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CHAPTER 16 Managing Employee Motivation and Performance CHAPTER SUMMARY This chapter deals with employee motivation. The key topics discussed include the nature of motivation and content, process, and reinforcement perspectives on motivation. Current and emerging perspectives on motivation are then explained, followed by a description of how organizations use reward systems to motivate employees. LEARNING OBJECTIVES After covering this chapter, students should be able to: 1. Characterize the nature of motivation, including its importance and historical perspectives. 2. Identify and describe the major content perspectives on motivation. 3. Identify and describe the major process perspectives on motivation. 4. Describe reinforcement perspectives on motivation. 5. Identify and describe popular motivational strategies. 6. Describe the role of organizational reward systems in motivation. In the opening case, the link between productivity and happiness is examined. There is one school of thought (as evidenced by Sara Caputo and Alexander Kjerulf in the case) that believes that if you are happy with your job you will be more productive. Others, however, don’t see the same causal link between happiness and productivity. Management Update: Every year Fortune identifies the 100 best companies to work for in America. The article also describes specifically what these companies do to make the workplace more enjoyable and stress free. Discussion Starter: Ask students – are they really happy in their jobs (if they work)? Do they know people who are happy with their job? Are these people more productive? LECTURE OUTLINE I. THE NATURE OF MOTIVATION Motivation is the set of forces that cause people to behave in certain ways. A. The Importance of Motivation in the Workplace Individual performance is generally determined by three factors. 1. Motivation is the desire to do the job. 2. Ability is the capability to do the job. 3. Environment includes the tools, material, and information needed to do the job. 4. While the last two can be controlled by the manager, the first cannot. Teaching Tip: Note that motivation reflects behavioral choices—people choose to work hard, to do just enough to get by, or to do nothing at all. Teaching Tip: Note the importance of ability and environment, in conjunction with motivation, as determinants of employee performance. No matter how much most of us want to be a championship tennis player or golfer, most lack the ability to do so. Discussion Starter: Ask students to recall instances in which they have done an exceptionally good job, and then to describe the respective roles of motivation, ability, and environment in that performance. B. Historical Perspectives on Motivation 1. The traditional approach to employee motivation is best represented by Frederick Taylor, who believed that economic gain is the only motivating force for workers. Cross-Reference: Note that Frederick Taylor and his scientific management approach were first introduced in Chapter 2. Interesting Quote: “If overpaid, many [workers] will work irregularly and tend to become more or less shiftless, extravagant, and dissipated.” (F.W. Taylor, Shop Management, Harper & Brothers Publishers, 1911, 27.) 2. The human relations approach grew out of the work of Elton Mayo and his associates who emphasized the role of social processes in the workplace. They suggested that motivation occurs when employees feel useful and important, when their strong social needs are met, and when they feel they have some involvement in determining their jobs. Extra Example: Carnation Milk used to use the slogan, “Our milk comes from contented cows.” This slogan essentially mirrors the human relations school of employee behavior. 3. The human resource approach assumes not only that the illusion of involvement is important, but that the workers will be motivated when they provide a real contribution to both themselves and the organization. Extra Example: Recent advances in the use of participation, empowerment, and work teams in organizations reflect the human resource approach to employee motivation. II. CONTENT PERSPECTIVES ON MOTIVATION Content perspectives are approaches to motivation that address the question “What factors in the workplace motivate people?” Content perspectives discuss what motivates people, but they do not describe how people are motivated. A. The Need Hierarchy Approach 1. Maslow’s hierarchy of needs states that people are motivated to satisfy five need levels. a) Physiological needs such as food and air. b) Security needs include housing or a job. c) Belongingness needs—love, affection, friendship. d) Esteem needs involve self-image and self-respect. e) Self-actualization needs, or being all one can be. Teaching Tip: Many students will have covered Maslow in other courses (e.g., psychology, marketing, etc.). You might consider asking for a show of hands and skimming or skipping this material if all of your students have already covered it. Extra Example: Maslow based his theory on research with monkeys, then college students, and then mental patients. Group Exercise: Have students work in small groups and identify ways that people might satisfy each of the five need levels in Maslow’s hierarchy. Maslow suggested that people will remain at one level until that need is satisfied and then move up to the next level. 2. The ERG theory of motivation was presented by Clayton Alderfer to address some of the weaknesses of Maslow’s model. Each letter of the name stands for a need. a) E stands for existence (the physiological and security needs described by Maslow). b) R—relatedness (the belongingness need). c) G—growth (the esteem and self-actualization needs). 3. There are two main differences from Maslow’s hierarchy. The ERG theory allows more than one level to cause motivation at the same time, and a person can back down the hierarchy if he or she becomes frustrated. Teaching Tip: Stress the similarities and differences between Maslow’s need hierarchy and the ERG theory. Discussion Starter: Ask students to critique these two theories and discuss how they, as future managers, might apply one or the other in a work setting. B. The Two-Factor Theory The two-factor theory was developed by Frederick Herzberg based on interviews with two hundred accountants and engineers. The responses indicated that a different set of factors was associated with satisfaction and with dissatisfaction. He concluded that satisfaction and dissatisfaction were not at opposite ends of one continuum, but they were each on a different continuum. Herzberg named the satisfaction continuum motivation factors and the dissatisfaction continuum hygiene factors. Therefore, for managers to ensure no worker dissatisfaction, they must provide hygiene factors, but to motivate, motivation factors must be provided. Cross-Reference: Note that Herzberg’s theory is the basis for job enrichment, an alternative approach to job design introduced and discussed in Chapter 11. Discussion Starter: Note that the two-factor theory suggests that people can be satisfied and dissatisfied at the same time. Ask students whether they accept this premise. Discussion Starter: Herzberg asserts that pay in and of itself does not motivate performance. At the same time, pay may be a motivator as a symbol of a person’s worth or value to an organization. Solicit student opinions about this idea. C. Individual Human Needs Individual human needs play a role in motivation as well. Three in particular have been well-researched. 1. The need for achievement, or the desire to accomplish a goal 2. The need for affiliation includes a desire for acceptance and companionship 3. The need for power, control, and influence Discussion Starter: Ask students to assess their own needs for achievement, affiliation, and power. Cross-Reference: In many ways, the needs for achievement, affiliation, and power can be thought of as individual differences of the sort discussed in Chapter 15. III. PROCESS PERSPECTIVES ON MOTIVATION Process perspectives focus on why people choose certain behavioral options to fulfill their needs and how they evaluate their satisfaction after they have attained these goals. Teaching Tip: Stress for students the “how” aspect of the process perspectives on motivation. A. Expectancy Theory Expectancy theory suggests that motivation depends on two things: (1) how much we want something and (2) how likely we think we are to get it. Discussion Starter: Ask students to recall an instance in which they did not pursue something they wanted because they felt they had little or no chance of achieving it. Cross-Reference: Victor Vroom, one of best known expectancy theorists, also developed an important theory of leadership discussed in Chapter 17. The assumptions of expectancy theory are: that behavior depends on both the individual and the environment, that people choose how they will behave, that different people have different needs and goals, and that people make choices based on their perceptions about the relationship between behavior and desired outcomes. There are three important perceptions in the expectancy model. 1. Effort-to-performance expectancy is the individual’s perception of the probability that effort will lead to high performance. 2. Performance-to-outcome expectancy is the individual’s perception that performance will lead to a specific outcome. 3. Outcomes and valences is individual’s perceptions about the various outcomes that will result, based upon behavior. Each outcome has an associated valence or value. If they want the outcome, the valence is positive; if they do not want it, the valence is negative. The valence is zero if they are indifferent to the outcome. 4. The Porter-Lawler extension to expectancy theory suggests that high performance may lead to satisfaction that results from the rewards given for a high performance. This reverses the direction of causation because expectancy theory says that motivated workers will have high performance, but the Porter-Lawler extension says that high-performing workers will become motivated. Cross-Reference: In Chapter 2 we noted the fallacy of the human relationists who argued that satisfaction causes performance. The Porter-Lawler extension of expectancy theory provides the framework from which this viewpoint was changed. B. Equity Theory Equity theory, developed by J. Stacy Adams, is based on the notion that people are motivated to seek social equity in the rewards they receive for performance. To determine equity, a person compares his or her ratio of outcomes (pay, recognition) to inputs (time, experience) to the ratio of someone else. The results can be a feeling of equitable rewards, too few rewards, or too many rewards. Those who feel underrewarded may reduce their inputs or ask for an increase in their outcomes in order to establish equity. Those who feel overrewarded may increase their effort or rationalize the differences away. Extra Example: An excellent example of equity theory occurs at the beginning of each new NFL season. Top draft choices fresh out of college sign big contracts, and disgruntled veterans almost immediately start calling for their own contracts to be renegotiated. John Feinstien’s book Next Man Up is an excellent portrayal of the motivational techniques used in the NFL. Discussion Starter: Equity theory predicts that if people believe that they are being overpaid, they will take some action to reduce their feelings of inequity. Ask students what they think about this prediction. Cross-Reference: Note the similarities between the equity process and the notion of psychological contracts, as discussed in Chapter 15. Discussion Starter: Have students recall situations in which they have felt both equity and inequity. Then ask them to diagram each instance in terms of their outcomes and inputs and those of a comparison other. C. Goal Setting Theory A relatively new process perspective on motivation is goal setting theory. This theory suggests that employees will be motivated by goals that are difficult and specific and which they accept and are committed to reaching. 1. Goal difficulty is the extent to which a goal is challenging and requires effort. 2. Goal specificity relates to the clarity and precision of the goal. Discussion Starter: Ask students if they think goals can be too difficult or too specific. 3. Goal acceptance is the extent to which an individual adopts a goal as his or her own. 4. Goal commitment is the extent to which an individual is personally interested in reaching the goal. Teaching Tip: Point out the similarities between the expanded goal-setting theory of motivation and the expectancy theory. Extra Example: Weyerhauser Corporation has been successful in using goal setting to motivate its employees. Cross-Reference: Note the similarities and differences in goal-setting theory (as discussed in this chapter) and MBO (as discussed in Chapter 7). IV. REINFORCEMENT PERSPECTIVES ON MOTIVATION Reinforcement theory is an approach to motivation that explains the role of rewards as they cause behavior to change or remain the same over time. Reinforcement theory argues that behavior that results in rewarding consequences is likely to be repeated, whereas behavior that results in punishing consequences is less likely to be repeated. A. Kinds of Reinforcement in Organizations 1. Positive reinforcement is a reward given after a desired behavior is performed, as a way to strengthen the behavior. Extra Example: Explain the role of reinforcement in the classroom as you provide grades, verbal compliments, criticisms, etc. in response to student behavior. Extra Example: Also note the reinforcing consequences that student behaviors have on instructors. For example, good class attendance and student enthusiasm provide positive reinforcement for instructors. 2. Avoidance can be used to strengthen the desired behavior by allowing the employee to avoid a negative consequence if a certain behavior is exhibited. 3. Punishment weakens undesired behavior by providing an undesirable consequence after a person exhibits the unwanted behavior. Punishment brings undesirable consequences, such as resentment, and it should be used infrequently, if at all. 4. Extinction weakens an undesired behavior by not providing reinforcement of any kind when the behavior is exhibited. Teaching Tip: Solicit additional examples of the various kinds of reinforcement from your students. B. Providing Reinforcement in Organizations 1. A fixed-interval schedule provides reinforcement at fixed intervals of time, regardless of behavior. 2. A variable-interval schedule provides reinforcement at varied time intervals. 3. A fixed-ratio schedule gives reinforcement after a fixed number of behaviors, regardless of time. 4. A variable-ratio schedule varies the number of behaviors needed for each reinforcement. Behavior modification, or OB Mod (for organizational behavior modification), is a technique for applying the concepts of reinforcement theory in organizational settings. Behavior that should be increased and decreased are identified and tied to specific kinds of consequences. Group Exercise: Have student groups design a motivational system that a manager might use that is based on the concepts and principles of reinforcement. V. POPULAR MOTIVATIONAL STRATEGIES Many managers today are exploring new ways to motivate their employees. A. Empowerment and Participation Empowerment is the process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of responsibility and authority. Participation is the process of giving employees a voice in making decisions about their own work. Teaching Tip: Stress for students the subtle but real difference between empowerment and participation. Discussion Starter: Ask students for their own personal examples involving participation and/or empowerment. 1. Participation can occur in many different settings and involve a variety of different problems or situations. 2. Organizations are moving toward more empowerment via such techniques as work teams and new methods of organizing. B. Alternative Forms of Working Arrangements Another popular strategy for motivating workers today is developing and offering alternative forms of work arrangements involving time and/or place. 1. Variable work schedules include a compressed work schedule in which a forty-hour week is completed in fewer than five full days. 2. Flexible work schedules, sometimes called flextime, provide flexibility in the hours and times a person works. For example, employees might report to work early or late, take a short or long lunch, and leave early or late. Extra Example: Texaco, Shell, and General Mills are among other firms that use modified workweeks of some sort. Discussion Starter: Ask students how they would feel about working different forms of modified workweeks. 3. Job sharing occurs when two or more part-time workers to share one full-time job. 4. Telecommuting allows employees to work at home, often with the assistance of information technology such as email and the Internet. Discussion Starter: Note that some employers promote telecommuting not for motivational reasons but rather to cut down their own facilities costs. VI. USING REWARD SYSTEMS TO MOTIVATE PERFORMANCE An organizational reward system is the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. Cross-Reference: Note that the design of reward systems is a part of human resource management, as discussed in Chapter 14. Rewards tied to performance are likely to be more motivational and to lead to further improvements in performance. A. Merit Systems Merit pay refers to pay awarded to employees on the basis of the relative value of their contributions to the organization. Merit pay plans base as least some part of the pay on merit. The most common type of merit pay plan is the annual raise. B. Incentive Reward Systems Incentive systems attempt to reward employees in proportion to what they do. Incentive systems have the advantage of rewarding employees for high performance while not becoming a part of an individual’s base salary, encouraging continued high performance over time. 1. A piece-rate incentive plan is used when an organization pays an employee a certain amount of money for every unit she or he produces. This is the simplest type of incentive system. 2. Individual incentive plans reward individual performance at the time when high performance occurs. 3. Another common variation on incentive pay involves paying incentives based on both individual and group performance, or calculating the amount of money available for incentive pay based on corporate or division performance as a whole. 4. Sales commissions, in which an agent is paid a percentage of his or her sales over a period of time, are another type of incentive pay. 5. Other types of incentives include nonmonetary incentives such as additional time off or a company-paid vacation. Global Connection: Workers in Japan receive an average of 25 percent of their total pay in the form of flexible bonuses. In the United States, the average is only 1 percent. C. Team and Group Incentive Reward Systems 1. Gainsharing programs are designed to share the cost savings from productivity improvements with employees. Gainsharing aligns employee and corporate interests. a) In implementing gainsharing, team performance is measured, and if it shows an improvement over time, team members are awarded a percentage of the improvement as a one-time bonus. b) A Scanlon plan is similar to gainsharing programs, but the percentage of award is very high, typically two-thirds or more of the savings, and the award is given to all workers, not just those who made the improvements. 2. One-time team incentives may be awarded as a proportion of each employee’s base salary, or the same dollar amount may be given to each worker. 3. Nonmonetary rewards may be given at the group level. 4. Profit sharing creates a pool of money for annual employee bonuses based on corporate profits. Rewards may be given at the end of the time period or kept in an account until retirement. 5. Employee stock ownership programs, or ESOPs, gradually grants stock ownership of the firm to employees as a reward. D. Executive Compensation Typically, top managers have a different compensation plan than do the rest of a firm’s employees. 1. Base salary is a guaranteed payment, but that is only one component of executive compensation. 2. Incentive pay for executives usually includes annual bonuses based on performance. Incentive percentages are often specified in advance. 3. A stock option plan is established to give senior managers the option to buy the company stock in the future at a predetermined fixed price. a) If executives are effective, then stock price should rise, and the managers may buy the stock at bargain prices. The options are worthless, however, if stock price falls. b) Options are popular because their cost to the organization is low and they align the interests of managers and stockholders. c) Disadvantages of options include the potential manipulation of stock price by unscrupulous executives, new accounting changes under consideration that may require options to be treated as an expense item on an income statement, and the fact that options are no reward when stock price is falling. 4. Executives also usually receive many other types of compensation, including club memberships, use of company apartments and planes, low- or no-interest loans, and so on. 5. There are two important criticisms of executive compensation in the U.S. today. a) Many feel that executive compensation, averaging over $1 million, is simply too high, particularly in comparison to the salary of workers. b) There often seems to be little relationship between executive pay and performance. E. New Approaches to Performance-Based Rewards 1. Some organizations are allowing employees to have a greater say in how rewards are determined and allocated. 2. Some firms customize rewards to each individual employee’s needs. Cross-Reference: Note the relevance of designing reward systems to various theories of motivation as discussed throughout earlier sections of this chapter. CHAPTER 17 Managing Leadership and Influence Processes CHAPTER SUMMARY This chapter explores the nature of leadership and influence processes in organizations. After describing the nature of leadership, the chapter discusses leader traits and behaviors and then focuses on the situational approach to leadership. Related perspectives on leadership are then discussed. Finally, the chapter concludes with a discussion of political behavior in organizations. LEARNING OBJECTIVES After covering this chapter, students should be able to: 1. Describe the nature of leadership and relate leadership to management. 2. Discuss and evaluate the two generic approaches to leadership. 3. Identify and describe the major situational approaches to leadership. 4. Identify and describe three related approaches to leadership. 5. Describe three emerging approaches to leadership. 6. Discuss political behavior in organizations and how it can be managed. The opening case highlights the work habits of several highly successful leaders. While each has an unique way of approach his or her job, the case points out the keys: ability to function with minimal sleep, dedication to exercise to keep the energy level up, ability to take in vast amounts of information, and the ability to use many sources of information. Management Update: BusinessWeek Online (www.businessweek.com/magazine/content/04_40/b3902020.htm) presents an interesting interview with Carlos Ghosn. It describes Ghosn leadership style and also documents how he turned Nissan around. LECTURE OUTLINE I. THE NATURE OF LEADERSHIP A. The Meaning of Leadership Leadership is both a process and a property. 1. Leadership as a process is the use of noncoercive influence to shape the group’s or organization’s goals, motivate behavior toward the achievement of those goals, and help define group and organization culture. 2. Leadership as a property is a set of characteristics attributed to individuals who are perceived to be leaders. Group Exercise: Have small groups of students brainstorm a list of names that they think of when they hear the word “leadership.” Have a representative from each group write its list on the board. Note similarities and differences among the different lists. B. Leadership and Management Leadership and management are related but different. For example, the management side of executing plans focuses on monitoring results, comparing them with goals, and correcting deviations. In contrast, the leadership side of the same activity focuses on energizing people to overcome bureaucratic hurdles to help reach goals. Teaching Tip: Walk through Table 17.1 with your students to highlight for them the various distinctions that can be drawn between management and leadership. Organizations need both good managers and good leaders if they are to be effective. C. Leadership and Power Power is the ability to affect the behavior of others. Teaching Tip: Some instructors use their role vis-à-vis their students to illustrate power. For example, instructors hold legitimate, reward, and expert power over students, but they may or may not hold coercive and/or referent power. 1. Legitimate power is power granted through the organizational hierarchy. 2. Reward power is the power to give or withhold rewards. 3. Coercive power is the power to force compliance by means of psychological, emotional, or physical threat. Managers who rely too much on coercive power are resented and seen as poor leaders. Interesting Quote: “I’ve yelled at people and I’m not ashamed of it. We have to run this company efficiently and without a bunch of babies who say ‘Mommy yelled at me today.’ It’s impossible to run a leveraged operation like camp. If you don’t like it, leave. It’s not a prison.” (Linda Wachner, CEO of Warnaco, Fortune, October 18, 1993, 41.) 4. Referent power is based on identification with, imitation of, loyalty to, and charm of the leader. Followers react favorably to the leader because of who he or she is. 5. Expert power is derived from information or expertise. Discussion Starter: Have students recall examples of when they have used or have witnessed these various bases of power. 6. Several means of using power have been identified. a) A legitimate request based on legitimate power. b) Instrumental compliance, whereby a subordinate performs a duty requested and receives a reward for doing so. c) Coercion. d) Rational persuasion. e) Personal identification. f) Inspirational appeal. g) Information distortion, an unethical way of withholding or manipulating information. Group Exercise: Have small groups of students connect specific kinds of power with each of the potential uses of power. That is, each potential use of power relies on or assumes that the manager has one or more kinds of power. Discussion Starter: Ask students to critique each use of power in terms of its likely effectiveness and acceptability. II. GENERIC APPROACHES TO LEADERSHIP These approaches assume that there is “one best way” to lead. The behavioral approaches are more realistic and accurate than the trait approaches, but both of these generic approaches are overly simplistic. A. Leadership Traits Research in leadership began by trying to generate “the profile" of a leader, including traits such as intelligence and self-confidence. The list had as many exceptions as items and soon became too long to be useful. Extra Example: Other traits that have been suggested as determinants of leader effectiveness include astrological sign, birth order, body shape, and handwriting style. Teaching Tip: Point out to students the assumptions about leadership traits that sometimes play a role in political races. For example, some people questioned H. Ross Perot’s political skills because of his height, and others criticized Bill Clinton because he has tended to have a weight problem. Still, Clinton defeated George Bush, in part due to what some people called Bush’s “wimp factor.” Perhaps “wimpiness,” then, is also a trait! B. Leadership Behaviors 1. The Michigan studies (conducted by Likert) identified two basic forms of leader behavior: job-centered leader behavior and employee-centered leader behavior. These behaviors were thought to be at opposite ends of one continuum with employee-centered leaders being the more effective. Cross-Reference: Note that the Michigan studies were part of the same research programs that led to the identification of Systems 1 through 4 forms of organization design, as discussed in Chapter 12. 2. The Ohio State studies also found two basic leader styles: initiating-structure behavior and consideration behavior. A leader who initiates structure clearly defines the leader-subordinate role so that everyone knows what is expected. A leader who uses consideration behavior shows concern for subordinates and attempts to establish a friendly and supportive climate. Unlike the Michigan studies, these two styles were on separate continuums. Teaching Tip: It may help to sketch the distinction between the one-dimensional Michigan view and the two-dimensional Ohio State approach. Extra Example: The Ohio State studies involved one of the earliest known attempts to train managers to be more effective leaders. 3. The Managerial Grid is also based on two forms of leader behavior: concern for people and concern for production. By combining these two forms of behavior, managers can analyze leader behavior in organizations. Extra Example: The Managerial Grid is also used as an organization development technique. Organizations can buy the grid program and use it to enhance various behavioral processes and dynamics. Extra Example: The reason that little scientific evidence exists regarding the grid is that users must sign a contract specifying that they will not allow outsiders to evaluate it. III. SITUATIONAL APPROACHES TO LEADERSHIP The goal of situational approaches to leadership is to identify key situational factors and to specify how they interact to determine appropriate leader behavior. Situational models are better at describing leadership and at advising managers on how to improve their leadership ability. Cross-Reference: Note that situational approaches to leadership are consistent with the contingency perspective on management introduced and discussed in Chapter 2. Teaching Tip: Even though it is many years old, Tannenbaum and Schmidt’s leadership continuum, presented in Figure 17.2 still is an effective way to introduce the idea of situational approaches to leadership. Interesting Quote: One early practitioner of situational leadership was President Lyndon Johnson. This quote is from his description of how he handled different reporters during an interview published in The Atlantic Monthly, January 1976, p. 78: “You learn that Mary McGrory likes dominant personalities and Doris Fleeson cares only about issues, so that when you’re with McGrory you come on strong and with Fleeson you make yourself sound like some impractical red-hot liberal.” Teaching Tip: The three scales presented here in the text are, of course, only part of the LPC questionnaire. Obtain a copy of the complete instrument and have your students complete it. Use their results as part of the discussion of the LPC theory. A. Least-Preferred Coworker (LPC) Theory The LPC theory, developed by Fred Fiedler, was the first situational leadership theory. The LPC theory is a combined trait and behavior approach. 1. First, the leader’s personality is assessed. Fiedler argued that a leader’s personality makes him or her either task-oriented or relationship-oriented. The least preferred coworker (LPC) scale determines a leader’s personality. The leader thinks of the worker he or she is least able to work with while completing the scale. The total score for the scale presumably reflects the leader’s personality type as either task-oriented or relationship-oriented. 2. Next, the situation is assessed. Fiedler believed that the favorableness of the situation is the most important situational factor. Favorableness is determined by three things. a) Leader-member relations refers to the trust and respect that exist between the leader and the work group. Good relations are more favorable. Discussion Starter: The LPC theory suggests that leader-member relations is the most important of the three determinants of situational favorableness, while position power is the least important of the three. Solicit student opinions on this importance ranking. b) Task structure measures the degree to which the group’s task is well defined. High structure is more favorable. c) Position power, which assesses the power vested in the leader’s position, is favorable when the leader has a lot of power. Teaching Tip: Have students write hypothetical scenarios representing various levels of each aspect of favorableness. 3. When the situation is the highly favorable or highly unfavorable, the best leadership style is task-oriented. Relationship-oriented leaders are best in situations that are neither highly favorable nor highly unfavorable. 4. Fielder argues that since the leader’s style is fixed, the situation should be changed to match the leader in order to make him or her most effective. Discussion Starter: Fielder asserts that leader behavior is inflexible and cannot be readily changed. Ask students if they agree or disagree with this assertion. Discussion Starter: If Fiedler’s theory is valid, what implications might be drawn regarding leadership training programs? B. Path-Goal Theory The path-goal theory of leadership suggests that the primary functions of a leader are to make valued or desired rewards available in the workplace and to clarify for the subordinate the kinds of behavior that will lead to goal accomplishment and valued rewards. 1. Managers can adopt any one of four styles, depending upon the situation. Path-goal theory, unlike LPC theory, assumes that managers can readily change style. a) Directive managers let employees know what is expected of them. b) Supportive managers are friendly and approachable. c) Participative managers consult subordinates. d) Achievement-oriented managers excel at setting goals. 2. Situational factors are also important in path-goal theory, and they consist of personal characteristics of the subordinates (locus of control, and so on) and the environmental characteristics of the workplace (task structure, and so on). Teaching Tip: Point out for students the logic underlying this theory’s somewhat awkward name: the theory asserts that the leader’s primary function is to clarify for subordinates the path to their goals. That is, the leader can enhance subordinate performance by determining what subordinates want (their goals) and then making those goals clearly linked to performance (i.e., the path). Cross-Reference: The path-goal theory of leadership is a direct extension of the expectancy theory of motivation discussed in Chapter 16. Recall that expectancy theory suggests that motivation is a function of how much we want something and how likely we think we are to get it. The path-goal theory says that a leader should clarify the likelihood of getting desired outcomes or goals. Discussion Starter: Note that in contrast to the LPC theory, path-goal theory suggests that leaders can alter their behavior with little difficulty. Poll your students to determine whether they agree. C. Vroom’s Decision Tree Approach Cross-Reference: Note that Vroom was also one of the primary expectancy theorists, as discussed in Chapter 16. Vroom’s decision tree approach uses a situational model of leader behavior to predict what kinds of situations call for what degrees of group participation. 1. Managers must first assess the situation and decide whether time is a critical element in the situation. Based on the answers to these two sets of questions, the model recommends the decision-making style that is most likely to be effective. Effectiveness is measured by the quality of the decision and by employee acceptance of the decision. 2. To maximize effectiveness, Vroom suggests that one of five leadership styles should be adopted, depending on the situation. Leadership styles include one autocratic style, two consultative styles, and two group styles. 3. The original model has been supported by research, while the newer model has not yet been fully tested. However, the model is also very complex, which makes it difficult to use. Automated methods make the model easier. Teaching Tip: When the Vroom model was first introduced, a consulting firm marketed a device similar to a pocket calculator for using the model. The user pressed yes/no buttons to answer the model’s questions, and the display indicated the appropriate style of decision making. Teaching Tip: The Vroom model is very complex and may be difficult for students to grasp. Walk through several examples based on different scenarios, using the trees in Figure 17.5 and Figure 17.6 references. Ask students to notice especially the differences in the decision trees for use in situations that are or are not time-driven. Global Connection: In recent years, Japanese managers have become very interested in learning how to use the Vroom model. D. The Leader-Member Exchange Approach This approach stresses the fact that leaders have different kinds of relationships with different subordinates. Those close to the manager are the in-group members who receive better treatment than the out-group members. Discussion Starter: Ask students if they have ever experienced in-group/out-group treatment. Also ask them if they have ever observed a leader treating subordinates in different ways. IV. RELATED APPROACHES TO LEADERSHIP A. Substitutes for Leadership Substitutes for leadership specify in what situations leader behaviors are neutralized or replaced by characteristics of the subordinate, the task, and the organization. For example, highly experienced employees do not need to be told what to do. Discussion Starter: Ask students to identify leadership substitutes that might work in a classroom setting (e.g., structured assignments, group projects, etc.). B. Charismatic Leadership Charismatic leadership assumes that charisma is an individual characteristic of the leader, and charismatic individuals are more successful in influencing others. 1. Charismatic leaders envision the future and have high expectations. 2. Charismatic leaders use enthusiasm and prior success to energize others. 3. Charismatic leaders support other and express confidence. Discussion Starter: Ask students to identify popular charismatic leaders today. Discussion Starter: As referenced in the text, ask students to debate the ethics of charismatic leadership. C. Transformational Leadership Transformational leadership is leadership that goes beyond ordinary expectations by transmitting a sense of mission, stimulating learning experiences, and inspiring new ways of thinking. Teaching Tip: Some experts have noted that while transformational leaders may be perceived to be highly effective during actual organizational transformation, they are often perceived to be less effective when leading the organization after transformation is completed. V. EMERGING APPROACHES TO LEADERSHIP A. Strategic Leadership Strategic leadership is the capability to understand the complexities of both the organization and its environment and to lead change in the organization so as to achieve and maintain a superior alignment between the organization and its environment. Strategic leadership is effective when leaders understand the capabilities of their firm, the firm’s environment, and the direction of important trends. Cross-Reference: Note that strategic leadership is closely related to the discussion of strategy and strategic management that is found in Chapter 8. B. Cross-Cultural Leadership Effective cross-cultural leaders understand cultural and national differences and also the diversity that exists within a national culture. As organizations become more global and more diverse, cross-cultural leadership will become more important. C. Ethical Leadership In the wake of recent corporate scandals, managers are being called upon to demonstrate sound ethical principles and serve as ethical role models. VI. POLITICAL BEHAVIOR IN ORGANIZATIONS Political behavior consists of activities carried out for the specific purpose of acquiring, developing, and using power and other resources to obtain one’s preferred outcomes. In most organizations, political behavior is perceived to be widespread, and top levels are thought to be more political than are lower levels. Discussion Starter: Ask students if they think an organization can function without some form of political behavior. Also ask them if they think political behavior is more likely to have positive or negative effects on an organization. A. Common Political Behaviors 1. Inducement means giving something in return for support. 2. Persuasion relies on manipulation of logic and emotions. 3. When a manager does a favor in hopes of receiving one in return, that is called creating an obligation. 4. Coercion, or the use of force, may be effective in the short-term, but it is often ineffective in the long-term. 5. Another common form of political behavior is impression management, a direct and intentional effort by someone to enhance his or her image in the eyes of others. Impression management often centers on superficial traits, such as appearance. B. Managing Political Behavior There are some guidelines for effective management of political behavior. 1. Be aware that others may assume your motives are political even if they are not. 2. Give subordinates autonomy, responsibility, challenges, and feedback to reduce political behavior. 3. Avoid using power if possible. 4. Get disagreements out in the open, reducing the effectiveness of politics. 5. Avoid covert activities to avoid even the perception of political behavior. Discussion Starter: Ask students to recall instances of positive and negative political behavior they may have observed. CHAPTER 18 Managing Interpersonal Relations
and Communication CHAPTER SUMMARY This chapter explores interpersonal relations and communication in organizations. It opens with
a discussion of interpersonal relations then relates communication to the manager’s job. Interpersonal, organizational, and informal communication are then introduced and discussed. Finally, the chapter concludes with a discussion of how communication can be managed. LEARNING OBJECTIVES After covering this chapter, students should be able to: 1. Describe the interpersonal nature of organizations. 2. Describe the role and importance of communication in the manager’s job. 3. Identify the basic forms of communication in organizations. 4. Discuss informal communication, including its various forms and types. 5. Describe how the communication process can be managed to recognize and overcome barriers. The opening case describes the “do’s” and “don’ts” of phone interviews, which are becoming increasingly popular because of time and cost savings. While most people think that phone interviews
are easier to do as a job candidate than face-to-face interviews, this is not always true. How you respond matters as much in a phone interview as in a face-to-face interview. Discussion Starter: The website http://jobsearch.about.com/cs/interviews/a/phoneinterview.htm presents a list of questions likely to be asked during a phone interview. These questions can be used
to start a lively discussion of how best to answer these questions so that a favorable impression is created by the interviewee. LECTURE OUTLINE I. THE INTERPERSONAL NATURE OF ORGANIZATIONS Much of what goes on in organizations results from interactions among people. Teaching Tip: Have students keep a one-day log of their own activities. Note how many of the activities involve interactions with others. Teaching Tip: In addition to the quantity of communication involved in this schedule, note its diversity as well—the manager read, talked, listened, and observed information about specific management functions, general management issues, sports, employees, and other subjects as well. Cross-Reference: As noted in Chapter 1, most of a manager’s time is devoted to scheduled and unscheduled meetings and telephone calls. Increasingly, work-related email is also taking a large amount of time as well. A. Interpersonal Dynamics The nature of interpersonal relations generally falls on two continua between personal and impersonal, and positive and negative. B. Outcomes of Interpersonal Behaviors Some of the possible outcomes of interpersonal behaviors include satisfying needs, gaining social support, accomplishing goals, or creating conflict. Teaching Tip: A good way to summarize the material about outcomes of interpersonal behaviors
is with a 2 × 2 matrix. Draw such a matrix on the board, label one axis positive versus negative, label the other personal versus impersonal, and show how different outcomes can be classified into one of the four cells. II. COMMUNICATION AND THE MANAGER’S JOB Interesting Quote: “Real communication takes countless hours of eyeball to eyeball, back and forth.
It means more listening than talking.” (Jack Welch, CEO of General Electric, Harvard Business Review, September–October 1989, 113.) Although this quote was made in 1989, it remains true even today, particularly the importance of listening. A. A Definition of Communication Communication is the process of transmitting information from one person to another. Effective communication is the process of sending a message in such a way that the message received is as close in meaning as possible to the message intended. Teaching Tip: Stress the critical differences between simple communication and effective communication. The differences in the two are subtle but important. B. The Role of Communication in Management Managers use communication in order to fulfill all of the roles they enact and to carry out the basic management functions. Teaching Tip: Stress the fact that communication is a major ingredient in all management functions—planning, organizing, leading, and controlling. C. The Communication Process 1. The communication process begins when one person (the sender) wants to transmit a fact, idea, opinion, or other information to someone else (the receiver). 2. The sender encodes the message. 3. The message is then transmitted to the receiver through a channel (for example, a memo or phone call). 4. The message is received by the receiver and decoded. 5. The message may prompt the receiver to initiate a message of his or her own, and the cycle continues. 6. Noise, anything that disrupts the process, can occur anywhere along the communication path. Discussion Starter: Ask students to identify other examples of noise that they may have encountered. Extra Example: Other contemporary examples of noise include erasing a telephone message tape before a message is heard and addressing an email message to the wrong recipient. Group Exercise: Have small groups of students diagram a series of communication exchanges
to ensure that they understand how the process occurs. Teaching Tip: Select a hypothetical piece of information that you could conceivably want to impart
to your students and use it as a reference as you walk through the communication process. III. FORMS OF COMMUNICATION IN ORGANIZATIONS A. Interpersonal Communication 1. Oral communication takes place in face-to-face conversations, group discussions, telephone calls, and other circumstances in which the spoken word is used to express meaning. Though oral communication provides prompt feedback and does not require a great deal of preparation and skill, it suffers from inaccuracy and lack of a permanent record. 2. Written communication occurs when you put the message in written form. This method of communication inhibits feedback and interchange and requires a great deal of preparation. However, written communication is usually quite accurate and the receiver can take time reviewing it. It provides a permanent written record. Discussion Starter: Ask students whether they prefer to use oral or written communication. Extra Example: Note that this book is a form of written communication through which a professor
of Management at Texas A&M University is communicating with your students. Extra Example: At Greyhound, copies of all reports describing why a reservation system failed
to work effectively have been destroyed. As a result, top managers report that they do not recall earlier discussions regarding the system’s weaknesses. 3. Choosing the right form Oral communication is better when the message is personal, nonroutine, and brief. Written communication is better when the message is more impersonal, routine, and longer. Discussion Starter: Ask students to recall the last five times they needed to communicate information to someone else. Then ask them what method they used and why. B. Communication in Networks and Work Teams A communication network is the pattern through which the members of a group communicate. Various patterns have been found, such as the wheel, in which all communication flows through one central person who probably is the group’s leader. Group Exercise: Have students diagram different forms of communication networks that might
be identified in three- and four-person groups. Extra Example: The growing use of teams in organizations today has spawned many new terms.
For example, “blamestorming” refers to a group talking about where to place blame for an error or problem. A “salmon day” refers to a day spent swimming upstream and not getting anywhere. C. Organizational Communication 1. Vertical communication flows both up and down the organization. a) Upward communication consists of messages from subordinates to superiors. b) Downward communication occurs when information flows down the hierarchy from superiors to subordinates. 2. Horizontal communication involves colleagues and peers at the same level of the organization. It facilitates coordination and helps in problem solving. Cross-Reference: In Chapter 10 we described several coordination techniques. Note the role and importance of horizontal communication as a part of coordination. Global Connection: Language barriers are often a complication in horizontal communication within multinational organizations. D. Electronic Communication Electronic communication includes teleconferences, electronic mail, databases, telecommuting, cellular phones, and fax machines. 1. Formal information systems link various areas of the organization by computer; they can also be used to create effective communications. Many firms are placing the task
of developing a formal information system on the chief information officer (CIO). 2. Personal electronic technology refers primarily to email, cell phones, and personal digital assistants (also known as PDAs or handheld devices). While electronic communication helps workers stay in touch and is convenient, it can add to stress because workers are never unavailable for work demands. Another risk is that electronic communication comes at the expense of face-to-face meetings and conversations, making it hard to build a strong culture, develop solid working relationships, and create a mutually supportive atmosphere of trust and cooperativeness. Cross-Reference: Formal information systems are discussed in more detail in Chapter 22. Extra Example: Another advantage of electronic communication is the increased efficiency of workers. On the other hand, too much access to electronic communication can add to stress because workers are never unavailable for work demands. Extra Example: A recent visitor to DisneyWorld in Florida noted that most of the visitors using a free Internet café were on the machines to catch up with office work. It seems that technology has even invaded our family vacations! Discussion Starter: Poll your students to see how many of them use email regularly. Ask them for their views as to its advantages and disadvantages. IV. INFORMAL COMMUNICATION IN ORGANIZATIONS A. The Grapevine The grapevine is an informal communication network that can permeate an entire organization. The two most common forms of the grapevine are the gossip chain in which one person spreads the message to many other people, and the cluster chain, in which one person spreads the information to a select few. The grapevine spreads “gossip,” but it can sometimes be accurate and is often a reliable indicator of the mood of an organization. Managers can learn how to effectively use the grapevine to enhance their communications. Discussion Starter: Ask students to recount some of their own experiences with grapevines. Extra Example: Students use grapevines to transmit information about specific classes and instructors (e.g., who is easy, which course is interesting, etc.). Discussion Starter: Solicit student examples of when the aforementioned types of information transmitted through the grapevine have been both accurate and inaccurate. B. Management by Wandering Around Another form of informal communication is management by wandering around, in which managers keep in touch with what’s going on by wandering around the company and talking to people. A related aspect of informal communication is the informal interchange among employees that takes place outside the workplace. C. Nonverbal Communication Nonverbal communication is a communication exchange that does not use words or that uses words to carry more meaning than the strict definition of the words themselves. 1. Images are created by the kinds of words people elect to us. Teaching Tip: Use images from current publications to illustrate and discuss different forms of nonverbal communication. 2. Settings refer to where the communication takes place. Teaching Tip: If you don’t mind the invasion of privacy, ask students to comment on how the arrangement of your office influences communication that occurs within it. 3. Body language includes how we use our arms, hands, legs, and eyes; where we choose
to stand; how we dress; or where we pause when speaking. Discussion Starter: Ask students for other examples they have observed or experienced that involved nonverbal communication. Managers should be aware of the messages that are sent through their use of body language. They should work to ensure that their spoken, written, and nonverbal communications all send the same message. V. MANAGING ORGANIZATIONAL COMMUNICATION A. Barriers to Communication 1. Individual barriers are associated with individuals and include the following types. a) Conflicting or inconsistent cues. b) Lack of credibility about the subject. Extra Example: During a meeting with an important client, a partner in a consulting firm walked up
to an air conditioning unit in the computer operations center, placed his hand on it, and said, “I can remember my days coding software for these babies.” The client was understandably amused. However, the consultant’s subordinates, who were expert programmers, felt humiliated and the partner lost credibility with his employees. c) Reluctance to communicate. d) Poor listening skills. e) Negative predispositions about the subject. 2. Organizational barriers are associated with the organization itself and include the following types. a) Semantics. Extra Example: In one example of the semantics barrier, an older male manager happily shouted at
a younger female employee, “You’re so hot today!” What he meant to convey was that he was impressed with her speed in accomplishing a task, but she interpreted the remark as a sexual invitation. b) Status or power differences. c) Different perceptions. d) Noise. e) Overload. f) Different languages in use at multinational firms. Discussion Starter: Ask students to recall instances in which they have encountered one or more of the individual barriers to effective communication. Discussion Starter: Ask students to recall instances in which they have encountered one or more of the organizational barriers to effective communication. B. Improving Communication Effectiveness 1. Individuals can use several techniques to enhance communication effectiveness. a) Develop good listening skills. Teaching Tip: Stress the importance of listening as the single most important contributor
to communication effectiveness. Discussion Starter: Ask students to characterize themselves in terms of the listening skills illustrated in Figure 18.6, titled “More and Less Effective Listening Skills”. b) Encourage two-way communication. c) Be aware of language and meaning. d) Maintain credibility. e) Be sensitive to the receiver’s perspective. f) Be sensitive to the sender’s perspective. Discussion Starter: Ask students to recall people with whom they have trouble communicating.
Then ask them to explain the factors that led to their difficulties. Discussion Starter: Ask students to recall situations in which they used one or more of the suggested individual methods for improving communication effectiveness. 2. Organizations can also use certain techniques to enhance communication effectiveness. a) Follow up to ensure that the message was received and understood. b) Regulate information flows so that information is not too sparse or too overwhelming. c) Understand the richness of different media and use appropriate media. Instructor Manual for Management Ricky W. Griffin,9781111969714
