Chapter 08

Motivation and Leadership

Learning Objectives
After completing this chapter you will be able to:
 Understand the basics of leadership and motivation.

 Define what leadership is and how it is applied at all

levels of organizational management.
 Know the definition and components of motivation.
 Comprehend how these concepts are applied to
motivate employees.
 Be able to associate leadership, motivation, task and
rewards both theoretically and practically.
Structure
1. Introduction to Leadership
1. Leadership Ethics
2. Leadership Strategy
3. Leadership & Motivation
2. Leadership Theories / Styles

1. Trait Theory.
2. Behavioral Theory
1. Role Leadership Style
2. The Managerial Grid Leadership Style.
3. Participative Leadership Theory
Structure

4. Situational Leadership Theory.

5. Contingency Leadership Theory
1. Fiedler’s Least Preferred Co-Worker (LPC)
Theory.
6. Transactional Leadership Theory
1. Leader-Member Exchange (LMX) Style.
7. Transformational Leadership.
3. Introduction to Motivation
1. Motivation and Performance
2. Motivation and Incentive
3. Motivation and Morale
Structure

4. Theories of Motivation

1. Taylor’s Scientific Management

2. Mayo’s Human Relations Approach
3. Maslow’s Hierarchy Needs
4. Herzberg’s Two Factor Theory
5. McGregor’s Theory X and Theory Y
Structure
5. Employee Motivation
1. Monetary Factors
2. Non-Monetary Factors
1. Status or Job Titles
2. Appreciation and Recognition.
3. Delegation of Authority.
4. Working Conditions.
5. Job Security.
6. Job Enrichment.
7. Job Enlargement
Structure

6. The Role of Industrial Psychologists

7. Summary.
8. Further Reading
9. Self Assessment Questions
1. Introduction to Leadership
In the popular TV program ‘Star Trek”, we observed
successful leader in Captain Jean Luc Picard. He had
democratic approach to management and confidence in
skills, experience of his crew members. He readily
consulted his competent crew members and delegated
responsibility to them.

However, like all managers, he had the absolute authority

to over rule the views of his subordinates when he
believed it to be necessary for the good of the mission.

He was an ideal example of a good leader!

1. Introduction to Leadership
In the session that follows we study the nature of
organizational leadership and what a leader must do to be
effective. Leadership has many different aspects. Leaders
influence and empower team members.
We also study various standard approaches to leadership
theories. Leadership is one of the most important skill
that supervisors and managers must master to be
successful.
Some leaders are born, but others can learn to be a
leader. Motivation is an important tool for those who
wish to be a leader.
1. Introduction to Leadership

Leadership is the ability to inspire

confidence
and support among the people
who are needed to achieve
organizational goals. Leadership ability
is important
at every organizational level.
1. Introduction to Leadership
An organization is established as an instrument for
achieving defined objectives. Its design specifies how
goals are subdivided and reflected in subdivisions of the
organization.

Divisions, departments, sections, positions, jobs, tasks

make up this work structure.

Employees’ entry and subsequent advancement is by

merit or seniority. They receive a salary and tenure.
Higher one’s position in the hierarchy, greater the
expertise to resolve problems that arise in work.
1. Introduction to Leadership
In contrast to the appointed head of a unit, a leader
emerges within the context of the informal organization
that underlies the formal structure. The organization
expresses personal objectives and goals of the individual
membership. Their objectives and goals may or may not
coincide with those of the formal organization.
The informal organization represents an extension of the
social structures that generally characterize human life –
the spontaneous emergence of groups and organizations
as ends in themselves. Through personal qualities the
leader wields influence and power.
1. Introduction to Leadership
An effective leader is an individual with the capacity to
consistently succeed in a given condition and be viewed
as meeting the expectations of an organization or society.
Whoever wields personal influence and power can
legitimize this only by gaining a formal position in the
hierarchy, with commensurate authority. Leadership can
defined as one’s ability to get others to willingly follow.
Every organization needs leaders at every level.

Leadership is a process by which one individual influences

others toward the attainment of organizational goals.
1. Introduction to Leadership

1. Leadership is a social influence process. It involves a

leader and followers.

2. Leadership elicits voluntary action from followers. This

voluntary nature of action distinguishes leadership
from authority.

3. Leadership results in followers’ action that is

purposeful and goal directed in some sort of organized
setting
Yet leadership does remain pretty much of a
“black box” or unexplainable concept.”
:- Fred Luthans.
1. Introduction to Leadership
1. Leadership Ethics
“Ethical Leadership requires Ethical Leaders.”

Ethics refer to the desirable and appropriate values and

morals according to an individual or the society at large.
Leadership embodies ethics. Leaders need to clearly
establish and embed ethics into their organizations. They
require constant vigilance and commitment and even a
minor or temporary lapses in ethics can destroy trust and
bring organization down.
It is believed that nurturing aspect of leaders can raise
organizational culture and employee values to high levels
of ethical concern.
1. Introduction to Leadership
1. Leadership Ethics
Business leaders must make decisions that will not only
benefit them but also they must think about how the
other people will be affected. The best leaders make
known their values and their ethics and preach them in
their leadership style and actions.
It consists of communicating complete and accurate
information, where there is personal, professional,
ethical, or legal obligation to do so. When practicing
ethics, you gain the respect and admiration of employees,
with the satisfaction of knowing that you did the right
thing.
1. Introduction to Leadership
1. Leadership Ethics
Being unethical in the workplace can include anything
from taking personal phone calls while at your desk,
telling someone the “cheque is in the mail”, when in fact
it is not even written yet and even taking office supplies
home for your personal use.

Most organizations create ethical code which is usually a

list of rules that tells you what behaviors are right and
what are wrong in the company. These rules clearly spell
out organizations policy on ethics in the workplace.
1. Introduction to Leadership
1. Leadership Ethics
An effective and ethical leader has the following traits /
characteristics :-
 Dignity and respectfulness.
 Serving others. Putting followers’ interests ahead
of leader’s.
 Justice.
 Community building.
 Honesty.
1. Introduction to Leadership
2. Leadership Strategy
Strategic leadership refers to a manager’s potential to
express a strategic vision for the organization and to
motivate and persuade others to acquire that vision.

The aim of strategic leadership is to develop an

environment in which employees forecast the
organization’s needs in context of their own job. Strategic
leaders encourage the employees forecast the
organization’s needs in context of their own job.
Employees are encouraged to follow their own ideas.
1. Introduction to Leadership
2. Leadership Strategy
The main characteristics of strategic leaders :-

 Keeping themselves updated.

 Judicious use of power.
 Wider perspective – beyond their own specialty.
 Social skills.
 Self awareness.
 Readiness to delegate and authorize.
 Articulacy. Lucidly communicate the vision.
 Constancy / reliability. Results in the vision becoming
a component of organization culture.
1. Introduction to Leadership
3. Leadership & Motivation
Leadership and motivation are the two elements that
affect individuals’ performance at work. The most basic
concepts are every person is
a) like every other person;
b) like some other people;
c) like no other person.

These differences suggest an analysis of leadership and

motivation can result general conclusions about behavior
and performance.
1. Introduction to Leadership
3. Leadership & Motivation
Central to Action-Centered Leadership- the concept
pioneered and developed by leadership guru John Adair,
are the

states that half of a person’s

motivation comes from within and half is due to their
environment, especially the leadership they
encounter there.
While it takes personal motivation to reach a status of
leadership, it requires an ability to motivate others to be
successful there.
1. Introduction to Leadership
3. Leadership & Motivation

1. Be self motivated.
2. Select people who are also self motivated.
3. Treat everyone as an individual.
4. Set challenging yet realistic targets.
5. Remember that process motivates.
6. Create a motivating environment.
7. Provide fair rewards.
8. Give recognition.
2. Leadership Theories / Styles
1. Trait Theory.
2. Leadership Theories / Styles
1. Trait Theory.
Scholars taking the trait approach attempted to identify
1. Physiological (appearance, height, weight)
2. Demographic (age, education, socioeconomic
background)
3. Personality (self confidence, aggressiveness)
4. Intellective (intelligence, decisiveness, judgment,
knowledge).
5. Task related (achievement drive, initiative, persistence)
6. and social (sociability, cooperativeness)
characteristics with leader emergence and leader
effectiveness.
2. Leadership Theories / Styles
1. Trait Theory.
Among the core traits identified are:
1. Achievement drive: high level of effort, high levels of
ambition, energy and initiative.
2. Leadership motivation: an intense desire to lead
others to reach shared goals.
3. Honesty and integrity: trustworthy, reliable, and open.
4. Self confidence: belief in one’s self, ideas and ability
2. Leadership Theories / Styles
1. Trait Theory.
Among the core traits identified are: (contd.)
5. Cognitive ability: capable of exercising good judgment,
strong analytical abilities and conceptually skilled.
6. Knowledge of business: knowledge of industry and
other technical matters.
7. Emotional maturity: well adjusted, does not suffer
from severe psychological disorders.
8. Others: charisma, creativity and flexibility.
2. Leadership Theories / Styles
1. Trait Theory.
Advantages of Trait Theory
 It is naturally pleasing theory.
 It is valid as lot of research has validated the
foundation and basis of the theory.
 It serves as a yardstick against the leadership traits of
an individual can be assessed.
 It provides a detailed knowledge and understanding of
the leader element in the leadership process.
2. Leadership Theories / Styles
1. Trait Theory.
Limitations of Trait Theory

 There is bound to be some subjective judgment in

determining who is regarded as a ‘good’ or ‘successful’
leader.
 The list of possible traits tends to be very long. More
than 100 different traits of successful leaders in
various leadership positions have been identified.
These descriptions are simply generalities.
 There is also a disagreement over which traits are the
most important for an effective leader.
2. Leadership Theories / Styles
1. Trait Theory.
Limitations of Trait Theory

 The model attempts to relate physical traits such as

height and weight to effective leadership. Most of
these factors relate to situational factors. For example,
a minimum weight and height might be necessary to
perform the tasks efficiently in a military leadership
position. In business organizations these are not
requirements to be an effective leader.
 The theory is complex.
2. Leadership Theories / Styles
1. Trait Theory.
Implications of Trait Theory
The trait theory gives constructive information about
leadership. It has universal application. Managers can utilize
the information from the theory to evaluate their position
in the organization. They can assess how their position can
be made stronger as now they have understood their
strengths and weaknesses.
Theory raises a question, are leaders born or made? Is
leadership an art or science? Leadership is a combination of
both. Some attributes like self confidence has to be
developed while motivation to lead comes from within.
2. Leadership Theories / Styles
2. Behavioral Theory
Behavioral theories of leadership focus on the study of
specific behaviors of a leader. For behavioral theorists, the
leader behavior is the best predictor of his leadership
influences and as a result, is the best determinant of
his/her success.
This behavior focused approach provides real marketing
potential since behaviors can be conditioned in a manner
that one can have a specific response to specific stimuli.
Here we study Role Leadership Style and The Managerial
Grid Leadership Style.
2. Leadership Theories / Styles
2. Behavioral Theory : Role Leadership Style
Role theory is how leaders and followers in a business
define their own roles, roles of others, how people act in
their roles and how people expect others to act in their
roles within the organization.
For example an employee may have an unsatisfied
customer but rather than make a decision on how to
resolve the conflict with the customer, the employee may
see this as the role the manager plays. While the
employee takes the role of gathering all relevant
information about the problem, the resolution is left to
the manager.
Because this is the case, the manager sees his role to
resolve customer problems.
2. Leadership Theories / Styles
2. Behavioral Theory :

Advantages of Role Theory

The primary benefit of role theory in an organization is

that it sets the standards for what is expected of the
leaders in the organization.

Ideally role conflict should not be an issue because the

roles the leaders think they should play and the role that
employees think the leaders should play is in sync.
2. Leadership Theories / Styles
2. Behavioral Theory :

Limitations of Role Theory

According to role theory, role conflict is a possible

experience for leaders within a business or organization.
When the employees in a business have a set of
expectations on the role of the leaders that are different
from what the leaders accept as their role, role conflict
can occur. Role conflict can also occur when a leader feels
they should be performing a certain role but employees
expect the leader to fill a different role.
2. Leadership Theories / Styles
2. Behavioral Theory :

Implications of Role Theory

Leaders often resort to role playing to encourage
participants to act in a similar manner in their respective
situations as leaders.
Company managers engage in training sessions using role
–playing to encourage desirable behavior.
Implementation of role theory has one thing in common
which is to produce desired behavior and in numerous
case, to internalize it.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
This is a behavioral leadership model developed by
Robert R Blake and Jane Mouton. The model identifies
five different leadership styles based on the concern for
people and the concern for production.

The concern for people The concern for production.

This is the degree to which a leader considers
‘the needs of team members, ‘concrete objectives,
their interests and areas organizational efficiency
of personal development’ and high productivity’
when deciding how best to accomplish a task.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
Understanding the model

The model is represented as a grid with concern for

production as the x-axis and concern for people as y-axis,
each axis ranges from 1 – Low to 9 – High.

The grid highlights five independent styles termed

Impoverished, produce or perish, country club, team
leader and middle of the road leaderships as graphically
reflected in the next slide.
2. Leadership Theories / Styles
The Blake Mouton Grid

High
Country Team
Club Leader
Concern for People

Produce
Impoverished or Perish
Low
Low High
Concern for Production
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
The Indifferent (Impoverished Leadership) style 1,1:
Low Production / Low People
The leader is mostly ineffective. He/she has neither a high
regard for creating systems for getting the job done, nor
for creating a work environment that is satisfying and
motivating.
The main concern for the leader of the organization is not
be held responsible for any mistakes, which results in less
innovative decisions. The result is a place of
disorganization, dissatisfaction and disharmony.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
The Accommodating (Country Club) style 1,9:
High People / Low Production
This style has high concern for people and a low concern
for production. This style of leader is most concerned
about the needs and feelings of members of his/her
team.
These people operate under the assumption that as long
as team members are happy and secure then they will
work hard. The resulting atmosphere is usually friendly ,
but not necessarily productive.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
The Dictatorial (Produce or Perish) style 9,1:
High Production / Low People
Leaders in this category believe that employees are
simply a means to an end. Employee needs are always
secondary to the need for efficient and productive
workplaces.

This leader is autocratic, has strict work rules, policies and

procedures. Any employee flouting them faces
punishment. This style is often used in crisis management.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
The Status Quo (Middle of the road) style 5,5:
Medium Production / Medium People

This style tries to balance between company goals and

workers’ needs. It may first appear to be an ideal
compromise but there is a problem too.
When you compromise, you necessarily give away a bitt
of each concern so that neither production nor people
needs are fully met. Leaders settle for average
performance and believe that is the most anyone can
expect.
2. Leadership Theories / Styles
2. Behavioral Theory : The Managerial Grid Leadership Style
The Sound (Team Leadership) style 9,9:
High Production / High People
This is the pinnacle of management style. These leaders
stress production needs and the needs of the people
equally highly.
The premise here is that employees understand
organizational purpose and determine production needs.
With such committed employees having stake in company
success needs of employees and of the organization they
serve coincide. Satisfaction
Respect Motivation
Trust Production
2. Leadership Theories / Styles
2. Behavioral Theory :The Managerial Grid Leadership Style

ELEMENT DESCRIPTION
Initiative Taking action and supporting
Inquiry Questioning, researching and verifying,
understanding
Advocacy Expressing convictions and championing ideas
Decision making Evaluating resources, choices and consequences
Conflict resolution Confronting and resolving disagreements
Resilience Dealing with problems, setbacks and failures
Critique Delivering objective , candid feedback
2. Leadership Theories / Styles
2. Behavioral Theory : Activity # 01

The Blake and Mouton Managerial Grid

Leadership Self Assessment Questionnaire
2. Leadership Theories / Styles
3. Participative Leadership Theory
Participative leadership is a style of leadership that
involves all members of a team in identifying essential
goals and developing procedures or strategies for each
those goals.

These leaders encourage participation and contribution

from group members and help group members feel more
relevant and committed to the decision making process.

In participative theories, however, the leader retains the

right to allow input of others.
2. Leadership Theories / Styles
3.Participative Leadership Theory

Advantages of Participative Leadership

One of the main benefits of Participative Leadership is
that the process allows for the development of additional
leaders who can serve the organization at a later date.
The discovery of these hidden assets helps to benefit the
work of the current team but also alerts the organization
to people within the team who should be provided with
opportunities to further develop some skill or ability for
future use. It expands the range of possibilities for the
team enabling a variety of perceptions to decision making
process.
2. Leadership Theories / Styles
3.Participative Leadership Theory
Limitations of Participative Leadership
One potential disadvantage of participative leadership is
the time factor. The style requires more time for decision
making as input from each member of the team is to be
procured and assessed.
Such delayed decisions, however, do benefit everyone
rather than faster decisions that have limited impact.
It is also possible that the leader, even though primarily
responsible for success, may not be in a position to
enforce his decisions in this democratic environment.
2. Leadership Theories / Styles
3.Participative Leadership Theory
Likert Items and Scale for Participative Management
Rensis Likert, the organizational psychologist is best
known for research on management styles. According to
Likert, the efficiency of an organization or its departments
is influenced by their system of management.
Linkert outlined four systems of management to describe
the relationship, involvement, and roles of managers and
subordinates in industrial settings.
Exploitative Authoritative Benevolent Authoritative
Consultative Participative
2. Leadership Theories / Styles
3.Participative Leadership Theory
Likert Items and Scale for Participative Management
Likert argued that the participative was the most effective
form of management. This system promotes genuine
participation in making decisions and setting goals
through free-flowing horizontal communication and
tapping into the creativity and skills of workers.
Al organizational goals are accepted by everyone as they
are set through group participation. Employees are highly
responsible and accountable. Satisfaction among
employees is highest out of the four systems ; so is
production.
2. Leadership Theories / Styles
3.Participative Leadership Theory
Likert Items and Scale for Participative Management
Likert’s technique asks participants to share their
agreement and disagreement with a set of pre-selected
questions/comments. Because responses are assigned
numerical values, it is easy for employers to calculate
agreement versus disagreement and use the data to
improve or alter process, policies, and other
organizational tasks.
It is important to note that the individual questions that
take this format are known as Likert items and the Likert
scale is the sum of several of these items.
2. Leadership Theories / Styles
3.Participative Leadership Theory
Likert Items and Scale for Participative Management
A typical comment / procedure / policy

1. Strongly disagree.
2. Disagree
3. Neither agree or disagree
4. Agree
5. Strongly agree

Likert’s survey format.

2. Leadership Theories / Styles
4. Situational Leadership Theory.
This is a leadership theory developed by Paul Hersey,
while working on Management of Organizational
Behavior. Originally it was termed “Life Cycle Theory of
Leadership.”

The fundamental underpinning of the situational

leadership theory is that there is no single “best” style of
leadership. Effective leadership is task relevant , and most
successful leaders are those that adapt their leadership
style to the maturity of the group they lead or influence.
2. Leadership Theories / Styles
4. Situational Leadership Theory.
Here by maturity, we mean, the capacity to set high but
attainable goals, willingness and ability to take
responsibility for the task, and relevant education and /
or experience of an individual or group for the task.
Effective leadership varies, not only with the person or
group that is being influenced, but it also depends on the
task, job or function that needs to be accomplished.
The Hersey Blanchard Situational Model rests on two
fundamental concepts : leadership style and the group’s
maturity level.
2. Leadership Theories / Styles
4. Situational Leadership Theory.
Leadership styles
Hersey and Blanchard characterized leadership style in
terms of the amount of Task Behavior and Relationship
Behavior that the leader provides to their followers. They
categorized all leadership styles into four behavior types,
which they named S1 to S4.
S1 : Telling
- is characterized by one way communication in which the
leader defines the roles of the group and provides the
what, how, why, when and where to do the task.
2. Leadership Theories / Styles
4. Situational Leadership Theory.
S2 : Selling
- while the leader is still providing the direction, he or she
is now using two-way communication and providing socio
emotional support that will allow the group being
influenced to buy into the process.
S3 : Participating
- this is how shared decision making about aspects of how
the task is accomplished and the leader is providing less
task behaviors while maintaining high relationship
behavior.
2. Leadership Theories / Styles
4. Situational Leadership Theory.
S4 : Delegating
- the leader is still involved in decisions; however, the
process and responsibility has been passed to the group.
The leader stays involved to monitor the progress.

Of these four styles, no one is considered optimal for all

leaders to use all the time.

Effective leaders need to be flexible and must adapt

themselves according to the situation.
2. Leadership Theories / Styles
4. Situational Leadership Theory.
Maturity Levels
The right leadership style will depend on the person or
the group being led.
Hersey and Blanchard Leadership Theory identified four
levels of Maturity M1 through M4.

HIGH MODERTAE LOW

M4 M3 M2 M1
Very capable Capable but Unable and Unable but
and confident unwilling insecure willing
2. Leadership Theories / Styles
4. Situational Leadership Theory.
M1 – they are unable to take on responsibility for the task
being done; however, they are willing to work at the task.
They are novice but enthusiastic.
M2 – they still lack the specific skills required for the job
in hand and are unable and unwilling to do or take
responsibility for this job or task.
M3 – they are experienced and able to do the task but
lack the confidence or the willingness to take
responsibility.
M4 – they are experienced, comfortable, able to take the
task with responsibility for it.
2. Leadership Theories / Styles
4. Situational Leadership Theory.

Maturity Levels are also task specific.

Persons might be generally skilled,
confident and motivated in their job,
but would still have
a maturity level of M1
when asked to perform
a task requiring skills
they don’t possess.
2. Leadership Theories / Styles
4. Situational Leadership Theory.

Developing People and Self Motivation

A good leader develops “the competence and

commitment of their people so there are self motivated
rather than dependent on others for direction and
guidance.”

According to Hersey’s “the situational book,” the leader’s

high, realistic expectation causes high performance of
followers; leader’s low expectations lead to poor
performance of followers.
2. Leadership Theories / Styles
4. Situational Leadership Theory.

Developing People and Self Motivation

According to Ken Blanchard “Four combinations of

competence and commitment make up what we call
‘development level.’

D1 – low competence and high commitment.

D2 – low competence and low commitment.
D3 – high competence and low / variable commitment
D4 – high competence and high commitment.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
Contingency theory is class of behavioral theory that
claims that there is no best way to organize a corporation,
to lead a company or to make decisions. Instead, the
optimal course of action is contingent (dependent) upon
the internal and external situation.
Several contingence approaches were developed
concurrently in the late 1960s. They suggested that
previous theories such as Weber’s bureaucracy and
Taylor’s scientific management had failed because they
neglected that management style and organizational
structure were influenced by contingency factors.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

This contingency model focused on leadership

effectiveness. It shows the relationship between the
leader’s orientation or style and group performance
under differing situational conditions.
The theory is based on determining the orientation of the
leader (relationship or task), the elements of the situation
(leader-member relations, task structure, and leader
position power) and the leader orientation that was
found most effective with change in situation from low to
high control.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Fiedler found that task oriented leaders were more

effective in low and moderate control situations and
relationship oriented managers were more effective in
moderate control situations.

This model contains the relationship between leadership

style and the favorableness of the situation. Situations are
favorable when leader is respected by followers, the task
is structured and high authority and power are formally
attributed to the leader.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Situational Elements:-
Leader-member relations

– the regard with which the leader and the group

members hold one another determines, in part, the
ability of the leader to influence the group and the
conditions under which he or she can do so. A leader who
is accepted by the group members is in more favorable
situation than one who is not.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Situational Elements:-
Task Structure
– factors that decide the task structure are 1) can a
decision be demonstrated as correct. 2) are the
requirements of the task understood by everyone. 3) is
there more than one way to accomplish the task and 4) is
there more than one correct solution. If the group’s task is
unstructured, and if the leader is no more knowledgeable
than the group about how to accomplish the task,
situation is unfavorable.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Situational Elements:-
Leader position power

– position power is determined at its most basic level by

the rewards and punishments which the leader has at his
or her disposal to deal with member’s performance.

The more power the leader has, the more favorable is the
situation.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Increasing
effectiveness
of the leader
Relationship
Oriented
Correlations
between the
leader’s
orientation and
the leader’s
effectiveness

Task Oriented
Increasing
effectiveness
of the leader
Increasing favorableness to leader.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style
Increasing favorableness to leader.

Leader
Member GOOD POOR
Relations

Task
Structure Structured Unstructured Structured Unstructured

Leader Strong Weak Strong Weak Strong Weak Strong Weak

Position
Power
High Moderate Low
control situation control situation control situation
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Leader Orientation

Relationship Oriented : (LPC score of 73 and above)

Generally high LPC leaders are more concerned with

personal relations, more sensitive to the feelings of others
and better off at heading off conflict. They are better able
to deal with the complex issues in making decisions. They
use their good relations with the group to get job done.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
Relationship Oriented : (LPC score of 73 and above)

High Control Moderate Control Low Control

Situation: Situation: Situation

Leaders are bored Leaders focus on Leaders are

and are not group relations. absorbed in
challenged. Seek Reduce stress and obtaining group
approval from anxiety of the group support, often at
superiors & ignore and resolve the the expense of the
subordinates or conflict. Find the task. They may
reorganize the task. task challenging and withdraw from the
interesting and leadership role and
perform well in it. fail to direct the
group.
2. Leadership Theories / Styles

1. Fiedler’s Least Preferred Co-Worker (LPC) Style

Task Oriented : (LPC score of 64 and below)

Generally low LPC leaders are more concerned with the

task and less dependent on group support.
They tend to be eager and impatient to get on with the
work.
They quickly organize the job and have a no-nonsense
attitude about getting the work done.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
Task Oriented : (LPC score of 64 and below)

High Control Moderate Control Low Control

Situation: Situation: Situation

Leaders tend to Leaders tend to be Leaders devote

relax and develop anxious and less them selves to their
pleasant relations effective. They don’t challenging task.
with subordinates. like to handle group They organize and
As the work gets conflict . They get drive the group to
done they do not absorbed in the task task completion.
interfere the group and ignore and are They control the
or expect insensitive to group and enforce
interference for personal relations in strict discipline.
superiors. the group.
2. Leadership Theories / Styles
5. Contingency Leadership Theory.
LPC scores between 65 and 72:

If your score falls into this borderline area,

you must carefully analyze your leadership
style as you learn more about the
relationship oriented and task oriented
styles.

???
2. Leadership Theories / Styles
6 Transactional Leadership Theory
Transactional Leadership is style of leadership in which
the leader promotes compliance of his followers through
both rewards and punishments. Unlike transformational
leadership, leaders using the transactional approach are
not looking to change the future, they are looking to
merely keep things the same.
These leaders pay attention to followers’ work in order to
find faults and deviations. Such leadership is effective in
crisis and emergency situations and for time bound
projects.
2. Leadership Theories / Styles
6 Transactional Leadership Theory
Transactional Leaders accept goals, structure and the
culture of the existing organization. This leadership is
passive and focuses on laying down criteria for rewards
and penalties.
It has two factors, contingent reward and management by
exception. Former provides rewards for effort and
recognizes good performance, while latter maintains the
status quo, intervenes when subordinates do not meet
performance levels and initiates corrective action for
improvement.
2. Leadership Theories / Styles
6 Transactional Leadership Theory
Transactional Leaders demonstrate active behaviors that
include providing a sense of mission.
Transactional Leadership
 Leadership is responsive.
 Works within the organizational culture.
 Employees achieve objectives through rewards and
punishments set by leader.
 Motivates followers by appealing to their own self
interest.
 Management by exception : maintain the status quo;
stress correct actions to improve performance.
2. Leadership Theories / Styles
6 Transactional Leadership Theory
6.1 Leader-Member Exchange (LMX) Style.

This theory asserts that leaders develop relationships

with each other in their work group. A high quality
relationship is characterized by the member having high
levels of responsibility, decision influence, and access to
resources.
Members who enjoy a high quality LMX relationship are
said to be the IN-GROUP. Others in the OUT-GROUP have
low levels of responsibilities and decision influence.
2. Leadership Theories / Styles

6.1 Leader-Member Exchange (LMX) Style.

The quality of the leader member exchange relationship is
theorized to be related to work and attitudinal outcomes.
The theoretical development of LMX is based on the
premise that leader-member relationships emerge as the
result of a series of exchanges or interactions during
which leader and member roles develop in three stages.

1. Role taking: the member joins the team, evaluated by

the leader who then offers the job opportunities where
member proves his/ her capabilities.
2. Leadership Theories / Styles

6.1 Leader-Member Exchange (LMX) Style.

2. Role making: the leader and member take part in an

unstructured and informal negotiation whereby a role is
created for the member and unspoken promise of benefit
and power in return for dedication and loyalty takes
place.
3. Routinization: a pattern of ongoing social exchange
between the leader and the member is established. Being
a successful or in-group member usually includes being
similar in many ways to the leader.
2. Leadership Theories / Styles

6.1 Leader-Member Exchange (LMX) Style.

3. Routinization: contd.
Trust, respect, empathy, patience are qualities of sensitive
and reasonable in-group members. Out-group member,
on the other hand, would display aggression, sarcasm and
self centered view.
LMX relationship is better when the challenge of the job is
extremely high or low. The size of the group, financial
resource availability, and overall workload are also
important.
2. Leadership Theories / Styles

6.1 Leader-Member Exchange (LMX) Style.

High LMX – In-Group

Leader
Exchange

Follower

Low LMX – Out-Group

2. Leadership Theories / Styles
Advantages of LMX:
I. It is descriptive theory which suggests that it is
important to recognize the existence of in-groups and
out-groups within the organization.
II. The LMX theory is unique because it’s the only
leadership theory that makes the concept of the
dyadic relationship the centerpiece of the leadership
process.
III. Further it directs our attention to the importance
communication in leadership.
IV. There is a large body of research substantiating that
LMX leads to positive organizational outcomes.
2. Leadership Theories / Styles
Limitations of LMX:
I. The LMX theory runs counter to basic human values
of fairness. It gives appearance and discrimination
against groups that don’t receive the special
attention.
II. The basic ideas of the theory are not fully developed.
Leaders cannot justify how characteristics of in-group
members are important for the organization.
III. There are questions regarding the measurement of
leadership member exchanges in LMX theory.
Measurement scales lack content validity.
2. Leadership Theories / Styles
7. Transformational Leadership
Transformational Leadership enhances the motivation,
morale and performance of followers through a variety of
mechanisms. These include connecting the follower’s
sense of identity and self to the mission and collective
identity of the organization; being a role model for
followers that inspires them; challenging followers to take
greater ownership for their work and understanding the
strengths and weaknesses of followers, so the leader can
align followers with tasks that optimize their
performance.
2. Leadership Theories / Styles
7. Transformational Leadership
According to Burns who introduced this concept,
Transformational Leadership can be seen “when leaders
and followers make each other to advance to a higher
level of moral and motivation.”
The theory was further expanded by Bass who state that
transformational leadership can be defined based on the
impact that it has on followers.
Transformational leaders, Bass added, garner trust,
respect, and admiration from their followers.
2. Leadership Theories / Styles
7. Transformational Leadership - Components
Bass also suggested following four different components:
1. Intellectual Stimulation: Transformational leaders not
only challenge the status quo, they also encourage
creativity among followers. The leader encourages
followers to explore new ways of doing things and
new opportunities to learn.
2. Individualized Consideration: Transformational leaders
offer support and encouragement to followers to
foster supportive relationships and keep their lines of
communication open to share ideas.
2. Leadership Theories / Styles
7. Transformational Leadership - Components
Bass also suggested following four different components:
3. Inspirational Motivation: Transformational leaders
have a clear vision that they are able to articulate to
followers. They are also able to help followers
experience the same passion and motivation to fulfill
these goals.
4. Idealized Influence: Transformational leaders serve as
a role model for followers. Because followers trust and
respect the leader, they emulate the leader and
internalize his / her ideals.
2. Leadership Theories / Styles
7. Transformational Leadership -
Advantages
I. Leader inspires staff to be more productive and work
towards company goals.
II. The leader has broad visions for the company’s future
and those visions are instrumental to corporate
planning.
III. The style attempts to make each employees’ jobs
simpler and creates plans for development of their
careers.
IV. There is a strong bond between the leader &
members.
2. Leadership Theories / Styles
7. Transformational Leadership -
Limitations
I. Any sign that leader has a hidden agenda or wishes to
manipulate followers can destroy the trust on the
leader.
II. The leader has to continuously reinforce the vision
and empower followers.
III. Lines of communication must remain open all the
time.
IV. To maintain enthusiasm constant frequent feedback
on employee’s progress is a must.
2. Leadership Theories / Styles
7. Transformational Leadership -
Implications

I. Develop a challenging and attractive vision, together

with the employees.
II. Tie the vision to a strategy for its achievement.
III. Develop the vision, specify and translate it to actions.
IV. Express confidence, decisiveness, and optimism about
the vision and its implementation.
V. Realize the vision through small planned steps for its
full implementation.
3. Introduction to Motivation

Motivation is the word derived from the ‘motive’ which

means needs, desires, wants or drives within the
individuals. Motivation is the process of stimulating
people to actions to accomplish goals. Its importance is
often underestimated. This is one key performance
indicator (KPI) that should be on any leader’s dashboard!

Motivation is a group phenomena which affect

the nature of an individual’s behavior
the strength of the behavior and
the persistence of the behavior.
3. Introduction to Motivation

Motivation is the process

of stimulating people
to actions to accomplish
the goals.
3. Introduction to Motivation

Motivation is important to
an individual as:

1. Motivation helps achieve personal goals.

2. Motivated employee has job satisfaction.
3. Motivation helps in self development
of an individual.
4. Motivation creates a dynamic team and
members stand to gain working in
such a team.
3. Introduction to Motivation

Motivation is important to
a business as:
1. More motivated the employees, the more
empowered the team is.
2. The more is the team work and individual
employee contribution more successful and
profitable is the business.
3. During periods of amendments, there
will be more adaptability and creativity.
4. Motivation leads to optimistic
and challenging attitude at work place.
3. Introduction to Motivation

Understanding what motivates an organization’s

employees is central to the study of industrial psychology.
While motivation can often be used as a tool to help
predict behavior, it varies greatly among individuals and
must often be combined with ability and environmental
factors to actually influence behavior and performance.

Motivation has a major role in influencing workplace

behavior. Organizations must recognize this and structure
the work environment to encourage productive behaviors
and discourage those that are unproductive.
3. Introduction to Motivation

The process of motivation consists of three stages:

A felt need or drive.
A stimulus in which needs have to be aroused.
When needs are satisfied, the satisfaction or
accomplishment of goals.

Motivational
posters
3. Introduction to Motivation
1. Motivation and Performance
The job of the leader in an organization is to get work
done through employees. To do this, the leader has to
motivate the employees. Thus link between motivation
and performance is clear. If individuals are highly
motivated, they will perform better. In better
performance leads to greater satisfaction which again
encourages motivation.
Job Performance is a function of ability* and motivation**.
* Depends upon education, experience & training.
** Can be enhanced quickly.
3. Introduction to Motivation
2. Motivation and Incentive
Employees are motivated by recognition, some by cash
incentives. Key to promoting motivation as an employer is
understanding and incentive. Employee incentive
programs go a long way towards ensuring employees feel
appreciated and worthwhile.

Incentive programs increase motivation because they are

not only encouraging productive performance but also
show employees that their company cares for them. This
feeling is very crucial in sustaining motivation.
3. Introduction to Motivation
3. Motivation and Morale
Morale can be defined as the total satisfaction derived by
an individual from his / her job., work group, superior, the
organization and the environment. It generally relates to
the feeling of individual’s comfort, happiness and
satisfaction.
Morale includes employees’ attitudes on and specific
reaction to the their job. Important components and
determinants of morale are
3. Introduction to Motivation
3. Motivation and Morale
There are two states of Morale : -
High Morale implies determination at work. It results in
A keen teamwork from employees.
Organizational commitment and a sense of
belonging.
Immediate conflict identification and resolution.
Healthy and safe workplace.
Effective communication.
Increase in productivity and
Greater motivation.
3. Introduction to Motivation
3. Motivation and Morale
There are two states of Morale : -
Low Morale has following features

Greater grievances and conflicts.

High rate of employee absenteeism and turnover
Dissatisfaction with superiors and employers.
Poor working conditions.
Employee frustration.
Decrease in productivity.
Lack of motivation.
4. Theories of Motivation
1. Taylor’s Scientific Management

Frederick Winslow Taylor was an American mechanical

engineer who sought to improve industrial efficiency. He
is known as the “father of scientific management.”
He conducted experiments to determine the best way of
performing each work operation, the time it required,
materials needed and the work sequence. He sought to
establish a clear division of labor between management
and employees.
His views on motivation:
4. Theories of Motivation
1. Taylor’s Scientific Management

Frederick Winslow Taylor

Taylor had a simple view about

what motivated people at
work: MONEY.
4. Theories of Motivation
1. Taylor’s Scientific Management
Taylor developed four principles of scientific
management:
1. A scientific management methodology has to be
developed.
2. Managers should assume the responsibility for
selecting, training, and developing the employee.
3. Managers should fully cooperate with employees to
ensure the proper application of scientific
management method.
4. Management should become involved with the work
of their employees as much as possible.
4. Theories of Motivation
1. Taylor’s Scientific Management

Scientific management led to time and motion studies,

efficiency experts, and others spreading the gospel.
Taylor’s optimistic belief that study of the organization
through his scientific method would provide answers
necessary to resolve the most difficult productivity
problems is extremely important to contemporary
management.
He is the first to point out that it is management’s primary
responsibility to make an organization productive.
4. Theories of Motivation
1. Taylor’s Scientific Management

Taylor had very precise ideas about how to introduce his

system. It is only through enforced standardization
enforced adoption of the best implements and working
conditions and enforced cooperation that this faster work
can be assured.
And this duty of enforcing standards and enforcing
cooperation rests with management alone. Workers were
supposed to be incapable of understanding what they
were doing . According to Taylor this was true even for
simple tasks.
4. Theories of Motivation
1. Taylor’s Scientific Management
Taylor had simple view about what motivated people at
work – money. He felt that workers should get a fair day’s
pay for a fair day’s work and that pay should be linked to
the amount produced (based on piece rates). Workers
who did not deliver a fair day’s work would be paid less
(or nothing). Workers who did more that a fair day’s work
(e.g. exceeded the target) would be paid more.
main form of motivation - wages
Taylor maintained : - manager’s job – tell workers
what to do and how.
worker’s job – do what is told.
4. Theories of Motivation
1. Taylor’s Scientific Management
Weakness in Taylor’s Approach

The approach ignores the many differences among

workers. There is no guarantee that the ‘best way’ suits
each worker.
Secondly, while money is an important motivation at
work for many people, it isn’t for everyone.
Taylor overlooked the fact that (many) people work for
reasons other than financial reward.
2. Mayo’s Human Relations Approach

George Elton Mayo

Mayo believed that monetary incentives and good

working conditions are less important to the individual
than the need to belong to a group.
4. Theories of Motivation

2. Mayo’s Human Relations Approach

George Elton Mayo is known as the founder of the Human
Relations Movement and was known for his research
including the Hawthorne Studies and his book The Human
Problems of an Industrialized Civilization.
He studied the behavior of people in groups, particularly
workplace groups and in Hawthorne studies he examined
the effects of social relations, motivation, and employee
satisfaction. For this purpose he two isolated groups and
studied effects changing factors on their productivity.
4. Theories of Motivation
2. Mayo’s Human Relations Approach
Conclusions from Mayo’s studies –
Workers are best motivated by better communication,
more managerial involvement and working in teams.
Good communication improves workers’ self esteem and
confidence, increases efficiency, productivity and healthy
working relationships.
Workers’ performance is dependent on both social issues
and job content.
A tension between workers’ ‘logic of sentiment’ and
managers’ ‘logic of cost and efficiency’ lead to conflicts.
4. Theories of Motivation
2. Mayo’s Human Relations Approach
Summary of Mayo’s beliefs:-
Individual workers cannot be treated in isolation, but
must be seen as members of a group.
Monetary incentives and good working conditions are less
important to the individual that the need to belong to a
group.
Informal and unofficial groups formed at work have a
strong influence on the behavior of those workers in the
group.
4. Theories of Motivation
2. Mayo’s Human Relations Approach
Summary of Mayo’s beliefs:-
Managers must be aware of these ‘social needs’ and cater
to them to ensure that employees collaborate with the
official organization rather than go against it.

Mayo’s simple instructions to industrial interviewers set a

template and remain influential to this day; a) pay full
attention to interviewee, b) listen, c) never argue, d) find
what is said, what is not said and e) summarize and
submit to interviewee for comments.
4. Theories of Motivation
3. Maslow’s Hierarchy of Needs

Maslow’s hierarchy of needs theory

helps the manager to visualize employee
motivation. It helps in understanding
the motivations and needs employees
have and the requirement to satisfy
basic needs in order to achieve
higher-level motivation.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Abraham Harold Maslow’s hierarchy of needs is a theory
in psychology proposed by him in the paper ‘A Theory of
Human Motivation.’

He observed that if you are hungry and thirsty, you’ll try

to take care of thirst first. Thus thirst is a ‘stronger’ need
than hunger and sex is less powerful than any of these.

Maslow went beyond water, food and sex to lay out five
broader layers of needs in following order.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
The physiological needs.

The needs for safety and security.

The needs for love and belonging.

The needs for esteem.

The need to actualize the self.

4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Hierarchy:

Maslow’s hierarchy of needs is often portrayed in the

shape of a pyramid, with the largest fundamental levels of
needs at the bottom and the need for self actualization at
the top.

Most fundamental and basic four layers of the pyramid on

the next slide contain what Maslow called ‘deficiency
needs’ or ‘d-needs’ namely esteem, friendship and love,
security and physical needs.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Hierarchy:
Morality
Creativity
Spontaneity
Problem solving
Self Actualization Lack of prejudice
Acceptance of facts
Self esteem, confidence, achievement,
Esteem respect of others , respect by others
Love, belonging Friendship, family, sexual intimacy
Security of body, employment,
Physiological resources, morality, the family, health,
property.
Breathing, food, water, sex, sleep,
homeostasis, excretion.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Hierarchy:

With the exception of the most fundamental

(physiological) , if these ‘deficiency needs’ are not met,
the body does not give any physical indication but the
individual feels anxious and tense.

Maslow’s theory suggests that the most basic level of

needs must be met before the individual will strongly
desire ( or focus motivation upon) the secondary or higher
level needs.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Hierarchy:

Maslow also coined the term Metamotivation to describe

the motivation of people who go beyond the scope of the
basic needs and strive for constant betterment. These
metamotivated people are driven by B-needs (Being
Needs), instead of deficiency needs. (D-needs).
Maslow was clear that human mind is complex and many
parallel processes are running at the same time. As such
this separation of needs into levels is ‘general’, ‘relative’
to use his words.
4. Theories of Motivation
3. Maslow’s Hierarchy Needs
Limitations with Maslow Model
Individual behavior seems to respond to several needs –not just
one.
The same need may cause quite different behavior in different
individuals.
There is a problem in deciding when a level has actually been
‘satisfied.’
The model ignores the behavior of individuals who tolerate low-
pay for future benefits.
Some critics suggest that Maslow’s model is relevant only to
workers in the USA.
4. Theories of Motivation
4. Herzberg’s Two Factor Theory

The job itself is the motivator.

4. Theories of Motivation
4. Herzberg’s Two Factor Theory
Frederick Irving Herzberg is most famous for introducing
job enrichment and the Motivator - Hygiene theory ( also
known as Two Factor theory). He claimed that people are
influenced by two set of factors as shown in the next
slide.

According to Herzberg, individuals are not content with

the satisfaction of lower-order needs at work. Thy look for
their share in achievement, recognition, responsibility,
advancement and the nature of work itself.
4. Theories of Motivation
4. Herzberg’s Two Factor Theory

Motivator Factors Hygiene Factors

Achievement
Pay and benefits
Recognition
Work itself Company Policy and Administration
Responsibility
Promotion Relationship with coworkers
Growth
Supervision
4. Theories of Motivation
4. Herzberg’s Two Factor Theory
His research showed that employee motivation is
obtained with challenging enjoyable work, where
achievement, growth, responsibility, and advancement
are encouraged and recognized. These are motivating
factors.
Poor lighting, ventilation, poor working conditions, low
salaries and poor supervisory relations serve as
dissatisfiers and are the hygiene factors.
Motivators encourage towards higher performance,
hygiene factors make employee unhappy but cannot
motivate them.
4. Theories of Motivation
4. Herzberg’s Two Factor Theory
Applying Herzberg’s model to de-motivated workers.
What might the evidence of de-motivated employees be
in business?
Low productivity.
Poor production or service quality.
Strikes/ industrial disputes / breakdowns in
employee communications and relationships.
Complaints about pay and working conditions.
4. Theories of Motivation
4. Herzberg’s Two Factor Theory
Applying Herzberg’s model to de-motivated workers.
According to Herzberg, management should focus on
rearranging work so that motivator factors take effect. He
suggested three ways in which this could be done.

Job Enlargement.
Job Rotation
Job Enrichment
4. Theories of Motivation
5. McGregor’s Theory X and Theory Y
Douglas Murray McGregor identified an approach of
creating an environment within which employees are
motivated via authoritative direction and control or
integration and self control, which he called theory X and
theory Y respectively.
These two theories are theories of human motivation that
describe two contrasting models of workforce motivation.
They have to do with perception managers hold about
their employees and not how employees behave. It’s
attitude and not attributes.
4. Theories of Motivation
5. McGregor’s Theory X and Theory Y

McGregor believes there are two basic kinds of managers.

One type of manager, Theory X, has a negative view of

employees assuming they are lazy, untrustworthy, and
incapable of assuming responsibility.

The other type of manager, Theory Y, assumes employees

are trustworthy, and capable of assuming responsibility
having high levels of motivation.
4. Theories of Motivation
5. McGregor’s Theory X
1. Employees are inherently lazy and will avoid work.
2. They dislike work.
3. Hence workers need to be closely supervised and
comprehensive systems of control need to be
developed.
4. A hierarchical structure is required with a narrow span
of control.
5. Only monetary incentives would make employees
work.
Beliefs in this theory lead to mistrust, highly restrictive supervision,
and punitive atmosphere.
4. Theories of Motivation

5. McGregor’s Theory Y

1. Employees may be ambitious, self motivated and

exercise control.
2. They enjoy their physical and mental work duties.
3. For them work is as natural as play.
4. They possess creative ability needed for problem
solving, but their talents are mostly underutilized.
5. Managers holding this theory create atmosphere of
trust for human resource development.
4. Theories of Motivation
McGregor’s
Theory X Theory Y

management staff

Authoritarian, repressive style. Liberating and developmental.

Tight control, no development. Control, achievement and continuous
Produces limited, depressed improvement obtained by enabling,
culture empowering and giving responsibility

staff management
5. Employee Motivation
1. Monetary Factors
Although some theorists like Herzberg believe that money
is not a positive motivator, pay scales are designed to
motivate employees. The scientific and theory X
approach, in particular, argues that workers respond to
financial rewards. Getting employee pay right (often
referred to as the “remuneration package”) is a crucial
task for a business.
Individual pay for performance schemes are most
important to high achievers, high performing employees,
and individuals with high self efficacy.
5. Employee Motivation
1. Monetary Factors
There are many methods of financial rewards:-

Bonus.
Incentives.
Time-rate pay.
Piece-rate pay.
Commission.
Performance related pay.
Shares and options.
Pensions.
5. Employee Motivation

2. Non-Monetary Factors
It is a mistake to get lost in the theory that more money
equals happy employees. Monetary factors will always be
a major factor in motivating people and the remuneration
package is critical in attracting and retaining employees.
But it may not always be the only or the best solution.
With solid compensation in place, let us now look at non-
monetary motivation to success.

Let us start with the first , Status or Job Titles

5. Employee Motivation
2. Non-Monetary Factors
1. Status or Job Titles
Job titles are important for employees as
 they define a job and its responsibility.
 they establish the company ladder.
 higher position entails distinction, greater access to
resources and recognition.
 they fulfill employee’s need to feel intelligent,
influential and important.
a formal announcement of an employee’s job titles fulfills
the next non-monetary factor i.e. appreciation and
recognition.
5. Employee Motivation
2. Non-Monetary Factors
2. Appreciation and Recognition
Recognition is an integral part of the need for esteem and
is vital as man moves towards self-actualization, the final
need in Maslow's hierarchical framework.
Accordingly recognition gains strategic importance not
only as a means to constantly motivate employees and
take care of their esteem but also as a tool that helps
business achieve certain desirable objectives.
Employee recognition is a communication tool that reinforces and
rewards the most important outcomes people create for your
business.
5. Employee Motivation
2. Non-Monetary Factors
3. Delegation of Authority.
Delegation of authority especially when employees feel
they’re being given an opportunity to learn new skills,
gain more knowledge and feel more connected to the
organization. The simple yet most powerful key in the
delegation process is to remember that delegation and
added responsibilities are important tools for motivating
employees.
Care needs to be exercised that prior to delegation the
necessary steps are arranged to prepare them for extra
authority and responsibility.
5. Employee Motivation
2. Non-Monetary Factors
4. Working Conditions.
Many employers underestimate the role of good working
conditions in motivating employees.

A motivating working environment requires going over

and beyond the call of duty and providing for the needs of
the workers.

Child care, bank facilities, bus service, cafeteria, well

equipped gym etc. create favorable working environment.
5. Employee Motivation
2. Non-Monetary Factors
4. Job Security.
Job security is the probability that an individual will keep
his or her job ; a job with high level of job security is such
that a person with the job would have a small chance of
becoming unemployed.

Job security is an incentive which provides great

motivation to employees. If the job is secured, the
employee puts maximum efforts to achieve the objectives
of the enterprise, in return.
5. Employee Motivation
2. Non-Monetary Factors
5. Job Enrichment.
Job enrichment is an attempt to motivate employees by
giving them the opportunity to use the range of their
abilities. It is an idea that was developed by the American
psychologist Frederick Herzberg in the 1950s. Job
enrichment is also described as ‘vertical loading’ of a job.
An enriched job should ideally contain: 1) A range of tasks
and challenges of varying difficulties. (physical or Mental)
2) A complete unit of work – a meaningful task & 3)
Feedback, encouragement and communication.
5. Employee Motivation
2. Non-Monetary Factors
5. Job Enrichment.
Job enrichment, as a managerial activity includes a three
steps technique.
a. Turn employees’ effort into performance. Provide
required resources, support and recognition.
b. Link employees’ performance directly to reward,
which is well defined. If reward is not given,
explanation is a must.
c. Make sure the employee wants the reward by asking
them or by conducting survey.
5. Employee Motivation
2. Non-Monetary Factors
6. Job Enlargement
Job enlargement means increasing the scope of a job by
extending the range of its duties and responsibilities
within the same level and periphery. This contradicts the
principles of division of labor or specialization.
Replacement of assembly line by modular work is a classic
example of job enlargement. With this change, a worker
instead of repetitively performing one part of assembly,
assembles entire ( or most of it) unit.
It is claimed that one time effect of job enlargement also
diminishes in the long run.
6. The Role of Industrial Psychologists

i. Conducting findings on organizational behavior and

worker management interactions.
ii. Analyzing corporate culture and individual/group
interactions.
iii. Assessing corporate leadership and employee
motivation strategies.
iv. Identifying causes and resolutions to internal
conflicts.
v. Structuring the work environment to encourage
productive behaviors.
vi. Providing guidance on reward systems, compensation,
promotion etc.
7. Summary.

Leadership is a process by which an executive can direct,

guide and influence the behavior and work of others
towards accomplishment of specific goals in a given
situation. Leadership is the ability of a manager to induce
the subordinates work with confidence and zeal.

Understanding the needs of individual members helps

develop programs that involve many enthusiastic,
committed and motivated volunteers.
7. Summary.
Positive incentives are those incentives which provide a
positive assurance for fulfilling the needs and wants.
Positive incentives generally have an optimistic attitude
behind and they are generally given to satisfy the
psychological requirements of employees.

Negative incentives are those whose purpose is to correct

the mistakes of employees. The purpose is to rectify
mistakes in order to get effective results. Negative
incentives (demotion, transfer, fine, penalties) are
deployed when positive incentives fail to change the
employee.
8 Further Reading
Emotional intelligence at the workplace
http://www.di-ve .com/Default.aspx?ID=71&Action= 1&NewsId=90909

Business leaders often fail to perform due to three

primary incompetencies related to handling change,
working in a team and poor interpersonal relations.
Developing intra- and interpersonal intelligence which is
more technically termed emotional intelligence (EI) has
proved to be the only way to keep company motivated
and to stimulate growth. EI is the ability to recognize and
understand emotions and their impact on behavior and
attitudes.
8 Further Reading

EI at the workplace

The modern workplace requires open communication,

teamwork and mutual respect among employees and
their supervisors.
With strong EI, an executive can build successful teams,
promote personal growth and self-actualization,
9 Self Assessment Questions
1 _________ is a social process where one person intentionally
exerts influence over one or more individuals to induce desired
behaviors or relationships.
A Followership
B Teaming
C Socialization
D Leadership*

2 Leadership research focusing on the effective characteristics of

leaders investigates
A Trait theories*
B Behavior theories
C Implicit theories
D Path goal theories
9 Self Assessment Questions
3 Which of the following is not a broad class of leadership theory
not discussed in this session?
A Contingency theory
B Trait theory
C Transformational leadership theory
D Motivational theory*

4 According to leader-member exchange theory of leadership

performance ratings tend to increase when communications
between leaders and subordinates are
A Infrequent but demanding
B Infrequent by calming
C Frequent and dependable*
D Stable with no changes
9 Self Assessment Questions
5 How organizations should be rewarding their employees is
based
A On best practice*
B Is arbitrary
C Is based on understanding behavioral theories
D Is based on Herzberg theory
6 The individual most associated with first recognizing the
link between pay and performance was
A Mayo
B FW Taylor*
C Herzberg
D Kohn
9 Self Assessment Questions
7 The order from bottom to top of Maslow’s hierarchy of
needs is
A Safety, esteem, love, actualization, physiological
B Physiological, safety, love , esteem, actualization*
C Actualization, safety, esteem, love, physiological
D Esteem, actualization, physiological, safety, love
8 To enrich a job requiring a minimal skill, an organization
might
A Offer more flexible work schedules*
B Increase the stress associated with monotonous work
C Eliminate the job through automation
D Increase the required number of hours per week
9 Self Assessment Questions
9 According to Herzberg ______ is not a motivator.
A Responsibility within the job
B Work*
C Personal growth
D Working conditions

10 Which approach to the study of leadership emphasizes the

role of situational factors and how these moderate the
relationships between leader traits or leadership behaviors
.
A Leader-oriented approach
B Contingency approach*
C Transactional approach
D Transformational approach
Thank You !