Chapter 15

Motivation and Leadership

©2004 by Nelson, a division of Thomson Canada Limited

1
 What Would You Do?
Leadership: Dealing with tragedy
 Sandler O’Neill is an investment

banking firm located in the World

Trade Center on September 11
 Top leaders are lost in tragedy

 Can new leadership help the firm

survive this catastrophic event?

©2004 by Nelson, a division of Thomson Canada Limited

2
 Learning Objectives:
What is Motivation?
After reading the next section,
you should be able to:

1. explain the basics of motivation

©2004 by Nelson, a division of Thomson Canada Limited

3
 Basics of Motivation

Exhibit 15.1

©2004 by Nelson, a division of Thomson Canada Limited

4
 Basics of Motivation

 Effort and performance

 Need satisfaction
 Extrinsic and intrinsic motivation
 Motivating with the basics

©2004 by Nelson, a division of Thomson Canada Limited

5
 Work Performance
and Motivation

Exhibit 15.2

©2004 by Nelson, a division of Thomson Canada Limited

6
 Effort and Performance
Job performance = Motivation x Ability x Situational
constraints

 Job performance
 how well someone performs a job
 Motivation
 effort put forth on the job
 Ability
 knowledge, skills, and talent of job incumbent
 Situational constraints
 factors beyond individual’s control impacting
performance

©2004 by Nelson, a division of Thomson Canada Limited

7
 Need Satisfaction
 Needs
 physical or psychological requirements that
must be met
 Unmet needs motivate people
 Four approaches
 Maslow
 Alderfer
 McClelland
 Herzberg
©2004 by Nelson, a division of Thomson Canada Limited
8
 Need Satisfaction
and Motivation

Exhibit 15.3

©2004 by Nelson, a division of Thomson Canada Limited

9
 Extrinsic and
Intrinsic Rewards
 Extrinsic rewards
 tangible and visible to others
 contingent on performance
 Intrinsic rewards
 natural rewards
 associated with performing a task for
its own sake

©2004 by Nelson, a division of Thomson Canada Limited

10
 Rewards and
Motivation

Exhibit 15.5

©2004 by Nelson, a division of Thomson Canada Limited

11
 Motivating with
the Basics
 Ask people what their needs are
 Satisfy lower-order needs first
 Expect people’s needs to change
 Satisfy higher-order needs by
looking for ways to allow
employees to experience intrinsic
rewards
©2004 by Nelson, a division of Thomson Canada Limited
12
 Learning Objectives:
How Perceptions and
Expectations Affect Motivation
After reading the next two sections,
you should be able to:

2. use equity theory to explain how

employees’ perceptions of fairness affect
motivation
3. use expectancy theory to describe how
workers’ expectations about rewards,
effort, and the link between rewards and
performance influence motivation
©2004 by Nelson, a division of Thomson Canada Limited
13
 Equity Theory
 Components of equity theory
 How people react to perceived
inequity
 Motivating with equity theory

©2004 by Nelson, a division of Thomson Canada Limited

14
 Components of
Equity Theory
 Inputs
 employee contributions to the organization
 Outcomes
 rewards employees receive from the
organization
 Referents
 others with whom people compare
themselves
 Outcome/Input ratio
 comparison of outcomes to inputs
©2004 by Nelson, a division of Thomson Canada Limited
15
 Outcome/Input Ratios

Exhibit 15.6

©2004 by Nelson, a division of Thomson Canada Limited

16
 Inequity
When people perceive that their
O/I ratio is different from their
referent’s.
 Underreward
 referent’s O/I ratio is greater than
yours
 experience anger or frustration
 Overreward
 referent’s O/I is less than yours
possibly experience guilt
©2004 by Nelson, a division of Thomson Canada Limited
 17
 How People React to
Perceived Inequity
(Underreward)
 Reduce inputs
 Increase outcomes
 Rationalize inputs or
outcomes
 Change the referent
 Leave

©2004 by Nelson, a division of Thomson Canada Limited

18
 Equity and Motivation

Exhibit 15.7

©2004 by Nelson, a division of Thomson Canada Limited

19
 Motivating with
Equity Theory
 Look for and correct major
inequities
 Reduce employees’ inputs
 Make sure decision-making
processes are fair
 distributive justice
 procedural justice

©2004 by Nelson, a division of Thomson Canada Limited

20
 Expectancy Theory

Components of expectancy theory

Motivating with expectancy theory

©2004 by Nelson, a division of Thomson Canada Limited

21
 Components of
Expectancy Theory
 Valence
 the attractiveness or desirability of a reward
 Expectancy
 perceived relationship between effort and
performance
 Instrumentality
 perceived relationship between
performance and rewards
Motivation = Valence x Instrumentality x
Expectancy
©2004 by Nelson, a division of Thomson Canada Limited
22
 Expectancy and
Motivation

Exhibit 15.8

©2004 by Nelson, a division of Thomson Canada Limited

23
 Motivating with
Expectancy Theory

 Systematically gather information

to find out what employees want
from their jobs
 Clearly link rewards to
performance
 Empower employees to make
decisions that enhance expectancy
perceptions
©2004 by Nelson, a division of Thomson Canada Limited
24
 Learning Objectives:
What is Leadership?
After reading the next two
sections, you should be able to:

4. explain what leadership is

5. describe who leaders are and
what effective leaders do

©2004 by Nelson, a division of Thomson Canada Limited

25
 Leadership
Leaders versus managers

Substitutes for leadership:

Do leaders always matter?

©2004 by Nelson, a division of Thomson Canada Limited

26
 Managers versus
Leaders

Exhibit 15.9

©2004 by Nelson, a division of Thomson Canada Limited

27
 Substitutes for
Leadership: Do Leaders
Always Matter
Leadership substitutes
 subordinate, task, or organizational
characteristics that make leaders redundant
or unnecessary

professional orientation, intrinsically satisfying
work, cohesive work groups
Leadership neutralizers
 subordinate, task, or organizational
characteristics that interfere with a leader’s
actions
 subordinate’s ability, intrinsically satisfying work,
©2004 by Nelson, a division of Thomson Canada Limited
organizational rewards beyond leader’s control 28
 Who Leaders Are and
What Leaders Do
 Leadership traits
 Leadership behaviours

©2004 by Nelson, a division of Thomson Canada Limited

29
 Leadership Traits
 Drive
 Desire to lead
 Honesty/integrity
 Self-confidence
 Emotional stability
 Cognitive ability
 Knowledge of the business
©2004 by Nelson, a division of Thomson Canada Limited
30
 What Really Works
Leadership Traits Do Make a Difference
Intelligenc
e

Dominance

Extroversion

©2004 by Nelson, a division of Thomson Canada Limited

31
 What Really Works
Performance and Charisma

Charisma and Perceived Leader Effectiveness

Charisma and Leader Satisfaction

©2004 by Nelson, a division of Thomson Canada Limited

32
 Leadership
Behaviours
 Initiating structure
 degree to which leader structures
followers’ roles by setting goals,
giving directions, setting deadlines,
and assigning tasks
 Consideration
 extent to which a leader is friendly,
approachable, supportive, and shows
concern for employees
©2004 by Nelson, a division of Thomson Canada Limited
33
 Learning Objectives:
Situational Leadership
After reading the next two
sections, you should be able to:

6. explain Fiedler’s contingency

theory
7. discuss Hersey & Blanchard’s
situational theory
©2004 by Nelson, a division of Thomson Canada Limited
34
 Putting Leaders in the
Right Situation:
Fiedler’s Contingency Theory

 Leadership style: Least preferred

co-worker
 Situational favourableness
 Matching leadership styles to
situations

©2004 by Nelson, a division of Thomson Canada Limited

35
 Fiedler’s Contingency
Theory

Exhibit 15.12

©2004 by Nelson, a division of Thomson Canada Limited

36
 Leadership Style: Least
Preferred Co-worker
 Leadership style is the way a leader
generally behaves toward followers
 leaders are generally incapable of changing
their leadership styles
 Style is measured by the Least
Preferred Co-worker scale (LPC)
 relationship-oriented
 task-oriented

©2004 by Nelson, a division of Thomson Canada Limited

37
 Situational
Favourableness
 How a particular situation either
permits or denies the leader’s
ability to lead
 Three factors
 leader-member relations
 task structure
 position power

©2004 by Nelson, a division of Thomson Canada Limited

38
 Situational
Favourableness

Exhibit 15.14

©2004 by Nelson, a division of Thomson Canada Limited

39
 Matching Leadership
Styles to Situations

Exhibit 15.15

©2004 by Nelson, a division of Thomson Canada Limited

40
 Adapting Leader Behaviour:
Hersey & Blanchard’s
Situational Theory
Situational leadership
 leaders need to adjust their leadership
styles to match followers’ maturity
Worker maturity
 ability and willingness of worker to take
responsibility for directing one’s own work
 four levels of maturity:
 M1 – neither willing nor able

M2 – willing but not able

M3 – able but not willing

M4 – able and willing

©2004 by Nelson, a division of Thomson Canada Limited

41
 Leadership Styles
 Leader chooses style based on
worker’s maturity for a specific
task
 Four styles:
 telling — high task/low relationship
 selling — high task and relationship
 participating — low task/high
relationship
delegating — low task and
 a division of Thomson Canada Limited
©2004 by Nelson,
42
 Strategic Leadership

After reading this next section,

you should be able to:

8. explain how visionary leadership

(i.e., charismatic and
transformational leadership) helps
leaders achieve strategic
leadership
©2004 by Nelson, a division of Thomson Canada Limited
43
 Visionary Leadership

Charismat
ic
leadersh
ip
Transformatio
nal leadership

©2004 by Nelson, a division of Thomson Canada Limited

44
 Charismatic Leadership
 Creates an exceptionally strong
relationship between leader and
followers
 Charismatic leaders:
 articulate a clear vision based on strong
values
 model those values
 communicate high expectations to followers
 display confidence in followers’ abilities
©2004 by Nelson, a division of Thomson Canada Limited
45
 Types of
Charismatic Leaders
 Ethical charismatics
 provide development opportunities for followers
 open to positive and negative feedback
 recognize others’ contributions
 share information
 emphasize interests of the group
 Unethical charismatics
 control and manipulate followers
 do what is best for themselves not the organization
 only want positive feedback
 only share information beneficial to themselves

©2004 by Nelson, a division of Thomson Canada Limited

46
 Transformational
Leadership

 Generates awareness and

acceptance of group’s purpose and
mission
 Gets employees to see beyond
their own needs and self-interest
 Goes beyond charismatic
leadership
©2004 by Nelson, a division of Thomson Canada Limited
 Different from transactional 47
 Transformational
Leadership
Transformational leaders are
visionary and they use:

 Inspirational motivation
 Intellectual stimulation
 Individualized consideration

©2004 by Nelson, a division of Thomson Canada Limited

48
 What Really Happened?
Leadership: Dealing with Tragedy
 Deceased employees’ families

 given pay check for the rest of the year

 insurance coverage for five years
 Jimmy Dunne became manager and
provided strong leadership
 developed skills in negotiation, calmness,
patience, support, while maintaining strong
business focus
©2004 by Nelson, a division of Thomson Canada Limited
49