Money

• Money in the form of wages, piecework, incentive pay, bonuses, stock options, company-paid insurance, or any other
thing given to people for performance, is important.

• Money is often more than monetary value; it can also mean status or power or other things.

• Money is more important to people who are raising a family, than to people who have “arrived.”

• In organizations, money is used as a means of keeping an organization adequately staffed and not primarily as a
motivator.

• Money as a motivator tends to be dulled somewhat by the practice of making the salaries of the various managers in a
company reasonably similar.

• Money to be effective motivator, people in various positions, even though at a similar level, must be given salaries and
bonuses that reflect their individual performance.

• Money can motivate only when the prospective payment is large relative to a person’s income. Many wage and salary
increases are not large enough to motivate the receiver.
Other Rewards Considerations

• Implicit in most motivation theories are intrinsic and extrinsic rewards.

• Intrinsic rewards – may include a feeling of accomplishment and self-actualization.

• Extrinsic rewards – include benefits, recognition, status symbols, and money.

• Pay based solely on individual performance will lead to competition among each other – ‘variable salary
component’

• Pay based on group performance leads to some individuals not contributing to the effort – ‘free rider’

• Pay based on organizational performance is based on the notion that employees contribute to outstanding
performance, and therefore should be rewarded – ‘annual performance bonus’
Job enrichment

It is related to Herzberg’s theory of motivation, in which, challenge, achievement, recognition, and

responsibility are seen as the real motivators.

• Job enrichment – building into jobs a higher sense of challenge and achievement.

• Job enlargement – enlarging the scope of the job by adding similar tasks without enhancing responsibility.
Leadership

• Leadership and motivation are closely interconnected.

• Leadership – the art or process of influencing people so that they will strive
willingly and enthusiastically toward the achievement of group goals.
The art of leadership has the following main ingredients:

1. The ability to use power effectively and in a responsible manner.

2. The ability to comprehend that human beings have different motivating forces at
different times and in different situations.
3. The ability to inspire
4. The ability to act in a manner that will develop a climate conducive to
responding to and arousing motivations.
Trait Approaches to Leadership
“Great man” theory – leaders are born and not made.

Specific traits related to leadership:

• 5 physical traits – energy, appearance, height.
• 4 intelligence and ability traits
• 16 personality traits – adaptability, aggressiveness, enthusiasm, and self-confidence.
• 6 task-related characteristics – achievement drive, persistence, initiative
• 9 social characteristics – cooperativeness, interpersonal skills, administrative ability

• Drive – achievement, motivation, energy, ambition, initiative, tenacity.

• Leadership motivation – aspiration to lead, honesty and integrity, self-confidence, cognitive ability.
Traits – Big 5 Personality Model
Extraversion – sociable, assertive, active, energetic, zeal.
• Significantly related with leadership
Agreeableness – trusting, compliant, caring, gentle.
• Not significantly related with leadership
Conscientiousness – to be diligent, dependability.
• Significantly related with leadership
Openness – imaginative, non confirming, autonomous.
• Significantly related with leadership
Neuroticism – anxiety, insecurity, hostility
• Negatively correlated with leadership
Charismatic Leadership Approach
Charismatic leaders

- self-confident

- having strong convictions,

- articulating a vision,

- being able to initiate change,

- communicating high expectations,

- having a need to influence followers and supporting them,

- demonstrating enthusiasm and excitement, and

- being in touch with reality.

Leadership Behaviour and Styles

1. Leadership based on the use of authority

2. The managerial grid
3. Leadership involving a variety of styles
Styles Based on use of authority

• Autocratic leader – commands and expects compliance, is dogmatic and positive,

and leads by the ability to withhold or give rewards and punishment.
• Democratic or Participative leader – consults with subordinates on proposed
actions and decisions and encourages participation from them.
• The free-rein leader – uses very little power, if at all, giving subordinates a high
degree of independence.
 Autocratic

The flow
of
Follow Follow Follow
influence
er er er
with three
leadership Democratic
styles

Follow Follow Follow

er er er

Free-rein

Follow Follow Follow

er er er
 The Managerial Grid – Blake and Mouton
• The Managerial Grid has two dimensions: concern for people and concern for production

9
high 1.9 “Country club” 9.9 Team management
8 style
Concer 7
n for
people 6
5
5.5 “Middle of the
4 road” style
3
1.1 “Impoverished” 9.1 “produce or perish
2 style style”/Autocratic task
management
low 1
1 2 3 4 5 6 7 8 9
low Concern for production high
1.1 (Impoverished Management) – Managers concern
themselves very little with people or production.
9.9 (Team Management) – Managers display highest possible
dedication to people and to production – Theory Y.
1.9 (Country club Management) – Managers have little or no
concern for production but are concerned only for people.
9.1 (Autocratic task Managers) – Managers concerned only
with developing an efficient operation, with little or no concern
for people – Theory X.
5.5 (Middle of the road) – Medium concern for production
and for people.
Leadership continuum concept – Leadership involves
a variety of styles, ranging from one that is highly boss
centered to one that is highly subordinate centered.
• The continuum theory recognizes that the appropriate
style of leadership depends on the leader, the follower,
and the situation.
 Nonmanager power and influence
Manager power and influence

Area of freedom for managers

Area of freedom for nonmanagers

Manager is Manager Manager Manager Manager

Manager Manager
able to must “sell” presents defines and
presents presents
make decision problem, limits within nonmanage
decision but tentative
decision before gets inputs which rs jointly
must decision
that gaining from nonmanage make
respond to subject to
nonmanage acceptance nonmanage rs make decision
questions change
rs accept rs, then decision within limits
from after
decides defined by
nonmanage nonmanage
organization
rs r inputs
Resultant manager and nonmanager behaviour al
constraints

The organizational environment

The societal environment

Situational or Contingency
Approaches to Leadership
Fiedler’s Contingency Approach to Leadership
• Contingency theory of leadership – People become
leaders not only because of their personality attributes,
but also because of various situational factors and the
interactions between leaders and group members.
• 3 dimensions
• Position power – arising from organizational authority.
• Task structure – clearly spell out tasks and hold people
responsible.
• Leader-member relations – extent to which group
members trust and follow the leader.
Least Preferred Co-worker – scale of 16 attributes
• High score – successful interpersonal relationships.
• Low score – task performance

“8 point semantic differential scale”

The Path-Goal Approach to
Leadership
Path-goal Theory – The main function of the leader is to
clarify and set goals with subordinates, help them find
the best path for achieving the goals, and remove
obstacles.
Characteristics of
the subordinates

Functions of the Motivated Effective

leader Leader behavior organization
subordinates

Work
environment
The Path-Goal Approach to
Leadership
The theory categorizes leader behaviour into four groups
1. Supportive leadership – considers needs of
subordinates, shows concern for well-being, creates
pleasant organizational climate.
2. Participative leadership – allows subordinates to
influence their decisions, which may increase motivation.
3. Instrumental leadership – gives subordinates specific
guidance and clarifies what is expected of them.
4. Achievement-oriented leadership – setting
challenging goals, seeking improvement of performance.
Transactional and
Transformational leadership
• Transactional leaders – identify what needs to be
done to achieve goals, including clarifying goals and
tasks, rewarding performance, and providing for the
social needs of the followers.
• Transformational leaders – articulate a vision, inspire
and motivate followers, and create a climate favourable
for organizational change.