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Achievement motivation theory

A theory that establishes a relationship between personal characteristics, social background, and achievement. A
person with a strong need for achievement tends to exhibit such characteristics as:

• regarding the task as more important than any relationship;

• having a preference for tasks over which they have control and responsibility;
• needing to identify closely, and be identified closely, with the successful outcomes of their actions;
• seeking tasks that are sufficiently difficult to be challenging, to be capable of demonstrating expertise, and to
gain recognition from others, while also being sufficiently easy to be capable of achievement;
• avoiding the likelihood and consequences of failure;
• requiring feedback on achievements to ensure that success is recognized;
• needing opportunities for promotion. The need for achievement is based on a combination of intrinsic
motivation (drives from within the individual) and extrinsic motivation (pressures and expectations exerted
by an organization, peers, and society). Achievement is also clearly influenced by education, social
awareness, cultural background, and values. See motivation.

Active management

1.. A management style characterized by high levels of involvement in both task-related activities, such as initiating
structures and setting goals, and interpersonal activities, such as listening, motivating, and providing feedback. See
relationship-motivated; task-motivated.

2. A method of portfolio management in which individual investments are selected with an eye to earning abnormal
returns. The general academic view is that this approach runs counter to the efficient markets hypothesis and is
therefore unlikely to be successful. The strategies of diversification and following a market index are thought more
likely to provide greater returns. Compare passive management.

Administrative management (classical school of management)

The traditional view of management that centres on how a business should be organized and the practices an
effective manager should follow. The two major contributors to this school of thought were Henri Fayol (1930) and
Max Weber (1922). Fayol's 14 principles of management are still relevant, while Weber's bureaucracy model still has
some relevance in medium and large organizations.

A feeling of detachment that causes employees to believe that their work is neither a relevant nor an important part of
their life. Because conflicts and disputes, leading to underperformance, can be caused by alienation, managers need to
be aware of its existence and its causes if they are to improve relationships within a workforce. Some of the principal
causes of alienation are:

• powerlessness – the inability to influence work conditions, quality, volume, etc.;

• meaninglessness – an absence of recognition of the contribution made by the individual to the output of work;
• isolation – the absence of human interaction during working hours; this may result from the nature of the
location or a psychological gap between individuals and their supervisors and managers;
• low self-esteem – a reflection of the lack of value placed on individuals by an organization and its managers;
• loss of identity with the organization – the absence of pride in working for the organization, reinforced by the
feeling that the individual's personal commitment is not recognized either financially or psychologically;
• lack of prospects – a feeling of frustration at being trapped in a situation that offers little prospect of
• lack of equality – a result of strict differentiation between the grades and levels in a hierarchical organization.
Only by addressing these causes can managers achieve groups of people who feel pride in their work,
supported in solving their problems, and rewarded for their skills and effort. See motivation; organizational

Assertiveness training
Training courses designed to help employees to develop their abilities, exercise initiative, present themselves
convincingly, translate ideas into action, and generally maximize their potential. Assertiveness training aims to raise
trainees' self-esteem to enable them to accept that as individuals they have a right to express themselves, to be
listened to, and to be taken seriously.

The way in which a person views and evaluates something or someone. Attitudes determine whether people like or
dislike things – and therefore how they behave towards them.

Attitude is traditionally divided into cognitive, behavioural, and affective components, although the main emphasis
now tends to fall on defining attitude in terms of affect – the person's feelings towards the object, brand, etc. Is the
brand good or bad? Is it likeable? The importance of the cognitive and behavioral components is still accepted, but
they are no longer regarded as critical components.

Attraction-selection-attrition model (ASA model)

A theory holding that: (1) individuals are attracted to organizations whose members are similar to themselves in terms
of personality, values, interests, and other attributes; (2) organizations are more likely to select those who possess
knowledge, skills, and abilities similar to the ones their existing members possess; and (3) over time, those who do
not fit in well are more likely to leave. Owing to these three factors, the personal characteristics of those who work
for an organization are likely to become more similar over time, leading to the consolidation of organizational

Authoritarian leader
A leader who makes all major decisions himself or herself and takes a highly dominant role in interactions with
subordinates. Experimental studies of leadership style have found that work groups with authoritarian leaders tend to
be more discontented than those with democratic leaders or laissez-faire leaders and to be less productive than such
groups when the leader is absent.

autonomous work groups (AWGs)

Small work units within an organization that are given considerable responsibility for organizing their activities and
achieving results without guidance from management. Advocates of AWGs argue that improvements in performance
can be attained if employees are highly motivated and fully involved in the direction and control of their work.
The process of identifying the best practice in relation to products and processes, both within an industry and outside
it, with the object of using this as a guide and reference point for improving the practice of one's own organization.
Benchmarking can take place within an organization, when it may form part of a total quality management (TQM)
exercise; in relation to direct competitors, although such organizations may be unwilling to divulge the details of their
practices; or in relation to organizations in totally different fields, in which case the main value of the practice is that
it forces people to look outside their established patterns of behaviour. Most of the early work in benchmarking was
carried out in manufacturing but the technique is now applied in a wide range of organizations. Typical areas in
which benchmarking can be expected to bring benefits to an organization include:

• Customer satisfaction. An organization wishing to improve some aspect of its performance (e.g., its website)
might ask customers how this compares with that of competitors. By identifying and making improvements
the company can expect to improve sales in the long run.
• Cost reduction. The benchmarking exercise may identify an area in which the organization has higher costs
than competitors. Potential savings may be identified, such as reducing the number of suppliers or making
better use of technology. Benchmarking can be applied to all departments.
• Increased efficiency and effectiveness. Benchmarking can help to streamline processes and identify ways of
delivering a better service. Before introducing benchmarking an organization will have to identify the costs of
the exercise and the potential benefits and cost savings. The most significant cost will be the management

Blue-collar worker
A manual worker, normally one working on the shop floor, as opposed to an office worker, who is known as a white-
collar worker. The blue collar refers to the blue overalls often worn in factories and the white collar to the normal
office attire of a white shirt and a tie.

A hierarchical administrative system designed to deal with large quantities of work in a routine manner, largely by
adhering to a set of strict and impersonal rules; it is characterized by its permanence and stability, its body of
experience and precedent, and its absence of a reliance on individuals. Bureaucracies have sprung up all over the
world in the public and private sectors of an economy, in government, and in the service industries. It is generally
believed to be the only viable structure for large sophisticated organizations. However, the modern strategies of
downsizing, business process re-engineering, and total quality management have to some extent undermined the
inevitability of its structures.

Bureaucratic leader
A leader who depends on his or her position in a clearly defined hierarchy to influence followers, who adheres to
established rules and procedures, and who is generally inflexible and suspicious of change. Compare charismatic
leader. See also leadership style.

Bureau pathology
(red-tape syndrome) The manifestations of exaggerated bureaucratic behaviors (see bureaucracy). They include
resistance to change, an obsessive reliance on rules and regulations, and an individual incapability of responding to
unpredictable events. The bureau path tends to believe the policies and procedures of an organization constitute an
end in themselves, rather than a means to an end.

A reaction against bureaucratic behavior (see bureaucracy; bureau pathology) by an individual (usually a client).
The individual demands personal attention and refuses to abide by the rules and procedures followed by an
A work-related condition of emotional exhaustion in which interest in work, personal achievement, and efficiency
decline sharply and the sufferer is no longer capable of making decisions. The condition is brought on by the
unrelenting stress of pressure at work and is frequently experienced by individuals in jobs involving considerable
involvement with people, who derive a major part of their self-esteem from their work, and have few interests outside

Change management
A systematic approach to dealing with both planned and unplanned change in the organization. A major part of
change management is dealing with fear of or resistance to change in the workforce. The best strategy for dealing
with such resistance is usually one of communication, participation, encouragement, and support.

Charismatic leader
A leader who inspires his or her followers through personal magnetism and highly developed communication skills.
Charismatic leaders tend to be confident, visionary, and change-oriented and may display eccentric or unusual
behavior. Compare bureaucratic leader. See also leadership style; power styles; transformational leadership.

Chartered Institute of Personnel and Development (CIPD)

A professional organization for personnel managers in the UK, founded in 1913. The Institute, an independent and
non-political body, aims to encourage and assist the development of personnel management by promoting
investigation and research and establishing standards of qualification and performance. Previously known as the
Institute of Personnel Management (IPM), it received the Royal Charter in 2000.

Cognitive processes (CIM)

The broad range of mental activities, including perception, learning, memory, thinking, information processing, and
reasoning, that involve the interpretation of stimuli and the organization of thoughts and ideas. These processes have
relevance to the attitudes of potential customers and their evaluation of the flow of information provided for them by
advertising and other communications seeking to persuade them to make purchases.

Cohort effect
Any effect associated with being a member of a group born at roughly the same time and bonded by common life
experiences (e.g. growing up in the 1980s). The effect is of great interest to advertisers and others involved in
marketing. In large organizations, cohorts are often defined by entry date and can retain some common characteristics
(size, cohesiveness, competition) that affect the organization.

Communications management
A systematic approach to defining, managing, and monitoring the official channels of communication within an
organization. The aim is to ensure that information flows freely and efficiently between the different levels and
sections of a company, thereby improving decision making, motivation, and overall performance. Various processes
and incentives can be devised to ensure that information flows in a bottom-up as well as a top-down direction, so that
e.g. the experience of shop-floor workers is considered by management. Effective communications management is
central to such modern philosophies as total quality management.

Conflict management
The control of conflict within an organization. There are three main philosophies of conflict management:

• traditionalists hold that all conflict is bad and potentially destructive for an organization;
• behaviorists see conflict as inevitable in an organization and attempt to harness it in a positive way;
• Integrationists see conflict as essential to the survival of an organization and as something that should be
encouraged. See also change management; diversity management.
Conflict of interests
A situation that can arise if a person (or firm) acts in two or more separate capacities and the objectives in these
capacities are not identical. The conflict may be between self-interest and the interest of a company for which a
person works or it could arise when a person is a director of two companies, which find them selves competing. The
proper course of action in the case of a conflict of interests is for the person concerned to declare any interests, to
make known the way in which they conflict, and to abstain from voting or sharing in the decision-making procedure
involving these interests.

Contingency theories of leadership

In industrial and organizational psychology, various models stating that the performance of a leader will depend
not only on his or her qualities or methods but also on certain key aspects of the work situation. The leader will be
most effective when his or her leadership style is best suited to the characteristics of the group (e.g. level of
experience) and the nature of the group task (e.g. whether clearly structured or not). One of the earliest and most
influential of such theories, that of Fred Fiedler, proposes that task-motivated leaders will be most successful in very
favorable or very unfavorable situations and that relationship-motivated leaders will be most successful when the
situation is not so extreme. Some other models suggest that it may be easier for the leader to alter the work situation
to suit his or her style than vice versa. See leadership theories.

Contingent time off (job and finish)

A job-design practice in which staff are allowed to go home as soon as an agreed amount of work, to an agreed
standard, has been completed.

1. (Worker co-operative) A type of business organization sometimes adopted in labour-intensive industries, such as
agriculture, and often associated with socialist systems. Agricultural co-operatives have been encouraged in the
developing countries, where individual farmers are too poor to take advantage of expensive machinery and large-
scale production. In this case several farms pool resources to jointly purchase and use agricultural machinery. The
principle has sometimes been extended to other industries, as when factory employees arrange a worker buy-out in
order to secure threatened employment. The overall management of such co-operatives is usually vested in a
committee of the employee-owners. 2.. (consumer co-operative) A movement launched in 1844 by 28 Rochdale
weavers who combined to establish retail outlets where members enjoyed not only the benefits of good-quality
products at fair prices but also a share of the profits (a dividend) based on the amount of each member's purchases.

Core job characteristics

The five characteristics that have been identified by job characteristics theory as inducing the critical psychological
states required for motivation at work:

• skill variety – the degree to which the job includes different activities drawing on several skills and abilities;
• task identity – the extent to which a person is able to complete a task from start to finish;
• task significance – the degree to which a person carrying out a task perceives it to be important to the
organization and its clients;
• autonomy – the degree to which a person has discretion as to how and when the task will be done;
• feed back – the extent to which the person receives feedback on the quality of performance from the task
itself. These core job characteristics are important to the psychological well-being of the individual. If they
are lacking, then job satisfaction (and hence motivation) may well suffer unless a programme of job
enlargement or job enrichment is instituted.

Democratic leader
A leader who maintains an egalitarian atmosphere within the group and who is prepared to delegate planning,
decision making, and other responsibilities to followers. Experimental studies of leadership style have found that
work groups with democratic leaders tend to be more flexible, innovative, and highly motivated than those with
authoritarian leaders or laissez-faire leaders.

The process of removing the requirement for individual skills as part of an operating system. Techniques to improve
the efficiency of systems tend to simplify and standardize procedures, so that they can be repeated at minimum cost.
Computers and information technology can also play a role in replacing human decision making. Deskilling can
result in a loss of motivation on the part of employees.

The practice of treating some people less favourably than others on grounds unrelated to merit, normally because they
belong to a particular group or category. In the UK, it is illegal to discriminate on grounds of sex, race, disability,
religious or other belief, sexual orientation, or age. Indirect discrimination is deemed to occur where a provision,
criterion, or practice is applied to everyone but the result is to put one group at a particular disadvantage. See equal

1.. Movement by a manufacturer or trader into a wider field of products. This may be achieved by buying firms
already serving the target markets or by expanding existing facilities. It is often undertaken to reduce reliance on one
market, which may be diminishing (e.g. tobacco), to balance a seasonal market (e.g. ice cream), or to provide scope
for general growth. 2.. The spreading of an investment portfolio over a wide range of assets to avoid serious losses if
a recession is localized to one sector of the market.

Diversity management
Management that embraces the challenges of managing a workforce that is heterogeneous in terms of culture,
ethnicity, religious belief, and political affiliation. The growing diversity of the workforce in most countries today
means that many former assumptions about shared attitudes, values, and cultural norms no longer apply. Successful
diversity management requires that managers acknowledge cultural differences in the workforce, understand the ways
in which these can translate into different work-related attitudes (e.g. in terms of attitudes toward authority or
individual competitiveness), and accept this diversity as an asset rather than a liability to the organization.

Ecocentric management
Management that treats environmental issues as a core business concern, rather than an externality. Recognizing the
relationship that the firm has with the natural environment, it regards taking full account of the environmental impact
it produces as part of management's responsibility.

E-learning (electronic learning)

Any form of training or education that uses computer technology as an essential part of the teaching process.
Typically, computerized data and programs substitute partly or completely for the human teacher and students engage
with all or part of the course remotely (e.g. over the Internet).

A person who works under the direction and control of another (the employer) in return for a wage or salary. An
employee works for the employer under a contract of employment, whereas an independent contractor who is
contracted to perform a specific task works under a contract for services. The distinction is crucial since employees
enjoy more protection under employment legislation. The question as to whether someone is or is not an employee is
governed by a number of tests laid down by the courts over many years and can be far from clear. Compare worker.

Employee assistance programme

A confidential personal counseling service funded by an employer. EAPs provide professional counselors with whom
employees can discuss their work and non-work-related problems, which may be emotional, financial, or legal or
related to alcohol or drug misuse.

Employee evaluation
A formal assessment of an employee's performance in his or her job, as measured by certain objective indicators (e.g.
sales figures, absenteeism) or by more subjective rating procedures. The employee may be evaluated in absolute
terms or by comparison with others doing similar work, as in the paired comparison method. The results are usually
presented to the employee as part of his or her performance appraisal.

Employee participation
1.The encouragement of motivation in a workforce by giving shares in the company to employees. Employee
shareholding (see Employee Share Ownership Plan) can be an important factor in improving industrial relations. 2..
The appointment to a board of directors of a representative of the employees of a company, to enable the employees
to take part in the direction of the company.

Employee share ownership plan (ESOP)

A method of providing the employees of a company with shares in the company. The ESOP buys shares in its
sponsoring company, usually with assistance from the company concerned. The shares are then allocated to the
employees, often on the basis of relative pay but sometimes more equally. The advantage claimed for ESOPs is that
they do not require dilution of the sponsoring company's share capital by the creation of new shares. In the USA they
are known as employee stock option plans.

Employment protection
The legal safeguards applying to an employee's position with regard to his or her employment.

In human-resource management, the giving of increased responsibility and a measure of control to employees in
their working lives. The concept is based on the view that people need personal satisfaction and fulfillment in their
work and that responsibility and control increase satisfaction. Employees like empowerment because an increase in
responsibility usually leads to greater rewards and enhanced prospects. On the other hand, it has been criticized
because staff are asked to become more accountable without being given more authority. Empowerment also has the
added advantage that it enables potential talents to be identified and developed, either by the employing organization
or the individual. As well as being a motivational strategy, empowerment may occur as part of a process of re-
engineering organizational structures to remove layers of management, so that the system can respond more rapidly
to customers' requirements.

Engel's law
The law stating that the lower a family's income the greater is the proportion spent on food. As the income rises the
family's spending is spread across a wider range of goods and services, such as housing, transport, consumer goods,
leisure activities, etc. It was stated by the German statistician Ernst Engels (1821–96).

Equal pay
The requirement of the Equal Pay Act 1970, expressing the principle of equal opportunities, that men and women in
the same employment must be paid at the same rate for like work or work rated as equivalent. Work is rated as
equivalent when the employer has undertaken a study to evaluate his employees' jobs in terms of the skill, effort, and
responsibility demanded of them and the woman's job is given the same grade as the man's or when an independent
expert appointed by an employment tribunal evaluates the two jobs as of equal value.

Ethical behavior
Behavior judged to be good, just, right, and honorable, based on principles or guides from a specific ethical theory.
However, ethical theories may vary from person to person, country to country, or company to company. Ethical
realism accepts that although morality does not apply internationally, the ethical values of a trading partner should be

Ethical dilemmas
The moral quandaries that can occur in running a business. While not confronting the law, most of these dilemmas
arise as a result of conflict between what the businessperson sees as necessary in the interests of the business and his
or her personal ethical values. These dilemmas may be related to entrepreneurial activities (Does the product or
service offered conflict with one's social responsibility?), to one's behavior to competitors (Have the claims for the
superiority of one's product or service overstepped the limits of fair competition?), to one's shareholders (Are they
earning a fair return on their capital?), and most of all, perhaps, to one's customers (Does the product or service offer
fair value for money?).

Belief, often unconscious, in the superiority of one's own ethnic group or the universality of one's own culture-bound
practices and preferences. In a global economy, such assumptions may be particularly dangerous in the fields of
marketing and advertising.

extrinsic motivation
An incentive to do something that arises from factors outside the individual, such as rewards or penalties. The
promise of a bonus if one meets agreed performance targets is an obvious example of such motivation. Compare
intrinsic motivation.

Fair trade
The policy of benefiting producers in developing countries by buying such commodities as rice and coffee directly
from them at a guaranteed price. In the UK, consumer demand for fairly traded products has grown rapidly in recent

The ability to adapt an operating system to respond to changes in the environment. Increasingly seen as a source of
competitive advantage in a rapidly changing market, it is an area of operations management in which Japanese
practices have had a major impact. Flexibility has two dimensions: how quickly and how far an organization can
change. Changes may be called for in terms of the product or service, i.e. the flexibility to introduce new products;
mix flexibility is the ability to provide a wide range or mix of products; volume flexibility is the ability to produce
different volumes to suit demand; delivery flexibility is the ability to change (usually advance) the delivery date.

Flexible working
Employees who have children aged under 6, a disabled child aged under 18, or who care for an adult dependent, have
the legal right to request a change in their working hours and conditions, including the option of working from home.
Although employers have no obligation to grant such a request, they are legally obliged to consider it seriously and to
give a written explanation for any refusal.

Flexi time (flexi hours)

A system of working, especially in offices, in which employees are given a degree of flexibility in the hours they
work. Provided they work an agreed number of hours per day, they may start or finish work at different times. The
object is usually to reduce time spent in rush-hour travelling or to adjust work schedules to other demands, such as
responsibility for children.

Glass ceiling
Invisible artificial barriers (sometimes generated by management) that can limit the career advancement of
employees, particularly women and members of minority groups. The expectations and aspirations of all staff within
an organization should be met equally. While standards of practice in this area are laid down by law in many
countries, they are not always observed.

Goal setting
The practice of setting individual performance targets for employees. To maximize performance and increase
motivation four general principles should be followed: (1) goals should be challenging but realistic; (2) goals should
be specific, not vague; (3) employees should have involvement in setting these goals; and (4) goals should be

Group roles
Certain identifiable roles (i.e. coherent sets of behaviours) that tend to be adopted by the different members of a
group, partly as a matter of personal inclination but also as a response to the expectations of others. These will
include relationship roles, such as the group encourager or comedian, as well as task roles, such as the initiator or

Groups think
In group decision making, the tendency to drift into ill-conceived policies or decisions without adequate debate. This
can be a result of various pressures, including the illusion of ingroup superiority and the wish to achieve consensus
and avoid painful disagreements.

Human relations theory

An approach to management based on the idea that employees are motivated not only by financial reward but also by
a range of social factors (e.g. praise, a sense of belonging, feelings of achievement and pride in one's work). The
theory, which developed from empirical studies carried out in the 1920s and 1930s, holds that attitudes, relationships,
and leadership styles play a key role in the performance of an organization. See motivation; self-actualization.

Human-resource management (HRM)

The management of people to achieve individual behavior and performance that will enhance an organization's
effectiveness. HRM encourages individuals to set personal goals and rewards, guiding them to shape their behavior in
accordance with the objectives of the organization that employs them. HRM was traditionally called personnel
management and involved such responsibilities as interviewing job applicants, providing training, and storing
personal data on employees. However, current trends place a greater emphasis on the morale and motivation of
employees, which is increasingly seen as the key to competitiveness. Strategies for achieving enhanced job
satisfaction may include training employees to do more than one job and encouraging all the members of a
workforce to accept responsibility (see empowerment).

Intrinsic motivation
An incentive to do something that arises from factors within the individual, such as a need to feel useful or to seek
self-actualization. Compare extrinsic motivation. See intrinsic reward; motivation.

intrinsic reward
A positive outcome of performing work that is integral to the work task itself, such as love of or pride in one's work,
a sense of challenge or achievement, etc.

Islamic finance
A system of finance that is bound by religious laws that prevent the taking of interest payments. Joint ventures in
which the funder and the borrower share profits and risks are, however, acceptable. There are a number of different
techniques by which this takes place. Murabaha is a good vehicle for temporary idle funds, which are used to
purchase goods from a supplier for immediate sale and delivery to the buyer, who pays a predetermined margin over
cost on a deferred payment date. The term can be as short as seven days. Musharaka transactions involve
participation with other parties in trade financing, leasing, real estate, and industrial projects. Net profits are shared in
proportions agreed at the outset. Shirkah is a partnership between a bank and a customer to share the risks and gains
of a project. Muqarada is a joint venture by finance providers. Ijarah involves profit from rental income on real
estate. Ijarawa-iktina is leasing of large capital items, such as property or plant and machinery. Leasing is achieved
by the equivalent of monthly rental payments, and at the expiry the lessee purchases the equipment.

An identifiable discrete piece of work carried out by an organization. For costing purposes a job is usually given a job

Job analysis
A detailed study of a particular job, the tools and equipment needed to do it, and its relation to other jobs in an
organization. The analysis should also provide the information needed to say how the job should best be done and the
qualifications, experience, or aptitudes of the person best suited to doing it. Data is usually collected by questioning
those already doing or supervising the job and is subjected to various forms of interpretation by a job analyst.
Accurate job analysis is crucial to effective job evaluation, employee evaluation, and personnel selection.

Job characteristics theory

A theory that describes how job design can affect motivation, performance, and job satisfaction. A number of
specific core job characteristics are held to induce high levels of motivation and performance.

Job description
An official document that states the purpose of a specific job, together with tasks or duties involved, performance
objectives, and the reporting relationships. It also provides information on the remuneration and working hours. In
large organizations, a job description is usually arrived at through a formal process of job analysis; it can then be
used to compile a personnel specification defining the skills and other attributes necessary to successful performance
of the job. See also job dimensions; personnel selection.

Job design
The process of putting together the various elements of work that constitute an operating system, to form jobs that
individuals will performance. The process involves a balance between the needs of the individual to be healthy, safe,
and motivated and the needs of the organization to be economic, efficient, and effective. There is no single solution:
each compromise will reflect the strategy and management philosophy favoured by a particular organization.

Job rotation
An approach to job design that reduces boredom, and thus increases motivation, by rotating staff through a range of
jobs. This process can also increase the flexibility of a system by introducing an element of multiskilling. The key is
to make use of rotation with a minimum of disruption and learning-curve effects, and to retain the element of

Job satisfaction
The sense of fulfilment and pride felt by people who enjoy their work and do it well. This feeling is enhanced if the
significance of the work done and its value are recognized by those in authority (see empowerment; motivation;
self-actualization). The factors that determine job satisfaction are investigated by industrial and organizational
psychology because it is widely accepted that a satisfied workforce is more productive and compliant than a
dissatisfied force. The general conclusion is that to motivate and reassure employees, managers should encourage the
sense of community felt by everyone in a successful organization, in addition to broadening their jobs and praising
their work. An absence of job satisfaction has been blamed for absenteeism,, accident proneness, high labour
turnover rates, poor industrial relations, and a demotivated workforce that produces shoddy work (see alienation).
Organizational psychologists have shown that apart from the human needs fulfilled by working, satisfaction is also
related to the expectations aroused by the job: both the needs and the expectations require fulfilment if the job is to
provide satisfaction.

Laissez-faire leader
A leader who effectively abdicates from the leadership role by allowing members of the group freedom of action and
providing little guidance or structure. Experimental studies of leadership style have found that work groups with
laissez-faire leaders tend to be more apathetic and less productive than those with authoritarian leaders or
democratic leaders.

leadership style
The traits, behavioural tendencies, and characteristic methods of a person in a leadership position. An important
dimension of leadership style is the extent to which the leader is willing to delegate responsibility and encourage
input from followers; some key styles here are those of the authoritarian leader, democratic leader, and laissez-
faire leader. Another basic dimension is the extent to which a leader is task-motivated (concerned with defining
goals and the means to achieve them) or relationship-motivated (concerned with supporting and encouraging
subordinates). A distinction can also be drawn between the charismatic leader, who relies on his or her personal
qualities to inspire followers, and the bureaucratic leader, who depends on his or her position in the hierarchy and
an established set of rules and procedures. See transactional leadership; transformational leadership. See also
power styles.

leadership theories
In industrial and organizational psychology, various theories that have been put forward to explain the successful
or unsuccessful performance of leaders. Such theories tend to fall into three main categories:

• Trait theories of leadership focus on the role played by certain key personality traits in the leader. These
usually include decisiveness, organizational ability, confidence, and communication skills.
• Behavioural theories of leadership focus on issues of leadership style, notably the extent to which the
leader can be described as task-motivated or relationship-motivated. Contingency theories of leadership
attempt to define the different leadership behaviours demanded by different situations.
• Cognitive theories of leadership focus on the ways in which followers' ideas and perceptions can affect the
performance of their leaders.

line and staff management

A system of management used in large organizations in which there are two separate hierarchies; the line
management side consists of line managers with responsibility for deciding the policy of and running the
organization's main activities (such as manufacturing, sales, etc.), while the staff management, and its separate staff
managers, are responsible for providing such supporting services as warehousing, accounting, transport, personnel
management, and plant maintenance.

Maslow's motivational hierarchy (Maslow's hierarchy of needs)

A model of human motivation developed by the US psychologist Abraham Maslow (1908–70). It posits a hierarchy
of human needs (or motives) with five levels: physiological needs, such as food and sleep; safety needs; love needs;
esteem needs, such as competence and recognition; and meta needs, such as the needs for beauty, knowledge, and
self-actualization. Essentially, the higher levels of motivation come into play after the lower needs have been
satisfied. Maslow developed this model largely as a reaction against behaviouristic theories of motivation, which
focus on the role of physical and material rewards. It has proved widely influential in human relations theory and
other aspects of industrial and organizational psychology.
The mental processes that arouse, sustain, and direct human behavior. Motivation may stem from processes taking
place within an individual (intrinsic motivation) or from the impact of factors acting on the individual from outside
(extrinsic motivation); in most cases these two influences are continually interacting. The vocabulary associated
with motivation is large; such terms as purpose, desire, need, goal, preference, perception, attitude, recognition,
achievement, and incentive are commonly used. Many of these drives can act on an individual simultaneously,
causing varying degrees of conflict. A consumer deciding between buying chocolate and buying ice cream is in
conflict. An employee who wants to disagree with the boss but also wants to keep his or her job is in conflict. In a
business context, an understanding of human motivation is crucial to understanding consumer buying behaviour. It is
also vital to the design of organizational norms and structures, including reward structures, that encourage effort and
achievement on the part of employees. In the realm of theory considerable importance has been given to the hierarchy
of needs investigated by Abraham Maslow (1908–70; see Maslow's motivational hierarchy), which places the basic
needs of human survival at the bottom of the scale of human motivation and self-actualization at the top. The more
flexible ERG theory focuses on three groups of needs that form a hierarchy: existence needs (physical and material
wants); relatedness needs (the desire for interpersonal relationships); and growth needs (desires to be creative and
productive). Although most psychologists now believe that human needs and motives are too variable to be confined
to a fixed hierarchy, these theories have the merit of emphasizing that, besides goals, ambitions, and rewards, there is
a need for success to be recognized by others and a need to develop and progress. A person in an organization never
works in a vacuum; there can be a real conflict between different motivations that relate to the organization: Would I
be worse paid working elsewhere? But would I be more secure/better trained/more appreciated elsewhere?

In the two-factor theory of motivation proposed by Frederick Herzberg (1923–2000), those aspects of the work
situation that can motivate employees by providing positive job satisfaction (as opposed to a mere absence of
dissatisfaction). They include responsibility, autonomy, variety, and the intrinsic rewards arising from the work

Organizational behavior
The ways in which people behave, individually and collectively, when working together in organizations. The study
of organizational behavior involves attention to such issues as organizational commitment, organizational culture,
and group decision making. See industrial and organizational psychology.

Organizational commitment
An individual's psychological attachment to an organization and desire to remain part of it. It is normally measured
by attitudinal dimensions, e.g. identification with the goals and values of the organization; desire to belong to the
organization; and willingness to display effort on behalf of the organization. A distinction is sometimes made
between affective commitment, which involves a sense of loyalty and shared values, and mere continuance
commitment, which arises from inertia or the problems of finding alternative employment. Compare alienation.

Organizational culture (corporate culture)

The values, customs, rituals, attitudes, and norms shared by members of an organization, which have to be learnt and
accepted by new members of the organization. It is argued that there are at least three different types of
organizational culture:

• In an integrative culture the objective is to obtain a consensus regarding the values and basic assumptions of
the organization and to produce consistent actions. This integration brings unity, predictability, and clarity to
work experiences.
• In a differentiated culture, subcultures develop that have internal consensus about values and basic
assumptions but differ greatly between each subculture; this produces inconsistencies throughout the
• In a fragmentation culture there are multiple interpretations of values and assumptions, which produce great
ambiguity. This can arise from fast changes within the organization, the growing diversity of the workforce,
and the increasingly global environment with which organizations are faced.

Performance appraisal
A formal review of the performance of an employee. The results of the appraisal may be used in deciding an
employee's pay or other rewards, career prospects, or training requirements. It usually involves an interview between
the employee and his or her immediate manager, although in some cases there may be an element of self-appraisal. In
most organizations, appraisal consists of assessing the employee's ability (or otherwise) to meet expected standards
and his or her general demeanour as a member of the workforce. See also employee evaluation.

Person–job fit
The extent to which an individual's skills, interests, and personal characteristics are consistent with the requirements
and rewards of their work.

Person–organization fit
The extent to which an individual's values, interests, and behavior are consistent with the culture of an organization as
a whole, rather than with a specific role or task.

Power styles
The characteristic ways in which different managers attempt to influence the behavior of employees and others,
overcome resistance, and achieve their goals. Power styles can be characterized as either competitive or collective.

• Impression management is a competitive power style in which information is controlled and manipulated in
order to influence peoples' attitudes to events, policies, or personalities. This reliance on presentation and
'spin' may at times amount to actual deceit.
• Consensus and charismatic power styles are forms of the collective use of power. The consensus power style
involves participative decision making and joint problem solving, whereas the charismatic style makes use of
the manager's personality to inspire the members of an organization to work together for a common purpose
(see charismatic leader; transformational leadership).
• A transactional power style involves the use of negotiation and contingent reinforcement (rewards and
penalties) to influence others; it can be either competitive or collective, depending on the decision maker.
Cooperation is needed for any transaction to take place: if that transaction involves the use and allocation of
scarce resources it could become very competitive. See transactional leadership.

Psychological contract
The psychological nature of a contract between an organization and its staff. This encompasses the implications and
expectations that arise as a result of the relationship. Psychological contracts can take various forms:

• A coercive contract is one in which the relationship between an organization and its staff, or between an
organization and its customers, is based on coercion. An example of this occurs if sections of the community
are forced into using a monopoly or near-monopoly for an essential commodity or service (electricity,
telecommunication, or fuel). It can occur with institutions, such as schools and colleges, where the students
attend because they are required to do so by society.
• In an alienative contract the relationship between staff and the employing organization is negative. This
traditionally applied to large sophisticated organizations, especially to staff working on production lines and
in administrative hierarchies, in which they have very little control over the quality and output of work.
• A remunerative contract is one in which the relationship between staff and the employing organization is
clearly drawn up in terms of money paid in return for the time spent at work. It is normally used when there is
a low level of mutual identity between the staff and the organization.
• A calculative contract is one in which the staff have a low commitment to the goals of the employing
organization and a high commitment to earnings and satisfaction. It is a key feature of the wage–work bargain
for production and administrative staff. For those with professional and technical expertise, the calculative
relationship is based on the ability to practise, the need to find an outlet for these skills, and individual drives
to serve and become expert.
• In a normative contract the individual is highly committed to the objectives of the employing organization.
This is usually found in religious organizations, political parties, and trade unions, and also occurs with some
business organizations if the wage–work bargain is sound and the organization accepts a range of obligations
and responsibilities to ensure that it is maintained. See also organizational commitment.

psychological tests
(personality tests) Tests designed to assess the personalities and abilities of individuals to determine their suitability
for a particular job and to make best use of their talents. With the increasing use of computers to analyse information,
the tests used in personnel selection have become increasingly complex; choosing the wrong person for a senior job
can be costly and have far-reaching effects in a competitive market.

Relationship-motivated (person-oriented)
Describing a leadership style that is concerned with maintaining positive relationships within the group, removing
causes of friction, and lifting morale. A relationship-motivated leader will demonstrate trust of subordinates, respect
for their ideas, and consideration for their feelings.

Resistance to change
Antagonism towards change among the employees in an organization. The reasons for resistance include a
misunderstanding of the goal of the change, having a low tolerance for change (particularly through fear), and
perceiving that something of value will be lost. In general, people will only change if they feel it will be in their
interests to do so. See also change management.

scientific management (Taylorism)

One of the classic approaches to management theory, which emphasizes the rationality of organizational systems and
holds that operational efficiency can be optimized by applying the appropriate scientific management principles.
Developed by Frederick Taylor in the late 19th and early 20th centuries, the theory forms the basis for the techniques
now known as work study. The key principles were:

• Managers should take full responsibility for the planning of work and should use scientific methods to specify
precisely how the job should be done to achieve the maximum efficiency.
• Managers should select the most appropriate person for the job, train them to do the job efficiently, and
monitor their performance to ensure conformity to the specification. Scientific management is credited with
increasing productivity enormously, but only at the cost of deskilling many areas of work. The boring,
repetitive, and alienating nature of the jobs created using scientific management methods causes demotivation
in staff and can lead to an extreme emphasis on pay rates as the primary form of motivation.

The drive people have to realize their potential and to find fulfilment. Self-actualization encompasses the human need
for challenge, responsibility, creativity, and variety at work, enabling employees to take pride in their achievements,
as well as in their technical or professional expertise. An integral part of the concept is for their worth to be
recognized and valued by those with, and for, whom they work.

Task-motivated (task-oriented)
Describing a leadership style that is concerned with setting goals, structuring tasks, and measuring performance. A
task-motivated leader will focus on such activities as planning, scheduling, defining roles and responsibilities, and
providing performance-related feedback. Compare relationship-motivated.

Task roles
A set of coherent roles that are often adopted by the different members of a group in order to solve problems, make
decisions, and meet targets. Some commonly identified roles of this kind include the initiator, who defines goals,
recognizes problems, and initiates procedures; the opinion giver, who provides ideas and information; the opinion
seeker, who elicits the ideas or expertise of others; and the summarizer, who clarifies and sums up the ideas of the
group. Compare relationship roles.

Total quality management (TQM)

An approach to management that seeks to integrate all the elements of an organization in order to meet the needs and
expectations of its customers. A number of people have pioneered this approach, including W. Edwards Deming,
Armand V. Feigenbaum, Kaoru Ishikawa, Joseph M. Juran, and Genichi Taguchi. Some details of their various
methods are in conflict, but all share a commitment to ensuring that all the parts of an organization and all the
individuals within the organization understand and contribute to the desired outputs. The implementation of TQM

• a systematic and long-term commitment, in particular by senior management;

• a commitment to getting things right the first time;
• a commitment to continuous improvement;
• an understanding of both internal and external customer–supplier relationships;
• an understanding of the total costs involved in the purchase of products and services, e.g. cheap inputs of low
quality can cause serious faults in processes and products;
• a commitment to aligning systems to organizational needs, which may involve a radical redesign of work
• appropriate management and training techniques to improve communications between sections and between
staff and management;
• improved workplace training and a degree of employee empowerment;
• meaningful measures of performance to enable workers to understand what they are contributing and how
they can improve. TQM as a philosophy should be able to incorporate other programmes of management
change. However, many organizations fail to exploit its full potential by abandoning it too soon, either
through lack of commitment or because it costs too much.