Business Management and

1. MODULE 2
LEADERSHIP AND MOTIVATION

2. CONCEPT
• LEADERSHIP IS ESSENTIALLY A CONTINUOUS PROCESS OF
INFLUENCING BEHAVIOR. IT MAY BE CONSIDERED IN
CONTEXT OF MUTUAL RELATIONS BETWEEN A LEADER AND
HIS FOLLOWERS.
• THE LEADER TRIES TO INFLUENCE THE BEHAVIOR OF
INDIVIDUALS OR GROUP OF INDIVIDUALS AROUND HIM TO
ACHIEVE DESIRED GOALS.
• IT IS A RELATIONAL PROCESS INVOLVING INTERACTIONS
AMONG LEADERS, MEMBERS AND SOMETIMES OUTSIDE
CONSTITUENCIES. GOOD LEADERS ARE MADE NOT BORN. IF
YOU HAVE THE DESIRE AND WILLPOWER, YOU CAN BECOME
AN EFFECTIVE LEADER.

3. DEFINITIONS
• KEITH DAVIS, “LEADERSHIP IS THE PROCESS OF ENCOURAGING
AND HELPING OTHERS TO WORK ENTHUSIASTICALLY TOWARDS
THEIR OBJECTIVES. LEADERSHIP MUST EXTRACT COOPERATION
AND WILLINGNESS OF THE INDIVIDUALS AND GROUPS TO ATTAIN
THE ORGANIZATIONAL OBJECTIVES.”
• GEORGE R. TERRY, “LEADERSHIP IS A RELATIONSHIP IN WHICH
ONE PERSON INFLUENCES OTHERS TO WORK TOGETHER
WILLINGLY ON RELATED TASKS TO ATTAIN WHAT THE LEADER
DESIRES.”
• KOONTZ AND O’DONNELL, “LEADERSHIP IS THE PROCESS OF
INFLUENCING PEOPLE SO THAT THEY WILL STRIVE WILLINGLY
TOWARDS THE ACHIEVEMENT OF GROUP GOALS.”

4. CHARACTERISTICS OF LEADERSHIP
1. THERE MUST BE FOLLOWERS:
• A LEADERSHIP CANNOT EXIST WITHOUT FOLLOWERS. IF A LEADER DOES NOT HAVE
FOLLOWERS, HE CANNOT EXERCISE HIS AUTHORITY. LEADERSHIP EXISTS BOTH IN
FORMAL AND INFORMAL ORGANISATIONS.
2. WORKING RELATIONSHIP BETWEEN LEADER AND FOLLOWERS:
• THERE MUST BE A WORKING RELATIONSHIP BETWEEN THE LEADER AND HIS
FOLLOWERS. IT MEANS THAT THE LEADER SHOULD PRESENT HIMSELF IN A PLACE
WHERE THE WORK IS ACTUALLY GOING ON. BESIDES, THE LEADER SHOULD BE A
DYNAMIC PERSON OF THE CONCERNED GROUP. IF HE IS NOT SO, HE CANNOT GET
THINGS DONE.
3. PERSONAL QUALITY:
• THE CHARACTER AND BEHAVIOUR OF A MAN INFLUENCE THE WORKS OF OTHERS.

5. 4. RECIPROCAL RELATIONSHIP:
• LEADERSHIP KINDLES A RECIPROCAL RELATIONSHIP BETWEEN THE
LEADER AND HIS FOLLOWERS. A LEADER CAN INFLUENCE HIS
FOLLOWERS AND, IN TURN, THE FOLLOWERS CAN INFLUENCE THE
LEADER. THE WILLINGNESS OF BOTH THE LEADER AND THE
FOLLOWERS IS RESPONSIBLE FOR THE INFLUENCE AND NO
ENFORCEMENT IS ADOPTED.
5. COMMUNITY OF INTERESTS:
THERE MUST BE COMMUNITY OF INTERESTS BETWEEN THE LEADER
AND HIS FOLLOWERS. A LEADER HAS HIS OWN OBJECTIVES. THE
FOLLOWERS HAVE THEIR OWN OBJECTIVES. THEY ARE MOVING IN
DIFFERENT DIRECTIONS IN THE ABSENCE OF COMMUNITY OF
INTERESTS. IT IS NOT ADVISABLE. IT IS THE LEADER WHO SHOULD
TRY TO RECONCILE THE DIFFERENT OBJECTIVES AND COMPROMISE
THE INDIVIDUAL INTERESTS WITH ORGANISATION INTERESTS.

6. 6. GUIDANCE:
• A LEADER GUIDES HIS FOLLOWERS TO ACHIEVE THE GOALS OF THE
ORGANISATION. A LEADER SHOULD TAKE STEPS TO MOTIVATE HIS FOLLOWERS FOR
THIS PURPOSE.
7. RELATED TO A PARTICULAR SITUATION:
• LEADERSHIP IS APPLICABLE TO A PARTICULAR SITUATION AT A GIVEN POINT OF
TIME. IT VARIES FROM TIME TO TIME.
8. SHARED FUNCTION:
• LEADERSHIP IS A SHARED FUNCTION. A LEADER IS ALSO WORKING ALONG WITH
HIS FOLLOWERS TO ACHIEVE THE OBJECTIVES OF THE ORGANISATION. BESIDES,
THE LEADER SHARES HIS EXPERIENCE, IDEAS AND VIEWS WITH HIS FOLLOWERS.
9. POWER RELATIONSHIP:
• A LEADER HAS POWERS TO EXERCISE OVER HIS FOLLOWERS. THE LEADER DERIVES
THESE POWERS FROM THE ORGANISATION HIERARCHY, SUPERIOR KNOW-LEDGE,
EXPERIENCE AND THE LIKE.

7. IMPORTANCE OF LEADERSHIP
1. LEADERS PROVIDE TASK SUPPORT:
• LEADERS SUPPORT THE FOLLOWERS BY ASSEMBLING THE
ORGANIZATIONAL RESOURCES; AND HELPING THEM ACCOMPLISH THEIR
TASKS IN ACCORDANCE WITH STANDARDS OF PERFORMANCE.
2. PSYCHOLOGICAL SUPPORT:
• LEADERS NOT ONLY HELP THE FOLLOWERS IN ACCOMPLISHING THE
ORGANIZATIONAL TASKS; THEY ALSO HELP THEM OVERCOME VARIOUS
PROBLEMS THEY CONFRONT WHILE PERFORMING THESE TASKS. THEY
CREATE WILLINGNESS IN PEOPLE TO WORK WITH ZEAL AND
ENTHUSIASM. THEY MAKE THE FOLLOWERS REALISE THAT THEIR WORK
IS IMPORTANT SO THAT THEY WORK WITH CONFIDENCE TOWARDS TASK
ACCOMPLISHMENT.

8. 3. DEVELOPMENT OF INDIVIDUALS:
• LEADERS BUILD WILLINGNESS, ENTHUSIASM AND CONFIDENCE IN
FOLLOWERS FOR ACCOMPLISHMENT OF THEIR INDIVIDUAL AND
ORGANIZATIONAL GOALS. THIS RESULTS IN THEIR OVERALL
GROWTH AND DEVELOPMENT.
4. BUILDING THE TEAM SPIRIT:
• NO INDIVIDUAL CAN WORK ALONE. LEADERS DEVELOP TEAM SPIRIT
AMONGST FOLLOWERS TO WORK COLLECTIVELY AND COORDINATE
THEIR ACTIVITIES WITH ORGANIZATIONAL ACTIVITIES AND GOALS.
A LEADER WORKS AS CAPTAIN OF THE TEAM.
5. MOTIVATION:
• LEADERS MOTIVATE THE EMPLOYEES TO TAKE UP JOBS THAT THEY
OTHERWISE MAY NOT BE WILLING TO EXERCISE.

9. 6. PROVIDES FEEDBACK:
• WHEN PEOPLE WORK TOWARDS WELL-DEFINED TARGETS, THEY WANT
CONSTANT FEEDBACK OF THEIR PERFORMANCE, WHICH HELPS IN
ACHIEVING THEIR GOALS EFFECTIVELY. LEADERS PROVIDE THEM THIS
FEEDBACK.
7. HELPS IN INTRODUCING CHANGE:
• EFFECTIVE LEADERS CAN CONVINCE MEMBERS ABOUT THE NEED AND
BENEFITS OF ORGANIZATIONAL CHANGE. THE CHANGE PROCESS CAN,
THUS, BE SMOOTHLY CARRIED OUT.
8. MAINTAIN DISCIPLINE:
• LEADERSHIP IS A POWERFUL INFLUENCE THAT ENFORCES DISCIPLINE IN
THE ORGANIZATION MORE THAN FORMAL RULES AND REGULATIONS CAN.
MEMBERS WILL BE COMMITTED AND LOYAL TO RULES AND REGULATIONS
IF THEIR LEADERS HAVE CONFIDENCE IN THEM.

10. 9. AFFIRMING ETHICAL VALUES:
• LEADERSHIP DERIVES FROM TRUST. ETHICS AFFIRMS TRUST OF PEOPLE (EMPLOYEES, CUSTOMERS,
SHAREHOLDERS, SUPPLIERS, REGULATORS AND COMMUNITY) IN A LEADER. THUS, A LEADER NEEDS
TO CONFORM TO ETHICAL PRACTICES.
10. EMPOWERING OTHERS:
• A GOOD LEADER LEADS BY EMPOWERING OTHERS. IT MEANS DELEGATION OF POWER. TODAY’S
LEADER IS NOT EXPECTED TO RETAIN ALL POWER WITH HIMSELF, HE GIVES AUTONOMY AND POWER
TO OTHERS. HE HAS TO DIFFUSE HIS POWER. HE HAS TO COMMAND POWER AND RESPECT FOR
EMPOWERING OTHERS.
11. REVIEWING THE NORMS:
• FROM TIME TO TIME, A LEADER NEEDS TO REVIEW HIS MISSION AND VISION STATEMENTS ALONG
WITH CLEAR NORMS AND GUIDELINES, TAKING INTO ACCOUNT VIEWS AND EXPERIENCES OF HIS
SUBORDINATES, BY INTERACTIVE WAYS LIKE ORGANIZING WORKSHOPS AND DISCUSSIONS.
12. SETTING THE ETHICAL EXAMPLE:
• THE ULTIMATE LEADERSHIP RESPONSIBILITY IS MODELING THE BEHAVIOUR OF OTHERS. EMPLOYEES
CONSTANTLY WATCH AND LEARN FROM LEADERS. THEY RIGHTFULLY ASSUME THAT IT IS OKAY TO DO
WHATEVER THE LEADER DOES. REGARDLESS OF WHAT IS WRITTEN OR SAID IN THE ORGANIZATION,
LEADER’S BEHAVIOUR IS THE PERFORMANCE STANDARD WHICH EMPLOYEES GENERALLY FOLLOW.

11. LIKERT SCALE THEORY
LIKERT MANAGEMENT SYSTEM
• THE LIKERT’S MANAGEMENT SYSTEM WAS DEVELOPED BY RENSIS LIKERT IN THE
LIKERT WITH HIS ASSOCIATES OBSERVED THE DIFFERENT PATTERNS AND STYLES
MANAGEMENT IN VARIOUS FIELDS. HE OBSERVED THE STYLES FOR AROUND
AND CAME UP WITH THE LIKERT’S MANAGEMENT SYSTEM. AFTER YEARS OF
RESEARCH, HE OUTLINED FOUR STYLES OF MANAGEMENT WHICH DESCRIBED THE
RELATIONSHIPS, INVOLVEMENT AND ROLES OF MANAGERS AND SUBORDINATES
INDUSTRIAL SETTING.
• THE OBSERVATION OF LIKERT WAS CARRIED OUT AT MICHIGAN UNIVERSITY,
THE FOUR STYLES THAT WERE GIVEN BY LIKERT WERE CALLED LIKERT'S
LIKERT DEVELOPED THESE LEADERSHIP STYLES WITH THOROUGH RESEARCH OF
ORGANIZATIONS. HE ALSO TOOK THE HELP OF QUESTIONNAIRES WHICH WERE
MANAGERS FROM OVER 200 DIFFERENT TYPES OF ORGANIZATIONS.

12. LIKERT’S FOUR STYLES OF LEADERSHIP
• THE LIKERT’S MANAGEMENT SYSTEM CONSISTED OF FOUR STYLES AND THEY ARE
AUTHORITATIVE, BENEVOLENT AUTHORITATIVE, CONSULTATIVE AND PARTICIPATIVE. THE
WERE DEVELOPED WITH A LOT OF RESEARCH AND OBSERVATION. THESE SYSTEMS
OF EVOLUTION OF PATTERNS OF MANAGEMENT IN DIFFERENT ORGANIZATIONS. THE
OF DIFFERENT VARIABLES SUCH AS MOTIVATION, INFLUENCE, LEADERSHIP,
INTERACTION AND DECISION MAKING.

13. EXPLOITATIVE AUTHORITATIVE SYSTEM
• IT IS THE FIRST SYSTEM IN LIKERT'S LEADERSHIP STYLES. UNDER THIS STYLE LIKERT STATES THAT
POWER LIES IN THE HANDS OF THE TOP SUBORDINATES. THE TOP MANAGEMENT MAKES THE
AND THE EMPLOYEES IN THE LOWER LEVEL ARE BOUND TO FOLLOW THE INSTRUCTIONS GIVEN
SUPERIORS. HERE, IT IS OBSERVED THAT THE WORKERS AT THE LOWER LEVEL DO NOT FEEL FREE
THEIR WORK WITH THEIR SUPERIORS. THE COMMUNICATION AND TEAMWORK IN THIS SYSTEM
• THE LEADERS IN THE SYSTEM OF EXPLOITATIVE AUTHORITATIVE HAVE A LOWER LEVEL OF
EMPLOYEES. THEY USE THREATS OR METHODS THAT INVOLVE FEAR TO ACHIEVE THEIR WORK.
THREAT WORKS WELL AND THE EMPLOYEES WORK EFFICIENTLY UPON ENTERING THE
LEADERS ARE IGNORANT OF THE PSYCHOLOGICAL FEELINGS OF THE EMPLOYEES AND THE
BETWEEN THEM IS ALMOST NIL.
• IN THIS TYPE OF SYSTEM, THE UPPER MANAGEMENT BURDENS EMPLOYEES WITH A HEAVY
ARE TO FINISH THE WORK WITHOUT FAIL. THE MONETARY BENEFITS AND WORK SATISFACTION
SYSTEM IS VERY LESS.

14. BENEVOLENT AUTHORITATIVE SYSTEM
• UNDER THIS SYSTEM OF LIKERT’S, IT IS OBSERVED THAT THE AUTHORITY LIES IN
THE MANAGERS AND NOT IN THE HANDS OF THE LOWER-LEVEL WORKERS. THE
HAVE A SMALL AMOUNT OF CONFIDENCE AND TRUST IN THE EMPLOYEES. THE
LESS CONTROL OVER THE EMPLOYEES. THEY DO NOT USE METHODS OF
THE EMPLOYEES ARE REWARDED AND PUNISHED AS PER THEIR PERFORMANCE IN
ORGANIZATION.
• IN THIS SYSTEM OF MANAGEMENT, THE EMPLOYEES ARE INVOLVED IN SOME OF
MAKING PROCESSES. BUT THE ULTIMATE POWER LIES IN THE HANDS OF THE
ALSO THE COMMUNICATION IS VERY LITTLE AND THE EMPLOYEES DO NOT FEEL
SHARE THEIR WORK EXPERIENCE WITH THE SUPERIORS.

15. CONSULTATIVE SYSTEM
• THIS IS THE THIRD STYLE OF LEADERSHIP GIVEN BY LIKERT. IN THIS SYSTEM, LIKERT HAS STATED
AND AUTHORITY ARE SPREAD WIDELY THROUGHOUT THE ORGANIZATION. THE SUBORDINATES IN
LEVELS OF THE ORGANIZATIONS ARE GIVEN DIFFERENT RESPONSIBILITIES. THE EMPLOYEES AND
WORK AS A TEAM ON CERTAIN DECISIONS. THERE IS FAIR COMMUNICATION BETWEEN THE
SUPERIORS. HOWEVER, THE POWER TO FORM POLICIES AND RULES LIES IN THE HANDS OF THE TOP
• UNDER THIS SYSTEM, THE EMPLOYEES ARE REWARDED FOR BETTER PERFORMANCE AND AT THE
ALSO PUNISHED FOR BAD PERFORMANCES. THE EMPLOYEES ARE FREE TO COMMUNICATE WITH THEIR
AND SUBORDINATES. THEY CAN SHARE THEIR WORK-RELATED ISSUES WITH THE SUPERIORS FREELY.
PROMOTES A HEALTHY WORK ENVIRONMENT FOR THE EMPLOYEES AND MOTIVATES THEM TO WORK

16. PARTICIPATIVE SYSTEM
• THIS IS THE LAST STYLE OF LEADERSHIP GIVEN BY LIKERT. UNDER THIS STYLE, LIKERT
POWER AND RESPONSIBILITY TO ACHIEVE THE GOALS OF THE ORGANIZATION IS
THE EMPLOYEES AND SUBORDINATES IN THE ORGANIZATION. ACCORDING TO THIS
EMPLOYEE HAS A CERTAIN ROLE TO PLAY IN THE SUCCESS OF THE ORGANIZATION. THE
THE UTMOST CONFIDENCE AND TRUST IN THEIR EMPLOYEES.
• THE EMPLOYEES ARE MADE TO PARTICIPATE IN THE DECISION-MAKING PROCESS OF THE
THE SYSTEM STATES THAT THERE IS A CONTINUOUS FLOW OF INFORMATION IN BOTH AN
DOWNWARD DIRECTION. THE EMPLOYEES ARE PROVIDED WITH A HEALTHY WORK
THEY ARE MOTIVATED CONTINUOUSLY BY THEIR SUPERIORS.

17. BLAKE AND MOUTON’S MANAGERIAL GRID
THEORY
ROBERT BLAKE AND JANE MOUTON (1960S) PROPOSED A GRAPHIC
PORTRAYAL OF LEADERSHIP STYLES THROUGH A MANAGERIAL
GRID (SOMETIMES CALLED LEADERSHIP GRID). THE GRID DEPICTED TWO
DEPICTED TWO DIMENSIONS OF LEADER BEHAVIOR, CONCERN FOR
PEOPLE (ACCOMMODATING PEOPLE’S NEEDS AND GIVING THEM PRIORITY)
PRIORITY) ON Y-AXIS AND CONCERN FOR PRODUCTION (KEEPING TIGHT
SCHEDULES) ON X-AXIS, WITH EACH DIMENSION RANGING FROM LOW (1)
TO HIGH (9), THUS CREATING 81 DIFFERENT POSITIONS IN WHICH THE
LEADER’S STYLE MAY FALL.

19. THE MODEL IS BASED ON TWO BEHAVIORAL DIMENSIONS:
• CONCERN FOR PEOPLE: THIS IS THE DEGREE TO WHICH
A LEADER CONSIDERS TEAM MEMBERS' NEEDS,
INTERESTS AND AREAS OF PERSONAL DEVELOPMENT
WHEN DECIDING HOW BEST TO ACCOMPLISH A TASK.
• CONCERN FOR RESULTS/PRODUCTION: THIS IS THE
DEGREE TO WHICH A LEADER EMPHASIZES CONCRETE
OBJECTIVES, ORGANIZATIONAL EFFICIENCY AND HIGH
PRODUCTIVITY WHEN DECIDING HOW BEST TO
ACCOMPLISH A TASK.

21. THE FIVE RESULTING LEADERSHIP STYLES ARE AS FOLLOWS:
1. IMPOVERISHED MANAGEMENT (1, 1): MANAGERS WITH THIS APPROACH ARE LOW ON BOTH THE DIMENSIONS
THE DIMENSIONS AND EXERCISE MINIMUM EFFORT TO GET THE WORK DONE FROM SUBORDINATES. THE
LEADER HAS LOW CONCERN FOR EMPLOYEE SATISFACTION AND WORK DEADLINES AND AS A RESULT
DISHARMONY AND DISORGANIZATION PREVAIL WITHIN THE ORGANIZATION. THE LEADERS ARE TERMED
INEFFECTIVE WHEREIN THEIR ACTION IS MERELY AIMED AT PRESERVING JOB AND SENIORITY.
2. TASK MANAGEMENT (9, 1): ALSO CALLED DICTATORIAL OR PERISH STYLE. HERE LEADERS ARE MORE
ARE MORE CONCERNED ABOUT PRODUCTION AND HAVE LESS CONCERN FOR PEOPLE. THE STYLE IS BASED
ON THEORY X OF MCGREGOR. THE EMPLOYEES’ NEEDS ARE NOT TAKEN CARE OF AND THEY ARE SIMPLY A
MEANS TO AN END. THE LEADER BELIEVES THAT EFFICIENCY CAN RESULT ONLY THROUGH PROPER
ORGANIZATION OF WORK SYSTEMS AND THROUGH ELIMINATION OF PEOPLE WHEREVER POSSIBLE. SUCH A
STYLE CAN DEFINITELY INCREASE THE OUTPUT OF ORGANIZATION IN SHORT RUN BUT DUE TO THE STRICT
POLICIES AND PROCEDURES, HIGH LABOUR TURNOVER IS INEVITABLE.
3. MIDDLE-OF-THE-ROAD (5, 5): THIS IS BASICALLY A COMPROMISING STYLE WHEREIN THE LEADER TRIES TO
LEADER TRIES TO MAINTAIN A BALANCE BETWEEN GOALS OF COMPANY AND THE NEEDS OF PEOPLE. THE
LEADER DOES NOT PUSH THE BOUNDARIES OF ACHIEVEMENT RESULTING IN AVERAGE PERFORMANCE FOR
ORGANIZATION. HERE NEITHER EMPLOYEE NOR PRODUCTION NEEDS ARE FULLY MET.

22. 4.COUNTRY CLUB (1, 9): THIS IS A COLLEGIAL STYLE CHARACTERIZED BY LOW TASK AND
HIGH PEOPLE ORIENTATION WHERE THE LEADER GIVES THOUGHTFUL ATTENTION TO THE
THUS PROVIDING THEM WITH A FRIENDLY AND COMFORTABLE ENVIRONMENT. THE LEADER
SUCH A TREATMENT WITH EMPLOYEES WILL LEAD TO SELF-MOTIVATION AND WILL FIND
HARD ON THEIR OWN. HOWEVER, A LOW FOCUS ON TASKS CAN HAMPER PRODUCTION
QUESTIONABLE RESULTS.
5.TEAM MANAGEMENT (9, 9): CHARACTERIZED BY HIGH PEOPLE AND TASK FOCUS, THE
STYLE IS BASED ON THE THEORY Y OF MCGREGOR AND HAS BEEN TERMED AS MOST
ACCORDING TO BLAKE AND MOUTON. THE LEADER FEELS THAT EMPOWERMENT,
RESPECT ARE THE KEY ELEMENTS IN CREATING A TEAM ATMOSPHERE WHICH WILL
IN HIGH EMPLOYEE SATISFACTION AND PRODUCTION.

23. ADVANTAGES OF BLAKE AND MOUTON’S MANAGERIAL GRID
• THE MANAGERIAL OR LEADERSHIP GRID IS USED TO HELP MANAGERS ANALYZE
LEADERSHIP STYLES THROUGH A TECHNIQUE KNOWN AS GRID TRAINING. THIS IS
ADMINISTERING A QUESTIONNAIRE THAT HELPS MANAGERS IDENTIFY HOW THEY
RESPECT TO THEIR CONCERN FOR PRODUCTION AND PEOPLE. THE TRAINING IS
BASICALLY HELPING LEADERS REACH TO THE IDEAL STATE OF 9, 9.
LIMITATIONS OF BLAKE AND MOUTON’S MANAGERIAL GRID
• THE MODEL IGNORES THE IMPORTANCE OF INTERNAL AND EXTERNAL LIMITS,
SCENARIO. ALSO, THERE ARE SOME MORE ASPECTS OF LEADERSHIP THAT CAN BE
BUT ARE NOT.

24. HOUSE PATH GOAL THEORY
• THE THEORY WAS DEVELOPED BY ROBERT HOUSE AND HAS ITS ROOTS IN THE EXPECTANCY
THEORY OF MOTIVATION. THE THEORY IS BASED ON THE PREMISE THAT AN EMPLOYEE’S
PERCEPTION OF EXPECTANCIES BETWEEN HIS EFFORT AND PERFORMANCE IS GREATLY AFFECTED
BY A LEADER’S BEHAVIOR. THE LEADERS HELP GROUP MEMBERS IN ATTAINING REWARDS BY
CLARIFYING THE PATHS TO GOALS AND REMOVING OBSTACLES TO PERFORMANCE. THEY DO SO BY
PROVIDING THE INFORMATION, SUPPORT, AND OTHER RESOURCES WHICH ARE REQUIRED BY
EMPLOYEES TO COMPLETE THE TASK.
• HOUSE’S THEORY ADVOCATES SERVANT LEADERSHIP. AS PER SERVANT LEADERSHIP THEORY,
LEADERSHIP IS NOT VIEWED AS A POSITION OF POWER. RATHER, LEADERS ACT AS COACHES AND
FACILITATORS TO THEIR SUBORDINATES. ACCORDING TO HOUSE’S PATH-GOAL THEORY, A LEADER’S
EFFECTIVENESS DEPENDS ON SEVERAL EMPLOYEE AND ENVIRONMENTAL CONTINGENT FACTORS
AND CERTAIN LEADERSHIP STYLES

26. LEADERSHIP STYLES
THE FOUR LEADERSHIP STYLES ARE:
• DIRECTIVE: HERE THE LEADER PROVIDES GUIDELINES, LETS SUBORDINATES KNOW WHAT IS
EXPECTED OF THEM, SETS PERFORMANCE STANDARDS FOR THEM, AND CONTROLS BEHAVIOR
PERFORMANCE STANDARDS ARE NOT MET. HE MAKES JUDICIOUS USE OF REWARDS AND
THE STYLE IS THE SAME AS TASK-ORIENTED ONE.
• SUPPORTIVE: THE LEADER IS FRIENDLY TOWARDS SUBORDINATES AND DISPLAYS PERSONAL
CONCERN FOR THEIR NEEDS, WELFARE, AND WELL-BEING. THIS STYLE IS THE SAME AS PEOPLE-
LEADERSHIP.
• PARTICIPATIVE: THE LEADER BELIEVES IN GROUP DECISION-MAKING AND SHARES
INFORMATION WITH SUBORDINATES. HE CONSULTS HIS SUBORDINATES ON IMPORTANT
WORK, TASK GOALS, AND PATHS TO RESOLVE GOALS.
• ACHIEVEMENT-ORIENTED: THE LEADER SETS CHALLENGING GOALS AND ENCOURAGES
EMPLOYEES TO REACH THEIR PEAK PERFORMANCE. THE LEADER BELIEVES THAT EMPLOYEES
RESPONSIBLE ENOUGH TO ACCOMPLISH CHALLENGING GOALS. THIS IS THE SAME AS GOAL-
• ACCORDING TO THE THEORY, THESE LEADERSHIP STYLES ARE NOT MUTUALLY EXCUSIVE AND
CAPABLE OF SELECTING MORE THAN ONE KIND OF A STYLE SUITED FOR A PARTICULAR

27. CONTINGENCIES
• THE THEORY STATES THAT EACH OF THESE STYLES WILL BE EFFECTIVE IN SOME SITUATIONS
OTHERS. IT FURTHER STATES THAT THE RELATIONSHIP BETWEEN A LEADER’S STYLE AND
DEPENDENT ON THE FOLLOWING VARIABLES:
• EMPLOYEE CHARACTERISTICS: THESE INCLUDE FACTORS SUCH AS EMPLOYEES’ NEEDS, LOCUS
EXPERIENCE, PERCEIVED ABILITY, SATISFACTION, WILLINGNESS TO LEAVE THE ORGANIZATION,
FOR EXAMPLE, IF FOLLOWERS ARE HIGH INABILITY, A DIRECTIVE STYLE OF LEADERSHIP MAY BE
INSTEAD A SUPPORTIVE APPROACH MAY BE PREFERABLE.
• CHARACTERISTICS OF WORK ENVIRONMENT: THESE INCLUDE FACTORS SUCH AS TASK
DYNAMICS THAT ARE OUTSIDE THE CONTROL OF THE EMPLOYEE. FOR EXAMPLE, FOR
SIMPLE AND ROUTINE TASKS, A SUPPORTIVE STYLE IS MUCH EFFECTIVE THAN A DIRECTIVE
PARTICIPATIVE STYLE WORKS MUCH BETTER FOR NON-ROUTINE TASKS THAN ROUTINE ONES.
WHEN TEAM COHESIVENESS IS LOW, A SUPPORTIVE LEADERSHIP STYLE MUST BE USED WHEREAS
SITUATION WHERE PERFORMANCE-ORIENTED TEAM NORMS EXIST, A DIRECTIVE STYLE OR
ACHIEVEMENT-ORIENTED STYLE WORKS BETTER. LEADERS SHOULD APPLY DIRECTIVE STYLE TO
TEAM NORMS THAT OPPOSE THE TEAM’S FORMAL OBJECTIVES.

28. CONCLUSION
THE THEORY HAS BEEN SUBJECTED TO EMPIRICAL TESTING IN SEVERAL STUDIES
RECEIVED CONSIDERABLE RESEARCH SUPPORT. THIS THEORY CONSISTENTLY
LEADERS THAT THEIR MAIN ROLE AS A LEADER IS TO ASSIST THE SUBORDINATES
THEIR GOALS AND THEN TO ASSIST THEM IN ACCOMPLISHING THOSE GOALS IN
EFFICIENT AND EFFECTIVE MANNER. THIS THEORY GIVES A GUIDE MAP TO THE
HOW TO INCREASE SUBORDINATES SATISFACTION AND PERFORMANCE LEVEL.

29. MODERN LEADERSHIP STYLES IN THE CHANGING
WORLD
CHARISMATIC LEADERSHIP
• CHARISMATIC LEADERSHIP IS LEADING BY DINT OF PERSONALITY AND CHARM, INSTEAD OF RELYING ON
POWER OR AUTHORITY.
• CHARISMATIC LEADERS SEEK TO FULFILL ORGANIZATIONAL GOALS BY INSTILLING DEVOTION. THEY SCAN
ENVIRONMENT IN WHICH THEY OPERATE TO PICK UP THE MOODS AND CONCERNS OF INDIVIDUALS AND
AND THEN HONE THEIR ACTIONS AND WORDS TO SUIT THE SITUATION. THEY ENGENDER THE TRUST OF
VISIBLE SELF-SACRIFICE AND TAKE PERSONAL RISKS IN THE NAME OF THEIR BELIEFS
THE MAJOR BEHAVIORAL ATTRIBUTES OF CHARISMATIC LEADERS INCLUDE:
1. SENSITIVITY TO THE ENVIRONMENT AND MEMBER NEEDS
2. ARTICULATION OF A CLEAR-CUT VISION SHAPED TO THE SITUATION
3. EFFECTIVE USE OF BODY LANGUAGE AND VERBAL LANGUAGE
4. PERSONAL RISK TAKING AND UNCONVENTIONAL BEHAVIOR
5. HIGH SELF-BELIEF
6. DISPLAYING CONFIDENCE IN FOLLOWER’S ABILITY
7. CHARISMATIC LEADERS HAVE THE POTENTIAL TO ELEVATE AND TRANSFORM AN ENTIRE COMPANY. THE DANGER
POWERS TO CREATE A PERSONALITY-BASED CULT THAT MISGUIDES PEOPLE.

30. TRANSFORMATIONAL LEADERSHIP
• TRANSFORMATIONAL LEADERSHIP IS ONE OF THE MOST POPULAR LEADERSHIP STYLES IN THE
CHANGING WORLD AND FOCUSES ON EFFECTING REVOLUTIONARY CHANGE IN ORGANIZATIONS
COMMITMENT TO THE ORGANIZATION’S VISION.
• TRANSFORMATIONAL LEADERS SELL THE COMPANY’S DEFINED VISION, USUALLY A RADICAL
FROM THE ESTABLISHED ONE BY MANY WAYS, SUCH AS:
• ARTICULATING THE VISION AND EXPLAINING HOW TO ATTAIN THE VISION IN AN APPEALING
• ESTABLISHING HIGH LEVELS OF PERSONAL INTEGRITY TO GAIN TRUST AND INSPIRE THE
• APPLYING PASSION AND ENERGY AT WORK, AND INJECTING SUCH ENERGY AND ENTHUSIASM TO
• LEADING FROM THE FRONT TO DEMONSTRATE ATTITUDES AND ACTIONS FOR FOLLOWERS TO
• MOTIVATING AND RALLYING FOLLOWERS BY CONSTANTLY LISTENING, SOOTHING, AND
• DEVELOPING A SHARED VISION AND APPEALING TO PEOPLE’S INBORN DESIRE TO ATTAIN HIGHER
TO LOVE, LEARNING, LEAVING A LEGACY, AND THE LIKE.

31. • TRANSFORMATIONAL LEADERSHIP HAS MUCH IN COMMON WITH CHARISMATIC LEADERSHIP, WITH
THE MAJOR DIFFERENCE RELATING TO THE SCOPE. WHILE TRANSFORMATIONAL LEADERSHIP
FOCUSES ON ORGANIZATIONAL CHANGE, CHARISMATIC LEADERSHIP MAY NOT HAVE SUCH A
FOCUS.
VISIONARY LEADERSHIP
• A VISIONARY LEADER DREAMS ABOUT THE FUTURE AND TRANSLATES SUCH DREAMS INTO
SPECIFIC, ACHIEVABLE GOALS AND IS ABLE TO ARTICULATE THEM WITH GREAT INSPIRATION TO
INSTILL THE COMMITMENT OF OTHERS. THEY ALSO BACK UP SUCH WORDS WITH ACTION.
• VISIONARY LEADERS ANTICIPATE CHANGE AND ACT PROACTIVELY TO HANDLE THE SITUATION.
INSTEAD OF THE TRADITIONAL LEADERSHIP METHOD OF DOMINATING AND DIRECTING PEOPLE,
THEY ADOPT A PARTNERSHIP APPROACH TO CREATE A SHARED SENSE OF VISION WITH THE
FOLLOWERS. THEY FOCUS ON OPPORTUNITIES RATHER THAN PROBLEMS, AND EMPHASIZE
WIN/WIN RATHER THAN ADVERSARIAL WIN/LOSE APPROACH.

32. • THE MAJOR CHARACTERISTICS OF VISIONARY LEADERSHIP INCLUDE:
• DEMONSTRATING PERSONAL INTEGRITY AND RADIATING A SENSE OF ENERGY, VITALITY, AND
ADHERENCE TO CORE VALUES. THEY EXERCISE MORAL LEADERSHIP WHEN ELEVATED WITH POWER
RATHER THAN BECOMING CORRUPTED BY POWER.
• MAINTAINING GOOD RELATIONS, ADOPTING A DEEPLY CARING APPROACH TO PEOPLE, AND TREATING
THEM WITH WARMTH AND RESPECT.
• INSPIRING PEOPLE TO BETTER THEMSELVES AND GIVING THEM A NEW SENSE OF HOPE AND
CONFIDENCE TO DO SO.
• TRANSFORMING OLD MENTAL MAPS OR PARADIGMS, AND CREATING “OUT OF THE BOX”
UNCONVENTIONAL AND INNOVATIVE STRATEGIES TO ACTUALIZE THE NEW VISION THROUGH BROAD
AND SYSTEMIC THINKING KEEPING THE BIG PICTURE IN MIND.
• DEVELOPING TEAM SPIRIT AND TEAM LEARNING INITIATIVES.
• VISIONARY LEADERSHIP BASES ITSELF ON A BALANCED EXPRESSION OF THE SPIRITUAL, MENTAL,
EMOTIONAL, AND PHYSICAL DIMENSIONS, AND REQUIRES THE PRESENCE OFALL SUCH DIMENSIONS
FOR SUCCESS.

33. TRANSACTIONAL LEADERSHIP
• TRANSACTIONAL LEADERSHIP BASES ITSELF ON GETTING THINGS DONE THROUGH A
OF COMMAND AND WORKS ON THE ASSUMPTION THAT REWARDS AND PUNISHMENT
PEOPLE.
• TRANSACTIONAL LEADERS NEGOTIATE A CONTRACT WITH SUBORDINATES THAT
STRUCTURES, MAKES EXPLICIT THE REQUIREMENT, AND INSTALLS A FORMAL SYSTEM
REWARDS AND DISCIPLINE. THE SUBORDINATE GETS A SALARY AND OTHER BENEFITS
COMPANY GETS COMPLETE AUTHORITY OVER THE SUBORDINATE IN RETURN. THE
BECOMES FULLY RESPONSIBLE FOR THE ALLOCATED WORK AND RECEIVES REWARDS
OR DISCIPLINE FOR FAILURE.
• TRANSACTIONAL LEADERS FOLLOW A MANAGEMENT BY EXCEPTION APPROACH,
NOT GIVE MUCH ATTENTION TO ROUTINE ISSUES OR EXCEPTED PERFORMANCE AND
ATTENTION TO PRESENT ISSUES.

34. • THE MAJOR CHARACTERISTICS OF TRANSACTIONAL LEADERS INCLUDE:
• RELIANCE ON STANDARD FORMS OF INDUCEMENT, REWARD, PUNISHMENT, AND SANCTION TO
CONTROL FOLLOWERS.
• MOTIVATING FOLLOWERS THROUGH GOAL SETTING AND A SIMPLE AND STRAIGHTFORWARD APPROACH
OF REWARDS FOR DESIRED PERFORMANCE AND DISCIPLINE FOR FAILURE.
• REINFORCING SUBORDINATES TO COMPLETE THEIR SIDE OF THE BARGAIN SUCCESSFULLY.
SUCCESSFULLY.
• AMONG ALL THE MODERN MANAGEMENT STYLES, TRANSACTIONAL LEADERSHIP COME THE CLOSEST
TO TRADITIONAL LEADERSHIP STYLES, BUT IT REMAINS ONE OF THE MODERN LEADERSHIP STYLES IN A
CHANGING WORLD, BEARING SOME SIMILARITIES WITH TRANSFORMATIONAL LEADERSHIP. THE
DIFFERENCE BETWEEN TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP IS THAT WHILE
TRANSFORMATIONAL LEADERS ADOPT A ‘SELLING’ STYLE, TRANSACTIONAL LEADERS ADOPTS A
‘TELLING’ STYLE.
•

35. SERVANT LEADERSHIP
• SERVANT LEADERSHIP BASES ITSELF ON THE PREMISE THAT LEADERS ARE SERVANTS FIRST AND LEADERS
DEPART FROM THE TRADITIONAL LEADERSHIP STYLE OF DOMINATING SUBORDINATES AND TELLING THEM
RATHER EMPOWER THE SUBORDINATE AND ACT PROACTIVELY TO INSPIRE THEM TO PERFORM. SUCH
COLLECTIVE EFFORTS, THE RESULTS OF WHICH TURN OUT TO BE MORE THAN THE SUM OF INDIVIDUAL
• SERVANT LEADER CHARACTERISTICS INCLUDE:
• TAKES THE TIME AND EFFORT TO HELP SUBORDINATES UNDERSTAND THEIR STRENGTHS AND WEAKNESSES,
POTENTIAL AND HIGHER PURPOSES THEY COULD NEVER ATTAIN ON THEIR OWN.
• SEES THINGS FROM OTHERS PERSPECTIVE, EXHIBITS PATIENCE, AND SHOWS EMPATHY.
• ATTACHES IMPORTANCE ON TEAMWORK AND RELATIONSHIP BUILDING.
• REMAINS MOORED IN SOCIAL AND ETHICAL CONSIDERATIONS.
• INCLUDES THE EMPLOYEES IN THE DECISION-MAKING PROCESS AND EMPOWERS THEM TO ACT, MAKING
FORM OF DEMOCRATIC LEADERSHIP.
• THE TEN MAJOR CHARACTERISTICS OF SERVANT LEADERSHIP IS LISTENING, EMPATHY, HEALING
PERSUASION, CONCEPTUALIZATION, FORESIGHT, STEWARDSHIP, COMMITMENT TO HUMAN RESOURCE
COMMITMENT TO BUILDING COMMUNITY.

36. MOTIVATION
CONCEPT AND IMPORTANCE OF MOTIVATION:
• MOTIVATION IS A HUMAN FACTOR IN MANAGEMENT. A MANAGER FEELS SOME SORT
OF CHALLENGE TO MOTIVATE THE PEOPLE IN THEIR RESPECTIVE JOB BECAUSE THIS
MOTIVATION RELATES TO THAT INTERNAL FORCE WHICH DIRECTS THE PEOPLE TO ACT
IN A PARTICULAR WAY TO GET SOMETHING OR SATISFY THEIR NEEDS. FROM THE
PREVIOUS STUDY, WE LEARN THAT A MANAGER GETS WORK DONE THROUGH OTHERS.
TO GET THE WORK PERFORMED IS NOT AN EASY TASK. A MANAGER HAS TO MAKE THE
PEOPLE WORK AS PER THE DIRECTION WAS GIVEN TO HIM. BUT THE QUESTION IS WHY
PEOPLE WORK? WHY THEY BEHAVE AS THEY DO? WHAT MOTIVES MAY DIRECT PEOPLE
TO BEHAVE IN A PARTICULAR WORK?
• THE TERM MOTIVATION IS DERIVED FROM THE ENGLISH WORD- MOTIVE, AND IT IS
BORROWED FROM THE LATIN WORD – “MOVERE: THE MEANING OF “MOVERE” IS TO
MOVE. MOTIVES MEAN THE DRIVES, NEEDS, DESIRES, WANTS OR IMPULSES WITHIN
THE INDIVIDUALS.

37. According to Dale S. Beach, "Motivation can be defined as a willingness to expend energy to achieve a
goal or reward.“
According to Harold Koontz and Heinz Weihrich, "Motivation is a general term applying to the entire
class of drives, desires, needs, wishes."

38. 1.Need:
The motivation process starts with needs or expectations. If employees have no need or expectation
they cannot be motivated. Employees run to address or to solve the need or expectation. The need
for expectation is a very important process of motivation. Managers of the business organization
must pay proper consideration towards the needs and expectations of employees. Food is a relevant
example of it.
2.Drive/ Action:
The drive is action-oriented. After the expectation, people seek a job. The action is needed to address
the need or expectations. Without action, employees cannot solve food problems. Thus, when the
need occurs the people move for its implementation.
3.Incentives:
An incentive is the last process of motivation. After having a job, employees should be provided for
and competitive wages. It supports to solve and address the need or expectation. Employees come to
an organization to sell their knowledge, skill, and labor. When they sell their labor, employees will get
incentives.

39. IMPORTANCE OF MOTIVATION
MOTIVATION IS IMPORTANT TO BOTH THE ORGANIZATION AND THE INDIVIDUAL. TO ACHIEVE
ORGANIZATIONAL GOALS, MOTIVATION HAS BECOME VERY EFFECTIVE TOOLS AND A MANAGER HAS
TO USE THIS TOOL TO MOTIVATE OR INSPIRE THE STAFF MEMBER IN THEIR RESPECTIVE JOB IN SUCH A
MANNER THAT THEY COULD WORK EFFECTIVELYAND EFFICIENTLY.
FROM THE VIEWPOINT OF ORGANIZATION AND INDIVIDUALS, MOTIVATION IS IMPORTANTAND PLAYS A
SIGNIFICANT ROLE AND IS ALSO CONSIDERED AS AN IMPORTANT DETERMINANT OF PERFORMANCE.
FOLLOWING ARE SOME OF THE IMPORTANCE OF MOTIVATION:
1. IMPROVEMENT IN COOPERATION:
DUE TO EFFECTIVE MOTIVATION, THE EMPLOYEES WILL BE READY TO COOPERATE IN THE
SUCCESSION OF THE ORGANIZATION. BY EXTENDING POSITIVE COOPERATION, EMPLOYEES HELP
THE ORGANIZATION TO ACHIEVE THE GOALS IN ONE HAND AND THEYALSO SOLVE THEIR PROBLEM/
GET SATISFACTION ON THE OTHER. THUS, PROSPERITY ON BOTH SIDES CAN BE OBSERVED WELL IF
THE MOTIVATION IS IMPLEMENTED WITHIN THE ORGANIZATION IN THE TRUE SENSE.

40. 2.HIGHER MORALE OF PERSONNEL:
MOTIVATION INCREASES THE WORK MORALE OF THE WORKERS. THE WORKERS HAVING HIGHER
MORALE ARE ASSERTED AS THE ASSETS OF THE ORGANIZATION. A MOTIVATED EMPLOYEE CAN
CONTRIBUTE TO THE ORGANIZATION BY LOWERING THE TURNOVER RATE AND ABSENTEEISM. HIGHER
TURNOVER AND ABSENTEEISM CREATE MANY PROBLEMS IN THE ORGANIZATION AND AFFECT THEIR
REPUTATION ADVERSELY. MOTIVATION HELPS TO BRING THESE RATES LOWER.
3.UTILIZATION OF FACTOR OF PRODUCTION:
HUMAN RESOURCES ARE ONE OF THE IMPORTANT RESOURCES AND IF THIS RESOURCE IS UTILIZED
PROPERLY THEN ONLY OTHER FACTORS CAN BE UTILIZED PROPERLY. MOTIVATION MAKES THE HUMAN
RESOURCE (EMPLOYEES) WORK SINCERELY AND PERFORMING/COMPLETING THE TASK EFFICIENTLY. IF
EMPLOYEES WORK EFFICIENTLY THEN ONLY THERE WILL BE A POSSIBILITY OF UTILIZING OTHER FACTORS
OF PRODUCTION PROPERLY AND THAT TOO IN MAXIMUM. HENCE, MOTIVATION HELPS TO UTILIZE THE
FACTOR OF PRODUCTION IN A MANAGERIAL WAY.

41. 5. HIGHER PRODUCTIVITY:
WITH THE HELP OF MOTIVATION, AN ORGANIZATION CAN ATTAIN A HIGHER LEVEL OF PRODUCTIVITY
BECAUSE BY MOTIVATING THE SUBORDINATES, A MANAGER CAN INDUCE THEM TO WORK EFFICIENTLY,
IT WILL HELP THE ORGANIZATION TO INCREASE TOTAL PRODUCTION AND PRODUCTIVITY. IF THE
WORKERS ARE INDUCED WITH A VARIETY OF MOTIVATING TECHNIQUES, THE INHERENT QUALITIES CAN
BE DEVELOPED AND THUS BE USED FOR THE PROSPERITY OF THE ORGANIZATION AND SUBORDINATES
AS WELL.
6. BEST REMEDY FOR RESISTANCE TO CHANGE:
THE SIGN OF DEVELOPMENT CHANGES IN WORK AND WORK TECHNIQUES. THE CHANGES IN
ORGANIZATION AND IT'S WORKING STYLES ARE THE USUAL PHENOMENON BECAUSE OF
ORGANIZATIONAL CHANGES IN ITS PRODUCTION TECHNOLOGY, MARKETING PROCESS AND EVEN DUE
TO ENVIRONMENTAL CHANGES, MANY CHANGES OCCUR IN THE ORGANIZATION. WHEN ANY CHANGES
OCCUR IN THE ORGANIZATION, THE WORKERS MAY NOT BE HAPPY, FEEL DISCOMFORT, ASSUME
INSECURITY AND SHOW THEIR DISAGREEMENT AND PROTEST AGAINST SUCH CHANGE. BUT IF THEY ARE
PROPERLY, TIMELY AND TACTFULLY MOTIVATED AND MANAGERS GIVE KNOWLEDGE AND INSPIRATION,
THEY WILL ACCEPT THE CHANGE EVEN MORE ENTHUSIASTICALLY.

42. 6.Healthy Industrial Relation:
Motivation creates healthy industrial relations within the organization. The
relation between management and trade unions will be very friendly.
There will not be any conflict between the management and trade unions
with the help of motivation. So, motivation provides a healthy relationship
in the industrial field too.
7.Realizing Organizational Goals:
Motivated employees develop a feeling of total involvement in the task of
organization and work wholeheartedly for the realization of
organizational goals. The employees should give more focus on the
organizational goals while motivating them. So, motivation helps to
realize the organizational goals of the employees.

43. EXPECTANCY THEORY OF MOTIVATION
THE EXPECTANCY THEORY STATES THAT EMPLOYEE’S MOTIVATION IS AN OUTCOME OF HOW MUCH AN
INDIVIDUAL WANTS A REWARD (VALENCE), THE ASSESSMENT THAT THE LIKELIHOOD THAT THE EFFORT
WILL LEAD TO EXPECTED PERFORMANCE (EXPECTANCY) AND THE BELIEF THAT THE PERFORMANCE
WILL LEAD TO REWARD (INSTRUMENTALITY).
• IN SHORT, VALENCE IS THE SIGNIFICANCE ASSOCIATED BYAN INDIVIDUAL ABOUT THE EXPECTED
OUTCOME. IT IS AN EXPECTED AND NOT THE ACTUAL SATISFACTION THATAN EMPLOYEE EXPECTS TO
RECEIVE AFTER ACHIEVING THE GOALS.
• EXPECTANCY IS THE FAITH THAT BETTER EFFORTS WILL RESULT IN BETTER PERFORMANCE.
EXPECTANCY IS INFLUENCED BY FACTORS SUCH AS POSSESSION OF APPROPRIATE SKILLS FOR
PERFORMING THE JOB, AVAILABILITY OF RIGHT RESOURCES, AVAILABILITY OF CRUCIAL
INFORMATION AND GETTING THE REQUIRED SUPPORT FOR COMPLETING THE JOB.
• INSTRUMENTALITY IS THE FAITH THAT IF YOU PERFORM WELL, THEN A VALID OUTCOME WILL BE
THERE. INSTRUMENTALITY IS AFFECTED BY FACTORS SUCH AS BELIEVE IN THE PEOPLE WHO DECIDE
WHO RECEIVES WHAT OUTCOME, THE SIMPLICITY OF THE PROCESS DECIDING WHO GETS WHAT
OUTCOME, AND CLARITY OF RELATIONSHIP BETWEEN PERFORMANCE AND OUTCOMES. THUS, THE
EXPECTANCY THEORY CONCENTRATES ON THE FOLLOWING THREE RELATIONSHIPS:

45. • EFFORT-PERFORMANCE RELATIONSHIP: WHAT IS THE LIKELIHOOD THAT THE
INDIVIDUAL’S EFFORT BE RECOGNIZED IN HIS PERFORMANCE APPRAISAL?
• PERFORMANCE-REWARD RELATIONSHIP: IT TALKS ABOUT THE EXTENT TO
WHICH THE EMPLOYEE BELIEVES THAT GETTING A GOOD PERFORMANCE
APPRAISAL LEADS TO ORGANIZATIONAL REWARDS.
• REWARDS-PERSONAL GOALS RELATIONSHIP: IT IS ALL ABOUT THE
ATTRACTIVENESS OR APPEAL OF THE POTENTIAL REWARD TO THE INDIVIDUAL.
• VROOM WAS OF VIEW THAT EMPLOYEES CONSCIOUSLY DECIDE WHETHER TO
PERFORM OR NOT AT THE JOB. THIS DECISION SOLELY DEPENDED ON THE
EMPLOYEE’S MOTIVATION LEVEL WHICH IN TURN DEPENDS ON THREE FACTORS
OF EXPECTANCY, VALENCE AND INSTRUMENTALITY.

46. ADVANTAGES OF THE EXPECTANCY THEORY
• IT IS BASED ON SELF-INTEREST INDIVIDUAL WHO WANT TO ACHIEVE MAXIMUM
WANTS TO MINIMIZE DISSATISFACTION.
• THIS THEORY STRESSES UPON THE EXPECTATIONS AND PERCEPTION; WHAT IS REAL
IMMATERIAL.
• IT EMPHASIZES ON REWARDS OR PAY-OFFS.
• IT FOCUSES ON PSYCHOLOGICAL EXTRAVAGANCE WHERE FINAL OBJECTIVE OF
MAXIMUM PLEASURE AND LEAST PAIN.
LIMITATIONS OF THE EXPECTANCY THEORY
• THE EXPECTANCY THEORY SEEMS TO BE IDEALISTIC BECAUSE QUITE A FEW INDIVIDUALS
HIGH DEGREE CORRELATION BETWEEN PERFORMANCE AND REWARDS.
• THE APPLICATION OF THIS THEORY IS LIMITED AS REWARD IS NOT DIRECTLY
PERFORMANCE IN MANY ORGANIZATIONS. IT IS RELATED TO OTHER PARAMETERS ALSO
POSITION, EFFORT, RESPONSIBILITY, EDUCATION, ETC.

47. IMPLICATIONS OF EXPECTANCY THEORY
THE MANAGERS CAN CORRELATE THE PREFERRED OUTCOMES TO THE AIMED PERFORMANCE
LEVELS.
THE MANAGERS MUST ENSURE THAT THE EMPLOYEES CAN ACHIEVE THE AIMED PERFORMANCE
LEVELS.
THE DESERVING EMPLOYEES MUST BE REWARDED FOR THEIR EXCEPTIONAL PERFORMANCE.
THE REWARD SYSTEM MUST BE FAIR AND JUST IN AN ORGANIZATION.
ORGANIZATIONS MUST DESIGN INTERESTING, DYNAMIC AND CHALLENGING JOBS.
THE EMPLOYEE’S MOTIVATION LEVEL SHOULD BE CONTINUALLY ASSESSED THROUGH VARIOUS
TECHNIQUES SUCH AS QUESTIONNAIRE, PERSONAL INTERVIEWS, ETC.

48. EQUITY THEORY OF MOTIVATION

49. • ADAM’S EQUITY THEORY, ALSO KNOWN AS THE EQUITY THEORY OF MOTIVATION, WAS
DEVELOPED IN 1963 BY JOHN STACEY ADAMS, A WORKPLACE BEHAVIORAL PSYCHOLOGIST.
• EQUITY THEORY IS BASED ON THE IDEA THAT INDIVIDUALS ARE MOTIVATED BY FAIRNESS. IN
SIMPLE TERMS, EQUITY THEORY STATES THAT IF AN INDIVIDUAL IDENTIFIES AN INEQUITY
BETWEEN THEMSELVES AND A PEER, THEY WILLADJUST THE WORK THEY DO TO MAKE THE
SITUATION FAIR IN THEIR EYES. AS AN EXAMPLE OF EQUITY THEORY, IFAN EMPLOYEE LEARNS
THAT A PEER DOING EXACTLY THE SAME JOB AS THEM IS EARNING MORE MONEY, THEN THEY
MAY CHOOSE TO DO LESS WORK, THUS CREATING FAIRNESS IN THEIR EYES.
• EXTRAPOLATING FROM THIS, ADAM’S EQUITY THEORY TELLS US THAT THE HIGHER AN
INDIVIDUAL’S PERCEPTION OF EQUITY (FAIRNESS), THEN THE MORE MOTIVATED THEY WILL BE.
CONVERSELY, AN INDIVIDUAL WILL BE DEMOTIVATED IF THEY PERCEIVE UNFAIRNESS.

50. UNDERSTANDING EQUITY
• TO UNDERSTAND ADAM’S EQUITY THEORY IN FULL, WE NEED TO FIRST DEFINE INPUTS AND OUTPUTS. INPUTS ARE
DEFINED AS THOSE THINGS THATAN INDIVIDUAL DOES IN ORDER TO RECEIVE AN OUTPUT. THEYARE THE
CONTRIBUTION THE INDIVIDUAL MAKES TO THE ORGANIZATION.
COMMON INPUTS INCLUDE:
• THE NUMBER OF HOURS WORKED (EFFORT).
• THE COMMITMENT SHOWN.
• THE ENTHUSIASM SHOWN.
• THE EXPERIENCE BROUGHT TO THE ROLE.
• ANY PERSONAL SACRIFICES MADE.
• THE RESPONSIBILITIES AND DUTIES OF THE INDIVIDUAL IN THE ROLE.
• THE LOYALTY THE INDIVIDUAL HAS DEMONSTRATED TO SUPERIORS OR THE ORGANIZATION.
• THE FLEXIBILITY SHOWN BY THE INDIVIDUAL, FOR EXAMPLE, BY ACCEPTING ASSIGNMENTS AT VERY SHORT NOTICE
OR WITH VERY TIGHT DEADLINES.

51. OUTPUTS (SOMETIMES REFERRED TO AS OUTCOMES) ARE THE RESULT AN INDIVIDUAL RECEIVES AS A RESULT OF THEIR INPUTS TO
THE ORGANIZATION. SOME OF THESE BENEFITS WILL BE TANGIBLE, SUCH AS SALARY, BUT OTHERS WILL BE INTANGIBLE, SUCH AS
RECOGNITION.
• COMMON OUTPUTS INCLUDE:
• SALARY
• BONUS
• PENSION
• ANNUAL HOLIDAY ALLOWANCE
• COMPANY CAR
• STOCK OPTIONS
• RECOGNITION
• PROMOTION
• PERFORMANCE APPRAISALS
• FLEXIBILITY OF WORK ARRANGEMENTS
• SENSE OF ACHIEVEMENT
• LEARNING

52. • NOW THAT WE UNDERSTAND INPUTS AND OUTPUTS, WE’RE IN A POSITION TO DEFINE EQUITY.
EQUITY IS DEFINED AS AN INDIVIDUAL’S OUTPUTS DIVIDED BY THAT SAME PERSON’S INPUTS.
• ADAM’S EQUITY THEORY GOES A STEP FURTHER AND STATES THAT INDIVIDUALS DON’T JUST
UNDERSTAND EQUITY IN ISOLATION, INSTEAD THEY LOOK AROUND AND COMPARE THEMSELVES
TO OTHERS. IF THEY PERCEIVE AN INEQUITY THEN THEY WILLADJUST THEIR INPUTS TO
RESTORE BALANCE. THIS IS ILLUSTRATED IN THE FOLLOWING EQUITY THEORY EQUATION.

54. • A REFERENT GROUP IS SIMPLY A COLLECTION OF PEOPLE A PERSON USES FOR THE
PURPOSES OF COMPARISON. FOR ADAM’S EQUITY THEORY OF MOTIVATION, THERE ARE
FOUR REFERENT GROUPS PEOPLE COMPARE THEMSELVES WITH:
1.SELF-INSIDE: THE INDIVIDUAL’S EXPERIENCE WITHIN THEIR CURRENT ORGANIZATION.
2.SELF-OUTSIDE: THE INDIVIDUAL’S EXPERIENCE WITH OTHER ORGANIZATIONS.
3.OTHERS-INSIDE: OTHERS WITHIN THE INDIVIDUAL’S CURRENT ORGANIZATION.
4.OTHERS-OUTSIDE: OTHERS OUTSIDE OF THE INDIVIDUAL ORGANIZATION.

55. For example, if a programmer compares what they earn to other programmers within the
same organization then the referent group is the others-inside. If they compare themselves to
programmers they know socially then the referent group is others-outside. If they were to
compare themselves to what they earnt in their previous job then the referent group is self-
outside.
Adam’s Equity Theory still holds even when people compare themselves to others doing very
different roles and earning very different compensation. Take our example of a programmer
again. They may compare themselves to the CEO of their company who earns 100 times
more than the programmer. How can this seem fair?
Well, the answer is that they will perceive the inputs to be vastly different. They will see that
they have a great work-life balance whereas the CEO is traveling a lot of the time. They may
perceive that the CEO has vastly more experience, alongside working much longer hours and
having to deal with more stress. In this way, fairness is established in the mind of the
individual.

56. GOAL SETTING THEORY
IN 1960’S, EDWIN LOCKE PUT FORWARD THE GOAL-SETTING THEORY OF MOTIVATION. THIS
THEORY STATES THAT GOAL SETTING IS ESSENTIALLY LINKED TO TASK PERFORMANCE. IT STATES
THAT SPECIFIC AND CHALLENGING GOALS ALONG WITH APPROPRIATE FEEDBACK CONTRIBUTE TO
HIGHER AND BETTER TASK PERFORMANCE.
IN SIMPLE WORDS, GOALS INDICATE AND GIVE DIRECTION TO AN EMPLOYEE ABOUT WHAT NEEDS
TO BE DONE AND HOW MUCH EFFORTS ARE REQUIRED TO BE PUT IN.

58. LOCKE AND LATHAM'S FIVE PRINCIPLES
ACCORDING TO LOCKE AND LATHAM, THERE ARE FIVE GOAL SETTING
PRINCIPLES THAT CAN IMPROVE OUR CHANCES OF SUCCESS:
1.CHALLENGE
2.CLARITY
3.COMMITMENT
4.TASK COMPLEXITY
5. FEEDBACK

60. THE IMPORTANT FEATURES OF GOAL-SETTING THEORY ARE AS FOLLOWS:
1. THE WILLINGNESS TO WORK TOWARDS ATTAINMENT OF GOAL IS MAIN SOURCE OF JOB MOTIVATION. CLEAR,
PARTICULAR AND DIFFICULT GOALS ARE GREATER MOTIVATING FACTORS THAN EASY, GENERALAND VAGUE
GOALS.
2. SPECIFIC AND CLEAR GOALS LEAD TO GREATER OUTPUTAND BETTER PERFORMANCE. UNAMBIGUOUS,
UNAMBIGUOUS, MEASURABLE AND CLEAR GOALS ACCOMPANIED BY A DEADLINE FOR COMPLETION AVOIDS
MISUNDERSTANDING.
3. GOALS SHOULD BE REALISTIC AND CHALLENGING. THIS GIVES AN INDIVIDUALA FEELING OF PRIDE AND
TRIUMPH WHEN HE ATTAINS THEM, AND SETS HIM UP FOR ATTAINMENT OF NEXT GOAL. THE MORE
CHALLENGING THE GOAL, THE GREATER IS THE REWARD GENERALLYAND THE MORE IS THE PASSION FOR
ACHIEVING IT.
4. BETTER AND APPROPRIATE FEEDBACK OF RESULTS DIRECTS THE EMPLOYEE BEHAVIOUR AND CONTRIBUTES
CONTRIBUTES TO HIGHER PERFORMANCE THAN ABSENCE OF FEEDBACK. FEEDBACK IS A MEANS OF GAINING
REPUTATION, MAKING CLARIFICATIONS AND REGULATING GOAL DIFFICULTIES. IT HELPS EMPLOYEES TO WORK
WITH MORE INVOLVEMENTAND LEADS TO GREATER JOB SATISFACTION.
5. EMPLOYEES’ PARTICIPATION IN GOAL IS NOT ALWAYS DESIRABLE.
6. PARTICIPATION OF SETTING GOAL, HOWEVER, MAKES GOAL MORE ACCEPTABLE AND LEADS TO MORE
TO MORE INVOLVEMENT.

61. ADVANTAGES OF GOAL SETTING THEORY
• GOAL SETTING THEORY IS A TECHNIQUE USED TO RAISE INCENTIVES FOR EMPLOYEES
WORK QUICKLY AND EFFECTIVELY.
• GOAL SETTING LEADS TO BETTER PERFORMANCE BY INCREASING MOTIVATION AND
ALSO THROUGH INCREASING AND IMPROVING THE FEEDBACK QUALITY.
• LIMITATIONS OF GOAL SETTING THEORY
• AT TIMES, THE ORGANIZATIONAL GOALS ARE IN CONFLICT WITH THE MANAGERIAL
CONFLICT HAS A DETRIMENTAL EFFECT ON THE PERFORMANCE IF IT MOTIVATES
ACTION DRIFT.
• VERY DIFFICULT AND COMPLEX GOALS STIMULATE RISKIER BEHAVIOUR.
• IF THE EMPLOYEE LACKS SKILLS AND COMPETENCIES TO PERFORM ACTIONS
THEN THE GOAL-SETTING CAN FAIL AND LEAD TO UNDERMINING OF PERFORMANCE.
• THERE IS NO EVIDENCE TO PROVE THAT GOAL-SETTING IMPROVES JOB

62. REINFORCEMENT THEORY
CARROT AND STICK APPROACH TO MOTIVATION | THEORY OF
MOTIVATION
INTRODUCTION TO CARROT AND STICK APPROACH:
• THE CARROT AND THE STICK APPROACH TO MOTIVATION, MAKES USE OF
REWARDS AND PENALTIES IN ORDER TO INDUCE DESIRED BEHAVIOUR.
• THE PHILOSOPHY OF THIS APPROACH COMES FROM THE OLD STORY THAT
THE BEST WAY TO MAKE A DONKEY MOVE IS TO PUT A CARROT OUT IN FRONT
OF IT OR JAB IT WITH A STICK FROM BEHIND.

63. MEANING AND IMPLICATIONS OF CARROT AND STICK APPROACH
CARROT REFERS TO REWARDS, WHICH ARE OFFERED OR PROMISED TO
INDIVIDUALS TO ACT IN THE DESIRED WAY; WHILE STICK REFERS TO
PUNISHMENTS WHICH ARE TO BE INFLICTED ON INDIVIDUALS, FOR NOT ACTING
IN THE DESIRED WAY. IN AWAY, CARROT REFERS TO POSITIVE MOTIVATION; AND
STICK REFERS TO NEGATIVE MOTIVATION.
FOLLOWING ARE THE IMPLICATIONS OF CARROT AND STICK APPROACH:
(I) AN OVERDOSE OF ‘CARROT’ ELEMENT, IN THE SYSTEM OF MOTIVATION INVITES
LAZINESS AND FEWER ATTITUDES TOWARDS WORK ON THE PART OF INDIVIDUALS.
THIS HAPPENS, SPECIALLY, BECAUSE MANY- A-TIMES, PEOPLE GET CARROT I.E.
REWARDS REGARDLESS OF THEIR PERFORMANCE E.G. SALARY INCREASE, SENIORITY
BASED PROMOTIONS, ETC.
(II) AN OVERDOSE OF ‘STICK’ ELEMENT, IN THE SYSTEM OF MOTIVATION LEADS TO
RETALIATORY BEHAVIOUR ON PART OF PEOPLE, STRONG ORGANISATION OF LABOUR
UNIONS AGAINST MANAGEMENT ATROCITIES, POOR QUALITY WORKMANSHIP ETC.

64. SPECIFIC CARROTS (REWARDS) AND STICKS (PENALTIES):
A BRIEF ACCOUNT OF SPECIFIC REWARDS AND PENALTIES; WHICH
FORM PART OF THE MANAGEMENT MOTIVATIONAL SYSTEM IS GIVEN
BELOW:
(I) CARROTS (REWARDS):
MONETARY REWARDS:
(I) WAGES/ SALARIES PAID IN CASH
(II) PAY INCREMENT ON A REGULAR BASIS.
(III) CASH AWARDS
(IV) PAYMENT OF ALLOWANCES IN CASH
(V) BONUS PAYMENT
(VI) GRANTING LEAVE WITH PAY
(VII) PROFIT SHARING SCHEMES FOR EMPLOYEES.
(VIII) PAYMENT OF PENSION RULES.
(IX) INCENTIVE SCHEMES OF WAGE PAYMENT.

65. REWARDS CAPABLE OF MEASUREMENT IN TERMS OF MONEY:
(I)TRAVEL CONCESSION
(II)REIMBURSEMENT OF MEDICAL EXPENSES
(III)SUBSIDIZED FOOD, HOUSING ETC.
(IV) FREE UNIFORMS
(V) EDUCATION TO EMPLOYEES’ CHILDREN-FREE OR SUBSIDIZED.
(VI)JOB SECURITY.
NON-MONETARY REWARDS:
(I) PROMOTIONS
(II) DELEGATION OF AUTHORITY
(III) ASSIGNMENT OF CHALLENGING WORK
(IV) CERTIFICATES OF MERIT
(V) STATUS SYMBOLS LIKE, PROVIDING A SEPARATE ROOM, PEON, PRIVATE
SECRETARY, TELEPHONE FACILITIES ETC.

66. (II) STICKS (PENALTIES OR PUNISHMENT):
MONETARY PUNISHMENT:
(I) LOSS OF JOB (MEANING LOSS OF REGULAR INCOME)
(II) FINES
(III) PENALTIES
(IV) WITHHOLDING ANNUAL SALARY INCREMENT
NON-MONETARY PUNISHMENT:
(I) DEMOTION
(II) TRANSFER TO AN INCONVENIENT WORK PLACE.
(III) TAKING UNFIT FOR DELEGATION OF AUTHORITY
(IV) NOT ALLOWING AN INDIVIDUAL TO PARTICIPATE IN DECISION-MAKING.
POINT OF COMMENT:
PROMOTION (CARROT) AND DEMOTION (STICK) MAY HAVE MONETARY
IMPLICATIONS ALSO E.G. IN FORM OF INCREASE OR DECREASE OF PAY,
RESPECTIVELY.