Lecture 1: Leadership and motivation theories Reading : Mandatory reading lecture 1: Tobbins, S., & Judge, T. (2021). Essentials of organizational behavior (15th Edition., Ch. 1, pp. 27-45, Ch. 7 & 8, pp. 129167). What is leadership ? Leadership is defined as the goal-oriented, reciprocal and social influence in order to execute common tasks in and by means of a structured work situation. Leadership is the goal-oriented, social impact on the attitude and behavior of single persons as well as the interaction in and between groups with the objective of reaching joint goals. Leadership is the ability to influence a group toward the achievement of a vision or a set of goals Used to attain goals – involves the use of influence – occurs among a group of people leadership influences culture, efficiency and productivity. Why Leadership ? 1. Leaders can increase their employees’ performance. (Judge & Piccolo, 2004) 2. CEO activities explain 14% of the variance in firm performance. (Joyce et al., 2003) 3. 70% of the variance in team engagement can be explained by the quality of leadership. (Harter, 2018) 1. A charismatic leadership style leads to an increase in affective (ρ = .45) and normative (ρ = .34) commitment of employee 2. Laissez faire leadership leads to lower affective commitment (ρ = -.30) of employees 3. Destructive leadership leads to lower employee well-being, higher turnover intention, higher resistance, more counterproductive behaviour and lower individual performance. Leadership versus Management Management skills are used to plan, build, and direct organizational systems to accomplish missions and goals, while leadership skills are used to focus on a potential change by establishing direction, aligning people, and motivating and inspiring The duality of leading tasks and managing tasks represents one of the fundamental dilemmas of leadership. Can leadership be learned 30% is traits (innate, stable) 70% are competencies (acquirable) - socialization - environment - experience - active development via training Indirect and Direct Leadership Indirect : by strategy (CFF) by structure (Swisscom) by culture (Hilti) by qualitative structure and personnel Conclusion : what is leadership ? - Without followers a person will not be a leader. Many managers are too busy with managerial tasks (“Doing things right”) instead of leadership tasks (“Doing the right things”). Direct leadership and indirect leadership (structure, culture or strategy) complement each other. Leadership can partly be learned. Theories of motivations Content-Oriented versus Process-Oriented Theories What is motivation : Motivation is the process that accounts for an individual’s intensity, direction, and persistence of effort toward attaining a goal Content-Oriented Theories Intrinsic motivation: Saint.gallen is super interesting and the content of the courses are super! Extrinsic motivation: I love the trischli and I want to have a good job Google : immaterial First theory: Hierarchy of needs Maslow Focus on growth needs for motivation Second theory: Theory X and Y The comportment of the boss is responsible of the behavior of the employee: if you treat your employee like they have a mentality X, they will act as theory X Third theory: Two factor theory Cover the minimum of hygiene factors and then focus totally and the motivators factors Conclusion Content-oriented theories Process-Oriented Theories People compare job inputs and outcomes with those of relevant others and will try to eliminate inequities To motivate people, outcomes of employees should be fair regarding their input as well in comparison with the output of others. Want to be paid equally as others because I compare myself to others = don’t feel good either if you are paid to less or to much Conclusion Process-oriented theories Performance-Based Compensation Motivation trough performance based compensation Compensation for specific and individual performance with the aim to enhance work efforts. Performance-based compensation components are paid in order to reward the additional output of an employee in comparison to normal performance. Positive effects Meta-analysis by Locke et al. (1980): Average increase in productivity of 30% Meta-analysis by Guzzo et al. (1985): Strong average effect on productivity Meta-analyses by Jenkins et al. (1998), Judiesch (1994) and Stajkovic et al. (1997) find similarly strong effects Results of new experimental research supports previous results (Cadsby et al., 2007; Dohmen & Falk, 2011; Nyberg et al., 2018) Problems - Self-selection: Different compensation models attract different people. Performance-based pay is more attractive for successful employees with high levels of performance needs and low risk aversion. But: Who comes for money, will leave for money! Measurement and evaluation problems: Unproblematic with simple work tasks. In more complex jobs, however, the reason for performance and success is not very easy to determine. Crowding-out: When intrinsically motivated people’s behavior is externally influenced their intrinsic motivation is reduced, their job satisfaction declines and, unless extrinsic rewards can compensate, their performance will be reduced too (crowding-out effect). Spill-over: When intrinsically motivated people receive extrinsic rewards for a task, the negative effect on intrinsic motivation is not only on that one task but also spills over to other areas. Multitasking-effect: People focus only on tasks with higher monetary rewards. Other positive behavior (e.g. helping behavior) is reduced and manipulations and forgery (e.g. “creative record keeping”, reclassification of money for own benefit) are increased. Negative effects Meta-analysis by Deci, Koestner and Ryan (1999) - Performance-based monetary or in-kind rewards have a negative effect on intrinsic motivation - This negative effect is stronger if the reward is announced. - Performance-based verbal appreciations have a positive effect on intrinsic motivation. Managerial Compensation boss being pay more to manage the company Conclusion performance based compensation Because there is a positive effect on extrinsic motivation and negative effect on intrinsic motivation, performance-based compensation is especially advisable if... - the company is capable and willing to pay enough performance-based rewards to compensate the negative effect on intrinsic motivation - there is little risk for multi-tasking-effects (which is rather the case for low complexity jobs) - Generally, it is important to establish an environment in which people are highly engaged and are not motivated exclusively by extrinsic rewards.
