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Chapter 1
Conceptualizing and Measuring the Severity of Setbacks at Work: An Event-Oriented Perspective
Julia Backmann, Matthias Weiss and Gisa Todt
Abstract
Setbacks and failures are part of organizational life. While a recent body of literature pointed to the importance of recovery, resilience, and learning from failure in responding to and dealing with setback events, the setback itself and its underlying dimensions remain underexplored. However, how severe employees perceive a setback to be plays an integral role in how successfully they handle these events. Taking an event-oriented perspective on work-related setbacks, this study defines setback severity as the setback eventās novelty, disruptiveness, and criticality. Based on the current literature and prior operationalizations, the authors introduce and validate a three-dimensional measure of setback severity. The exploratory and confirmatory factor analyses provide support for the proposed three-dimensional model. Further analyses show that disruptiveness and criticality are significantly related to identity threat, emotional exhaustion, trauma, turnover intention, and thriving, while novelty is only related to turnover intention and thriving. The implications of the setback severity measure are discussed along with recommendations for future research.
Keywords: Setback severity; failure; event system theory; novelty; disruption; criticality; measurement
Todayās organizations maneuver through dynamic environments, making the presence of setback experiences in organizational life inevitable. Work-related setbacks, defined as deviations between actual and expected results (Jenkins, Wiklund, & Brundin, 2014; Rauter, Weiss, & Hoegl, 2018), encompass a variety of experiences and take different shapes and forms (Hoegl & Hartmann, 2020), including a missed opportunity to win over a new customer, a declined promotion, or exposure to an abusive supervisor. Setbacks are experiences that bring individuals out of their state of homeostasis ā a state of relative stability ā and trigger the activation of resources and effortful responses to return to stability (Bonanno, Romero, & Klein, 2015; Matusik, Hollenbeck, Matta, & Oh, 2019). How much an individualās stable state is shaken by the setback depends on the severity of the setback and their personal assessment of it. Given that individuals differ in terms of their prior experiences, dispositions, and abilities, the severity of an experienced setback depends on an individualās perception. For instance, while some individuals perceive a complaint from a customer or negative feedback from a direct supervisor as salient and impactful, others seem to move on from these experiences without much hesitation. But what aspects determine whether a setback is seen as severe? Current research has examined the responses to and consequences of setbacks (e.g., Jenkins et al., 2014; Shepherd, Patzelt, & Wolfe, 2011), but our knowledge of setbacks themselves and their underlying dimensions remain underexplored. Prior studies tend to either focus on one specific setback experience (e.g., project termination, business failure, or negative performance feedback (e.g., Rauter et al., 2018; Shepherd, Douglas, & Shanley, 2000; Shepherd, Patzelt, Williams, & Warnecke, 2014) or measure setbacks as a dichotomous variable that are either present or non-existent (e.g., Todt, Weiss, & Hoegl, 2018; Ucbasaran, Westhead, Wright, & Flores, 2010). Such attempts fall short of capturing the organizational reality of a multitude of different setback experiences. Furthermore, measuring setbacks as a dichotomous variable limits the explanatory power and does not provide further insight into underlying dimensions that make setbacks impactful (Tilcsik & Marquis, 2013).
To overcome these gaps, this study sets out to conceptualize and operationalize the severity of setbacks as perceived by the individual experiencing the setback. In doing so, we apply an event-oriented perspective. Events are regarded as āhappenings,ā which are occurrences that materialize in a specific location at a specific point in time (Weiss & Cropanzano, 1996). Consequently, the concept of an event is wider than a setback; events encompass setbacks, but not all events are setbacks. Events can be positive, such as a surprising promotion, or negative, such as a negative performance review. Setback events are negative in nature. To examine setbacks from an event-oriented perspective, we incorporate a promising theoretical lens ā event system theory (EST) (Morgeson, Mitchell, & Liu, 2015) ā to better account for the multi-dimensional nature of setback events. The theory identifies novelty, disruption, and criticality as event characteristics that affect changes in behaviors or features of work environments (Morgeson et al., 2015). By applying EST to setbacks, we respond to current gaps to place setback events at center stage (Hoegl & Hartmann, 2020) and apply a continuous measurement of such events (Liu, Fisher, & Chen, 2018). Therefore, we advance the current literature by allowing for a more fine-grained understanding of the nature of setbacks.
In summary, the aims of this chapter are twofold: First, we draw on EST to develop an individual-level conceptualization of setback severity in work environments. Second, based on this conceptualization, we develop and validate a three-dimensional measure of setback severity. The validation of the construct draws on two samples (N sample one = 175 employees, N sample two = 225 employees) collected in Australian office work environments. After presenting the results of the measurement validation, we will discuss the theoretical and practical implications and identify opportunities for future research on setback severity.
Conceptualizing Severity of Setbacks
According to EST (Morgeson et al., 2015), events differ from more stable features of work environments (such as job design) in the sense that they are ādiscrete and bounded in space and timeā (p. 516). Events are part of the external context of the entity under consideration. Events are triggers for change within the organization because they influence the behaviors of individuals and other organizational entities, which may result in adaptations in the features of the work environment and are likely to induce subsequent events (Morgeson et al., 2015). Taking a systemic perspective of events, Mortenson et al. (2015) defined the event system as
a complex system of three interrelated components: (1) event strength (an eventās novelty, disruption, and criticality); (2) event space (where an event originates and how its effects spread through an organization); and (3) event time (when an event occurs, how long it remains impactful, and the evolution of event strength). (p. 517)
Events occur at all levels within the organization, but we take a micro-level perspective on setback events, focusing on how individuals perceive the severity of setbacks. Thus, we build on the component of event strength when defining setback severity.
Similar to organizational systems striving for stability, individuals have a tendency to maintain homeostasis (Halbesleben, Neveu, Paustian-Underdahl, & Westman, 2014). Setback events disrupt the stability and certainty of work environments by breaking up routines and challenging the status quo, preventing the employees from continuing with their work as usual and relying on automatic cognitive processing (Chen, Liu, Tang, & Hogan, 2020; Morgeson, 2005; Morgeson et al., 2015). Therefore, employees need to redirect their efforts and attentions toward adapting their behaviors and features to cope with the setback event. Which attributes of a setback event redirect attention and effort to a change response? In alignment with EST (Morgeson et al., 2015), we propose that the severity of a setback is characterized by novelty, disruption, and criticality. The higher the setback severity, the more likely the setback creates or changes an individualās behaviors and the features of the work environment. Applying this lens helps us distinguish the occurrence of a setback and its underlying severity from the response to a setback event.
The Novelty Dimension of Setback Severity
The novelty dimension reflects the extent to which a setback event is surprising, unexpected, uncommon, and different from past setbacks and behaviors (Morgeson et al., 2015). When a similar setback has been experienced previously, there is no need to thoroughly re-evaluate the event as established guidelines based on prior responses can be applied. When experiencing a novel setback event, employees may be uncertain about how to respond to the setback as they cannot rely on such established routines and guidelines (Crawford, Thompson, & Ashforth, 2019; Morgeson, 2005). Therefore, they need to direct their attention and efforts to the setback and defer from their habitual, automatic processing (Chen et al., 2020). For instance, given an organization with a historically low voluntary and involuntary turnover rates, if majority of the marketing team suddenly leaves simultaneously to join a competitor, the remaining employees ā especially those who have worked closely with the marketing team ā need to invest their time and resources to make sense of the situation (LauliĆ© & Morgeson, in press). Consequently, novelty represents the first dimension of setback severity. Novel setbacks require a re-assessment of the event, as well as changes in behaviors and ways of thinking.
The Disruption Dimension of Setback Severity
Disruption is defined as the extent to which the setback breaks up or blocks existing routines and affects usual work practices and tasks (Morgeson et al., 2015; Zellmer-Bruhn, 2003). In short, disruptive setbacks change the way things are done and interfere with task completion. An example of a highly disruptive event is a major restructuring that requires laying off 15% of the workforce and is accompanied by negative media coverage, leading to conflicts and debates within the organization. The survivors may feel stressed and uncertain, and the way in which restructuring is handled prevents them from continuing with their usual work practices (LauliƩ & Morgeson, in press). Disruptive setbacks direct the information processing to determine which rules, routines, and behaviors need to be adjusted or created (Morgeson et al., 2015). The setback causes the individual to pause and develop response strategies to stop the disruption caused by the setback (Morgeson, 2005) and re-establish effective functioning. The severity of a setback event is reflected by its degree of disruption.
The Criticality Dimension of Setback Severity
The criticality of setback events reflects the extent to which the event is important, of personal relevance, and a priority for an individualās goal attainment (Morgeson et al., 2015; Morgeson & DeRue, 2006). If a setback event is not perceived as salient and imp...
