management during the last 40
years should have nourished its assumptions.
 The most international approach is the Quality of Working Life movement Eupsychian
which started in the 1950s but blossomed in Western Europe and North management and
America in the 1960s and 1970s. Walton (1974) listed these guiding principles: the millennium
adequate and fair compensation; a safe and healthy working environment; jobs
that developed people's capacities; personal and career enhancement; a
workplace high on social integration; the constitutional protection of
employees' rights; integration of work and life outside the workplace; 223
responsibility to the community and local environment. The 1980s saw the
same set of ideas marketed as employee involvement, which added the
importance of empowerment and access to information for decision-making.
These were claimed to be the characteristics of ``High performing
organizations''. Lawler et al. (1995) surveyed the Fortune 1,000 companies in
1987, 1990 and 1993 and showed that the number of companies using the ideas
and the proportion of the workforce exposed to them increased over that period.
The evidence is generally supportive that these practices do lead to greater
employee commitment and motivation and hence productivity and
effectiveness, though the gains are modest in scale in most instances
(Cummings and Worley, 1997).
These trends to increase employee involvement were further boosted by the
adoption of total quality management (TQM) systems, which had been very
successfully developed by the Japanese manufacturing organizations in the
1970s. Although there are important technical aspects to TQM, the psychology
of encouraging workers to see themselves as service providers to others (their
customers) with the goal to continuously improve that service necessitated
participation, involvement and innovations which were publicly rewarded. All
have the characteristics of satisfying the higher order needs for esteem and
growth. As with most organizational interventions, the evidence for their
efficacy is mixed, but Powell (1995) compared TQM adopters with non-
adopters in a sample of 54 organizations and found the adopters outperformed
the non-adopters. The conclusion was drawn that the difference was not
attributable to the tools and techniques of TQM, but to the cultural change
towards empowerment and commitment associated with it: ``these tacit
resources and not TQM tools and techniques drive TQM success, and
organizations that acquire them can outperform competitors without the
accompanying TQM ideology'' (Powell, 1995, p. 36). On the other hand, Argyris
(1998) questions the success of empowerment programs in an article sub-titled,
``The emperor's new clothes''.
Two other philosophies of work design were also widely adopted during the
last 20 years. They are job design and autonomous work groups/self-managing
teams. Job design involves creating jobs which require a range of skills, are
meaningful tasks which have some overall identity for the worker, and then
giving them the necessary autonomy to be responsible for the quality
achievement of the tasks. The final design element was feedback of results so
that the worker could learn from mistakes and improve their performance
(Hackman and Oldham, 1980). Providing autonomy and control is obviously
Journal of important in creating self-managing teams too. The team is given
Managerial responsibility for a whole product or service and allowed to determine what
Psychology they do, how they do it, how much they aim for, who does what and when.
Members of the team learn most jobs and move around them regularly to
15,3 provide flexibility and personal development. The published evidence for both
interventions is generally favourable, showing improvements in productivity,
224 quality and cost reductions, though there are large differences across studies in
the size of these improvements, and none at all in about 30 per cent of the
studies. Macy et al. (1994) concluded from a meta-analysis of 131 studies that
the improvements tended to be larger if they were accompanied by changes in
information systems, reward systems and performance management systems.
One of the most comprehensive and convincing arguments for the
philosophy of building success through the correct management of people is
stated by Jeffrey Pfeffer (1998) in a book entitled The Human Equation:
Building Profits by Putting People First. Pfeffer has assembled a great deal of
evidence to support the claim in the title. Despite this well advertised body of
evidence he argues that only about 12 per cent of organizations will do what is
required to build profits by putting people first. Short-term financial pressures,
managerial norms about being tough and analytical, failure to delegate, and the
inadvertant destruction of competence and wisdom because of these, are the
main barriers. In a study of small to medium size British manufacturing
organizations, Patterson et al. (1998) found little evidence amongst managers
for investing in designing jobs and systems to develop their employees, though
the study found such practices were strongly linked to organisational
performance.
At least in well informed organizations there have been moves towards
improving the conditions for self-actualisation during the last 40 years. How
many got close to Eupsychia is impossible to judge, but probably none as an
entire organization. It is possible that at the height of the Japanese miracle large
companies there came close to providing the personal growth, social
integration and societal contribution that Maslow predicted, but harsh
economic realities have changed even that successful model, and many
Japanese workers now suffer very high levels of stress and reduced job
security. The strong identification with the organization required in the
Japanese culture might also have limited self-actualisation as conceived by
Maslow.

Eupsychian management in the millennium

In many Western economies the gap between the rewards paid to top managers
and those paid to lower levels of employee has increased enormously in the last
ten years. Such developments seem inconsistent with the culture of
colleagueship that Maslow suggested would follow the creation of self-
actualising environments, though it seems reasonable to conclude that many
top managers are in self-actualising environments: they create them. The
downsizing trend has slowed but is accompanied by greater use of contract
workers, and part-time workers. Organizations are unlikely to invest in such Eupsychian
people by creating self-actualising opportunities. The increased opportunities management and
this creates for entrepreneurial activity, however, may lead to more people the millennium
generating their own self-actualisation. Perhaps such smaller companies can
create Eupsychia more easily than large business and government. While
technology has partly encouraged downsizing, it opens up opportunities for
self-development which are not dependent on being employed, though it has 225
helped to create self-actualising opportunities at work too. It can also be used to
increase control of people at work, or even on a contract ± such uses are anti
Eupsychian. Eupsychia depends on the choices made by powerful people in
powerful organizations and the portents are not good. There are managers
making choices based on a more spiritual approach to people and the examples
and justification for their success are convincingly described in Dorothy
Marcic's (1997) book, Managing with the Wisdom of Love. However, it is a very
short book.
In an epilogue to The Hungry Spirit Handy presents the year 2097 like this:
``Global communications and a global economy will bring global fortunes to
those few who can succeed in a fiercely competitive world. It is a world in
which the best are everywhere and the rest are nowhere'' (Handy, 1997, p. 253).
In looking at a more positive possible future he clings to the notion that, ``The
workplace has always been the real school for life. Perhaps it needs to change
its curriculum a little to tune in with the new age of personal initiative'' (Handy,
1997, p. 262). Apart from the fact that the workplace does not exist for large
numbers of unemployed people, it seems a little change in the curriculum of
global organizations is unlikely to bring about the changes proposed by
Maslow or Marcic. The island of Eupsychia never existed. It will take a change
of volcanic force to create it in the next 100 years and a revolution in mankind
to create it across continents. It is some consolation that the concept of Utopia
persists.
References.
Argyris, C. (1998), ``Empowerment: the emperor's new clothes'', Harvard Business Review, May-
June, pp. 98-105.
Cummings, T.G. and Worley, C.G. (1997), Organization Development and Change, 6th ed., West
Publishing Co., St. Paul, MN.
Fernberg, P.M. (1998), ``Stress: hidden source of lost time'', Occupational Hazards, Vol. 60 No. 6,
pp. 76-80.
Hackman, J.R. and Oldham, G. (1980), Work Redesign, Addison-Wesley, Reading, MA.
Handy, C. (1997), The Hungry Spirit, Arrow, London.
Lawler, E.E.I., Mohrman, S. and Ledford, G. (1995), Creating High Performance Organizations,
Jossey-Bass, San Francisco, CA.
Macy, B., Bliese, P. and Norton, J. (1994), ``Organizational change and work innovation: a meta-
analysis of 131 N. American field experiments ± 1961-1990, in Woodman, R. and Pasmore,
W. (Eds), Research in Organizational Change and Development, Vol. 7, JAI Press,
Greenwich, CT.
Journal of Marcic, D. (1997), Managing with the Wisdom of Love: Uncovering Virtue in People and
Organizations, Jossey-Bass, San Francisco, CA.
Managerial Maslow, A.H. (1998), Maslow on Management, J. Wiley & Sons, New York, NY.
Psychology Maslow, H. (1965), Eupsychian Management: A Journal, Irwin, Homewood, IL.
15,3 McGregor, D. (1960), The Human Side of Enterprise, McGraw-Hill, New York, NY.
McShulskis, E. (1997), ``Record number of companies say they are understaffed'', HR Magazine,
226 Vol. 42 No. 4, pp. 26-9.
Morehead, A., Steele, M., Alexander, M., Stephen, K. and Duffin, L. (1997), Changes at Work: The
1995 Australian Workplace Industrial Relations Survey, Longman, Melbourne.
Patterson, M.G., West, M.A., Lawthom, R. and Nickell, S. (1998), Impact of People Management
Practices on Business Performance, Vol. 22, Institute of Personnel and Development,
London.
Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Harvard
Business School Press, Boston, MA.
Powell, T. (1995), ``Total quality management as a competitive advantage: a review and empirical
study'', Strategic Management Journal, Vol. 16, pp. 15-37.
Thurow, L. (1996), The Future of Capitalism, Nicholas Brealey, London.
Walton, R. (1974), ``Improving the quality of working life'', Harvard Business Review, Vol. 52,
May-June, pp. 54-7.