MMM7520

Contemporary Leadership
Individual Assignment
Title Name: The Importance of Intrinsic Motivation in
Leadership: A Case Study of British American Tobacco

Mustakkima Afrin
Date: 13 April 2015

Word Count: 3238

Abstract:

This assignment will focus on the motivational tools & transformational leadership in
British American Tobacco. The motivational tools are used intrinsically to satisfy
employee needs with enabling employee empowerment in key leadership roles for
strategic decisions, and streamlined reward operations enabling the organization to deal
with growing requirements.
A detail analysis in motivational tools applied to keep employee satisfaction high and
comparison with Japan Tobacco International is done in the assignment. Results from the
comparison study suggest that effective implementation of intrinsic motivational tools
with transformational leadership helped BAT to create a better working environment for
employees compare to JTI.

Key words: British American Tobacco, Japan Tobacco International, Transformational

Leadership, Motivation, Intrinsic Motivation & Extrinsic Motivation.

Contents
Page 2 of 18

Topic
Page No.
1.0 Introduction
4
2.0 Literature Review on different kinds of Motivation
5
2.1 Intrinsic Motivation
5
2.2 Extrinsic Motivation
6
3.0 Case Study: Intrinsic vs. Extrinsic: The importance of Intrinsic
7
Motivational Tools in British American Tobacco
3.1 Intrinsic Motivational Techniques used at BAT
3.2 Reward and Recognition Techniques used in BAT
4.0 BAT vs. JTI (Japan Tobacco International): The opposite approach of JTI

10
13
15

in Motivational Tools utilization

5.0 Conclusion
Reference

17
18

1.0 Introduction:
Transforming leadership occurs when one or more persons engage with others in such
a way that leaders and followers raise one another to higher levels of motivation and
morality by transforming leadership which ultimately becomes moral in that it raises the
level of human conduct and ethical aspirations of both the leader and led and, thus, has a
transforming effect on both. (Gregor Burns 1978)
Transformational Leadership is about innovation which means new thoughts are derived
and put into practice. These leaders welcome changes and continuously bring about
Page 3 of 18

changes in themselves and those nearby them. Motivation is the key factor in the
behaviour and attitude of the employees. In order to extract the best performance,
transformational leaders need to motivate employees in different way to a certain level.
"The term motivation refers to factors that activate, direct, and sustain goal-directed
behaviour... Motives are the "whys" of behaviour - the needs or wants that drive
behaviour and explain what we do. We don't actually observe a motive; rather, we infer
that one exists based on the behaviour we observe." (Nevid, 2013)
Employee motivation has always been a key problem for managers of all organisations.
Demotivated employees do not really participate in building either the profits or the
reputation of an organisation; they tend to produce low quality work and leave the
organisation if given an opportunity. On the other hand, employees who are highly
motivated can contribute significantly by producing high quality work (Amabile, M. T,
1993).
The goal of this assignment is to ascertain the importance of intrinsic motivation in
leadership. In order to do that a case study has been conducted by the using British
American Tobacco (Section 3.0) and a comparison has been made with Japan Tobacco
International for a holistic view (Section 4.0). Before moving to the case study a literature
review has been conducted on different kind of motivation in order to understand the
concept more fully (Section 2.0). The assignment closes with its concluding remarks.
(Section 5.0)

2.0 Literature Review on different kinds of Motivation:

Motivation plays a major role in increasing the motivational level of employees in the eye
of transformational leaders. Numerous researches show that motivation can be a better
retention tool and performance motivator in comparison with money or a compensation
plan The man who does not work for the love of work but only for money is not likely to
make money nor find much fun in life (Charles Schwab (1862-1939) was quoted in The
Best Damn Book about the Profession of Selling. Period! (Howard B, Rutstein, 2006). As
Page 4 of 18

a result there always been a debate on this issue. It is worthwhile to mention here that
motivation can mainly be divided into two parts -

Intrinsic

Extrinsic

2.1 Intrinsic Motivation:

When an employee does an activity for its innate satisfactions rather than for an extensive
outcome it is essentially intrinsic motivation. Amabile, M. T, (1993) argues that
employees are intrinsically motivated when they enjoy, an interest, the satisfaction of
curiosity, self-expression or personal challenge within the organisation. According to
learning theories (eg Hull, 1943 which is typical) all behaviours are motivated by
physiological drives (and their derivatives) and people become satisfied completely if
they are intrinsically motivated through satisfaction of their innate psychological needs.
Deci (1980) saw intrinsic motivation as the need for capability and self-determination
and Bandura and Schunk (1981) explained that a sense of personal efficiency in
understanding challenges is pertinent to breed greater interest in the activity than is selfperceived inefficiency in making capable performances Deci (1972) also stated that
intrinsic motivation tends to decline when extrinsic tools are offered depending on
performance, as these rewards may lessen an individual's intellect of personal connection
and feelings of capability.
2.2 Extrinsic Motivation:
It is a concept that pertains whenever an activity is done by an employee in order to attain
some separable outcome, preferably tangible. This might take the form of a reward: a pay
raise, a cash bonus, a gift or some other good or benefit than can be easily be called
tangible reward for performance. Amabile, M. T, (1993) argues that employees are
intrinsically motivated when they engage in the work to obtain some target that is apart
from the work itself. According to Deci (1972), extrinsic motivation is a concept that
Page 5 of 18

relates whenever an action is done in order to get some distinguishable result; and Ryan
(1982) suggested that extrinsic motivation operates when a person performs an act in
order to enhance or maintain self-esteem;, or when companies seek to get the best out of
their employees by offering tangible resources like monetary benefits or promotion.

3.0 Case Study: Intrinsic vs. Extrinsic: The importance of Intrinsic Motivational
Tools in British American Tobacco
British American Tobacco (BAT) is one of the leading companies in tobacco industry and
has operated successfully since 1873. BAT is a pioneer in blending innovation with
experience in every aspect of operations, especially in employee satisfaction.
BAT operates in more than 180 countries in the world with 55,000+ employees. Across
all the functions, BAT is highly appreciated for outstanding employee benefits. In
Page 6 of 18

particular there are high standards of employee benefits .These added benefits include
flexi work time, informal group meetings in both indoor & outdoor locations, recognition
through global notice board for high performers, yearly employee satisfaction survey and
proactive actions based on that
Intrinsic Motivation is vital for the British American Tobacco leadership teams &
managers in many ways. Reward & recognition policies are based on attracting, retaining
& motivating top talent in the organization and letting them drive great performance.
BAT believes in rewarding employees competitively and fairly for their contribution
towards delivering business results. Reward & recognition is based on four pillars. They
are Growth, Productivity, Winning Organization and Sustainability.
Thus BAT employees drive growth through giving their best efforts; in turn, BAT ensures
maximum productivity by providing the best working environment for them. Winning
Organization means placing the organization before any individual: team work instead of
individual brilliance. The collective effort of the team is more productive and growth
centric than one individual performing outstandingly. And the final part of sustainability
means continuity in every sphere of the organization.
BAT leaders are therefore exemplary in that they seek to leverage intrinsic motivational
tools to grow their teams performance and utilise their maximum potentials. Some of
classic results of their approach are:

Figure: Benefits of Intrinsic Motivation

Page 7 of 18

Higher Morale
Successful use of intrinsic motivational principles raises morale for employees and teams
in BAT. These principles are related to an employees recognition, self-esteem, ownership
etc. They intrinsically reward the performing employee so that it boosts his/her morale.
Maximum Productivity
Employees who feel good about their jobs and their performance tend to perform at an
even higher level which results in maximum productivity in time, cost & quality. HR &
Line Managers in BAT makes sure that the employees feel good in their job so that they
have the best drive for result attitude in them. These certainly enable employees to deliver
their maximum output/productivity in their particular job. As a result of this, the company
always has the capacity to bring out the best in each employee.
Lower Absenteeism
Employees who feel theyre important to the organisation look forward to coming to
work; and this results in lower absenteeism. As employees are highly motivated and their
drive for results is high, they always want to give more. This further leads them to
maximise their impact at every opportunity.
Higher Retention
Line Managers generally strive for better employee/supervisor relationships, for
increased engagement, and for interaction with employees that makes them feel valuable
to the organisation. A motivated and happy employee will always look to build his/her
career around the job s/he is doing right now. Whenever employees are happy, they tend
to stick with the current job. And these factors lead the company to have higher retention
rate than companies that do not foster intrinsic motivation.
Best Bottom Line Results
Managers able to get the best from each employee ultimately affect the bottom line. In
BAT managers are trained to become charismatic or transformational leaders so that they
can inspire their teams in what they say and do. These managers usually go for intrinsic
Page 8 of 18

motivational tools to encourage their teams. Furthermore, there is competition between

teams, and a mutually beneficial and symbiotic relationship develops between manager,
team and the work in hand.

3.1 Intrinsic Motivational Techniques used at British American Tobacco

Interest

There are many ways to motivate employees intrinsically. Managers at British American
Tobacco leverage seven factors to promote intrinsic motivation. These are
Imagination

Co-Operation

Intrinsic Motivation Techniques

Control

Page 9 of 18

Recognition
Task

Competition

Figure: Intrinsic Motivational Tools used by BAT

Interest:
It is an activity that stimulates an employees attention to achieve or get the job done.
Leaders should always focus on an employees needs fulfilment tools. They always mix
and match different techniques like a global employee recognition board (where the best
employees of the quarter are announced), taking the team on an informal tour to energise
them, giving unannounced leave etc., all to create a buzz or excitement among
employees. This increases the interest of the employees in their job.
Task:
BAT provides each employee with a goal which involves a certain amount of difficulty
for the employee. An employee is not allocated the most difficult task from the
beginning. Rather they are given a certain task with deadline that can be finished with
some ease. When employees continue to meet deadlines successfully, their confidence
increases.
Control:

Page 10 of 18

BAT allows employees to have a choice in what happens in their activities. Each
employee gets some sort of control in their job. This element of control increases their
ownership in the task, and develops the decision-making skill of the employee. By
continuously doing this, the employee becomes more confident and motivated and they
become an asset for the company.
Imagination:
BAT uses creative games to promote learning in the workplace. The company arranges
informal sessions, a tour or a task. It gives the employee the capacity to organise feeds
into leadership training and development as well.
Competition:
BAT compares the performance of one employee to another to show their current
progress during a task. It is always better to show the same level employees their
performance relative to others. A healthy competition among employees will only result
in the betterment of the organisation.
Co-operation:
BAT habitually encourages employees to help each other to achieve goals and to think
about the broader picture. Team spirit is fundamental to the success of the organisation.
Line managers always encourage employees to work for the betterment of the team, not
for the individual themselves.
Recognition:
BAT appreciates employees accomplishments through different means of recognition;
this in turn can intensify their motivation. Line managers are trained to appreciate and
recognise their employees in the right channel or in the appropriate forum. Recognition of
this kind helps employees to increase their morale as they feel, they are an inseparable
part of the team.

Page 11 of 18

3.2 Reward and Recognition Techniques used in British American Tobacco

British American Tobacco believes that employee recognition is vital in keeping
employees happy. They usually follow the below techniques:

Informal Leadership Roles

Track & Post KPIs
Page 12 of 18

Praise

Development

Communicate

Promotes from Within

Figure: Reward & Recognition Techniques in BAT

Praise:
Line managers recognise their employees for a job well done & thank them at the end of
the day. They praise their employees for doing a great job, particularly if they catch them
doing something well and tell them how well they did, praise them in public, gather
their team together for a moment and celebrate an accomplishment.
Development:
They consistently train their employees, increase their skill base, and prepare them to fill
in at the next level, or make temporary assignments to different departments. The new
joiners go through a three day intensive induction module to accustom themselves with
the company. Along with that they provide functional trainings to employees who are
ready for promotion. In addition to that, they send employees to expatriate assignment to
gain experience and exposure from the assignments.
Promote from Within:
BAT managers tend to prefer an internal promotion, which not only recognises the
employees involved but also ensures that others know that advancement is possible.
Managers make sure employees know what skills are required to take that next step, and
make sure they provide the resources to gain those skills.
Create Informal Leadership Roles:
Line managers find ways to create informal leadership roles for their employees, like
allowing them to lead a small project, to train new employees, to give facility tours to
visitors, or simply to share experiences from a training seminar or inter-departmental
assignment with the rest of the team. Transformational leadership is presumed as a task
involving development through delegation and the best approaches of delegating work
are learnt by a manger through exercise and on the job experience. The manager should
identify that learning is a result of the chances faced during a task. This is why employees
with more exposure and opportunities and employees who have worked with a number of

Page 13 of 18

tasks during their career have the extra edge of developing and growing in a professional
manner to grow later into successful managers of their own. (Bass & Avolio, 1993)
Communicate:
BAT managers communicate with employees in formal, informal, written and spoken
ways to share their ideas, their suggestions and their concerns.
Track and Post KPIs:
BAT managers make sure that their employees know how they & their department are
performing. They post results, discuss improvement needs and, most importantly,
celebrate accomplishments (measured in line with the companys goals). As activities are
followed up continuously, the employees feels important as they are able to see that their
work is evaluated and recognised in the right channel though the right forum. Because of
this, they take their every opportunity or work seriously no matter how important it is and
try to deliver their maximum effort on the job.

4.0 BAT vs. JTI (Japan Tobacco International): The opposite approach of JTI in
Motivational Tools utilization
BAT seeks to change and adapt reward and recognition techniques to keep employees
highly motivated. It is a difficult task as there is a large and diversified employee pool.
But this can be achieved through tailoring the reward and recognition schemes and
matching them to employee needs and demands. This requires research inside & outside
the company to find the best motivational tools for line managers.
On the contrary, a core competitor of BAT is JTI. They are always famous for providing
extrinsic benefits towards their employees. They provide good compensation to the
employees with profit sharing, yearly performance bonus and other monetary incentives.
Although they are not focused on individual performance management which is why they
Page 14 of 18

have lower retention rate than BAT. Their managers believe transactional leadership as
they are more focused on compliance through monetary reward or punishment. Their
approach is keep the same structure for infinity and they pay attention to find employees
faults and deviations.
If we compare the extrinsic and intrinsic factors of both companies, then we will be able
to get a clearer picture
BAT Salary
55,000/Year
35,000/Year
38,000/Year

Job Title
Finance Manager
Key Accounts Manager
Regional Sales Manager

JTI Salary
61,000/Year
38,000/Year
42,000/Year

Table: Pay Comparison of BAT & JTI

BAT Recognition
Yes
Yes
Yes

Recognition Head
Expatriate Assignments
Benefit Car
Individual Development

JTI Recognition
No
No
No

Scheme
Table: Recognition comparison of BAT & JTI
The above tables are a clear guideline about the two companies approaches regarding
employee benefits. BAT is more inclined towards intrinsic factors as they focuses on
providing individual recognition and JTI is towards extrinsic factors as they focuses on
monetary factors.

Page 15 of 18

5.0 Conclusion
Intrinsic and extrinsic motivation tools are both necessary for any organisation in order to
motivate employees, especially in large and diverse organisations like BAT & JTI. Which
motivational principles should be used, and how & when they should be used are matters
of fine psychological and organizational judgement. Intrinsic motivational tools are
highly appreciated by those employees who are in the upper or mid-level of the
organisation because these employees are more likely to respond to incentives that
address their self-esteem or self-actualisation needs (which are unlikely to be physical
motivational tools like monetary reward or gifts at this level). However for employees at
lower levels within the organisational structure (who may have greater economic need)
extrinsic tools are more appropriate than intrinsic.
So finally, it can be concluded that BAT successfully balances intrinsic and extrinsic
motivation better than JTI. However, the most important tools of motivation they use are
the intrinsic motivational tools.

Page 16 of 18

Reference:
Amabile, M. T, (1993) Motivational Synergy:

Toward New Conceptualisation of

Intrinsic and Extrinsic Motivation in Work Place. Human Resource Management Review,
Vol3, No. 3,185-201
Anderson C., Hellriegel D. & Slocum J (1977) Managerial response to environmentally
induced stress. Academy of Management Journal, 20, 260272.
Bandura A., Adams N. E., Beyer J. (1977) Cognitive processes mediating behavioural
change. Journal of Personality and Social Psychology, 35, 124139.
Bandura A., Schunk D. H. (1981) Cultivating competence, self-efficacy, and intrinsic
interest through proximal self-motivation. Journal of Personality and Social Psychology,
41, 586598.
Bass, B. M., & Avolio, B. J. (1993) Improving Organizational Effectiveness

throughTransformational Leadership London: Sage.

Page 17 of 18

Brief A. P., Aldag R. J. (1981) The self in work organisations: A conceptual review.
Academy of Management Review. 6, 7558.
Burns, M. J. (1978). Leadership. Harper & Row.
Deci E. L.(1972) The effects of contingent and non-contingent rewards and controls on
intrinsic motivation. Organisational Behaviour and Human Performance. 8, 217229.
Deci E. L. (1980). The psychology of self-determination. Lexington, MA: Lexington
Books.
Deci E. L. (1975). Intrinsic motivation. New York: Plenum.
Deci E. L., Ryan R. M.(1985) Intrinsic motivation and self-determination in human
behaviour. New York: Plenum.
Howard B, Rutstein, (2006), The Best Damn Book about the Profession of Selling.
Period!
Nevid, J. (2013). Psychology: Concepts and applications. Belmont, CA: Wadworth.
www.glassdoor.com/Reviews/British-American-Tobacco-Reviews-E8378.htm
www.glassdoor.com/Salary/JT-International-Salaries-E8764.htm

Page 18 of 18