FUNDAMENTALS OF MANAGEMENT

• Chapter 7 Human Resource Management

• Prof.Dr. Fatma Zehra TAN

HUMAN RESOURCE
MANAGEMENT
• The process of planning, organizing, directing (motivating),
and controlling the procurement, development,
compensation, integration, maintenance, and separation of
organizational human resources to the end that
organizational, individual, and societal needs are satisfied.
 HUMAN RESOURCE MANAGEMENT

Human Resource Management includes all activities used to attract & retain
employees and to ensure they perform at a high level in meeting
organizational goals.
These activities are made up of
1. Recruitment & selection.
2. Training and development.
3. Performance appraisal and feedback.
4. Pay and benefits.
5. Labor relations.
 HUMAN RESOURCE PLANNING

• HR Planning includes all activities managers do to forecast current and future

HR needs.

• Must be done prior to recruitment and selection

• Demand forecasts made by managers estimate the number & qualifications the firm will
need.
• Supply forecasts estimate the availability and qualifications of current workers and those in
the labor market.
 HRM COMPONENTS

• Component should be consistent with the others, organization structure, and strategy.
• Recruitment: develop a pool of qualified applicants.
• Selection: determine relative qualifications & potential for a job.
• Training & Development: ongoing process to develop worker’s abilities and
skills.
• Performance appraisal & feedback: provides information about how to train,
motivate, and reward workers.
• Managers can evaluate and then give feedback to enhance worker performance.
 HRM COMPONENTS

 Pay and Benefits: high performing employees should be rewarded with raises,
bonuses.
• Increased pay provides additional incentive.
• Benefits, such as health insurance, reward membership in firm.
 Labor relations: managers need an effective relationship with labor unions that
represent workers.
• Unions help establish pay, and working conditions.

If management moves to a decentralized structure, HRM should be adjusted as

well.
 RECRUITMENT
• External recruiting: managers look outside the firm for people who have not worked at
the firm before.
• Managers advertise in newspapers, hold open houses, recruit at universities, and on
the Internet.
• External recruitment is difficult since many new jobs have specific skill needs.
• A multi-prong approach to external recruiting works best.
• Internal Recruiting: positions filled within the firm.
• Internal recruiting has several benefits:
• Workers know the firm’s culture, may not have new ideas.
• Managers likely already know the candidates.
• Internal advancement can motivate employees.
 HRM PLANNING: OUTSOURCING

• Outsourcing: managers can decide to contract with outside workers rather than hiring
them.
• Outsourcing is more flexible for the firm.
• Outsourcing often provides human capital at a lower cost.

• Outsource problems: managers lose control over output.

• Outsource contractors are not committed to the firm.
• Unions typically are against outsourcing that has potential to eliminate member’s jobs.
 SELECTION TOOLS
Background
Information

Interviews References

Selection

Performance tests Paper tests

Physical
Ability tests
 SELECTION PROCESS

After a pool of applicants are identified, qualifications related to the job requirements are
determined:
• Background Information: includes education, prior employment, college major, etc.
• Interview: almost all firms use one of two types:
• Structured interview: managers ask each person the same job-related questions.
• Unstructured interview: held like a normal conversation.
• Usually structured interviews preferred; bias is possible.
• Physical Ability Test: measure strength & endurance.
• Good for physically demanding jobs.
 SELECTION PROCESS

 Paper & Pencil Tests: Either an ability and personality test.

• Ability test: assess if applicant has right skills for the job.
• Personality test: seek traits relevant to job performance.
• Be sure test is a good predictor of job performance.
 Performance Tests: measure job performance.
• Typing speed test is one example.
• Assessment Center: candidates assessed on job-related activities over a period of a few
days.
 References: outside people provide candid information about candidate.
• Can be hard to get accurate information.
 RELIABILITY & VALIDITY

• Selection tools must be reliable and valid.

• Reliability: the degree to which the tool measures the same thing each time it is
used.
• Scores should be close for the same person taking the same test over time.
• Validity: Does the test measure what it is supposed to measure?
• Example: does a physical ability test really predict the job performance of a firefighter?
• Managers have an ethical and legal duty to develop good selection tools.
TRAINING & DEVELOPMENT

• Training: teach organizational members how to perform

current jobs.
• Help worker’s acquire skills to perform effectively.
• Development: build worker’s skills to enable them to take on
new duties.
• Training used more often at lower levels of firm, development is
common with managers.
• A Needs Assessment should be taken first to determine who needs
which program and what topics should be stressed.
 TYPES OF DEVELOPMENT

• Varied Work Experiences: Top managers must build expertise in many areas.
• Workers identified as possible top managers given many different tasks.
• Formal Education: tuition reimbursement is common for managers taking classes for MBA
or similar.
• Long-distance learning can also be used to reduce travel.

Whatever training and development efforts used, results must be transferred to

the workplace.
JOB ANALYSIS

• Job Analysis-the act of examining positions within an

organization
• Job Description-narrative explaining the scope of a position
• Job Characteristics-tasks involved in a position
• Job Requirements-personal characteristics necessary to fill
a position
PERFORMANCE APPRAISAL

• Process of evaluating employee performance

• job related strengths
• development needs
• progress toward goals
• determine ways to improve performance
• Pay an promotion decisions

• More systematic is better, for the most part

PERFORMANCE APPRAISAL
(CONT)
• Self Appraisal
• Peer Appraisal
• 360 Degree appraisal
• Central Tendency Error-everyone ranked as average
• Leniency-individuals are ranked higher than they deserve
WHO APPRAISES PERFORMANCE?

Supervisors

Peers Customers &

Clients
Sources of
performance
appraisals

Self Subordinates
 PAY AND BENEFITS

• Pay level: how the firm’s pay incentives compare to other firms in the industry.
• Managers can decide to offer low or high relative wages.
• Pay Structure: clusters jobs into categories based on importance, skills, and
other issues.
• Benefits: Some are required (social security, workers comp).
• Others (health insurance, day care, and others) are provided at the employers
option.
• Cafeteria-style plan: employee can choose the best mix of benefits for them. Can
be hard to manage.
PAY

• Base Wage
• Job Based Pay-paid for the job that is done
• Competency Based Pay-pay is linked to job-relevant skills, knowledge,
and experience

• Incentive Pay-linked to job performance

• can increase motivation
• links employees to firm performance
• works well when employees trust firm
INDIVIDUAL INCENTIVES

• Piece-Rate - Pay for each unit of output

• Commissions - Pay from percentage of sales or profits
• Bonuses - Lump sum payments
• Merit Pay - Permanent increases in base pay linked to
individual’s previous performance
• Seniority - Increases over time
TEAM OR ORGANIZATIONAL
INCENTIVE
• Gain Sharing - teams of employees share in gains from
improvements in productivity or cost saving measures
• Profit Sharing - A percentage of profits earned by a
department or company
• Stock Ownership
• Options
• Employee Stock Ownership Plans
 Fundamentals of Management

Chapter 8: Managing the Change and

Innovation
Chapter 9: Fundamentals of Indıvual Attidues

Prof. Dr. Fatma Zehra TAN

WHY DO ORGANIZATIONS CHANGE
Organizational change is the movement of an
organization from one state of affairs to another.
A change in the environment often requires
change within the organization operating within
that environment. Change in almost any aspect
of a company’s operation can be met with
resistance, and different cultures can have
different reactions to both the change and the
means to promote the change.
To better facilitate necessary changes, several
steps can be taken that have been proved to
lower the anxiety of employees and ease the
transformation process. Often, the simple act of
including employees in the change process can
drastically reduce opposition to new methods.
In some organizations, this level of inclusion is
not possible, and instead organizations can
recruit a small number of opinion leaders to
promote the benefits of coming changes.
• Workplace Demographics
• Technology
• Globalization
• Changes in the Market Conditions
• Growth
• Poor Performance
• Resistance to Change
 Why Do People Resist Change?

• Disrupted Habits
• Personality
• Feelings of Uncertainty
• Fear of Failure
• Personal Impact of Change
• Prevalence of Change
• Perceived Loss of Power
 Organizational change is any change in the people in the
organization, in the structure or technology of the
organization. Two metaphors are exchanged. These;

The waveless sea metaphor; sees

the change as an interruption in the
normal flow, indicating that this
interruption can be planned using
Lewin's three-step process (thaw,
change, freeze).

 In the river turbulence approach, it reveals that the change is

uninterrupted and its management is continuous.
Goal of Organizational Change

In general due to changing internal and external

environment just to make the organization's more
active, to increase productivity, enabling its
members to achieve the highest satisfaction and
development to establish an organizational
structure.

The world we live in is an extremely dynamic

environment where hundreds of changes occur
every day. The reason why our age is called an age
of change is that as a result of technological
advances and related changes in organizational
theories and management approaches,
organizations that continue their lives in a social
environment have increased their efforts to keep
up with the changes in the internal and external
environment. In this sense, the saying "the only
constant thing is change" reflects an important
reality of today.
 Innovation is the process of taking a creative idea and turning
it into useful goods, services or ways of working.
 Creativity the use of imagination or original ideas to create
something, the ability to produce or use original and unusual
ideas
 TYPES OF INNOVATION
• Architectural innovation
• Radical innovation

• Incremental innovation
• Disruptive innovation
 Organizational Behavior (OB) is the study of human behavior
in organizational settings, the interface between human
behavior and the organization, and the organization itself.

 Organizational Behavior
researchers study the behavior
of individuals primarily in their
organizational roles.

 One of the main goals of organizational behavior is to

revitalize organizational theory and develop a better
conceptualization of organizational life.
 Important employee behaviors that are concerned
with organizational behavior are as follows;

• employee productivity
• discontinuity
• labor turnover
• organizational citizenship
behavior
• inappropriate behavior at
work
 The Role of Attitudes in Job Performance
 Attidues; positive or negative evaluative statements about
things, people or events.

 An attitude has three components. These; cognitive, affective

and behavioral components.

Employees related to work; job

satisfaction, work commitment,
organizational commitment and
employee commitment.
 Personality, It is a unique collection of
mental, emotional and behavioral
patterns that affect how an individual
reacts to situations and interacts with
other individuals.

 Personality types are also effective in individuals' interactions

with each other and ways of solving problems.
Personality Theories
Myers-Briggs Type Indicator: It is a
personality assessment model that uses four
dimensions of personality in defining
different personality types. These
dimensions are; social interaction is data
collection preference, decision making
preference and decision making style.

People who recommend the use of this

scale, individuals with other individuals of
personality types their interactions and
problem solving styles This personality
because they think it will affect It is
important to know the types they
emphasize.
Five-factor personality model(big five model) : It examines
extroversion, compliance, responsibility, emotional application,
and openness to experience.

According to another view, the five basic characteristics that

explain the behavior of the individual in organizations are:,
Machiavellianism (sneaky, cunning, and lacking a moral code),
Self-esteem, Self-control, Locus of control and risk taking.

Finally, how an individual copes

with their emotional responses and
emotions is a function of their
personality. An individual with high
emotional intelligence has the
ability to notice and manage
emotional cues.
 It is the process of organizing and interpreting the sensory
impressions of individuals in order to make sense of their
environment.
Citation theory helps us
understand how we make different
judgments about people. Basically,
it is tried to determine whether the
behavior is caused by internal or
external causes. This depends on
three factors;
 Distinctiveness
 Consensus
 Consistency
 Operant Conditioning: It is learning to establish a connection
between behavior and result.

 Reinforced (leading to satisfactory results)

behaviors become stronger, punished
(leading to unpleasant consequences)
behaviors become weaker.

The law of influence: Reactions ending with

satisfactory results are repeated, reactions
ending with unsatisfactory results are not
repeated
 Social Learning Theory: It is a theory that suggests that
people can learn through observation and direct
experience. In the center; the influence of other
individuals takes place. The effects on individuals are
measured with the attention process, the reminding
process, the reactivation of behavior, and the
motivation process.

Advisers can shape employees'

behavior by using positive
reinforcers, negative reinforcers,
punishments or suppression.
Chapter 10 Understanding The Groups And
Managing The Teams

Hazırlayan; Prof. Dr. Fatma Zehra TAN

 What Is A Group?
 A Group is basically an
assemblage of people. It
can be understood as a
collection of individuals
(two or more), who come
together and interact
with each other, so as to
achieve the objectives of
the organization. These
are the foundation of an
organization.
Size: To form a group, it must be having at least two members. Practically, the
number of group members ranges from 15 to 20. The more the members in
the group, the more complex it is to manage.

Goals: Every group has certain goals, that are the reasons for its existence.

Norms: A group has certain rules, for interacting with the group members.

Structure: It has a structure, based on the roles and positions held by the
members.

Roles: Every member of a group has certain roles and responsibilities, which
are assigned, by the group leader.

Interaction: The interaction between the group members can occur in several
ways, i.e. face to face, telephonic, in writing or in any other manner.

Collective Identity: A group is an aggregation of individuals, which are

separately called as members, and collectively called as a group
 FORMAL GROUPS
• The Formal Groups are formed deliberately
and consciously collectively to direct the
efforts of group members, especially the
employees towards the accomplishment of
organizational objectives.
 The formal groups are formed to fulfill any of the following
purposes:

• To capitalize the expertise of each individual towards the

accomplishment of complex tasks.
• To make use of synergy, i.e. collective efforts of group
members yields better results than an individual working
separately.
• To facilitate a proper decision-making, as with many people
in a group the conflicting ideas and thoughts arise that
could be considered to formulate a better decision.
• To help others in the group to learn new skills and to know
about the details of the organizational environment.
• To satisfy the personal needs of social affiliations, i.e. need
to get accepted by others.
 The several groups are formed to serve the
specific needs of the organization and can be in
any of the following forms:
• Quality Circles: A number of employees classed together belonging
to the same field, who meet every week for an hour, to talk about
their problems, identify the causes and find out solutions, to take
necessary steps in this regard.
• Committees: An association of people created by the management
for different matters to identify and discuss the issues of the
company and arrive at a conclusion. It can be:
– Standing Committee
– Advisory Committee
– Audit Committee
– Grievance Committee
– Adhoc Committee
• Task force: It is a temporary committee, wherein people belonging
to different fields are grouped together for the performance of the
task.
The formal groups, mostly relate to the
organizational missions and can either be
permanent or temporary. The permanent formal
groups are in the form of top management team
such as the board of directors, management
committees, several departments within the
organization etc. The temporary formal groups
are created to fulfill the specified set of
objectives.
Informal Groups: The social and psychological
variables operating at the workplace, results in
the formation of informal groups. The creation
of these groups is spontaneous due to the
common interest, social needs, physical
proximity and mutual attraction.
Apart from the two broad classifications of the
group, they are also divided into
• the primary groups,
• secondary groups,
• membership groups,
• reference groups and
• interest groups.
Reasons for Group Formation
• Personal Characteristics: Individuals with similar beliefs,
attitudes and values are more likely to form groups.
• Opportunity for interaction: If the employees of an
organization, are given an opportunity to interact with one
another, they find that they have many things similar, which
also creates a group.
• Interest and goals: When individuals share common
interest and goals, it requires cooperation and coordination
for its achievement, which also results in the formation of
groups.
• Influence and power: Last but not the least, a group has
more influence and power, as compared to an individual,
which also promotes its formation.
• In general, groups are
created out of
individual need
satisfaction, which can
be personal, social or
economical. Meaning
that the members need
to associate with the
group in order to fulfil
their basic needs.
 WHAT IS A TEAM?
 A team is a group of individuals, all working
together for a common purpose. The
individuals comprising a team ideally should
have common goals, common objectives and
more or less think on the same lines.
Individuals who are not compatible with each
other can never form a team. They should
have similar if not the same interests, thought
processes, attitude, perception and likings.
 Team Size
• The team size depends on the complexity of the task to
be accomplished. Ideally a team should consist of 7-10
members. Too many members also lead to confusions
and misunderstandings.
• It is not always that we require a team. Teams should
be formed when the task is a little complicated. A
single brain can sometimes not take all critical
decisions alone, thus a team is formed where the team
members contribute equally making the task easy. A
team can actually create wonders if all the team
members work in unison.
Difference between Group and Team

A group is not necessarily a

team. A group can have
individuals with varied
interests, attitude as well
as thought processes. It is
not necessary that the
group members would have
a common objective or a
common goal to achieve.
• A team must have individuals with a common
objective to achieve. They should all work
together and strive towards the achievement
of a common goal.
Chapter 11 Motivation

Prof. Dr. Fatma Zehra TAN

WHAT IS MOTIVATION?
Motivation is defined as the
desire to achieve a goal or
a certain performance
Motivation is one of the level, leading to goal-
forces that lead to directed behavior. When we
performance. refer to someone as being
motivated, we mean that
the person is trying hard to
accomplish a certain task.
Motivation is clearly
important if someone is to
perform well.
 So what motivates
people? Why do some
employees try to reach
their targets and pursue
excellence while others
merely show up at work
and count the hours?
•
 Theories of Motivation

Need-based
Process Theories
Theories

Acquired- Reinforce Locke's

Hierarchy Two-factor Goal Equity Expectancy
needs Erg Theory ment
Of Needs Theory Setting Theory Theory
Theory Theory Theory
MASLOW’S HIERARCHY OF NEEDS

Abraham Maslow is among

the most prominent
psychologists of the
twentieth century. His
hierarchy of needs is an
image familiar to most
business students and
managers. The theory is
based on a simple premise:
Human beings have needs
that are hierarchically
ranked
 There are some needs that are basic to all
human beings, and in their absence nothing
else matters. As we satisfy these basic needs,
we start looking to satisfy higher order needs.
In other words, once a lower level need is
satisfied, it no longer serves as a motivator.
HERZBERG TWO-FACTOR THEORY
• Frederick Herzberg
approached the question of
motivation in a different way.
By asking individuals what
satisfies them on the job and
what dissatisfies them,
Herzberg came to the
conclusion that aspects of
the work environment that
satisfy employees are very
different from aspects that
dissatisfy them.
ACQUIRED-NEEDS THEORY
Among the need-based
approaches to motivation, David
McClelland’s acquired-needs
theory is the one that has
received the greatest amount of
support. According to this theory,
individuals acquire three types of
needs as a result of their life
experiences. These needs are the
need for achievement, the need
for affiliation, and the need for
power. All individuals possess a
combination of these needs, and
the dominant needs are thought
to drive employee behavior.
ALDERFER ERG THEORY

• ERG theory, developed

by Clayton Alderfer, is a
modification of
Maslow’s hierarchy of
needs.
ALDERFER ERG THEORY
 Instead of the five needs that
are hierarchically organized,
Alderfer proposed that basic
human needs may be grouped
under three categories,
namely, existence,
relatedness, and
growth. Existence corresponds
to Maslow’s physiological and
safety
needs, relatedness correspond
s to social needs,
and growth refers to Maslow’s
esteem and self-actualization.
MCGREGOR X VE Y THEORY
REINFORCEMENT THEORY
 Reinforcement theory is based on the work of
Ivan Pavlov on behavioral conditioning and the
later work of B. F. Skinner on operant
conditioning.
 Reinforcement theory is based on a simple idea
that may be viewed as common sense.
Beginning at infancy we learn through
reinforcement. If you have observed a small
child discovering the environment, you will see
reinforcement theory in action.
REINFORCEMENT THEORY
 Reinforcement theory
describes four
interventions to modify
employee behavior. Two
of these are methods of
increasing the frequency
of desired behaviors,
while the remaining two
are methods of reducing
the frequency of
undesired behaviors.
 GOAL SETTING THEORY
• Locke’s Goal Setting Theory gave us the blueprint for
modern workplace motivation by making the direct
relationship between goals, productivity and employee
engagement both clear, and actionable.
• He demonstrated that employees are motivated by clear,
well-defined goals and feedback, and that a little
workplace challenge is no bad thing.
 Clarity. A goal must be specific and
clear.
 Challenge. An easy or tedious goal is
demotivating. But keep a realistic
balance: don’t expect anyone on your
team to spin straw into gold.
 Commitment. Your employees have to
understand and buy in to the goal from
the outset.
 Feedback. Provide regular feedback
throughout the whole process. This
helps to keep the goal on track.
 Task complexity. Think about realistic
timescales, and break down the
process into sub-goals with regular
reviews.
EQUITY THEORY

• Equity is determined by
comparing one’s input-
outcome ratio with the
input-outcome ratio of a
referent. When the two
ratios are equal, equity
exists.
EXPECTANCY THEORY
According to expectancy theory, individual motivation to put
forth more or less effort is determined by a rational
calculation in which individuals evaluate their situation.

According to this theory, individuals ask themselves three

questions.
 Seven Reasons For Employee Motivation

 Sound leadership

 Feeling valued

 Right workload

 Career visioning

 Development opportunities

 Debate

 Job Security
FUNDAMENTALS OF
MANAGEMENT

LEADERSHIP AND TRUST

Prof. Dr. Fatma Zehra TAN

 How can we define leadership?
 Leader; is someone who can see how
things can be improved and who rallies
people to move toward that better
vision
 Leadership, is the art of motivating a
group of people to act toward achieving
a common goal. In a business setting,
this can mean directing workers and
colleagues with a strategy to meet the
company's needs.
• Integrity. • Gratitude.
• Ability to delegate. • Learning agility.
• Communication. • Influence.
• Empathy.
• Self-awareness.
The Great Man Theory: Thomas Carlyle
proposed the Great Man Theory in the
1840s, and it merely believes that leadership
is an inherent trait of a person who is
destined to become a great leader by birth
and they prove themselves when the great
need arises. In other words, some people
are born to become leaders and leadership is
a heroic act.
 Behavioral
Approach

Trait Contingency
Approach Approach

Leadership
Approaches
 Trait Approach
 The trait approach to leadership
concentrates on the idea that great
leaders are born with the given
abilities, and not a learned ability.
Individuals are brought into this
world with all of the characteristics
needed to become a great leader.
 The trait theory also indicates that
great leaders cannot be made, or
learned. If you are not born with
specific personality traits, you are not
destined to be a leader. I think the
ability to learn is a quality of a great
leader. Being able to learn from your
mistakes and apply them towards
future leadership situations is a
fantastic characteristic to exhibit.
 Some of the core leadership traits
based on this theory can be
categorised as follows:
•Physiological traits: Height, weight, structure, colour,
appearance and so forth.
•Socioeconomic characteristics: Gender, religion, marital
status, age, occupation, literacy and earnings.
•Personality traits: Extraversion, self-confidence,
patience, agreeable, reliable, honesty and leadership
motivation.
•Intellectual traits: Decisiveness, intelligence,
judgemental ability, knowledge and emotional attribute.
•Task-related traits: Attainment drive, dedication,
initiative, determination and business expertise.
•Social characteristics: Socially active, cordiality and
cooperation.
•Some of the other traits being charisma, adaptiveness,
creativity, uniqueness.
 Behavioral Leadership Theory
• Behavioural theories are based upon the
belief that great leaders are made, not born
• Behavioural theories concentrate on, what
leaders do
• Behavioral approach is based on the leader's
beliefs, values, and interpersonal relations
• Considers the Leader's attitude, behavior,
opinion, and concern about his
followers/organization
• Studies leadership behavior from the point of
view of motivation, supervision, and
authority
• Behavioural theories assume that specific
behavioral patterns of leaders can be
acquired
• People can learn to become leaders through
teaching and observation.
Behavioral Leadership Theory
https://youtu.be/jQ4kPxo5T_4
 Contingency Approach
The contingency
theory of leadership supposes
that a leader's effectiveness
is contingent on whether or
not their leadership style suits
a particular situation.
According to this theory, an
individual can be an
effective leader in one
circumstance and an
ineffective leader in another
one.
Contingency Approach
• Fred Fiedler’s Contingency Model: Dr Fred E. Fiedler tried
to explain that the performance of a group or team is
banked on the pleasant and unpleasant situations and style
of leadership.
• Evans and House Path-Goal Theory: The Path-Goal Theory
was proposed by Robert J. House and Martin Evans in
1970s.This theory pro-founded that leader’s noticeable
behaviour, and the situation in which he is placed are inter-
connected. To increase the organisation’s effectiveness, the
managers should either match the situation with the
leader’s behaviour or change his behaviour according to
the situation in which he is placed. This theory focused on
the need for flexibility while adopting different leadership
styles in different situations.
Hersey Blanchard
Situational Theory
The Hersey-Blanchard
Situational Theory states
that the style of
leadership depends upon
the maturity of the
subordinates; accordingly
the following four styles
were developed:
• Telling: When a new person enters the organisation, he has to be
told everything, i.e. he is given training and orientation to make him
understand the task to be performed.
• Selling: The leader leads by providing social and emotional support
to the subordinates and convincing the groups to give maximum
output.
• Delegating: The leaders are least concerned about and hardly
interferes with the execution of the tasks. They are not even
concerned about the subordinates and their issues.
• Participating: It is a democratic style where subordinates are
allowed to participate in the decision-making process. Here, the
leader is less focussed on the achievement of objectives.
Vroom-Yetton-Jago Decision-
Making Model: This model
suggested that leadership style
varies on the basis of the
decision-making ability of the
leaders in different situations.
Leadership style was merely
based on the degree of
employee’s contribution and
activeness in the decision-
making process.
 Charismatic Leadership Theory: This theory believes that a leader
must possess some extraordinary and exceptional qualities to become
an effective leader. Such leaders lead by their key traits i.e.
• Envisioning/Foreseeing: Leaders foresees future
possibilities and create a vision accordingly,
usually having high expectations and dreams.
• Energizing/Empowering: Leaders are highly
enthusiastic, proactive, energetic and confidently
aiming towards success.
• Enabling/Guiding: Leaders provide complete
support and guidance and show compassion and
trust in followers. Such leaders are highly
focussed and committed towards their goal
accomplishment.
 Transactional Leadership Theory:
Transactional Leadership Theory
emphasises the realisation of a
desired outcome and result. The
leaders motivate the followers by
way of a reward system, i.e.
rewarding the performers and
punishing the non-
performers.The theory
emphasises maintaining a cordial
relationship with the followers,
leaders and followers must work
mutually to meet organisational
goals.
Transformational Leadership Theory:
The transformational theory
states that a leader is effective
only if he can transform or
change the perceptions,
behaviour and expectations of
the followers and direct them
towards a common goal which
will lead to the
accomplishment of the
leader’s vision. Such leaders
have a charismatic and
influential personality.
 Trust is often the key value which can help organizations to convert its
planning to real performance through proper and strategic execution.
Lack of trust with leaders or employees can reduce or slow down
performance. Is trust a performance multiplier?

The five dimensions that make up the concept of trust are;

 Morality
 Competence
 Consistency
 Loyalty
 Openness
“Where the willingness is great, the
difficulties cannot be great. ”.
Nicola Machiavelli