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Why do people behave the way they do? What cause different people to react differently
to the same situation? Why are some organizations more successful than others, even
though they appeared to be managed in the same manners? And why do managers spend
too much of their time trying to “figure out what makes people think”? All of these
questions and more are the substance of what organizational behavior is all about.
An understanding of the behavior of people in organization has become increasingly
important as more and more of us find ourselves involved with organizations and the
management of people, not only at work, but in all facets of our lives.
By having the above about the subject of organization behavior let us understand first the
term organization behavior. Organization behavior it is made up of two words
“organization” and “Behavior”.
What is an organization?
Organizations are as old as the human race. Archaeologists have discovered massive
temples dating back to 3500 B.C. that were constructed through the organizational
actions of many people. The fact that it was built suggests not only that complex
organization existed, but also that the people in them cooperated reasonably well. In
connection with this if we ask a question about the powerful constructs that we call
organization; they are group of peoples who work interdependently toward some purpose.
Organizations are not buildings or other physical structures. Rather organizations are
people who work together to achieve a set of goals. Employees have structured patterns
of interaction, meaning that they expect each other to complete certain task in
coordinated way – in an organized way.
An organization can also be defined as “a consciously coordinated social entity, with a
relatively identifiable boundary, that functions on a relatively continuous basis to achieve
a common goal or set of goals”.
The above definition is a mouthful of words; the meaning of the definition is discussed
below in to more relevant parts.

 The words consciously coordinated imply management. Social entity means that
the unit is composed of people or groups of people who interact with each other.
The interaction patterns that people follow in organization do not just emerge:
rather, they are premeditated. Therefore, because organizations are social entities,
the interaction pattern of their member must be balanced and harmonized to
minimize redundancy yet ensure the initial task are being completed. The result is
that our definition assumes explicitly the need for coordinating the interaction
pattern of people.

 An organization has a relatively identifiable boundary. This boundary can change

over time, and it may not always be perfectly clear, but a definable boundary
must exist in order to distinguish members from non-members. It tends to be
achieved by explicit or implicit contracts between members and their
organizations. In most employment relationships, there is an implicit contract
where work is exchange for pay. In social or voluntary organization, members
contribute in return for prestige, social interaction, or the satisfaction of helping
others. But every organization has a boundary that differentiate who is and who
is not part of the organization.

 People in an organization have some continuing bonds. The bond, of course,

doesn’t mean life long membership. On the contrary, organization face constant
change in their membership, although while they are members, the people in an
organization participate with some degree of regularity. (e.g., Salesperson vs.
Member of national organization for women).

 Finally, organizations exist to achieve something. These something are ‘goals’,

and they are usually are either unattainable by individual working alone, or if
attainable individually, are achieved more efficiently through group. While it is
not necessary for all members to endorse the organization goal fully, our
definition implies general agreement with the mission of the organization.

We can define the term organization as two or more individuals who are interacting with
each other within a deliberately structured set up and working in an interdependent way
to achieve some common objective/s. Organizations play a major role in our lives. We
possibly cannot think of a single moment in our lives when we are not depending on
organizations in some form or the other. Right from the public transport that you use to
come to your institute, the institutes itself, the class you are attending at this moment, are
all examples of organizations.
What is Behavior?
Is it the behavior of Organization or the Behavior of the people who are working in the
organization? It is the behavior of the people working in an organization to achieve
common goals or objectives. Organization comprises of people with different attitudes,
cultures, beliefs, norms and values. So let us understand organizational behavior and
what it exactly it means.
“Organizational Behavior” can be defined as:
 The study of what people think, feel, and do in and around organizations.
 The study of actions of people at work that affect performance in the workplace.
 The study of individual behavior and group dynamics in organizational settings.
Nature of Organizational Behavior (OB)
Organizational behavior is an applied behavioral science that is built on contributions
from a number of behavioral disciplines such as psychology, sociology, social
psychology, anthropology and economics. So now let’s see how these disciplines are
related to organizational behavior,
• Psychology
Psychology is the study of human behavior which tries to identify the characteristics of
individuals and provides an understanding why an individual behaves in a particular way.
This thus provides us with useful insight into areas such as human motivation, perceptual
processes or personality characteristics.
• Sociology
Sociology is the study of social behavior, relationships among social groups and
societies, and the maintenance of social order. The main focus of attention is on the social
system. This helps us to appreciate the functioning of individuals within the organization
which is essentially a socio-technical entity.
• Social psychology
Social psychology is the study of human behavior in the context of social situations. This
essentially addresses the problem of understanding the typical behavioral patterns to be
expected from an individual when he takes part in a group.
• Anthropology
Anthropology is the science of mankind and the study of human behavior as a whole.
The main focus of attention is on the cultural system, beliefs, customs, ideas and values
within a group or society and the comparison of behavior among different cultures. In the
context of today’s organizational scenario, it is very important to appreciate the
differences that exist among people coming from different cultural backgrounds as
people are often found to work with others from the other side of the globe.
• Economics
Any organization to survive and sustain must be aware of the economic viability of their
effort. This applies even to the non-profit and voluntary organizations as well.
• Political Science
Although frequently overlooked, the contributions of political scientists are significant to
the understand arrangement in organizations. It studies individuals and groups within
specific conditions concerning the power dynamics. Important topics under here include
structuring of conflict, allocation of power and how people manipulate power for
individual self-interest etc. The following figure depicts to highlight the interdisciplinary
nature of organizational behavior.
Why Study OB?
The main reason for studying organization behavior is that to understand, predict and
influence the behavior of others in organizational settings.
Figure 2.1 Reason for studying organizational behavior


Influence Predict
organizational organizational
Event Event

Irrespective of the function that peoples engaged in an organization everyone needs

organizational behavior knowledge to address the people issue that we face when trying
to apply our different expertise bit marketing, management, computer science, and other
Understanding and predicting organizational Events: Every one of us has inherent
need to know about the world in which we live. This is practically true in organizations,
because they have a profound effect on our lives. We want to understand why
organizational event occurs and to more accurately predict what do expect in the future.
In other words, we need to map out our organizational events so that we can participate
more fully and comfortably in that area.
Influencing organizational events: Although it is nice to understand and predict
organizational events, most of us want to influence the environment in which we live.
Whether you are a manager, a marketing specialist, accountant or computer specialist,
irrespective to your discipline communicate effectively with others, manage conflict,
make better decisions, build commitment to your ideas, help work teams operate more
effectively, and soon. OB theories and concepts will help you to influence organizational
There is wide agreement among organizational theorists that the system approach offer
important insight into the workings of an organization. This part we look at the idea of
systems, differentiate open from closed systems and demonstrate how an open system
approach can help to conceptualize better just what it is that organizations do.
Definition of systems: a system is a set of interrelated and interdependent parts arranged
in a manner that produce a unified whole. Societies are systems, and so too automobiles,
plants and human bodies. They take input, transform them and produce some output.
The unique characteristics of system viewpoint are the interrelationship of parts within
the system. Every system is characterized by two divorce forces: Differentiation and
In the system specialized functions are differentiated, which replace diffuse, global
patterns. In the human body system, for instance, the lungs, hart, and liver are all distinct
functions. Similarly organizations have divisions, departments, and like units separated
out to perform specialized activities. The same time in order to maintain unity among the
differentiated parts and form a complete whole, every system has a reciprocal process of
integration. In organization the integration is typically achieved through devices such as
coordinating level of hierarchy, direct supervision and rules and procedures and policies.
Every system therefore requires differentiation to identify its subparts and Integration to
ensure that the system doesn’t break down into separate elements. Although
organizations are made up of parts or subsystems, they are themselves subsystems within
large system.

Types of System: System is classified typically as either closed or open. Closed system
thinking stems primarily from the physical sciences. It views the system as self-
contained. Their dominant characteristic is that it essentially ignores the effect of the
environment on the system. A perfect closed system would be one that receives no
energy from an outside source and from which no energy is released to its surroundings.
More idealistic than practical, the closed-system perspective has little applicability the
study of organization.
The open system recognizes the dynamic interaction of the system with the environment.
No students of organizations could build much defense for viewing organization as
closed system. Organizations obtain their raw materials and human resource from the
environment. They further depend upon clients and customers in the environment to
absorb their output. A simplified graphic representation of an open system looks as


Input Transformatio
System Output
n Process


A more complex picture of an open system as it would apply to an organization is

presented hereunder:

Input: Technical
-material Processing Customer
-labor Core: s
-capital Transformation

Customer advocacy
Financial Institutions
Payment of loan
Labor force

Suppliers Payment of creditors

In the graphic representation of system we see inputs, technological process created for
transforming inputs into finished products / services (output). The finished product in
turn, is sold to a customers are all parts of the environment.
If you stop to think about it for a moment, it is difficult to conceive of any system as
being fully closed. All systems must have some interaction with the environments if they
are to survive.

Characteristics of an open system: A system has inputs, transformation process and

outputs. Open system, however, have some additional characteristics that have relevance
to those of us studying organizations.
1. Environmental awareness: one of the most obvious characteristics of an open
system is its recognition of the interdependency between the system and its
environment, change in the environment affect on or more attributes of the
system, and conversely, changes in the system affect its environment.
2. Feedback: open systems continually receive information for their Environment.
This helps the system to adjust and allows it to take corrective actions to rectify
deviations from its prescribed course. We call this receipt of information form
environment as feed back; that is, a process that allows a portion of the output to
be turned to the system as input (ex: information & money) so as to modify
succeeding outputs from the system.

3. Cyclical character: open system is cycles of events. The systems output furnish
the means of new inputs that allow for the repetition of the cycle.

Hawthorne Studies: Elton Mayo’s Study on Employees motivation and Productivity

The Hawthorne Studies (or experiments) were conducted from 1927 to 1932 at the
Western Electric Hawthorne Works in Chicago, where Harvard Business School
professor Elton Mayo examined productivity and work conditions. What took place in the
actual experiments are detail and well documented, but are briefly outlined below.
In some respects the studies themselves were more interesting in what they didn't show
rather than what they did. The studies were started under the auspices of the earlier
findings of F.W. Taylor and grew out of preliminary experiments at the plant from 1924
to 1927 on the effect of light on productivity. Unfortunately for those who believed in the
theories of Taylor, these experiments showed no clear connection between productivity
and the amount of illumination, so the researchers began to wonder what kind of changes
would influence output (remember that they still broadly believed in the findings of
In particular, Mayo wanted to find out what effect fatigue and monotony had on job
productivity and how to control them through such variables as rest breaks, work hours,
temperature and humidity, so that optimum efficiency and effectiveness would be
achieved. In the process, he "happened" upon a new principle of human motivation that
would help to revolutionize the theory and practice of management and organization
behavior and lead to the second "school" of motivational theorists.

The Experiments
Mayo took six women from the assembly line, segregated them from the rest of the
factory and put them under the eye of a supervisor who was more a friendly observer than
disciplinarian. Mayo made frequent changes in their working conditions, always
discussing and explaining the changes in advance (this is important). In particular he
changed the hours in the working week, the hours in the workday the number of rest
breaks and the time of the lunch hour. Bear in mind that when Mayo was conducting his
experiments, the workforce did not enjoy the "privileges" that today’s workers enjoy. In
these times if you didn't work-you didn't eat. In fact he occasionally would return the
women to their original, harder working conditions to no noticeable effect (in fact the
workers worked HARDER).

The Relay Assembly Room



• Model of individual behavior and performance

• Individual differences and organizational behavior




Almost all complex human behavior is learned. If we want to explain, predict or control
behavior, we need to understand how people learn. Learning is broader concept than
“what we did when we want to school”. In actuality each of us is continuously “going to
school”. Learning is going on all the time.
Psychologists defined learning as: a relatively permanent change in behavior (or
behavior tendency) that occurs as the result of a person’s interaction with the
environment. Behavior change is the only evidence of learning. For example, if a team
leader had a tendency to be blunt or rude toward coworkers but doesn’t act this way
anymore, then we say that he/she has learned to interact with others more effectively.
Learning occurs when behavior change is due to interaction with the environment. That
means it occurs through the use of a person’s senses, study, observation, and experience.
Notice, too, that learning requires a relatively permanent change in behavior. This
distinguishes learning from situational contingencies that cause short term behavior
Learning influences ability, role perceptions, and motivation in the model of individual
behavior and performance. With respect to ability, employees develop competencies
through formal and informal learning processes. They clarify role perceptions through
learning. Lastly, Learning is a basic assumption behind many theories of motivation. For
example, employees learn to expect certain rewards(less favorable outcomes) following
their behavior and performance. They develop or lose confidence by learning whether
their effort results in desired performance.
Learning Explicit and Tacit Knowledge
When employees learn they acquire both explicit and tacit knowledge. Explicit
knowledge is organized and can be communicated from one person to another. It can be
written down and given to others. An example is information you receive in a class
lecture because the instructor packages and consciously transfers to you.

Tacit knowledge is the idea that we know more than we can tell. You have probably
said to some one: “I can’t tell you how to do this, but I can show you.” Tacit knowledge
is embedded in our actions and ways of thinking, but it not clearly understood and
therefore cannot be explicitly communicated. The knowledge and skills you want to
give to others are not sufficiently articulated, so that they cannot be communicated
through verbal messages. It is not documented; it is action oriented and known below
the level of consciousness. Tacit knowledge acquired through observation and direct
experience Examples include: Organization’s culture, Team’s implicit norms,
Operating jets (airplane), driving car, etc.
There are four perspectives of learning: Behavior modification, Feedback, Social
learning (observation) and direct experience. These activities are not completely
different, rather they provide different views of the learning process and by
understanding each of these perspectives we can more fully appreciate the dynamics of
Behavior modification (also known as operant conditioning, operant learning or
reinforcement theory) implies that learning is completely dependent upon the
environment. It is modifying behavior through the use of positive of negative
consequences following specific behaviors. Behavior modification argues that we learn
from previous interactions with the environment to alter our behaviors in such a way that
we maximize positive consequences and minimize adverse consequences. In other words,
past experience teaches us how to “operate” on environment so that we receive desired
consequences from that environment.
Behavior modification emphasizes voluntary behaviors. Researchers call them operant
behaviors, because they “operate” on the environment- they make the environment
respond in ways that we want. For example, you put a certain amount of money in a soft
drink machine and press a certain button so that the machine will provide you a particular
can of pop. You learned from past experience how to cause the environment (soft drink
machine) to deliver that brand of soft drink.
Operant behaviors are different from respondent behaviors that are involuntary responses
to the environment. These are uncontrollable responses to the environment, such as
automatically withdrawing your hand from a hot stove element or having your eyes
automatically contact when you turn on a bright light. The environment causes
respondent behaviors, where as people voluntarily engage in operant behaviors to cause
environmental responses. Our attention here is on operant behaviors because they
represent most learned behaviors in organizational settings.
Behavior modification is based on the law of effect. According to law of effect, the
likelihood that operant behavior will be repeated depends on its consequences. If
behavior is followed by a pleasant experience, then the person will probably repeat the
behavior. If the behavior is followed by unpleasant experience or no response at all, then
the person is less likely to repeat it. The law of effect explains how people learn to
associate behaviors with specific environmental responses.

A-B-C’s of Behavior Modification

Behavior modification helps us to understand how environmental contingencies influence
learning and behavior. Behavior is influenced by two environmental contingencies: The
antecedents that precede behavior and the consequences that follow behavior. Together,
these elements form the A-B-C model. Central objective of behavior modification is to
change behavior (B) by managing antecedents (A) and consequences (C). Antecedents
are events preceding the behavior, informing employees that certain behaviors will have
particular consequences. For example, the request from your supervisor to complete a
specific task by tomorrow is antecedent. These antecedents signal employees to establish
certain behaviors in order for certain consequence to occur. Although antecedents are
important, behavior modification mainly focuses on the consequences of behavior.
Consequences are events following a particular behavior. This concept is based on law of
effect that is mentioned above.
Behavior modification steps
Antecedents → Behavior → Consequences
What happens prior to → What the person does → What happens after the
behavior or says behavior

Example: warning light Example: operator → Example: co-workers thank

flashes on operator’s → switches off the operator for stopping the
console machine’s power machine
Figure: A-B-C’s of behavior modification


Basically the strategies of behavior modification are: Reinforcement (+ or -), Punishment
and extinction. Reinforcement enhances desirable behavior, but punishment and
extinction diminish undesirable behavior.
1. Reinforcement – is the attempt to develop or strengthen desirable behavior by either
bestowing positive consequences or withholding negative consequences. Hence, we have
two types of reinforcement: Positive and negative.
i. Positive reinforcement – occurs when the introduction of a consequence
increases or maintains the frequency or probability of a future behavior. It occurs
when a behavior (response) is followed by a favorable stimulus (commonly seen
as pleasant) that increases the frequency of that behavior. It results from the
application of a positive consequence following a desirable behavior. Positive
consequences are the results of behavior that the person find attractive or
pleasurable. They include a pay increase, a bonus, a promotion, a transfer to more
desirable geographical location or praise from a supervisor. Therefore, for
example receiving a bonus for successfully completing a project is positive

ii. Negative reinforcement –occurs when the removal or avoidance of a

consequence increases or maintains the frequency or future probability of a
behavior. It results from withholding a threatened negative consequence when a
desirable behavior occurs. Negative consequences are the results of a person’s
behavior that the person finds unattractive or aversive. They might include
disciplinary action, an undesirable transfer, demotion, harsh criticism from
supervisor. For example, a manager who reduces an employee’s pay(negative
consequence) if the employee comes to work late(undesirable behavior) and
refrains from doing so when the employee is on time(desirable behavior) has
negatively reinforced the employee’s on time behavior. The employee avoids the
negative consequence (a reduction in pay) by exhibiting the desirable behavior.
Negative reinforcement is also known as escape or avoidance learning because
employees engage in the desired behaviors to avoid unpleasant consequences
(such as being criticized by your supervisor or being fired from your job).
2. Punishment – It occurs when a consequence decreases the frequency or the
probability of a future behavior. It is the attempt to eliminate or weaken undesirable
behavior by either bestowing negative consequences or withholding positive
consequences. An example of the former would be threatening an employee with a
demotion or discharge after treating a client badly. The latter form of punishment would
occur when sales person who makes few visits to companies (undesirable behavior) and
whose sales are well below the quota (undesirable behavior) is likely to receive a very
small commission check (positive consequence) at the end of the month.

Comparing punishment with negative reinforcement

Behavior Consequenc
Consequence Behavior e
Customer Customer
Boss stops
served slowly Boss criticizes served

Punishment Negative Reinforcement

Punishment and negative reinforcement are easy to mix up. Punishment reduces the
frequency or likelihood of a behavior. For instance, after your boss criticizes your
performance, you are less likely to do things (such as chatting with co-workers) that
cause slow service. Negative reinforcement, on the other hand increases the frequency or
likelihood of a behavior. Thus, you are more likely to repeat the behaviors that provide
speedier customer service.

3. Extinction – occurs when the target behavior decreases because no response follows
it. It is the attempt to weaken a behavior by attaching no consequence to it. It is
equivalent ignoring the behavior. The rationale for using extinction is that a behavior not
followed by any consequence is weakened. For example, if an employee makes practical
jokes that are potentially dangerous or costly, this behavior might be extinguished by
discouraging others from praising the employee when he or she engages in these pranks.
Behavior that is no longer reinforced tends to disappear or be extinguished. In this
respect, extinction is a do nothing strategy.

Schedules of Reinforcement
Along with the types of consequences, behavior modification identifies the schedules that
should be followed to maximize the reinforcement effect. In fact there is evidence that
scheduling the reinforcer affects learning more than the size of the reinforcer. Behavior
modification theorists have identified five schedules for reinforcement.
a. Continuous reinforcement – reinforcing every occurrence of the desired behavior.
This produces the most rapid learning of the targeted behavior. When the reinforcer is
removed, extinction also occurs very quickly. It is most effective for employees learning
new behaviors.
The other four schedules of reinforcement are intermittent because reinforcement does
not occur every time or with every behavior. Instead, intermittent schedules apply the
reinforcer after a fixed or variable time (interval) or number of target behaviors (ratio).
The intermittent schedules are described below:
b. Fixed interval schedule – occurs when behavior is reinforced over a fixed time.
Example: weekly paychecks. As long as the job is performed satisfactorily, a paycheck is
received on the appointed day.
c. Variable interval schedule – involves administering the reinforcer after a varying
length of time. Example: promotions that occur at uneven time interval( first promotion
after two years of good performance, the next after four years, the third after 18 months
and so on).
d. Fixed ratio schedule – reinforces a behavior over a fixed number of times Example:
piece rate systems where employees get paid after they produce a fixed number of units.
e. Variable ratio schedule – reinforces behavior after a varying number of times
.Example: sales incentive plans.
Note: interval schedule is time-based whereas ratio schedule is behavior based.
Limitations of behavior modification
Behavior modification is not always cost effective, and it certainly has a number of
a. Cant reinforce non observable behavior- Behavior modification may work with easily
observable behaviors, such as work attendance, but it is more difficult to apply to
conceptual activities such as making good decisions.
b. Reinforcer tends to wear off- Behavior modification programs often suffer from
“Reward inflation” – the reinforcer is quickly forgotten or is eventually considered an
entitlement. In other words, a bonus that was once an unexpected surprise becomes an
expected part of the employment relationship. Withholding the reinforcer may represent
extinction, but it feels like punishment.
c. Variable ratio is a form of gambling- the variable ratio schedule may be best for
maintaining behavior, but it also resembles a lottery. Some people worry about ethical
nature of this schedule because employees are essentially betting that they will receive a
reinforcer after the next behavior.
d. Ethical concerns about perceived manipulation- Some critics say that behavior
modification tries to manipulate employee behavior and treat people as animals with low
intelligence. This perception occurs largely because behavior modification focuses on
behaviors and therefore pays less attention to human thoughts. However, behavior
modification experts point out that any attempt to change employee behavior is a form of
manipulation. No matter how valid this counterargument, behavior modification has an
image problem that will remain for some time to come.


Feedback is any information that people receive about the consequences of their
As with other forms of learning, feedback has a powerful effect on behavior and job
performance by improving role perceptions, ability and motivation. With respect to role
perceptions, feedback lets people know what behaviors are appropriate or necessary in
particular situation. Feedback also improves employee ability by frequently providing
information to correct performance problems. Employees develop better skills and
acquire job related information by watching instrumental dials or non verbal cues from
customers. This is known as corrective feedback, because it makes people aware of their
performance errors and helps them correct those errors quickly. Feedback is also source
of motivation. Positive feedback fulfills personal needs and makes people more confident
that they are able to accomplish certain tasks.
Feedback Sources
Feedback can originate from social or non social sources.
Social sources: supervisors, clients, coworkers, and anyone else who provides
information about the employee’s behavior or results. 360-Degree Feedback: a multi-
source feedback received from a full circle of people around the employee, including
subordinates, coworkers, project leaders, and customers. Research suggests that Multi-
source feedback is improves employee performance. The main reason is that multi source
feedback provides more complete and accurate information than from when it is from
single source (supervisor alone).It can be conducted through anonymous performance
Nonsocial feedback sources: computer, job itself. With the click on the mouse of
computer, one can look at the previous day’s sales and compare them with the results
from any other day over the previous year. The job it self can be a source of feedback.
Many employees see the results of their work effort by looking directly at the results of
their work.
The preferred feedback source depends on the purpose of information.
 To learn about one’s progress toward goal accomplishment, employees prefer
nonsocial feedback sources. This is because:
• Information from nonsocial sources is considered more accurate
than from social sources.
• Corrective feedback from nonsocial sources is also less damaging
to self esteem.
 When employees want to improve their self-image, they seek out positive
feedback from social sources. Positive feedback from co-workers and other social
sources mainly motivates because it fulfills our need for social recognition.
Giving Feedback Effectively
Characteristics of effective feedback:
A. Specific feedback – should be quantifiable and precise. Feedback should include
specific information rather than general. This helps employees redirect their effort
and behavior more precisely and gives them a greater sense of accomplishment.
Specific feedback is focused on the task, not the person. This reduces the person’s
defensiveness when receiving negative feedback.
B. Frequent feedback – should coincide with the job structure. Feedback should be
continuously available to employees from nonsocial sources so they can adjust the
feedback frequency to suit their needs. If feedback is provided by someone else,
the optimal frequency depends on the task cycle (how long until the task is
completed) and task uniqueness. The employees whose job has short cycle (like
cashier and assembly line workers)receive feedback more often because they
complete their work with in short period of time. On the other hand, employees
with long cycle tasks (like executives and sales people) receive feedback less
C. Timely feedback – should be available as soon as possible so that employees see a
clear association between their behavior and its consequences.
D. Credible feedback – should be trustworthy and reliable. Multipurpose feedback
has high credibility because it comes from several sources which reduce the bias.
Employees are more likely to accept credible feedback from non-social sources
(e.g. computer printout, job itself, electronic gauges) because it is not as such
E. Relevant feedback – should relate to the individual’s behavior rather than to
conditions beyond the individual’s control. This ensures that the feedback is not
distorted by situational contingencies. Feedback is also relevant when it is linked
to goals. Goals establish the bench mark (i.e. what ought to be) against which
feedback is judged.
Seeking Feedback
1. Inquiry – asking other people about performance and behavior. It tends to
be used when individuals have high self esteem, expect to receive positive
feedback and work in organization that values openness. Direct inquiry is
powerful form of learning in a private setting and when the person
providing the feedback communicates the information clearly
2. Monitoring – involves scanning the work environment and the behavior of
others for information cues. .


Social learning theory states that much learning occurs by observing others. It states that
learning mainly occurs by observing others and then modeling the behaviors that lead to
favorable outcomes and avoiding behaviors that lead to punishing consequences. There
are three related feature s of social learning theory: Behavior modeling, learning
behavior consequences and self reinforcement.
1. Behavioral Modeling
Premise is that people learn by observing the behaviors of a role model on the critical
task, remembering the important elements and them practicing them. It is a valuable form
of learning because:
(a) Tacit knowledge and skills can be acquired.
(b) It enhances self-efficacy. This is because people gain self confidence (can do
attitude) after seeing some one else do it than if they are simply told what to do.
This is particularly true when observers identify with the model, such as some one
who is similar in age, experience, gender, and other related features.
2. Learning Behavior Consequences
Premise is that people learn the consequences of behavior in ways other than direct
In particular, we learn by:
i. Logically thinking through the consequences of our actions. We often anticipate
desirable or adverse consequences through logic. We expect either positive reinforcement
or negative reinforcement after completing an assigned task and either punishment or
extinction after performing the job priority because it is a logical conclusion based on
ethical values.
ii. People learn to anticipate the consequences by observing the experiences of other
people. Learning behavior consequence occurs in more subtle ways in contemporary
organization. For example, consider the employee who observes a co-worker receiving a
stern warning for working in an unsafe manner. This event would reduce the observer’s
likelihood of engaging in unsafe behaviors he/she has learned to anticipate a similar
reprimand following those behaviors.
3. Self-Reinforcement
It occurs whenever an employee has control over a reinforcer but doesn’t take the
reinforcer until completing a self-set goal. For example, you might be thinking about
taking a work break after you finish reading the rest of this chapter- and not before. You
could take a break right now, but you don’t use this privilege until you have achieved
your goal of reading the chapter. The work break is a form of positive reinforcement that
is induced. You use the work break to reinforce completion of a task.
It has become increasingly important because employees are given more control over
their working lives and are less dependent on supervisors to give positive reinforcement
and punishment.


Most learning occurs when employees directly interact with their environment. Learning
through experience is important because tacit knowledge and skills are acquired
through experience as well as observation. Thus, most of our learning takes
place while practicing new behaviors and watching the environmental responses
to our actions. This relates to the concept of implicit learning. Implicit learning
is acquiring information about the environment through experience without any
conscious attempt to do so. In other words, we are not aware of much of the
information we acquire. Most implicit learning occurs when we interact with
the environment; such as when we work with customers or operate a machine.
Less implicit learning occurs off the job because knowledge about the
environment is indirect.
Learning through experience is experiential Learning in Practice. It works best where
there is a strong learning orientation.
Action learning is the fastest growing form of experiential learning whereby employees
are involved in real, complex, and stressful problems, usually in teams, with immediate
relevance to the company.


Motivation is one of the key ingredients in the employee performance and productivity.
Even when people have clear work objectives, the right skill and supportive work
environment, they won’t get the job done without sufficient motivation to achieve those
work objectives.

The term motivation drives from Latin word ‘mover’, meaning ‘to move’. In the present
context motivation represents “those psychological processes that cause the arousal,
direction and persistence of voluntary action that are goal directed.

It also refers to the force within the person that affects person’s direction, intensity and
persistence of voluntary behavior. Motivated employees are willing to exert a particular
level of effort (intensity), for a certain amount of time (persistence), toward a particular
goal (direction). Managers need to understand these psychological processes if they are to
successfully guide employees toward accomplishing organizational objectives.

Motivation theories fall in to two main categories: Content theories and Process theories

These theories explain the dynamics of employee needs, such as why people have
different needs at different times. By understanding an employee’s needs, we can
discover what motivates that person. Most contemporary theories recognize that
motivation begins with individual needs. Needs are deficiencies that energize or trigger
behaviors to satisfy those needs. At some point in your life, you might have strong need
for food and shelter. At other times, your social needs may be unfulfilled. Unfulfilled
needs create tension that makes us want to find ways to reduce or satisfy those needs. The
stronger your needs, the more you are motivated to satisfy them. Conversely, a satisfied
need does not motivate.
There are four content theories of motivation:
• Maslow’s need hierarchy
• Alderfer’s ERG theory
• Hertzberg’s motivator- hygiene theory
• McClelland’s theory of learned needs

1. Maslow’s Need Hierarchy Theory

IN 1943, Psychologist Abraham Maslow published his own famous need hierarchy
theory of motivation. Although the theory was based on his clinical observation of a few
neurotic individuals, it has subsequently been used to explain the entire spectrum of
human behavior. Maslow proposed that motivation is a function of five basic needs.
These needs are:
(1) Physiological: Most basic needs, which include the needs to satisfy biological
requirements. Entails having enough food, air, water and shelter to survive.
(2) Safety: consist of the need to be safe from physical and psychological harm. (i.e.,
the need for secure and stable environment and the absence of plain, threat, or
(3) Love (Belongingness): The desire to be loved and to love. It consist the need for
affection, belonging and interaction with other peoples.
(4) Esteem: Need for reputation, prestige and recognition from others. Also contain
need for self confidence and strength. It generally includes self-esteem through
personal achievement as well as social esteem through recognition and respect
from others.
(5) Self-Actualization: Desire for self-fulfillment-to become the pest one is becoming
of capable. It is something a sense that the person’s potential has been realized.
Maslow said these five needs are arranged in pre-potent hierarchy as shown below. In
other word, he believed human needs generally emerge in predictable stair-step fashion.

Self actualization




Accordingly, when One’s physiological needs are relatively satisfied, one’s safety needs
emerge, and so on up the need hierarchy, one step at a time. Once a need is satisfied it
activates the next higher need in the hierarchy. These processes continue until the need
for self-actualization is activated.

There is one key managerial implication of Maslow’s theory worth nothing. That is, a
satisfied need may lose its motivational potential. Therefore, managers are advised to
motivate employee by devising programs / practices aimed at satisfying emerging or
unmet needs. In conclusion, managers are more likely to fuel employee motivation by
offering benefits and rewards that meet individual needs.
2. Alderfer’s ERG Theory
ERG theory of motivation was developed by Clayton Alderfer as an alternative theory of
human needs in the late 1960s. ERG theory group human needs in to three broad
categories; these are:
Existence (E): the desire for physiological and materialistic well-being. Corresponds to
Maslow’s physiological and safety need.
Relatedness (R): the desire to have meaningful relationship with significant others. It
Corresponds to Maslow’s need of belongingness.
Growth (G): the desire to grow as human being and to use one’s abilities to their fullest
Alderfer’s theory of need differ from Maslow’s in three major respects:

(i) A smaller set of core needs is used to explain behavior. From lowest to
highest level they are; existence, relatedness and growth need
(ii) ERG / Alderfer’s theory of need does not assume needs are related to each
others in stair-step hierarchy as does Maslow. Alderfer’s believes that more
than one need may be achieved at a time.
(iii) Finally, ERG theory contains a frustration-regression component. That is
frustration of higher order need can influence the desire for lower-order needs.
In other word, those who are unable to satisfy higher needs become frustrated
and regress back to the next lower need level. If existence and relatedness
needs have been satisfied but growth need fulfillment have been blocked, the
individual will become frustrated and relatedness will again emerges as the
dominant source of motivation. For example, employees may demand higher
pay or better benefit (existence needs) when they are frustrated / dissatisfied
with the quality of their interpersonal relationships (relatedness needs) at
There are two key managerial implications associated with ERG theory.
- The First revolves around the frustration-regression aspect of the theory.
Managers should keep in mind that employee may be motivated to pursue lower-
level needs because they are frustrated with higher order needs.
- Second, ERG theory is consistent with the finding that individual and culture
differences influence our need states. People are motivated by different needs at
different times in their lives. This implies that managers should customize their
reward and recognition programs to meet employees’ varying needs.

3. McClelland’s Needs Theory

David McClelland, a well-known psychologist, has been studying the relationship
between need and behavior since the late 1940s. Although he is most recognized for his
research on the need for achievement, he also investigates the need for affiliation and
power. He considered these three needs as a source of motivation.

Need for Achievement: Achievement theories propose that motivation and performance
vary according to the strength of one’s need for achievement. Peoples with a high need
for achievement want to accomplish reasonably challenging goals through their own
efforts. The need for achievement is defined by the following desires:
To accomplish something difficult. To master, manipulate, or organize physical objects,
human beings or ideas. To do this as rapidly and as independently as possible. To
overcome obstacles and attain a high standard. To excel one’s self. To rival and surpass
others. To increase self regard by the successful exercise of talent.

Achievement motivated people share three common characteristic.

 Preference of working one tasks of moderate difficulty. The high achiever’s
preferences for moderately difficult tasks reinforce achievement behavior by
reducing the frequency of failure and increasing the satisfaction associated with
successfully completing challenging tasks.
 Like situations in which their performance is due to their own efforts rather than
to other factors, such as luck.
 They desire more feedback on their success and failures than do low achiever’s.

Given these characteristics McClelland proposed that high achiever are more likely to be
successful entrepreneurs.

Need for Affiliation: researchers believe that people possess a basic desire to form and
maintain a few lasting, positive and important interpersonal relationships. Need for
affiliation refers to a desire to seek approval from others, conform to their wishes and
expectations, and avoid conflict and conformation.

People with a high need for affiliation prefers to form positive relationship with others,
try to project favorable image of themselves and take other steps to be liked by others,
spend more time in wanting to be loved. Individuals with high need for affiliation are not
the most effective managers or Leaders because they have a hard time making difficult
decisions without worrying about being dislike.

Need for power: The need for power reflects an individuals desire to influence, coach,
teach, or encourage others to achieve. People with high need for power like to work and
are concerned with discipline and self respect. There is a positive and negative side in this
need. The negative effect of power is characterized by an “if I win, you lose” mentality.
In contrast, people with positive orientation to power focus on accomplishing group goals
and helping employees obtain the feeling of competence.

Because effective managers must positively influence others, McClelland propose that
top managers should have a high need for power coupled with a low need for affiliation.

Managerial Implications: Achievement, affiliation and power needs can be considered

during the selection process, for better placement. Managers should create challenging
task assignments or goals because the need for achievement is positively related /
correlated with goal commitment, which in turn, influence performance. Moreover,
challenging, jobs/ goals should be accomplished with a more autonomous work
environment and employee empowerment to capitalize on the characteristics of high

4. Herzberg’s Two Factors Theory

One of the most widely known and influenced views of work motivation is Fred
Herzberg’s two factor theory, as part of a study of his job satisfaction. He asked
respondents to recall two separate job-related events in which their work satisfaction had
improved or declined. The response suggested that the work related factors that led to
feelings of satisfaction were different from those factors that led to dissatisfaction. The
satisfiers usually pertained to the content of job and include such factors as career
advancement, recognition, sense of responsibility and feelings of achievement. Herzberg
called these MOTIVATOR factors. The dis-satisfier most often stemmed from the
context in which the job was performed. They related to job security, company policies,
interpersonal relationships, and working condition. Herzberg called these HYGIENE

Herzberg responds that motivator factors had the potential to motivate workers to higher
level of performance because they provide opportunities for personal satisfaction.
Although the absence of these factors would not make employees unhappy, it would
leave them feeling some what neutral toward their jobs.

On the other hand, Improving hygiene’s will reduce job dissatisfaction, but the will have
almost no effect on job satisfaction or employee motivation.

A unique characteristic of motivator-Hygiene theory is that it does not view job

satisfaction and dissatisfaction as opposite. Improving motivators increase job
satisfaction, but it does not decrease job dissatisfaction. Improving hygiene does reduce
job dissatisfaction but it does not increase job satisfaction. Moreover, job satisfaction is
produced by growth fulfillment and other work / job content outcomes, where as job
dissatisfaction produced by the work context.
Herzberg Motivator – Hygiene Model
Hygiene Motivators

Dissatisfaction ← No Dissatisfaction No satisfaction → Satisfaction

Job with poor job with good Job that does not jobs offering
Company policies, company policy & Offer achievement, achievement,
Administration, administration recognition, recognition,
Technical supervision, technical stimulating work, stimulating work,
Salary, interpersonal supervision, responsibility, responsibility,
Relationship with salary, and and
Supervisors and interpersonal advancement advancement
Working condition relationship with
1. Vroom’s Expectancy Theory of Motivation
Expectancy theory is a motivation theory based on the idea that work effort is directed
toward behaviors that people believe will lead to desired outcomes. Through experience,
we developed expectation about whether we can achieve various level of job
performance. We also develop expectation about whether job performance and work
behavior leads to particular outcomes. Finally, we naturally direct our effort toward
outcomes that help us fulfill our needs.

Although many variations of expectancy theory have been proposed, the most widely
cited version was proposed by victor vroom. Vroom’s model argues that the
psychological force on an employee to exert effort is a function of his / her expectancies
about the future and the attractiveness of specific future outcomes. Two kinds of
expectations are important in Vroom’s model: the expectation that effort will lead to
performance and the expectation that performance will lead to rewards.

The key variable of interest in expectancy theory is effort- the individual’s actual exertion
of energy. An individual’s effort level depends on three factors:
1. Effort to Performance(E-P) expectancy
2. Performance to outcome(P-O) expectancy
3. Outcome Valences(V)
Employee motivation is influenced by all three components of the expectancy theory
model. If any component weakens, motivation weakens.
Effort-performance Expectancy (E → P): The effort performance expectancy is the
individual’s perception that his / her effort will result in a particular level of performance.
In deciding on a course of action, employees will consider whether their effort will
translate in to a desired accomplishment. If the obstacles are such that they cannot
reasonably expect their effort to lead to an acceptable level of performance, their
motivation to perform will be diminished.
The statement like “if I try harder, I can do better” shows E-P expectance.
Mechanisms of increasing E-P expectancies
The employees should be given:
 Necessary competency
 Clear role perception
 Favorable situational contingency
 Counseling and coaching to build self-confidence
 Shaping(assign similar or fewer tasks until employees can master
 Behavioral modeling, etc

Performance – outcome Expectancy (P → O): The performance to outcome expectancy

is the perceived probability that a specific behavior or performance level will lead to
specific outcome. This is the second consideration whether a given level of performance
will result in the obtainment of a particular outcome. The more strongly an employee
believes that performance will lead to a positive outcome, the more likely it is that he /
she will be motivated to higher levels of performance. The statement like “if I perform
better, I will get more pay”.
The P-O expectance of employee can be increased by measuring performance accurately
and distributing more valued rewards to those with higher job performance or having a
performance based reward system. This fact must be communicated to employ

Valence (v): The third element in expectancy theory is the valence of each outcome that
you consider. Valance refers the anticipated satisfaction or dissatisfaction that an
individual feels toward an outcome. The valance that an individual attaches to an
outcome is a personal matter that cannot be accurately predicted by other people. Thus, it
is essential to ask an individual about the valance that he / she attach to anticipated
outcomes. The valance of a given outcome may also vary in relation to how recently how
the individual has been rewarded.

The Linkage of effort performance and performance outcome expectancy can be

measured by questioning individuals on the subjective probabilities that they believe
characterize the linkages.

Subjective probabilities are estimates of the likelihood that one event will follow another.
In this case, respondents would be asked to report their personal probability estimate that
effort will lead to performance and the performance will lead a given outcome. These
probabilities can range from zero; including a belief that one event will definitely not
follow the other, to 1.0, indicating complete confidence that on event will follow the
other. The valance of outcome is assessed by having respondents provide an associated
value that can range from -1.0 (highly unattractive) to + 1.0 (highly attractive).

The probability estimates can be multiplied to yield an overall expectancy value. This
value can then be multiplied by associated valence to yield a summary index of the
psychological force on an individual to exert effort. In summery the mathematics
involved is:

(E → P) x (P→ O) x (V) = Motivational force.

As an example, consider a sales person who is decided whether to make additional sales
calls. The sales person believes that the additional calls (effort) will lead to additional
sales (performance) and that the additional sales will lead to a bonus (outcome). The size,
or magnitude, of the bonus (valance) must also be considered.

For illustrative purposes, imagine that the sales person’s probability estimate of E → P is
0.8, and the estimated of P → O is 0.7. Also, the anticipated bonus has valance of 0.6. The
motivational forces that is exerted on the salesperson is given by (0.8) x (0.7) x (0.6) =
0.34. If the salesperson had valued the bonus more highly, so that its valence were 0.9,
the motivational force would have been (0.8) x (0.7) x (0.9) = 0.50. If he / she felt that the
bonus were trivial, the valence portion of the equation would greatly reduce the
motivational force.

2. Adams’s Equity Theory of Motivation

Defined generally, Equity theory is a model of motivation that explains motivation in

terms of how people strive for fairness and justice in social exchanges.
Psychology of Stacy Adams pioneered application of the equity principle to the work
place. Central to understanding Adams’s equity theory of motivation is an awareness of
key components of individual organization relationship. This relationship is pivotal in the
formation of employees’ perceptions of equity and inequity.

Adams point out those two primary components is involved in the employee-employer
exchange, inputs and outcomes. An employee’s, for which they expect a just return,
include education, experience, skills and efforts. On the outcome slide of the exchange,
the organization provides such things, as pay, fringe benefit, and recognition. These
outcomes vary widely depend ones organization are rank.
On the job, feelings of inequity revolve a round a persons evaluation of whether he/she
receive adequate rewards to compensate for his/her contributive inputs. People perform
this evaluation by comparing the perceived fairness of their employment exchange to that
of relevant others. This comparative process, which is based on the equity norm, was
found to generalize across countries. People tend to compare themselves to other
individuals with whom they have close interpersonal ties- such as friends or-to similar
others-such as people performing the same job or individual of the same gender or
functional level-rather than dissimilar others.

AS a result of the comparison three different equity relationships will exist: Equity,
negative inequity and positive inequity. Assume two peoples in each equity relationships
have equal background, and perform identical tasks. Only their hourly pay rates differ.
- Equity exist for an individuals when his/her ratio of perceived outcomes to input
for relevant co-workers. If the other person’s additional outcomes are due to
his/her greater inputs, a sense of equity may still exist.
- However, if the comparison person enjoys greater outcomes for similar inputs,
negative inequity may perceive.
- On the other side a person will experience positive inequity when his/her
outcomes to inputs ratio is greater than that of relevant co-workers.

3. Goal setting theory

Goal setting is one of the most effective and widely practiced theories of motivation in
organizations. Goals are the immediate or ultimate objectives that employees are trying to
accomplish from their work effort. Goal setting is the process of motivating employees
and clarifying their role perception by establishing performance objectives.
Goal setting potentially improves employee performance in two ways: By stretching the
intensity and persistence of effort and by giving employees clearer role perceptions so
that their effort is channeled toward behaviors that will improve work performance.
Goal setting is widely used to motivate employees. Some companies apply goal setting
through a formal process known as management by objectives (MBO). MBO is a
participative goal setting process in which organizational objectives are cascaded down to
work units and individual employees. Employees are actively involved with their
superiors in goal formation as well as clarifying the means to reach the agreed up on
goals. MBO also includes periodic review and feed back.
Characteristics of effective goals
Goal setting is more complex than simply telling some one to “do your best”. Instead,
Organizational Behavior scholars have identified five conditions which are necessary to
maximize task effort and performance:
1. Specific goals: employees put more effort in to a task when they work to ward
specific goals rather than “do your best” targets. Specific goals have measurable
levels of change over a specific time such as “decreasing scrap rate by seven
percent over the next six months”. Specific goals communicate more precise
performance expectations, so employees can direct their effort more efficiently
and reliably.
2. Result oriented goals: result oriented goal is one that directly refers to the
person’s job performance, such as the number of customers served per hour.
Result oriented goals improve work performance more than process oriented
goals. Process oriented goals refer to the work processes used to get the job done.
Research indicates that these process oriented goals encourage employees think
about different ways to get the job done, but they seem to block them from
choosing one method and getting on with the job. Therefore result oriented goals
tend to be effective.
3. Challenging goals: employees tend to have more intense and persistent work
effort when they have challenging goals rather than easy goals. Challenging goals
also fulfill a person’s need for achievement or growth needs when the goal is
achieved. Challenging goals stretch the employee’s abilities and motivation
toward peak performance.
4. Goal commitment: Of course, there are limits to challenging goals. At some point,
a goal becomes so difficult that employees are no longer committed to achieving
it. The optimal level of goal difficulty is the area in which it is challenging but
employees are still committed to achieving the goal. Therefore, the balance
between challenge and commitment should be maintained by establishing
intermediate goals (Realistic goal).
5. Participation in goal formation
Participation in goal setting tends to increase goal commitment because
employees take ownership of the goal, compared to goals that are merely assigned
by supervisors. Participation may also improve goal quality, because employees
have valuable information and knowledge that may not be known to those who
initially formed the goal.
6. Goal feedback: In goal setting, feedback lets us know whether we have achieved
the goal or are properly directing our effort toward it. Feedback is also an
essential ingredient in motivation. Because our growth needs can’t be satisfied
unless we receive information on goal accomplishment.


Job design is the process of assigning tasks to a job, including the interdependency of
those tasks with other jobs. A job is set of tasks performed by one person. Some jobs
include few tasks, each requiring limited skill or effort. Other jobs include a very
complex set of tasks and can be accomplished by only a few highly trained professionals.
Organizational behavior scholars usually emphasize the job it self as a preferred source of
motivation. It is also important factor in work efficiency, work related stress and various
other employee out comes.
Job characteristics model
Herzberg’s writing is significant because it led to considerable study in to the
motivational potential of jobs. Out of that research has emerged J. Richard Hackman and
Greg Oldham’s Job characteristic model. This model details the motivational properties
of jobs as well as specific personal and organizational consequences of these properties.
The model identifies five core job dimensions that produce three psychological states.
Employees who experience these psychological states tend to have higher level of
internal work motivation (motivation from the work itself), job satisfaction (with work
itself) and work effectiveness.

Core job Critical
characteristics psychological
High internal work
Skill variety Experienced
Task identity meaningfulness of
Task significance the work
High growth
High general
Autonomy Experienced satisfaction
for outcomes High work
outcomes effectiveness
Feedback form job
Knowledge of
results of work
Fig: Job characteristic model

Context satisfaction
Knowledge & skill
Growth needs strength
Core job characteristics
Hackman and Oldham have identified five core job characteristics. Desirable work out
comes increase when jobs are redesigned such that they include more of the following
1. Skill variety- refers to the use of different skills and talents to complete a variety
of work activities. For example, Sales clerks who normally only serve customers
might be assigned the additional duties of stocking inventory and changing
storefront displays.
2. Task identity- is the degree to which a job requires completion of a whole or
identifiable piece of work, such as doing some thing from beginning to end or
where it is easy to see how one’s work fits in to the whole product or service.
For example an employee who assembles an entire computer modem rather than
simply soldering the circuitry would develop a stronger sense of ownership or
identity with the final product.
3. Task significance- refers to the degree to which a job has a substantial impact on
the organization and/or larger society. For example, Air traffic controllers would
have a high degree of task significance because the quality of their work affects
the safety of other.
4. Autonomy is the degree to which the job provides employees with freedom,
independence and discretion in scheduling the work and determining the
procedures to be used to complete the work. In autonomous jobs, employees make
their own decisions rather than rely on detailed instructions from supervisors or
procedure manuals.
5. Job feedback- is the degree to which employees can tell how they are doing based
on direct sensory information from the job itself. For example, physicians can see
whether their operations have improved the patients’ health.
Critical psychological states
The five core job characteristics affect employee motivation and satisfaction through
three critical psychological states.
a. Experienced meaningfulness- the belief that one’s work is worth while or
important. Skill variety, task identity and task significance directly contributed to
the job meaningfulness. If the job has high levels of all these three characteristics,
employees are likely to feel that their job is highly meaningful. The
meaningfulness drops as the job loses one or more of these characteristics.
b. Experienced responsibility for work out comes- work motivation and performance
increase when employees feel personally accountable for the outcomes of their
efforts. Employees must be assigned control of their wok work environment to
feel responsible for their successes and failures. Autonomy directly contributes to
this feeling of experienced responsibility.
c. Knowledge of results of work activities- employees wants information about the
consequences of their work effort. It can originate from co-workers, supervisors,
or clients. However, job design focus on knowledge of result from the work itself.
Feedback from job contributes to knowledge of result.
Individual differences
Job redesign doesn’t increase work motivation for every one in every situation
because of individual differences. It can improve work motivation of employees
under the following conditions:
1. Employees must have the required skill and knowledge to master the more
challenging work. Otherwise, job redesign tends to increase stress and reduce job
2. Employees must reasonability satisfied with their work environment (working
condition, job security, salaries, etc) before redesign affects work motivation.
3. Employees must have strong growth needs. People with strong growth needs have
satisfied their relatedness or existence needs and are looking for challenges from
work itself. In contrast, improving the core job characteristics will have little
motivational effect on people who are primarily focused on existence or
relatedness needs.
Increasing work motivation through job design
Three main strategies potentially increase the motivational potential of jobs are job
rotation, job enlargement, and job enrichment.
1. Job rotation- the practice of moving employees from one job to another, typically
for short period of time. The reasons to introduce job rotation are to;
 Reduce boredom
 Reduce the incidence of repetitive strain injuries
 Develop a flexible work force. Helps employees learn new tasks
and thereby increasing their ability to move to jobs where they are
2. Job enlargement- refers to increasing the number of tasks employees perform
with in their job. We might combine two or more complete jobs in to one or just add
one or two more tasks to an existing job. Job enlargement improves customer service
because assigning all tasks to one employee minimizes coordination problems.
However, employees are motivated by job enlargement when they have task variety,
autonomy and knowledge.
3. Job enrichment – this occurs when employees are given more responsibility for
scheduling, coordinating and planning their own work.
Ways to enrich jobs are:
• Empowering employees- refers to feeling of control and self efficacy that
emerges when people are given power in a previously powerless situation.
Empowered employees have autonomy, task significance, and control over
performance feedback.
• Forming natural work units: to organize tasks in to a natural grouping
such as completing a whole product. It increases task identity and task
significance because employees perform a complete product or service.
For example, the jobs would be redesigned around natural units by having
each employee take responsibility for all human resource activities (like
recruitment, selection, training and development, compensation, etc) for
specific group of employees.
• Establishing client relationship: Putting employees in direct contact with
their clients rather than using the supervisor as a go between.

DEFINITION: Leadership is the process of influencing and directing the behavior of
people toward achievement of goals. The process involves setting a direction for the
organizations, aligning people with that direction through communication, and
motivating people to action through empowerment and basic need gratification. The
influence and the power are central elements of leadership. The influence is any action
that brings change in the behavior of other persons. Power refers to the capacity/ability to
influence others i.e. A has power over B means that A can influence the behavior of B,
and B does some thing that otherwise would not do. So the leaders use power in order to
shape the behavior and action of their followers.


Leadership and management are two notions that are often used interchangeably.
However, these words actually describe two different concepts. Leadership and
management share many similarities. Both leadership and management involve influence,
working with people, and working with effective goal management. However, the fields
of leadership and management can also be considered very different.
Leadership is just one of the many assets a successful manager must possess. Care must
be taken in distinguishing between the two concepts. The main aim of a manager is to
maximize the output of the organization through administrative implementation. To
achieve this, managers must undertake the following functions: organizing, planning,
staffing, directing and controlling.
Leadership is just one important component of the directing function. A manager cannot
just be a leader; he also needs formal authority to be effective.
Managers vs. Leaders
It is important to make a distinction between the terms “manager” and “leader.” A
manager is one who performs the functions of management (planning, organizing,
direction, and controlling) and occupies a formal position in an organization. For
example, the sales manager is the individual who manages the sales force of the
company. A leader, on the other hand, is anyone who is able to influence others to pursue
certain goals. Leaders deal with the interpersonal aspects of a manager’s job. Leaders
inspire others, provide emotional support, and try to get employees to rally around a
common goal. Leaders also play a key role in creating a vision and strategic plan for an
organization. Managers, in turn, are charged with implementing the vision and strategic
The distinction between leaders and managers is more than a semantic issue for four
1. It is important from a hiring standpoint. Because leaders and managers perform a
subset of unique functions, it is important to recruit and select people who have the
required intellectual abilities, experience, and job-relevant knowledge to perform
their jobs.
2. Differences may affect group effectiveness. Work group performance can be
increased by staffing a productive mix of leaders and managers.
3. Successful organizational change is highly dependent upon effective leadership
throughout an organization. Senior executives cannot create change on their own.
According to organizational change expert John Kotter, successful organizational
transformation is 70% to 90% leadership and 10% to 30% management.
4. Distinctions between leading and managing highlight the point that leadership is not
restricted to people in particular positions or roles. Anyone from the bottom to the top
of an organization can be a leader. Many informal leaders have contributed to
organizational effectiveness. This conclusion supports warren Bennie’s point about
and leaders as individuals who do the right things.
Table5.1 Difference between leader and manger
Leaders managers
Innovate Administer

Develop Maintain

Inspire Control

Long-term view Short-term view

Ask what and why Ask how and when

Originate Initiate

Challenge the status quo Accept the status quo

Do the right things Do things right

Leadership is the outcome of complex relationship between leader, subordinates, the
organization, social values, economic and political conditions. It is influenced by
numerous factors relating to traits, behaviors, and situations. Based on these factors there
are three leadership theories such as Trait theory, Behavioral theory, and Contingency
1. Trait theory: It is the theory of leadership that suggests personality
characteristics/traits and physical attributes distinguish leaders from non leaders.
Physical attributes include height, weight, physique, energy, appearance and even
age. According to the trait theory the important leadership competencies may
include: drive, leadership motivation, integrity, self confidence, intelligence,
knowledge of business, and emotional intelligence.
a. Drive- refers to inner motivation that leaders possess to pursue their goals.
b. Leadership motivation- leaders need for socialized power to accomplish
team/organizational goals.
c. Integrity- leader’s truthfulness and tendency to translate words in to deeds.
d. Self confidence- leaders belief in his/her own leadership skills and ability to
achieve objectives.
e. Intelligence- Leaders above average cognitive ability to process enormous
amount of information. This does not mean that leaders should be necessarily
genius, but they should have superior ability to analyze alternative scenarios
and identify potential opportunities.
f. Knowledge of the business – leaders understanding of the company’s
environment to make more intuitive decisions.
g. Emotional intelligence – leaders ability to monitor his/her own and others’
emotion, discriminate among them and use the information to guide his/her
thought and actions.
Generally, trait theory states that leaders were basically born: you either had it or did
not. That is the one who have desirable physical attribute and the above mentioned
competencies is recognized to become the leader by his/her very nature. So according to
this theory we cannot made leaders through training and development methods.
The limitation of trait theory:
• Acceptance of universality – it assumes that great leaders have the same
personality characteristics and all of them are equally important in all situations.
But the right actions in one situation are not necessarily right for a different
situation. So it ignored the situational factors.
• Emphasis on personality characteristics-There is insufficient evidence to conclude
that leaders can be distinguished from followers on the basis of physical attributes
and personality traits.
The implication of trait theory is that, if it is implemented properly assuming the
prescription of the theory works; it might help organizations to select the right individuals
for leadership positions. It recognizes that some people possess personal characteristics
that offer them a higher potential to be great leader, so the organization can hire people
for future leadership position.
2. Behavioral theories
Behavioral theories are groups of theories of leadership which states that specific leaders’
behavior differentiate leaders from non leaders. It is concerned with describing leaders’
actions and behaviors. Like trait theory, these theories exclusively emphasize the leaders,
as opposed to situational characteristics. Behavioral theories do not consider
characteristics of the followers themselves or of the leadership situation in understanding
the leadership process.
Behavioral theories help organizations train and develop leaders rather than selecting
them. In other words, if there were specific behaviors that identified leaders, then we
could teach leadership. This was surely a more exciting avenue, for it would mean that
the supply of leaders could be expanded. If training worked, we could have an infinite
supply of effective leaders. The behavioral theories are classified in to two parts: The
basic leadership style and two dimensional theories.
A. The basic leadership style
The earliest research on leadership style, conducted by Kurt Lewis and his students,
identified three basic styles: Autocratic, democratic and laissez-faire.
1. Autocratic style: a leadership style in which the leader uses strong, directive,
controlling actions to enforce the rules, regulations, activities and leaderships in the
work environment. In this style of leadership, subordinates are excluded from the
process of decision making. The leaders assign work with out consulting subordinates
or knowing their inclinations and desires. Leaders are more tasks oriented and less
concerned about human element.
2. Democratic style: a style of leadership in which the leader takes collaborative,
responsive and interactive actions with followers concerning the work and work
environment. Democratic leaders are effective and more productive because they consult
subordinates on various matters and include them in the process of decision making.
They are more oriented toward both task and human element.
3. Laissez-faire style: A style of leadership in which the leader fails to accept the
responsibilities of the position. The leaders have little or no confidence in their leadership
ability, do not set goals for the group and do not enhance group interaction and
communication. They leave the employees alone, assuming that they are responsible. In
fact, the laissez –faire types of leader do little supervision. Consequently, the group has to
make many on the job decisions. There are a variety of reasons why a leader may exhibit
this style of leadership. Some leaders perceive that the costs associated with leading are
greater than the benefits. The specific reason may be lack of self- confidence, fear of
failure, or the perceived social cost of ostracizing by the work group. We can immediately
question why a leader who feels this way is occupying this type of role. On the positive
side, a leader may adopt this style because he or she feels that subordinates will perform
better if they are given a great deal of discretion.
B. The two dimensional theories.
1. Ohio state leadership studies
The most comprehensive and replicated of the behavioral theories resulted from research
that began at Ohio state university in the late 1940s. These studies sought to identify
independent dimensions of leader behavior. The group identified two dimensions i.e.
initiating structure and consideration.
a. Initiating structure: refers to the extent to which a leader is likely to define and
structure his or her role and those of subordinates in the search for goal
attainment. It includes behavior that attempts to organize work, work relationships
and goals. The leader characterized as high in initiating structure could be
described in terms such as “assign group members to particular tasks”, “expects
workers to maintain define performance standards”, and “emphasizes the meeting
of deadlines”.
b. Consideration: Refers to the extent to which a person is likely to have job
relationship characterized by mutual trust, respect for subordinates’ ideas, and
regard for their feelings. The leader high in consideration could be described as
one who helps subordinates with personal problems, is friendly and approachable,
and treats all subordinates as equals.
The Ohio study identified that the different degree of combination of leaders orientation
to the dimensions would give rise to four different leadership styles:
1. low consideration, low structure
2. low consideration, high structure
3. high consideration, low structure
4. high consideration, high structure
The conclusion arrived is that leaders high in initiating structure and consideration (a
“high-high” leader) tended to achieve high subordinate performance and satisfaction
more frequently than those who rated low in either an initiating structure, consideration
or both.
2. University of Michigan study
This study was a contemporary to the Ohio studies and had similar research objectives: to
locate behavioral characteristics of leaders that appeared to be related to measures of
performance effectiveness. The Michigan group also came up with two dimensions of
leaders’ behavior, which they labeled employee oriented and production oriented.
A. Employee oriented - Employee oriented leaders were described as emphasizing
interpersonal relations; they took a personal interest in the needs o their
subordinates and accepted individual differences among members.
B. Production oriented –leaders tended to emphasize the technical or task aspects of
the job- their main concern is in accomplishing their group’s tasks, and the group
members are a means to that end.
The conclusions arrived at by the Michigan researchers strongly favored the leaders who
were employee oriented in their behaviors. Employee oriented leaders were associated
with higher group productivity and higher job satisfaction .production oriented leaders
tended to be associated with low group productivity and low worker satisfaction.

3. Managerial grid:
A graphic portrayal of two dimensional views of leadership styles was developed
by Robert Blake and Jenny Mouton. They proposed a managerial grid based on
the style of concern for people and concern for production which essentially
represent the Ohio state dimension of consideration and initiating structure or the
Michigan dimensions of employee oriented and production oriented. The grid has
nine possible positions along each axis, creating 81 different positions in which
the leader’s style may fall. However, the model emphasizes on five major
leadership styles.
Concern for people

9 (1,9)- (9,9)-
Country club Team
5 (5,5)-
of the


1 (1,1)- (9,1)-
Impoverished Authority
mgmt compliance
1 2 3 4 5 6 7 8 9
Concern for production

Fig. Managerial grid

1. Country club (1.9) –this gives thoughtful attention to the needs of people and
their relation ships so as to create a comfortable working environment. It gives
little consideration for production and high consideration for people.
2. Impoverished management (1.1) - low concern for both people and
production. They do the minimum required to fulfill their leadership role and keep
their job .it is the worst leadership style and ineffective. It is similar to laissez
faire style and is a form of abdication of responsibility.
3. Middle of the road (5.5) - work for adequate organizational performance by
balancing getting work done and maintaining morale. It gives intermediate
emphasis for both production and people.
4. Authority compliance management (9.1) - emphasizes production and works
to achieve high level of efficiency in operations by minimizing any interference
from the human element .production maximization is the hall mark of this
manager .it refers to high concern for task and low concern for people.
5. Team management (9.9) - emphasizes high level of work accomplishment
through committed, and trust-worthy people. There is no trade off between people
and production. It is a peak of leadership style and most effective.
3. Contingency theories
The contingency perspective of leadership is based on the idea that the most appropriate
leadership style depends on the situation. Unlike the trait and behavioral theories,
contingency theories have a dual focus: the leader and the situation in which the leaders
works. The central concern for contingency theories is how the leader’s traits interact
with situational factors in determining team effectiveness in task performance.
A. The Fiedler model
The first comprehensive contingency model for leadership was developed by Fred
Fiedler. His model proposes that effective group performance depends on the proper
match between the leader’s style of interacting with his or her subordinates and the
degree to which the situation gives influence to the leader. He developed an instrument
called least preferred co-worker (LPC) scale to measure whether a person is task
oriented or relationship oriented. Least preferred co-worker (LPC) is the person a leader
has least preferred to work with over his or her carrier. This is not necessarily the person
the leader likes least; rather, it is the person with whom the leader had the most difficulty
getting the job done.
The leader is asked to describe this least preferred co-worker using sixteen contrasting
adjectives (such as pleasant-un pleasant, efficient- inefficient, open-guarded, supportive-
hostile, etc). The leader who describe the LPC in relatively positive terms has a high LPC
score, then he/she is classified as relationship oriented. On the other hand, if the least
preferred co-worker is described in relatively unfavorable terms (low LPC score), then
the leader is classified as task oriented. Fiedler believed that, on the basis of the answers
to this LPC scale he would determine a leader’s basic leadership style. His premise was
that what you say about others tells more about you than it tells about the person you are
The extent of effectiveness of both leadership styles are determined by the interaction of
three situational variables and factors which are defined as follows:
1. Leader member relations- the degree of confidence, trust and respect subordinates
have in their leader. It could be good or bad.
2. Task structure – the degree to which the job assignments of subordinates are
structured or unstructured. It could be high or low.
3. Position power – the degree of influence a leader has over power variables hiring,
firing, discipline, promotions and salary increase. It could be either strong or
Fiedler stated that the better the leader –member relations, the more highly structured the
job, and the stronger the position power, the more control or influence the leader had
(favorable for the leader). On the other hand, in unfavorable situation the leader might
have very little control. Altogether, by mixing the three contingency variables there are
potentially eight different situations or categories in which a leader could find him self or
her self.

Good task oriented

Poor Favorable Moderate Unfavorable
Category 1 2 3 4 5 6 7 8
Leader Good Good Good Good Poor Poor Poor Poor
Task high high low low high High low low
Position Strong weak stron weak stron weak strong weak
power g g
Fig. Fielder model
Fiedler concluded that task oriented leaders tend to perform better than relationship
oriented leaders in situations that are very favorable (category1, 2, &3) to them and in
situations that are very unfavorable (category7&8) to them. Relationship oriented leaders,
however perform better I moderately favorable situations (category 4, 5, & 6).
Given the fielders’ findings, how would you apply them? You would seek to find to
match leaders and situations. However, Fiedler viewed an individual’s leadership style as
being fixed. That is either relationship oriented or task oriented. Therefore, there are only
two ways in which to improve leaders’ effectiveness.
First, you can choose the leader who best fits the situation. So, for example, if situation is
unfavorable (requires task oriented leader) but is currently led by a relationship oriented
leader, the group performance could be improved by replacing that manager with one
who is task oriented. Second, you can change the situation to fit the leader. This could be
done by restructuring tasks or increasing or decreasing the power that the leader has to
control factors such as salary increases, promotions and disciplinary actions.
B. The path-goal theory
Developed by Robert House, path-goal theory is a contingency model of leadership
that extracts key elements from the Ohio state leadership research on initiating
structure and consideration and the expectancy theory of motivation. The term path-
goal is derived from the belief that effective leaders clarify the path to help their
followers get from where they are to the achievement of their work goals and make the
journey along the path easier by reducing road blocks and pit falls.
According to path-goal theory, a leader’s behavior is acceptable to subordinates to the
degree that it is viewed by them as immediate source of satisfaction or as a means of
future satisfaction. The theory also states that effective leaders influence employee
satisfaction and performance by making their need satisfaction contingent on effective
job performance. This could be possible using two ways;
1. Leaders can strengthen the P-O expectance and outcome valence by ensuring that
employees who perform their jobs well have a higher degree of need fulfillment
than employees who perform poorly.
2. Leaders can strengthen E-P expectance by providing the information, support and
other resources necessary to help employees complete their tasks.
According to path-goal theory, leaders motivate and satisfy employee by adopting one
or a combination of four leadership’s styles such as directive, supportive, participative
and achievement –oriented.
1. Directive- the leader clarifies performance goals, the means to reach those goals,
and the standard against which performance will be judged. It includes judicious
use of rewards and disciplinary actions.
2. Supportive- these behaviors provides psychological support for subordinates. The
leader is friendly and approachable, makes the work more pleasant, treats
employees with equal respect, and shows concern for the status, needs, and well-
being of employees.
3. Participative- these behaviors encourage and facilitate subordinates involvement in
decision making beyond their normal suggestions, and takes these ideas in to
serious considerations before making decision.
4. Achievement –oriented - these behaviors encourage employees to reach their peak
performance. The leader sets challenging goals, expects employees to perform at
their highest level, continuously seeks improvement in employee performance and
shows high degree of confidence that employees will assume responsibility and
accomplish challenging goals.
Path-goal theory states that each of these four leadership style will be effective in
some situations but not in others. The theory specified two sets of situational variables
that can moderate the relation ship between a leader’s style and effectiveness.
I. Employee contingencies: This includes skills/experience and Locus of control
II. Environmental contingencies: This includes task structure and team dynamics

Employee contingencies
-Skill and experience
-Locus of control
-Directive motivation
-Supportive -Employee
-Participative satisfaction
-Achievement -Leader acceptance

Environmental contingencies

-Task structure
-Team dynamics

Figure: path-goal theory model

Effectiveness of the four leadership styles in different situation is summarized as follows;

Worker Leadership styles
Directive Supportive Participative Achievement
- Skill and Low low high high
Locus of control External external internal internal
-Task structure Non -routine Routine Non-routine ?

-Team dynamics Negative norm Low cohesive Positive norms ?

Servant leadership is more a philosophy of managing a testable theory. The term servant-
leadership was coined by Robert Greenleaf in 1970. Greenleaf believes that great leaders
act as servants, putting the needs of others, including employees, customers, and
community, as their first priority. Servant-leadership focuses on increased service to
others rather than to oneself.
Because the focus of servant-leadership is serving others over self-interest, servant-
leaders are less likely to engage in self-serving behaviors that hurt others (e.g., stock-
holders and employees). More and more companies are trying to instill a philosophy of
servant-leadership in to their organizational cultures.
Servant-leadership takes mote than words to embed servant-leadership into an
organization’s culture. It must be reinforced through organizational structure, systems,
and rewards for it take hold. At the individual level, however, managers also need to
commit to a set of behaviors underlying servant-leadership.
According to Jim Stuart, co-founder of the leadership circle in Tampa, Florida,
“Leadership derives naturally from a commitment to service. You know that you’re
practicing servant-leadership if your followers become wiser, healthier, more
autonomous- and more likely to become servant-leaders themselves.” Servant-leadership
is not a quick-fix approach to leadership. Rather, it is a long-term, transformational
approach to life and work. Table 7.3 present ten characteristics possessed by servant

Table 5.3 Characteristics of the servant- leader

Servant-Leadership characteristics Description

1.Listening Servant-leaders focus on listening to identify and clarify the needs

and desires of a group.
2.Empathy Servant-leaders try to empathize with others’ feeling and
emotions. An individual’s good intentions are assumed even when
he or she performs poorly.
3.Healing Servant-leaders strive to make themselves and others whole in the
face of failure or suffering.
4.Awareness Servant-leaders are very self-aware of their strengths and
5.Persuasion Servant-leaders rely more on persuasion than positional authority
when making decisions and trying to influence others.
6.Conceptualization Servant-leaders take the time and effort to develop broader based
conceptual thinking. Servant-leaders seek an appropriate balance
between a short-term, day-today focus and a long-term, conceptual
7.Foresight Servant-leaders have the ability to foresee future outcomes
associated with a current course of action or situation
8.Stewardship Servant-leaders assume that they are stewards of the people and
resources they manage.
9.Commitement to the growth Servant-leaders are committed to people beyond their immediate
Of people work role. They commit to fostering an environment that
encourages personal, professional, and spiritual growth.
10. Building community Servant-leaders strive to create a sense of community both within
and outside the work organization.


New perspectives of leadership theory have emerged in the past 15 years, variously
referred to as “charismatic,” “heroic”, “transformational” or “visionary” leadership.
These competing but related perspectives have created confusion among researchers and
practicing managers. Fortunately, Robert House and Boas Shamir have given us a
practical, integrated theory; it is referred to as charismatic leadership. This section begins
by highlighting the differences between transactional and charismatic leadership. We
then discuss a model of the charismatic leadership process and its research and
management implications.
What is the difference between transactional and charismatic leadership?
Most of the models and theories previously discussed represent transactional leadership.
Transactional leadership focuses on the interpersonal transactions between managers
and employees. Leaders are seen as engaging in behaviors that maintain a quality
interaction between themselves and followers. The two underlying characteristics of
transactional leadership are that (1) leaders use contingent rewards to motivate employees
and (2) leaders exert corrective action only when subordinates fail to obtain performance
In contrast, charismatic leadership emphasizes “symbolic leader behavior, visionary
and inspirational messages, nonverbal communication, appeal to ideological values,
intellectual stimulation of followers by the leader, display of confidence in self and
followers, and leader expectations for follower self- sacrifice and for performance beyond
the call of duty. Charismatic leadership can produce significant organizational change
and results because it “transforms” employees to pursue organizational goals in lieu of
self –interests.
How does charismatic leadership transform followers?
Charismatic leaders transform followers by creating changes in their goals, values, needs,
beliefs, and aspirations. They accomplish this transformation by appealing to followers’
self –concepts –namely, their values and personal identity. Figure7.4 presents a model of
how charismatic leadership accomplishes this transformation process.
Figure7.4 shows that organizational culture is a key precursor of charismatic leadership.
You may recall from our discussion of organizational culture that long term financial
performance was highest for organizations with an adaptive culture. Organizations with
adaptive cultures anticipate and adapt to environmental changes and focus on leadership
that emphasizes the importance of service to customers, stockholders, and employees.
This type of management orientation involves the use of charismatic leadership.

Figure 5.4 a Charismatic Model of Leadership

Organizationa Effect on
l culture Leader followers and Outcomes
behavior work group
- Adaptive - leaders establish - increased intrinsic - personal
a vision motivation, achievement commitment
orientation and goal to leader and
pursuit vision
Charismatic leaders first engage in three key sets of leader behavior. If done effectively,
these behaviors positively affect individual followers and their work groups. These
positive effects, in turn, influence a variety of outcomes. Before discussing the model of
charismatic leadership in more detail, it is important to note two general conclusions
about charismatic leadership. First, the two –headed arrow between organizational culture
and leader behavior in Figure 5.4 reveals that individual with charismatic behavioral
tendencies are able to influence culture. This implies that charismatic leadership
reinforces the core values of an adaptive culture and helps to change dysfunctional
aspects of an organization’s culture that develop over time. Second, charismatic
leadership has effects on multiple levels within an organization. For example, Figure 7.4
shows that charismatic leadership can positively influence individual outcomes (e.g.,
motivation) group outcomes (e.g., group cohesion), and organizational outcomes (e.g.,
financial performance). You can see that the potential for positive benefits from
charismatic leadership is quite widespread.
Charismatic leader behavior the first set of charismatic leader behaviors involves
establishing a common vision of the future. A vision is “a realistic, credible, attractive
future for your organization. According to Burt Nanus, a leadership expert, the “right”
vision unleashes human potential because it serves as a beacon of hope and common
purpose. It dose this by attracting commitment, energizing workers, creating meaning in
employees’ lives, establishing a standard of excellence, promoting high ideals, and
bridging the gap between an organization’s present problems and its future goals and
aspirations. In contrast, the “wrong” vision can be very damaging to an organization. The
second set of leader behaviors involves two key components:
1. Charismatic leaders set high performance expectations and standards because they
know challenging, attainable goals lead to greater productivity.
2. Charismatic leaders need to publicly express confidence in the followers’ ability
to meet high performance expectations. This is essential because employees are
more likely to pursue difficult goals when they believe they can accomplish what
is being asked of them.
The third and final set of leader behaviors involves being a role model. Through their
actions, charismatic leaders model the desired values, traits, beliefs, and behaviors
needed to realize the vision.
Motivational mechanisms underlying the positive effects of charismatic leadership
Charismatic leadership positively affects employee motivation. One way in which this
occurs is by increasing the intrinsic value of an employee’s effort and goals. Leaders do
this by emphasizing the symbolic value of effort; that is, charismatic leaders convey the
message that effort reflects important organizational values and collective interest.
Followers come to learn that their level of effort represents a moral statement. For
example, high effort represents commitment to the organization’s vision and values,
whereas low effort reflects a lack of commitment.
Charismatic leadership increases employees’ self esteem and self efficacy. Leaders also
increase the intrinsic value of goal accomplishment by explaining the organization’s
vision and goals in terms of the personal values they represent. This helps employees to
personally connect with the organization’s vision. Charismatic leaders further increase
the meaningfulness of actions aimed toward goal accomplishment by showing how goals
move the organization toward its positive vision, which them gives followers a sense of
growth and development, both of which are important contributors to a positive self

Group is two or more individuals interacting and interdependent who come together to
achieve particular objectives. It is two or more people having common interest or
objectives. Group dynamics is the study of groups, and also a general term for group
processes. In group dynamics, the phrase "group process" refers to the understanding of
the behavior of people in groups, such as task groups, that are trying to solve a problem
or make a decision. In other words, group process refers to how an organization's
members work together and get things done. If you've ever wondered about your group's
morale, membership participation, how decisions are made and by whom, or how people
get along, then you've been affected by "group process."

An individual with expertise in 'group process, such as a trained facilitator, can assist a
group in accomplishing its objective by diagnosing how well the group is functioning as a
problem-solving or decision-making entity and intervening to alter the group's operating
behavior. Because they interact and influence each other, groups develop a number of
dynamic processes that separate them from a random collection of individuals. These
processes include norms, roles, relations, development, need to belong, social influence,
and effects on behavior. The field of group dynamics is primarily concerned with small
group behavior
Features of group:
• Definable membership
• Group consciousness (psychological aware of one an other)
• Sense of shared purpose
• Interaction and interdependence
• Decisions are usually based on consensus, not majority vote

Group can be broadly classified as formal and informal group.
Formal group is the group that is defined by organization’s structure, with designated
work assignments establishing tasks and groups. It is created by management and have
clearly stated organizational task. In formal groups the behaviors that one should engage
in are stipulated by and directed toward organizational goals.

The formal group can further subdivided into two: command group and task group.
Command group is composed of the subordinates who report directly to a given manager.
They have formal organizational task and visible in organizational structure. For
example, the combination of the principal of the high school and the teachers form
command group. Task group is also organizational determined, represent persons
working together to complete a job. However, a task group’s boundaries are not limited
to its immediate hierarchical superior. It can cross command relationships. Not visible in
organizational structure because they came from different organizational parts. E.g.
disciplinary committee, recruitment and selection committee
Note that all command groups are also task groups, but the reverse need not be true
because task group can cut across the organization.

Informal group: it is alliances neither structured nor organizationally determined.

Informal group is emerged out of social interaction. It is not created by management and
cannot be eliminated by management. It can be further subdivided as the interest group
and the friendship group. Interest group refers to people who affiliate to attain specific
objectives with which each is concerned. For example, employees who band together to
have their vacation schedule altered or to support a peer who has been fired. Friendship
group is developed by the individual members who have one or more common
characteristics. The social allegiances, which frequently extend outside the work
situations, can be based on similar age, having attended the same college, holding similar
political view, etc.
Generally informal groups can facilitate or constrain the work of formal groups in
organization. It provides a very important function by satisfying their members’ social
needs. The interaction among individuals, even tough informal, deeply affect their
behavior and performance.

Table 6.1: Why do people join groups?

Reasons Benefits
1. Security individuals can reduce the insecurity of “standing alone” .People feel
stronger, have fewer self doubts, and are more resistant to threats when
they are part of a group.

2. Status Inclusion in a group that is viewed as important by others provides

recognition and status for its members.
3. Self- Membership can also give increased feelings of worth to the group
esteem members themselves.
4. Affiliation Groups can fulfill social needs.
5. Power What cannot be achieved individually often becomes possible through
group action. There is power in number.
6. Goal There are times when it takes more than one person to accomplish a
achievement particular task- there is a need to pool talents, knowledge or power in
order to get a job completed.


The group members must resolve several issues and pass through several stages of
development before emerging as an effective work unit. They must get to know each
other, understand their respective roles, discover appropriate and inappropriate behaviors,
and learn how to coordinate their work or social activities. There are five stages of group
development: Forming, storming, norming, performing and adjourning.
i. Forming: it is the period of testing and orientation in which members learn
about each other and evaluate the benefits and costs of continued membership.
The focus is on the interpersonal relationship among the members. People
tend to be polite and will defer to existing authority of a formal or informal
leader who must provide an initial set of rules and structures for interaction.
Members experience a form of socialization as they try to find out what is
expected of them and they will fit in the group.
ii. Storming: During this stage, individual members become more proactive by
taking on specific roles and task responsibilities. It is marked by interpersonal
conflict as members compete for leadership and other roles in the group. This
stage is a tenuous stage in the group development particularly when leader is
autocratic and lacks the necessary conflict management skills. The focus is on
decision making activities related to the group’s task accomplishment.
iii. Norming: the group develops its first real sense of cohesion as roles are
established and a consensus forms around group objectives. Members have
developed relatively similar mental model, so they have common expectations
and assumptions about how the group’s goals should be accomplished. This
common knowledge structure allows them to interact more efficiently, so they
can move in to the next stage, performing.

Figure 6-1 Tuchman’s Five-Stage Theory of Group Development


ming Return to

Stormi Dependence/
ng Interdependen



What is How can I

How do I What does
best What is
Individu my role other expect
perform my
fit in? me to do? next?
al issue here? role?
Why are we
fighting over Can we agree Can we do Can we help
Why we who is in on role and members’
Group the job
are here? charge and work as a
issue who does team? out?

iv. Performing: the group becomes more task-oriented in the performing stage
because it shifts from establishing and maintaining relations to accomplishing
its objectives. In high performance group, members are highly cooperative,
have a high level of trust in each other, and are committed to group objectives.
The group is more cohesive.
v. Adjourning: this is the stage in which group is disbanded. The group
eventually end because of completion of project, when several members leave
the organization, lay offs or plant shutdowns, etc. what ever the cause of team
adjournment, members shift their attention away from task orientation to a
socio emotional focus as they realize that their relationship is ending.


Work groups transform individuals in to functioning organizational members through
subtle yet powerful social forces. These social forces, in effect, turn “I” into “we” and
“me” in to “us”. Group influence weaves individuals into the organization’s social fabric
by communicating and enforcing both role expectations and norms. We need to
understand roles and norms if we are to effectively manage group and organizational
1. Roles
According to an OB scholar, “roles” are sets of behaviors that persons expect of
occupants of a position. Roles are a set of expected behavior patterns that are attributed to
occupying a given position in a social unit. Role theory attempts to explain how these
social expectations influence employee behavior. This section explores role theory by
analyzing a role episode and defining the terms role overload, role conflict, and role

Role Episodes: A role episode, as illustrated in Figure 6-1 consists of a snap-short of the
ongoing interaction between two people. In any given role episode, there is a role sender
and a focal person who is expected to act out the role within a broader context. One may
be simultaneously a role sender and a focal person. For the sake of social analysis,
however, it is instructive to deal with separate role episodes.
Role episodes begin with the sender’s perception of relevant organization’s or groups
behavioral requirements. Those requirements serve as a standard for formulating
expectations for the focal person’s actual behavior. The role sender then cognitively
evaluates the focal person’s actual behavior against those expectations. Appropriate
verbal and behavioral messages are then sent to the focal person to pressure him or her in
to behaving as expected.
Figure 6-2 A Role Episode
Roles sender
Focal person
Perceived organizational/
Group requirements Perceived role
Comparative evaluation Role modeling Experienced role
of overload, role conflict,
- Role expectations role ambiguity
For focal person Communication of Constructive/destructiv
- Focal person’s e response
Approval or need
Need for change

Feed back

On the receiving end of the role episode, the focal person accurately or inaccurately
perceives the communicated role expectations and modeled behavior. Various
combinations of role overload, role conflict and role ambiguity are then experienced.
(These three outcomes are defined and discussed in the following sections.) The focal
person then responds constructively by engaging in problem solving, or destructively
because of undue tension, stress, and strain.
Role Overload: According to organizational psychologist Edgar Schein, role overload
occurs when “the sum total of what role senders expect of the focal person far exceeds
what he or she is able to do” Students who attempt to handle a full course load and
maintain a decent social life while working 30 or more hours a week know full well the
consequences of role overload. As the individual tries to do more and more in less time,
stress mounts and personal effectiveness slips.
Role Conflict: Have you ever felt like you were being torn apart by the conflicting
demands of those around you? If so, you were a victim of role conflict. Role conflict is
the conflict that occurs when expectation for a person role differs from the person
perception or belief and when it differs among role set members. Role conflict can be in
either of the following forms:
a. Inter-role conflict- occurs when an employee has two roles that are in
conflict with other.
b. Intra role conflict- when individuals receive contradictory messages from
different people.
c. Person role conflict- when organizational values and work obligations are
incompatible with personal values.
We can better understand an individual’s behavior in specific situations if we know what
role that person is playing. If you are dealing with employees, it helps to think in terms of
what group they are predominantly identifying with at the time and what behaviors would
be expected of them in that role.
Role Ambiguity: Those who experience role conflict may have trouble complying with
role demands, but they at least know that is expected of them. Such is not the case with
role ambiguity, which occurs when “members of the role set fail to communicate to the
focal person expectations they have or information needed to perform the role, either
because they do not the information or because they deliberately withhold it. In short,
people experience role ambiguity when they do not know what is expected of them.
Organizational newcomers often complain about unclear job descriptions and vague
promotion criteria. According to role theory, prolonged role ambiguity can foster job
dissatisfaction, erode self-confidence, and hamper job performance.

As might be expected, roe ambiguity varies across cultures. In 21-nation study, people in
individualistic cultures were found to have higher role ambiguity than people in
collectivist cultures. In other words, people in collectivist or “we “cultures had a clearer
idea of others’ expectations. Collectivist cultures make sure everyone knows their proper
place in society. People in individualistic “me” cultures may enjoy more individual
discretion, but comparatively less input from others has it’s price-namely, greater role
As mentioned earlier, these role outcomes typically are experienced in some
combination, usually to the detriment of the individual and the organization. In fact, a
study documented lower job performance when employees experienced a combination of
role conflict and role ambiguity.
2. Norms
Norms are acceptable standards of behavior with in a group that are shared by group’s
members. Or the informal rules and expectations that groups establish to regulate the
behavior of their members. Norms guide the way team members deal with clients, how
they share resources, whether they are willing to work longer hours, and many other
behavior in organizational life.
Norms may be explicit (outwardly stated) or implicit (known only by observation).They
tell the group members how to behave or how not to behave in different situations.
Norms are more encompassing than roles. While roles involve behavioral expectations
for specific positions, norms help organizational members determine right from wrong
and good from bad. According to one respected team of management consultants: “a
norm is an attitude, opinion, feeling, or action-shared by two or more people-that guides
their behavior,” Although norms are typically unwritten and seldom discussed openly,
they have a powerful influence on group and organizational behavior.

Group members positively reinforce those who adhere to current norms with friendship
and acceptance. On the other hand, nonconformists experience criticism and even
ostracism, or rejection by group members or Newcomers who do not follow these rules
may be excluded from the group. Anyone who has experienced the “silent treatment”
from a group of friends knows what potent social weapon ostracism can be. Norms can
be put in to proper perspective by understanding how they are enforced.

Examples of norms may include:

• How much socializing occurs at meetings?
• How members dress at meetings.
• Whether group members go out together and when.
• Whether meetings start on time or are always 15 minutes late.
How Norms Are Developed: Experts say norms evolve in an informal manner as the
group or organization determines what if takes to be effective. Generally speaking, norms
develop in various combinations of the following four ways:
1. Explicit statements by supervisors or co-workers. For instance, a group leader might
explicitly set norms about not drinking (alcohol) at lunch.
2. Critical events in the group’s history. At times there is a critical event in the group’s
history that establishes an important precedent. (For example, a key recruit may have
decided to work else where because a group member said too many negative things
about the organization. Hence, a norm against such “sour grapes” behavior might
3. Primacy. The first behavior pattern that emerges in a group often sets group
expectations. If the first behavior pattern that emerges in a group often sets group
expectations. If the first group meeting is marked by very formal interaction between
supervisors and employees, then the group often expects future meetings to be
conducted in the same way.
4. Carryover behaviors from past situations. Such carryover of individual behaviors
from past situations can increase the predictability of group members’ behaviors new
settings and facilitate task accomplishment. For instance, students and professors
carry fairly constant sets of expectations from class to class.

Why Norms Are Enforced: Norms tend to be enforced by group members when they
• Help the group or organizations survive.
• Clarify or simplify behavioral expectations.
• Help individuals avoid embarrassing situations.
• Clarify the groups or organization’s central values and/or unique identity.

Table 6-2 Four Reasons Norms Are Enforced

Norm Reason for Enforcements Example

“Make our department look Group/or organization After vigorously defending the vital role
good in top management’s survival played by the Human Resources
eyes.” Management Department at a divisional
meeting, a staff specialist is
complimented by her boss.
“Success comes to those who Clarification of behavioral A senior manager takes a young
Work hard and don’t make expectations associate aside and cautions him to be a
Waves.” bit more patient with co-workers who
see things differently.
“Be a team player, not a star.” Avoidance of A project team member is ridiculed by
embarrassment her peers for dominating the discussion
during a progress report to top
“Customer service is our top Clarification of central Two sales representatives are given a
priority values/unique identity surprise Friday afternoon party for
having received prestigious best-in-the-
industry customer service awards from
an industry association.

3. Group cohesiveness:
Cohesiveness refers to the extent to which group members are attracted to each other and
are motivated to stay in the group. Assuming other things constant cohesiveness is
positive attribute of group. Cohesiveness is related to group’s productivity. The
relationship of cohesiveness and productivity depends on the performance related norms
established by the group. The more cohesive the group, the more its members will follow
its goals. Performance related norms include high out put, quality work, cooperation with
individuals outside the group, etc. The following chart illustrates how performance norms
influence the relationship between cohesiveness and productivity.
Performance norms

High Low
High Strong increase in Moderate increase in
productivity productivity
Low Decrease in productivity No significant effect on

Table 6.3: The relationship between Cohesiveness and productivity

If the cohesiveness is high and performance norms are also high, the productivity of
the group increases. If the group is less cohesive and performance norms are high, the
productivity also increases but not as much as in high cohesiveness and high
performance norms situation. The productivity decrease when the group is highly
cohesive and the performance norm is also high. When both cohesiveness and
performance norm are low, no significant effect on productivity.
Determinants of cohesiveness
 Size- smaller group is more cohesive than larger group
 Compatibility- the homogeneous group (similar characteristics of members) is
more cohesive than heterogeneous group (members have different
 Permanence- permanent group is more cohesive than temporary group
 Entry barrier -difficulty of attaining membership enhances cohesiveness
 External threats -competition with other group increases cohesiveness
 Nature of task- the job that need frequent interaction and inputs from different
people increase the cohesiveness. The self contained job makes the group less
 Communication pattern- the face to face communication enhances
cohesiveness than impersonal communication.
 Past success/ failure- the group that experienced success is more cohesive
than the one that experienced failures.
 Stage of maturity- the cohesiveness of the group is high in performing stage of
group development.
Measures to be taken to encourage group cohesiveness
• Making the group smaller
• Encourage agreement with goals
• Increase the time members spend together
• Increase the status of the group and the perceived difficulty of attaining
membership in the group.
• Stimulate competition with other group
• Give rewards to the group rather than to members
• Physically isolate the group, etc


Groupthink is a type of thought exhibited by group members who try to minimize conflict
and reach consensus without critically testing, analyzing, and evaluating ideas.
Individual creativity, uniqueness, and independent thinking are lost in the pursuit of
group cohesiveness, as are the advantages of reasonable balance in choice and
thought that might normally be obtained by making decisions as a group. During
groupthink, members of the group avoid promoting viewpoints outside the comfort
zone of consensus thinking. A variety of motives for this may exist such as a desire
to avoid being seen as foolish, or a desire to avoid embarrassing or angering other
members of the group. Groupthink may cause groups to make hasty, irrational
decisions, where individual doubts are set aside, for fear of upsetting the group’s
balance. The term is frequently used pejoratively, with hindsight.
Highly cohesive groups are much more likely to engage in groupthink, because their
cohesiveness often correlates with unspoken understanding and the ability to work
together with minimal explanations. The closer group members are in outlook, the less
likely they are to raise questions that might break their cohesion.
Although group cohesion is the most important antecedent to groupthink, it will not
invariably lead to groupthink: 'It is a necessary condition, but not a sufficient condition'
(Janis, Victims of Groupthink, 1972). According to Janis, group cohesion will only lead
to groupthink if one of the following two antecedent conditions is present:
• Structural faults in the organization: insulation of the group, lack of tradition of
impartial leadership, lack of norms requiring methodological procedures,
homogeneity of members' social background and ideology.
• Provocative situational context: high stress from external threats, recent failures,
excessive difficulties on the decision-making task, moral dilemmas.
Social psychologist Clark McCauley's three conditions under which groupthink
• Directive leadership.
• Homogeneity of members' social background and ideology.
• Isolation of the group from outside sources of information and analysis.

Symptoms of groupthink
To make groupthink testable, Irving Janis devised eight symptoms indicative of
1. Illusions of invulnerability creating excessive optimism and encouraging risk
2. Rationalizing warnings that might challenge the group's assumptions.
3. Unquestioned belief in the morality of the group, causing members to ignore the
consequences of their actions.
4. Stereotyping those who are opposed to the group as weak, evil, biased, spiteful,
disfigured, impotent, or stupid.
5. Direct pressure to conform placed on any member who questions the group,
couched in terms of "disloyalty".
6. Self censorship of ideas that deviate from the apparent group consensus.
7. Illusions of unanimity among group members, silence are viewed as agreement.
8. Mind guards — self-appointed members who shield the group from dissenting
Groupthink resulting from the symptoms listed above results in defective decision
making. That is, consensus-driven decisions are the result of the following practices
of group thinking:
1. Incomplete survey of alternatives
2. Incomplete survey of objectives
3. Failure to examine risks of preferred choice
4. Failure to reevaluate previously rejected alternatives
5. Poor information search
6. Selection bias in collecting information
7. Failure to work out contingency plans.
Groupthink Research and Prevention Laboratory studies using college students as
subjects validate portions of Janis’s groupthink concept. Specifically, it has been found
• Groups with a moderate amount of cohesiveness produce better decisions
than low or high-cohesive groups.
• Highly cohesive groups victimized by groupthink make the poorest decisions,
despite high confidence in those decisions.
Janis believes prevention is better than cure when dealing with groupthink. He
recommends the following preventive measures:
1. Each member of the group should be assigned the role of critical
evaluator. This role involves actively voicing objections and doubts.
2. Top-level executives should not use policy committees to rubber-stamp
decisions that have already been made.
3. Different groups with different leaders should explore the same policy
4. Subgroup debates and outside experts should be used to introduce fresh
5. Someone should be given the role of devil’s advocate when discussing
major alternatives. This person tries to uncover every conceivable negative
6. Once a consensus has been reached, everyone should be encouraged to
rethink their position to check for flaws.
2. Social Loafing
Is group performance less than, equal to, or greater than the sum of its parts? Can three
people, for example, working together accomplish less than, the same as, or more than
they would work separately? An interesting study conducted more than a half century ago
by a French agricultural engineer named Ringelmann answer to be “less than.” In a rope-
pulling exercise, Ringelnann reportedly found that three people pulling together could
achieve only two and a half times the average individual rate. Eight pullers achieved less
than four times the individual rate. This tendency for individual effort to decline as group
size increase has come to be called social loafing. Social loafing is the failure of group
member to contribute personal time, effort, thought, or other resources to the group. It is
the situation in which people perform at lower level (exert less effort) when working in
groups than when working alone. It is most likely to occur in large groups where
individual output is difficult to identify.
Minimizing social loafing
1. Forming smaller group: In smaller groups each person’s performance becomes
more noticeable and important for group performance. Moreover, smaller groups
also potentially increase cohesiveness.
2. Task specialization: it is easier to see everyone’s contribution when each group
member performs a different work activity. Moreover, measuring individual
performance can reduce social loafing
3. Increase job enrichment: social loafing could be minimized when group members
are assigned more motivating jobs, such as requiring more skill variety or having
direct contact with clients. This minimizes social loafing only if members have
growth need. Social loafing is less common among employees with high job
4. Select motivated employees: Selecting job applicants who are motivated by the
task and have a collectivist value work harder for the group because they value
their membership in the group.

Dysfunctional Behaviors in Groups
•Cutting off others
• Attacking people rather than issues
• Topic jumping
• Withholding reactions, feelings or information
• Dominating
• Attending to side issues -nitpicking
• Side grouping –side conversations
• Avoiding responsibility
• Operating on assumptions – “not checking it out”
Helpful Behaviors in Groups
• Seek to make each person welcome
• Ask or comments from those reacting nonverbally
• Encourage each to listen to others
• Request that all state their feelings
• Give positive feedback or support
• Involve everyone – ask for everyone’s reactions
• Keep relationships honest and supportive
• Maintain a sense of freedom and mutual responsibility
• Listen to those who speak
• Encourage group members to state their opinions
• Avoid direct argument with a group member
• Ask individuals to try something –never insist
• Use inclusive language (i.e. “we”)
• Exhibit “Sharing Behavior” (offer rides, bring snacks)

Duties of a Leader within a Group

• As a student leader, it is your job to stimulate and promote goal-oriented thinking
and behavior. Make people feel strong (help them eel that have the ability to
influence their future and their environment).
• Structure cooperative relationships rather than competitive.
• Build members’ trust in the leader (lack of mutual trust means lack of faith in the
• Resolve conflicts by mutual confrontation of issues rather than avoidance or forcing
a particular solution.
Organizational Behavior

Compiled Material