CHAPTER FIVE

LEADING/ DIRECTING
Learning Objectives:
 To understand the meaning and nature of direction.
 Present leadership theories and styles.
 Present motivation theories.
 Discuss the meaning and importance of communication.
 Understand the types and forms of communication.
 Understand the meaning, importance and techniques of coordination

5.1. INTRODUCTION
People are the most important source in an organization. To achieve organizational objectives HR
should be directed towards the accomplishment of goals. Hence, the successful achievement of
organizational objectives is greatly the manifestation of the managers’ ability to lead employees.

5.2. MEANING AND NATURE OF DIRECTION

Direction is a vital managerial function, performed by every manager. Whenever decision is
taken, it must be converted into action by proper implementation. Otherwise, it is of no use. Effective
implementation of a decision is made possible by directions. Planning, organizing and staffing are
concerned only with the preparation for work performance and it is the direction which stimulates the
organization and its staff to execute the plans. Hence, it is also called ‘management-in-action’. Every
manager gives direction to his subordinates as superior and receives directions as subordinate from his
superior.
Different authors define leading in different ways, but the general ideas of each definition give the
same messages. Therefore, directing is simply defined as;
 The process of influencing people so that they will contribute to the organization & group goals
or actuating organizational members to work efficiently & effectively for the attainment of
organizational goals /objectives. Influencing means motivating people to contribute their
maximum efforts for the achievement of organizational goals; but it does not to mean coercing/
forcing, imposing sanctions or pushing people at the behind.
 A function of management which is related with instructing, guiding and inspiring human factor
in the organization to achieve organizational mission and objectives.
 According to Koontz and O’Donnel, “Direction is a complex function that includes all those
activities which are designed to encourage subordinates to work effectively and efficiently in
both the short and long term”.
 Directing is the process of integrating the people with the organization, so as to obtain their
willingness and enthusiastic co-operation for the achievement of its goals. It requires the
integration of organizational & individual goals. It is the heart of managerial functions because it
is involves with initiating actions.

5.3. ELEMENTS OF DIRECTING

Employees as individual or group members, contribute their efforts & abilities to achieve
organizational goals which can result in advancement towards their own individual or group goals.
Managers to direct individuals require three basic elements. They are
1. Leadership
2. Motivation &
3. Communication

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 5.3.1. LEADERSHIP
What is leadership? There are almost as many definitions of leadership Dictionaries define leading as
"guiding and directing on a course" and as "serving as a channel." A leader is someone with commanding
authority or influence. For the longest time, leadership was viewed as the domain of battle and sport fields.
Researchers, for their part, have developed many working definitions of leadership. Although these
definitions share much in common, they each consider different aspects of leadership.
Some define leadership as an integral part of the group process. Others define it primarily as an influence
process. Still others see leadership as the initiation of structure and the instrument of goal achievement.
Several even consider leaders to be servants of their followers. Therefore, Leadership can be observed,
studied, dissected, and learned from so many sources, angles, and analogies. Despite the differences, the
various definitions of leadership share three common elements:
 First, leadership is a group phenomenon; there can be no leaders without followers. As such,
leadership always involves interpersonal influence or persuasion.
 Second, leadership is goal directed and plays an active role in groups and organizations. Leaders use
influence to guide others through a certain course of action or toward the achievement of certain
goals.
 Third, the presence of leaders assumes some form of hierarchy within a group. In some cases, the
hierarchy is formal and well defined, with the leader at the top; in other cases, it is informal and
flexible.
Combining these three elements, we can define a leader as any person who influences individuals and
groups within an organization, helps them in establishing goals, and guides them toward achievement of
those goals, thereby allowing them to be effective. Recent definition of leadership is as follows: “Leadership
is a process whereby an individual influences a group of individuals to achieve a common goal”.
According to Hersey and Blanchard, leadership is a function of the leader, followers and situation which can
be depicted as:
L=F (L, F, S)
Where L denotes leadership F- the function of, L- leader, F-followers and S -the situation
Leadership at-Individual level involves mentoring, coaching, inspiring and motivating.
-Group level, leaders build team, create cohesion and resolve conflict; and
-Organizational level, leaders build culture, and create change.
TABLE 1-1 Definitions of Leadership
• Leadership is “the behavior of an individual . . . directing the activities of a group toward a shared
goal.” (Hemphill & Coons, 1957, pg. 7)
• Leadership is “the influential increment over and above mechanical compliance with the routine
directives of the organization.” (Katz & Kahn, 1978, pg. 528)
• “Leadership is exercised when persons . . . mobilize . . . institutional, political, psychological, and
other resources so as to arouse, engage, and satisfy the motives of followers.” (Burns,1978, pg. 18)
• “Leadership is realized in the process whereby one or more individuals succeed in attempting to
frame and define the reality of others.” (Smircich & Morgan, 1982, pg. 258)
• Leadership is “the process of influencing the activities of an organized group toward goal
achievement.” (Rauch & Behling, 1984, pg. 46)
• “Leadership is about articulating visions, embodying values, and creating the environment within
which things can be accomplished.” (Richards & Engle, 1986, pg. 206)
• “Leadership is a process of giving purpose (meaningful direction) to collective effort, and causing
willing effort to be expended to achieve purpose.” (Jacobs & Jaques, 1990, pg. 281)

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 • Leadership “is the ability to step outside the culture . . . to start evolutionary change processes that are
more adaptive.” (Schein, 1992, pg. 2)
• “Leadership is the process of making sense of what people are doing together so that people will
understand and be committed.” (Drath & Palus, 1994, p. 4)
• Leadership is “the ability of an individual to influence, motivate, and enable others to contribute
toward the effectiveness and success of the organization. . . .” (House et al., 1999, pg. 184)
Most definitions of leadership reflect the assumption that it involves a process whereby intentional
influence is exerted over other people to guide, structure, and facilitate activities and relationships in a
group or organization. The numerous definitions of leadership appear to have little else in common.
They differ in many respects, including who exerts influence, the intended purpose of the influence, the
manner in which influence is exerted, and the outcome of the influence attempt. The differences are not
just a case of scholarly nit-picking; they reflect deep disagreement about identification of leaders and
leadership processes.

5.3.2. LEADERSHIP STYLES

Leadership style
 is the typical pattern of behavior a leader uses to influence employees to achieve organizational
goals.
 is the behavior exhibited by a leader during influencing subordinates to accomplish
organizational objectives.
 implies the ways in which the leaders exercise leadership.
 is the ways in which the functions of leadership are carried out.
 is the ways how the leaders behave towards their subordinated in the accomplishment of the
work.
No matter what their traits or skills, leaders carry out their roles in a wide variety of styles. Therefore,
there are many leadership styles from which to choose from a very classical autocratic approach to a
very creative, participative approach. Not everything old was bad and not everything new was good.
Different styles were needed for different situations and each leader needed to know when to exhibit a
particular approach.

Basic leadership styles

Leadership styles are also broadly classified based on three points of view: Motivation, Authority and
supervision. On the basis of motivation leadership style can be positive or negative style. In positive style a
leader motivates his followers to work hard by offering them rewards, for example, higher bonus. In
negative styles, a leader forces his followers to work hard and punishes them for lower productivity.
On the basis of Authority, leadership styles are divided as follows;
1. AUTOCRATIC (AUTHORITARIAN) LEADERSHIP
Autocratic Leader
“Look, I’m the boss around here. I’ll make the decisions and I’ll tell you what I want you to do.
You’d better do your job because I’ll be watching your every move.”

Autocratic leadership is the classical approach to leadership style. Autocratic leadership Style is also
known as ‘’I’’ approach. This type of leadership is practiced by the managers concentrating on power and
authority within themselves. Leader expects high degree of compliance by subordinates. A Leader having
this style does not consult staff, nor allowed to give any input. He is dogmatic and positive in his approach.
Manager exhibiting this type of style has the ability and enforces decision by use of rewards and fear of
punishment. As a result, staffs are expected to obey orders without receiving any explanations.

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 Communication tends to be primarily in one direction from manager to follower. Some autocratic leaders
are seen as “benevolent autocrat.” Though they listen considerably to their followers’ opinion before
making any decision, the decision remains to be their own. They seemingly consider their subordinate’s
ideas but when it comes to decision making they are more autocratic than benevolent. An advantage of
autocratic leadership is the speed of decision-making, as the leader does not have to obtain group members
approval. However there appears to be a low morale syndrome on the group members because their views
are not given due consideration and may resent the decision and support the same as little as possible.
An autocratic leader is one who dominates and drives his subordinates through coercion, command and
the instilling of fear in his followers. An autocratic leader alone determines policies, plans and makes
decisions. He demands strict obedience. Such leaders love power and love to use it for promoting their own
ends.
They never like to delegate their power for they fear that they may lose their authority. The merits of this
type of leadership is that, it can increase efficiency, save time, and get quick results under emergency
conditions, chain of command and division of work are clear. The demerits are people are treated machine-
like cogs without human dignity, one way communication without feedback and the leader receives little or
no input from his sub-ordinates for his decision-making which is dangerous in the current dynamic
environment.
Generally, this approach is not a good way to get the best performance from a team.
Merits
 Such a leadership style is suitable when subordinates are basically lazy and avoiding duties.
 It helps to make quick decisions as decision-making is the prerogative of the leader alone.
 As subordinates are under constant threat of disciplinary action, they are always cautious.
 Inefficient and insincere workers can easily be identified and removed from service.
Demerits
 Subordinates normally show resistance to this type of leadership style as it curtails their freedom to
act.
 It kills initiative to work and results in frustration among workers.
 It often gives scope for conflicts between the leader and his followers which is bad for the
organization.
 At some stage, the subordinates may stop obeying the orders of the leader and start showing their
protest. If such a stage is reached, the leader will become helpless.
2. BUREAUCRATIC LEADERSHIP STYLE
It is also known as manages “by the book”. Everything done according to procedure or policy if not
covered by the book, referred to the next level above.
 A police officer not a leader
 Enforces the rules
Most effective when:
 Staff performing routine tasks over and over
 Staff needs to understand certain standards or procedures.
 Safety or security training conducted
 Staff performing tasks that require handling cash
Ineffective when:
 Work habits form those are hard to break, especially if they are no longer useful
 Staff loses their interest in their jobs and in their co-workers
 Staff do only what is expected of them and no more

3. DEMOCRATIC LEADERSHIP STYLE

This style of leadership is also known as participative leadership. As the name itself indicates, in this style,
the entire group is involved in goal setting and achieving it. A democratic leader follows the majority

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opinion as expressed by his group. Subordinates have considerable freedom of action. The leader shows
greater concern for his people’s interest, is friendly and helpful to them. He is always ready to defend their
subordinates individually and collectively. This type of leadership encourages people to develop and grow,
receives information and ideas from his subordinates to make decisions, and boosts the morale of
employees. The demerits of this type of leadership are (1) Some leaders may use this style as a way of
avoiding responsibility, (2) Can take enormous amount of time for making decisions.
Merits:
 As the followers are able to participate in the decision-making process, they feel motivated.
 The decision finally made is mutually acceptable. The followers, therefore, work for its
implementation wholeheartedly.
 There is no resistance from the subordinates.
 It improves the job attitudes of the subordinate staff.
 As the subordinates do not have ill-feelings of any kind, the labour-management relationship is
bound to improve.
Demerits:
 There may be delay in arriving at a decision, as consensus among the individuals is necessary.
 Democratic leadership is suitable only if the subordinates are all capable of making worthwhile
suggestions. If they are less efficient and prefer to work as per the leader’s directions, participative
leadership will not serve the purpose.
 It may, sometimes, be very difficult to evolve a solution that is acceptable to everyone.

4. LAISSEZ-FAIRE/FREE-REIN LEADERSHIP STYLE

In this type of leadership, the leaders exercise absolutely no control. He only provides information, materials
and facilities to his subordinates. This type of leadership is employee centered and the subordinates are free
to establish their own goals and chart out the course of action. This type of leadership can be disaster if the
leader does not know well the competence and integrity of his people and their ability to handle this kind of
freedom. The Figure below shows the spectrum of leadership styles where at one end there is no freedom
for people and full freedom at the other.
Merits
1. Obviously, as the subordinates have full freedom to act, their level of motivation is bound to be
very high.
2. Those subordinates, who are highly efficient, can make use of the freedom given to them to
excel.
3. The superior-subordinate relationship is bound to be very good.
Demerits:
1. The laissez faire leadership style will produce good results only if the subordinates are all
highly efficient and capable of doing their work independently.
2. As the leader does not involve himself at all in the activities of his subordinates, control may
become difficult.
3. The leader does not exercise his formal authority. As a result, the work place may lose its
official character.
4. The subordinates are deprived of the expert advice and moral support of their leader.

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 Spectrum of leadership styles

5. SITUATIONAL LEADERSHIP STYLE

Effectiveness of leadership depends on the situation. The styles a manager chooses may depend on the
following situations.
o Forces in the manager i.e. his value system & confidence in subordination
o Forces in subordinate e.g. subordinates expectation
o Forcer in the situation e.g. types of the organization, the nature of the problem, the pressure of time, etc.
Conclusion
Varying Leadership Style
Three factors that influence which leadership style to use.
1. The manager’s personal background: What personality, knowledge, values, ethics, and
experiences does the manager have. What does he or she think will work?
2. Staff being supervised: Staff individuals with different personalities and backgrounds; the
leadership style used will vary depending upon the individual staff and what he or she will
respond best to.
3. The organization: The traditions, values, philosophy, and concerns of the organization influence
how a manager acts
Determining the Best Leadership Style
• Leaders tasks should be more relationship (people) oriented
• Leaders have a dominant style, one they use in a wide variety of situations
• No one best style - leaders must adjust their leadership style to the situation as well as to the
people being led
• Many different aspects to being a great leader - a role requiring one to play many different
leadership styles to be successful.

5.3.3. LEADERSHIP THEORIES

For decades, leadership theories have been the source of numerous studies. In reality as well as in
practice, many have tried to define what allows authentic leaders to stand apart from the mass! Hence,
there are many theories on leadership as there are philosophers, researchers and professors that have
studied and ultimately published their leadership theory. Every leader is different, and no single theory

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 works for all leaders Therefore, theories are commonly categorized by which aspect is believed to
define the leader the most. The most widespread one's are:
1. Great Man Theory,
2. Trait Theory,
3. Behavioral Theories.
4. Contingency Theories,
1. GREAT MAN THEORY (Thomas Carlyle, 1847)
This theory is often linked to 19th century philosopher and historian Thomas Carlyle, who commented that
"The history of the world is the biography of great men." This theory is usually contrasted with a theory that
talks about events occurring in the fullness of time, or when an overwhelming wave of smaller events cause
certain developments to occur.
The Great Man theory assumes that the traits of leadership are intrinsic. That simply means that great
leaders are born they are not made. This theory is based on the belief that leaders are exceptional people,
born with innate qualities, destined to lead.
The idea of the Great Man also strayed into the mythic domain, with notions that in times of need, a Great
Man would arise, almost by magic. Gender issues were not on the table when the 'Great Man' theory was
proposed. Most leaders were male and the thought of a Great Woman was generally in areas other than
leadership. Most researchers were also male, and concerns about andocentric bias were a long way from
being realized. The use of the term 'man' was intentional since until the latter part of the twentieth century
leadership was thought of as a concept which is primarily male, military and Western. This led to the next
school of Trait Theory.
2. TRAIT THEORY :Late 1800s to Mid-1940s
This theory is similar to the Great Man theory. In the 1920's and 1930's, leadership research focused on
trying to identify the traits that differentiated leaders from non-leaders. These early leadership theories were
content theories, focusing on "what" an effective leader is, not on 'how' to effectively lead. The trait
approach to understanding leadership assumes that certain physical, social, and personal characteristics are
inherent in leaders. Sets of traits and characteristics were identified to assist in selecting the right people to
become leaders. Physical traits include being young to middle-aged, energetic, tall, and handsome. Social
background traits include being educated at the "right" schools and being socially prominent or upwardly
mobile. Social characteristics include being charismatic, charming, tactful, popular, cooperative, and
diplomatic. Personality traits include being self-confident, adaptable, assertive, and emotionally stable.
Task-related characteristics include being driven to excel, accepting of responsibility, having initiative, and
being results-oriented.
Trait theories intended to identify traits to assist in selecting leaders since traits are related to leadership
effectiveness in many situations. The trait approach to understanding leadership supports the use of tests and
interviews in the selection of managers. The interviewer is typically attempting to match the traits and
characteristics of the applicant to the position. For example, most interviewers attempt to evaluate how well
the applicant can work with people.

Early research on leadership was based on the psychological focus of the day, which was of people having
inherited characteristics or traits. Attention was thus put on discovering these traits, often by studying
successful leaders, but with the underlying assumption that if other people could also be found with these
traits, then they, too, could also become great leaders. Stogdill (1974) identified the following traits and
skills as critical to leaders.
Traits Skills
 Adaptable to situations  Clever (intelligent)
 Alert to social environment  Conceptually skilled
 Ambitious and achievement  Creative

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orientated  Diplomatic and tactful
 Assertive  Fluent in speaking
 Cooperative  Knowledgeable about group task
 Decisive  Organized (administrative ability)
 Dependable  Persuasive
 Dominant (desire to influence  Socially skilled
others)
 Energetic (high activity level)
 Persistent
 Self-confident

McCall and Lombardo (1983) researched both success and failure identified four primary traits by which
leaders could succeed or 'derail':
 Emotional stability and composure: Calm, confident and predictable, particularly when under stress.
 Admitting error: Owning up to mistakes, rather than putting energy into covering up.
 Good interpersonal skills: Able to communicate and persuade others without resort to negative or
coercive tactics.
 Intellectual breadth: Able to understand a wide range of areas, rather than having a narrow (and
narrow-minded) area of expertise.
Limitations / Short coming of Trait theory
1. All the leaders may not possess all the traits & many of non leaders may possess most or all of
them.
2. The trait approach gives no guidance as to how much of any trait a person should have.
3. It doesn’t indicate the best style of leadership.
4. It ignores situational factors.
3. BEHAVIORAL LEADERSHIP THEORY: Mid 1940s to Early1970s
The results of the trait studies were inconclusive. Traits, amongst other things, were hard to measure. How,
for example, do we measure traits such as honesty, integrity, loyalty, or diligence? Another approach in the
study of leadership had to be found.
After the publication of the late Douglas McGregor's classic book The Human Side of Enterprise in 1960,
attention shifted to ‘behavioral theories’. McGregor was a teacher, researcher, and consultant whose work
was considered to be "on the cutting edge" of managing people. He influenced all the behavioral theories,
which emphasize focusing on human relationships, along with output and performance.
Behavior theory focuses on what an effective leader “does.” Leadership is not something you are born with,
nor do you need a set of commonly accepted traits. However, effective leadership is dependent on the right
behavior.
Behavioral theories of leadership do not seek inborn traits or capabilities. Rather, they look at what leaders
actually do. If success can be defined in terms of describable actions, then it should be relatively easy for
other people to act in the same way. This is easier to teach and learn then to adopt the more ephemeral
'traits' or 'capabilities'.
Behavioral leadership theory is a big leap from trait theory, in that it assumes that leadership capability can
be learned, rather than being inherent. This opens the floodgates to leadership development, as opposed to
simple psychometric assessment that sorts those with leadership potential from those who will never have
the chance.

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A behavioral theory is relatively easy to develop, as you simply assess both leadership success and the
actions of leaders. With a large enough study, you can then correlate statistically significant behaviors with
success. You can also identify behaviors which contribute to failure, thus adding a second layer of
understanding.
Focusing on behaviors provides several advantages over a trait approach:
 Behaviors can be observed more objectively than traits.
 Behaviors can be measured more precisely and more accurately than traits
 As opposed to traits, which are either innate or develop early in life, behaviors can be taught.
These factors provided a clear benefit to the military and various other organizations with a practical interest
in leadership. Instead of identifying leaders who had particular personality traits, they could focus on
training people to perform effective leadership behaviors. The early work of Lewin and his associates
(Lewin and Lippit, 1938; Lewin, Lippit, and White, 1939) concerning democratic, autocratic, and laissez-
faire leadership laid the foundation for the behavior approach to leadership. Democratic leaders were
defined as those who consult their followers and allow them to participate in decision making, autocratic
leaders as those who make decisions alone, and laissez-faire leaders as those who provide no direction and
do not become involved with their followers. Although the three types of leadership style were clearly
defined, the research failed to establish which style would be most effective or which situational factors
would lead to the use of one or another style. Furthermore, each of the styles had different effects on
subordinates. For example, laissez-faire leadership, which involved providing information but little
guidance or evaluation, led to frustrated and disorganized groups that, in turn, produced low-quality work.
On the other hand, autocratic leadership caused followers to become submissive, whereas groups led by
democratic leaders were relaxed and became cohesive.

4. THE CONTINGENCY (SITUATIONAL) THEORY: Early 1960s to Present

Even before the behavior approach's lack of success in explaining and predicting leadership effectiveness
became evident, a number of researchers were calling for a more comprehensive approach to understanding
leadership. Specifically, researchers recommended that situational factors, such as the task and type of work
group, be taken into consideration. It, however, was not until the 1960s that this recommendation was
applied. In the 1960s, spearheaded by Fred Fiedler, whose Contingency Model of leadership is discussed
later in this part, leadership research moved from simplistic models based solely on the leader to more
complex models that take a contingency point of view. The primary assumption of the contingency view is
that the personality, style, or behavior of effective leaders depends on the requirements of the situation in
which the leaders find themselves.
Advocators of this theory argue that the practice of leadership is too complex to represent by unique traits or
behaviors. They also propose that leaders choose the best course of action based upon situational variable.
Different styles of leadership may be more appropriate for certain types of decision-making i.e. leaders are
products of a given situation; what is effective in one situation may not be effective in other situation.
Generally, they argue that effective leadership is really a function of the interaction of several variables,
including
 superior - subordinate relationships;
 the power distribution between superior and subordinate;
 the degree to which the job is structured;
 Expectations and behavior of superiors;
 Subordinate characteristics, anticipation and behavior;
 Organizational culture and policies;
Leadership is strongly affected by a situation from which a leader emerges and in which he works. Hence,
leadership is a function of the leader, the followers and the situations.

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 Situational theory attempts to discover that the no one unique set of leadership traits were largely successful.
As to modern management theorists, leadership is more complex, it cannot be represented by one set of
traits or by single set of behavior, and effective leadership behavior depends on the environment or the
situation.
The major theories contributing towards this school of thought are described below.
A. Fiedler's Contingency Model
Fiedler's contingency theory postulates that there is no single best way for managers to lead. Situations
will create different leadership style requirements for a manager. The solution to a managerial situation is
contingent on the factors that impinge on the situation. For example, in a highly routine (mechanistic)
environment where repetitive tasks are the norm, a relatively directive leadership style may result in the best
performance, however, in a dynamic environment a more flexible, participative style may be required.
He also proved that effective group performance depends on the proper match between the leader’s style of
interacting in his subordinates & the degree to which the situation gives control & influence to the leader.
People become leaders not only because of the attributes of their personalities but also because of various
situations & their interaction in group members.
He identified 3 situational dimensions that influence the leader’s effectiveness.
a. Leader - member relations: refers to the degree of confidence, trust & respect the followers have
in their leader.
b. Task structure: the degree to which the job assignments of subordinates are structured or
unstructured. If tasks are clear/ structure the quality of performance easily controllable &
employees are responsible for their performance.
c. Position power: it is a degree of influence a leader has for living, promoting, firing, salary increase
etc. It refers to the power inherent in the leadership position to reward or punish. A leader with
clear & considerable position power can obtain good followership more easily.
These factors together determine how favorable the situation is for the leader. Good member - leader
relations, high task structure & strong position power indicates the most favorable situation.
B. Path-goal theory
It is a model developed by Robert House and his colleagues, which combines the Ohio State research on
initiating structure and consideration with the expectancy theory of motivation. Effective leaders increase
motivation and satisfaction among subordinates when they help them pursue important goals and help
subordinates see the goal. Essence of the theory is that it is the leader’s job to assist their followers in
attaining their goals and to provide direction and/or support needed to ensure that their goals are compatible
with the overall goals of the organization. Role of the leader is to clarify the path to help followers get to
their goals and to make the journey along that path easier by reducing roadblocks and pitfalls. Leader’s
behavior is acceptable to subordinates if they view the leader as an immediate source of future source of
satisfaction.
Leader’s behavior is motivational if it:
− Makes the subordinate’s satisfaction contingent on performance
− Provides the coaching guidance, support, and rewards necessary for effective performance
In contrast to Fielder’s contingency model, path-goal theory assumes that managers can alter their leadership
style as needed.
According to path goal theory, factors influencing the contingency relationship are:
− Environmental factors beyond the control of the leader (e.g., task structure, formal authority system,
and work group)
− Personal characteristics of the subordinates (e.g., locus of control, experience, and perceived ability)
Path-goal model provides a framework for explaining and predicting leadership effectiveness that has
developed a solid, empirical foundation. Leader will be ineffective when their behavior is redundant with the
sources of environmental structure or incongruent with subordinate characteristics.

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 5.3.4. Qualities of leadership
A leader should have some leadership qualities in order to provide effective leadership. According to Henry
Fayol, a leadership should have the following qualities.
1. Health and physical fitness
2. Mental vigor and energy
3. courage to accept responsibility
4. steady, persistent and thoughtful determination
5. should have general educational and
6. management ability of embracing foresight and the art of handling men
In general, the important qualities of leadership are
1. Physical appearance and strength: A leader has to put hard work physically. He should have a
capacity to work for long hours than others. This proves the diligence of the leader to his followers
easily.
2. Mental vigor: A leader has to be strong mentally. He is expected to withstand strain in finishing
the work properly.
3. Emotional stability: A leader should not be moved by emotion or sentiment, but he should analyze
the problem rationally and take decisions without bias.
4. Sense of judgment: A leader should know human psychology. He should understand the behavior,
needs, thoughts, motives, etc... of his followers. This helps him to take strategic decisions and get
recognized by his followers.
5. Goodwill: A leader should understand the feeling of others and take decisions on the basis of his
followers, and then he will win the goodwill of his followers.
6. Motivation: A leader should know the motivation techniques and how to use them.
7. Communication skill: A leader should communicate information to the workers, and also be
effective speaker & writer. Whatever the information needed to the workers, it should pass through
the leader.
8. Guiding ability: A leader should act as a teacher for new workers and help his followers to learn
their work.
9. Sociability: An able leader can easily mingle (mix) with the workers. The workers should be
encouraged to discuss their problems and difficulties with their bosses. The leader should meet
workers frequently.
10. Technical knowledge: A leader should posses a thorough knowledge of theory and practice of his
job; and he also knows the current development in his job along with technical knowledge.
11. Be honest, sincere and fair: A leader should also be honest, sincere and fair. Others mostly like
sincere, fair and honest people and their leadership is accepted by one or all.

5.4. MOTIVATION
Motivation is a frequently used but poorly understood term. Over 140 definitions have been provided
over the years, and noted scholars of work motivation have said that trying to define motivation often

11
gives them “a severe stomach ache.” This remark may be a bit of an exaggeration, but it underscores
the need to get a firm grasp on what motivation is before we try to understand its role in understanding
and managing organizational behavior. The term motivation is derived from the Latin word
“MOVERE”, meaning “TO MOVE.” Motive is the urge, need, want or desire that induces a person to
work.
Definitions of Motivation
The following are some of the important definitions of motivation given by eminent management
thinkers:
1. Motivation is defined as “inner burning passion caused by need, wants and desire which propels an
individual to exert his physical and mental energy to achieve desired objectives”. Efficiency of a
person depends upon performance. Performance can be expressed as under;
Performance= Ability × Motivation
2. Scot defined motivation as “a process of stimulating people to action or accomplish desired goals”.
3. Mc Farland has defined “motivation as the way in which urges, drives, desires, aspirations,
strivings needs direct, control or explain the behavior of human beings”.
4. Something that moves the person to action and continues him in the course of action already
initiated– Robert Dubin.
5. Motivation is the process of attempting to influence others to do your will through the possibility of
gain or reward. – Edwin B. Flippo.
6. The Encyclopedia of Management: Motivation refers to degree of readiness or an organism to
pursue some designated goals and implies the determination of the nature and locus of the forces,
including the degree of readiness.
7. Memoria: “A willingness to expand energy to achieve a goal or reward. It is a force that activates
dormant energies and sets in motion the action of the people. It is the function that kindles a
burning passion for action among the human beings of an organization”. The author defines
“motivation as inner burning passion caused by needs; wants and desires that propels an individual
to exert physical and mental energy to achieve desired objective”.

5.4.1. CHARACTERISTICS OF MOTIVATION

(a) Motivation is a psychological phenomenon. It is the inner desire of an individual to accomplish
something more. The very deficiency forces him to undertake certain amount of work. More is the
individual motivated better the performance and organization relations.
(b) Motivation is a continuous process. Since need is a continuous phenomenon if one need is
satisfied the other need emerges and so does individual propels to work and thus the continuous
chain is created.
(c) Motivation is caused due to anticipated perceived value from an action. Perceived value is the
probability or the expectancy. Therefore motivation=valance (value) × expectancy.
(d) There are unsatisfied needs. A person remains disturbed till they are satisfied. This disturbance or
tension causes disequilibria in human behavior. The more the motivation level, the higher will be
efforts to get over the tension and in the process job accomplishment would take place.
(e) Individual is motivated by positive motivation. It refers to incentives offered by the organization
to achieve efficiency. Incentive can be monetary like increase in pay, allowances, and payment of
bonus- Payment for additional or overtime work. It can be non-monetary like issuing of certificates
for excellence, awards, recognition, status, job enrichment, competitions, and the like. Monetary
rewards prevent individuals from getting demotivated or they do not motivate so to say. However
non-monetary awards motivates individual as it is related to the inner/psychological aspects.

12
 5.4.2. IMPORTANCE OF MOTIVATION
(a) High level of performance: It is the duty of every manager to ensure that the employees have a
high degree of motivation. He should offer monetary and non-monetary incentives. Highly
motivated workers would be regular for work, and have a sense of belonging for the organization.
Quality of product will be improved, wastage will be minimum and there will be increase in
productivity, and performance level will be high.
(b) Low employee turnover and absenteeism. Employee turnover and absenteeism is caused due to
low level of motivation on the part of managers. When dissatisfaction is increased employees do
not enjoy the work assigned to them. Therefore there is a tendency of absenteeism. The workers
hunt for an alternative job and leave the organization whenever they get an opportunity. High level
of absenteeism causes low level of production, wastages, poor quality and disruption in production
schedules. Increased turnover is disastrous for any organization as it puts strain on financial
position of the organization due to additional recruitment, selection, training and development.
Motivation is therefore a very important management tool to achieve organizational excellence.
(c) Acceptance of organization change. Management must continuously scan the external and the
internal environment. There has been a great impact of social change and technology evolution on
the motivation level of employees. Social change increases aspirations of workers and put an
additional demand on the organization, which must be considered positively so that conducing
working environment is created. Technical innovation, better working conditions, better R & D
facilities, encouragement to employees and existence of better personal policies should be part of
any organization. This will facilitate retention of employees. Management must ensure that the
changes are introduced in the organization and its benefits explained to the employees so that there
is no resistance to change and organizational growth is achieved. Re-engineering, empowerment,
job enrichment, job rotation, introduction of new technology and processes will go a long way to
boost employee morale and achieve high degree of motivation.
(d) Organizational image: Employees are the mirrors of any organization. Managers must lay down
high performance standards coupled with high monetary and nonmonetary rewards. Training &
development programmes should be regularly organized and employee skill improved. It will have
a positive impact on the employees and the image of the organization will be improved. It will also
reduce employee turnover and better employee will look forward to join the organization. High
organizational image will contribute towards brand image of the product and services the
organization is marketing.

5.4.3. TYPES OF MOTIVATION

Motivation can be classified on several bases. On the basis of approach, motivation can be classified
as positive and negative.
1. Positive Motivation
Positive motivation implies creation of an environment in which people can satisfy their needs and
aspirations. Under it rewards and incentives are offered to inspire employees. All necessary facilities
are provided to workers. They are offered prizes and awards for best performance. Positive motivation
removes the psychological barrier and develops a sense of affiliation.
2. Negative Motivation
Negative motivation involves creating a sense of fear or unhelpful environment. Workers who do not
perform well are penalized. There is a cut in their facilities and remuneration. Demotion, layoffs are
other punitive measures which the workers have to suffer in case their performance does not come up to
the desired level. Negative motivation creates detachment between the individuals and the organization
and lack of integrity to the purpose. Negative motivation is based on pessimistic view which holds that
only fear of punishment will force employees to improve their performance.

13
On the basis of the type of incentives used, motivation may be financial or non-financial.
3. Financial Motivation
Financial motivation implies use of monetary benefits to inspire employees. Financial incentives
include wages and salaries, bonus, fringe benefits, retirement benefits, etc., Money plays an important
role in motivation. Money helps to satisfy physiological and security needs of workers. Money is also
useful in satisfying social needs to some extent because money is often recognize as a symbol of power,
prestige and status.
4. Non-financial Motivation
Non-financial motivators are not associated with monetary rewards. These include recognition of work
done, greater involvement in decision-making, responsibility, challenging job, etc. Praise, competition,
knowledge of results, suggestion system, and opportunity for growth are other important non-financial
motivators.
On the basis of the nature of reward used, motivation may be extrinsic or intrinsic.
5. Extrinsic Motivation
Extrinsic motivators do not occur on the job but around the job. These factors include pay allowances,
bonus, and fringe benefits. Extrinsic reward may be direct which are linked with performance and
indirect compensation like free housing, conveyance, medical facilities, etc., generally direct
compensation is more effective motivator.
6. Intrinsic Motivation
Intrinsic motivation occurs on the job and provides satisfaction while the job is being performed.
Intrinsic or internal motivators include status, authority, participation, challenging task etc., variety of
work, freedom for discretion, greater responsibility opportunity for advancement are also intrinsic
rewards.
7. Financial and non- financial, intrinsic and extrinsic
All rewards have their own utility. But for the effective use of rewards certain guidelines should be
followed. First, rewards should be consistent with the goals and needs of employees. Secondly, reward
should be linked with desired performance. Thirdly, workers must know in advance what rewards are
available for successful performance of the job.

5.4.4. THEORIES OF MOTIVATION

Many experts have developed different theories on the concept of motivation. Popular ones are given
below:
1. Maslow’s Theory of Need Hierarchy
2. Motivation and Hygiene Two Factor Theory
3. Theory X and Theory Y
4. ERG Theory

1. MASLOW’S NEED HIERARCHY THEORY

Abraham Maslow was a clinical psychologist in USA. His motivation theory is widely accepted and
studied. Maslow suggested that every individual has complex set of needs at any particular moment and
his behavior is determined by the existence of strongest need. He stated that human beings have five
types of needs and physiological need is the strongest hence the individual behaves in a particular
manner to satisfy that need. Needs are hierarchal in nature and only one need dominates at any one
point of time. Once the strongest need is satisfied then the second need emerges as being the strongest
need and human behavior is regulated in process of achieving satisfaction in series of need
requirements.

14
Maslow further started that there is only one need satisfying process is underway at any one time. They
do not disappear once they are satisfied but their intensity is reduced (relegated) below the subsequent
need.
Let us discuss the hierarchy of needs theory:
1. Physiological Needs - As per Maslow physiological need is strongest in every human being and
hence it has highest strength as compared to the other needs. Individual behaves in a particular manner
to satisfy basic bodily needs like hunger; thirst, shelter and clothing. These needs keep dominating
unless they are reasonably satisfied. Human being is therefore motivated to work in that direction.
2. Safety Needs or Security Needs - Once the physiological need of an individual is satisfied, the
safety need /security need arises and is dominant at that point of time. This need is related to the
following:–
(a) Every worker is concerned about his personal safety and wants to be free of physical danger.
(b) There are various dangerous processes in the work setting. Individual desires to be free and work
toward self-preservation.
(c) Safety need is also related to employee/employer relationship, which should be cordial and free
from any threat to job security.
(d) There should be certainty in the job and non existence of arbitrary action on the part of
management/employer.
(e) Administration policy of any organization must cover various points that are related to safety of an
individual like pay, pension, insurance, and gratuity. Individual should be given opportunities for
choice of job so that he derives satisfaction. He must also be given adequate security against being
fired, laid off or demotion.
3. Social Needs - Once the safety need is satisfied, third need i.e. social need arises. People want to
belong to some social group where their emotional need of love, affection, warmth and friendship are
satisfied. Being member of sports club, social organizations or being the company of friends and
relatives, needs can satisfy social. In the work setting individuals want to be member of work group and
contribute towards it so that the social need of the individual is fulfilled.
4. Esteem Need or Ego Need - Fourth need in the hierarchy of needs as suggested by Maslow is
Esteem need or Ego need. Individual wants self-recognition, appreciation for the work done. It is
related to self-respect, self-confidence, praise, power and control. It these needs are satisfied it gives an
individual a sense self-worth and ego satisfaction.
5. Self-actualization Need - Self-actualization is the last need in the need hierarchy. Once esteem need
is satisfied, there appears the self-actualization need of human being. It is related to an intense carving
for something supreme one wants to achieve in life. It is transcended and related to achieving the very
best that may be possible of human endeavor. People set high goals, achieve them and set a higher
goals again and to achieve the same by utilizing fullest potential. It is related to development of
intrinsic capabilities. An individual seeking to satisfy self-actualization need seek situations or jobs that
are challenging in nature - achievement of highest value out of the work. Mahatma Gandhi wanted to
achieve freedom for India by unique weapons of peace and non-violence. He strived hard, faced various
challenges but ultimately achieved his goal with his innovative freedom. In essence Maslow’s
Motivational Theory covers the following.
(a) There are five levels of human needs.
(b) These needs are hierarchical in nature.
(c) A satisfied need is no longer a need. Once that need is satisfied, the next level need becomes
stronger.
(d) Needs do not diminish. It is the gravity that changes. Individual strives to satisfy the need that
has a strong appeal at any point of time.

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Critics of Maslow’s Hierarchy of Needs Theory and Its Application
Maslow’s theory of motivation and its nature of hierarchy of needs lays down a systematic approach a
manager can apply to motivate his subordinates. It will be seen that needs are generally in the order.
Maslow has suggested that when a worker is employed he is concerned about his basic need of food,
water, shelter and clothes and wants a minimum level of rewards so that the above need is fulfilled
(physiological need). Once the first need is satisfied, a manager must strive to fulfill second need
(security need) of his subordinates by providing them physical security, job security and laying down
various policies, which are required for smooth running of an organization. Management must enjoy
cordial relationship with employees and ensure free flow of communication so that employees devote
maximum attention towards organizational work. Workers can “belong” to a particular organization
(social need). By creating work groups and extending facilities for social interaction so that esteem
need and self-actualization needs, which are of intrinsic nature can be accomplished by workers.
Maslow has laid down that individual has a particular pattern and hierarchy of needs which may not be
true. There are craftsmen, poets, sculptures, painters who have devoted their entire life towards
fulfillment of self- actualization need without having satisfied physical, safety or even social needs. To
some people esteem need may be more important than social need. Therefore, they may seek self-
assertion. There is a lack of direct cause and effect relationship between need and behavior as
propagated by Maslow. A person feeling thirsty may not always drink water but he may switch over to
cold drinks soda or even a glass of beer to squint thirst. Level of need satisfaction generally differs
from person to person hence the theory cannot be universally applied.

Maslow has been criticized for laying down needs in particular order. But in reality it may not be so.
For Example a person may like to ‘belong’ to a particular organization or a social group and his social
need may be dominant as compared to the physical need or the safety needs. On the other hand a
worker who is a sole income earner for the whole family may feel job security as his most dominant
need. It is therefore fair to state that we may not find the needs in the given order and that the strength
of particular need is situation-based. It is therefore necessary that the contingency approach should be
adopted by various managers while applying the model to real life situations in the organization. Other
studies reported that needs vary according to a person’s career stage, the size of the organization, and
even geographical location. There is also no consistent evidence that the satisfaction of a need at one
level decreases its importance and increases the importance of the next higher need. Finally, when the
hierarchy of needs is examined across cultures, values become important. For instance, social needs
tend to dominate in more collectivist societies, such as Mexico and Pakistan.
2. HERZBERG’S MOTIVATION— HYGIENE THEORY (Two factor theory)
Fredrick Herzberg and his associates developed Motivation Theory based on two main factors in late
1950’s. This theory is also known as Two Factor Theory. Herzberg carried out research in nine
different organizations where 200 respondents comprising accountants and engineers were subjects. A
structured interview was carried out. The purpose of the study was to identify various factors for goal
achievement and also the factors that could be included so that motivation levels do not fall.
Findings of the study: Herzberg concluded, “There are two types of needs, independent of each other”.
(a) Motivational Factors: There is a set of job conditions, which operates primarily to build strong
motivation and job satisfaction. These factors are called motivational factors.
They are intrinsic in nature and help increase one’s output. These factors have positive effect on
morale, productivity, and job satisfaction and overall efficiency of the organization.
These factors are as under: Achievement, Advancement, Possibility of Growth, Recognition, and Work
Itself
(b) Maintenance Factors: There are some job conditions which operate primarily to dissatisfy
employees when these conditions are absent. These factors are also called hygiene factors. When these

16
factors are present they do not motivate in a strong way, when absent they dissatisfy, that is why these
factors are called dissatisfiers. These factors are.
• Company Policy and administration.
• Technical supervision.
• Interpersonal relationship with superiors.
• Interpersonal relationship with peers.
• Interpersonal relationship with subordinates.
• Salary.
• Job security.
• Personal Life.
• Working condition.
• Status.
The above factors are not an intrinsic part of a job. They prevent losses due to work restrictions. These
factors are necessary to maintain a reasonable degree of satisfaction of employees. As stated earlier
they are demotivators if they are not present. For example minimum level of working conditions must
be maintained by the organization to ensure that minimum level of satisfaction exists. If working
conditions are poor, the employees will be dissatisfied and it would have adverse effect on goal
achievement. Potency of various factors does not increase the motivational level. It is influenced by
personality and characteristics of individual employee. Herzberg has identified that employees are
either maintenance seekers or motivation seekers.
ANALYSIS
HYGIENE FACTORS MOTIVATORS

 Company Policy and administration. Achievement

 Technical supervision. Recognition
 Interpersonal relationship with superiors. Work itself
 Interpersonal relationship with peers. Responsibility
 Interpersonal relationship with subordinates. Advancement
 Salary.
 Job security.
 Personal Life.
 Working condition.
 Status.

High Job Dissatisfaction 0 Job Satisfaction High

Figure 1: Sources of dissatisfaction and satisfaction in Herzberg’s two-factor theory.
As shown in Figure1 Herzberg and his associates noted that the respondents identified somewhat
different things when they felt good or bad about their jobs. From this study they developed the two-
factor theory, also known as the motivator-hygiene theory, which portrays different factors as primary
causes of job satisfaction and job dissatisfaction.
According to this theory, hygiene factors are sources of job dissatisfaction. These factors are
associated with the job context or work setting; that is, they relate more to the environment in which
people work than to the nature of the work itself. Among the hygiene factors shown on the left in
Figure 1 perhaps the most surprising is salary. Herzberg found that low salary makes people

17
dissatisfied, but that paying them more does not necessarily satisfy or motivate them. In the two-factor
theory, job satisfaction and job dissatisfaction are totally separate dimensions. Therefore, improving a
hygiene factor, such as working conditions, will not make people satisfied with their work; it will only
prevent them from being dissatisfied.
To improve job satisfaction, the theory directs attention to an entirely different set of factors—the
motivator factors shown on the right in Figure 1. These factors are related to job content—what
people actually do in their work. Adding these satisfiers or motivators to people’s jobs is Herzberg’s
link to performance. These factors include sense of achievement, recognition, and responsibility.
According to Herzberg, when these opportunities are not available, low job satisfaction causes a lack of
motivation and performance suffers. He suggests the technique of job enrichment as a way of building
satisfiers into job content. For now, the notion is well summarized in this statement by Herzberg: “If
you want people to do a good job, give them a good job to do.”
Herzberg’s Theory indicates the following:
(a) It has been found that most of the people are capable of satisfying their lower level needs
considerably as they are not motivated by maintenance factors/hygiene factors.
(b) Any improvements in Hygiene factors do not motivate workers but their reduction below a certain
level will dissatisfy them. For example increase in status or salary need not motivate an employee
because he feels it, as a matter of happening but if he was not to get an increase in salary or if his
status is not increased he would be dissatisfied. Hence the hygiene factors are called dissatisfiers.
Therefore they do not contribute towards motivation.
(c) The model suggested by Herzberg is not applicable in all conditions. There is a mixing up of both
factors in a job, which cannot be separated, as intrinsic and extrinsic. Because the level of personal
need and relative strength of each of the needs is different from person to person.
(d) Job satisfaction and job dissatisfaction are two opposite points on a single continuum. It has been
seen that individuals are affected more by job environment or job contents when we want to achieve
this, what we are actually doing is keeping hygiene factors constant and increasing the motivational
factors in a job like improving the work itself or having growth orientation or we delegate the job to
an individual and vest in him the full authority and responsibility.
(e) Herzberg’s theory of motivation is not conclusive as the scope was narrow. Only 200 respondents
were interviewed and that to persons belonging to white collar jobs [engineers & accountants]
hence affect of various hygiene factors may be positive on workers.
(f) The study is “Method bound”. It has not shown any positive results in actual work environment.
(g) Herzberg’s study of motivation is important, as it has identified two main factors as Motivational
factors and Maintenance or Hygiene factors. They should not be divided in strict water tight
compartments. Certain overlap is bound to happen. Since these are applied in relation to various
human beings.

Comparison of Maslow’s need hierarchy theory and two-factor theory of Herzberg

On comparing both the studies, certain similarity has been noticed. Maintenance factors propagated by
Herzberg are identical to lower level needs of Maslow. Higher level needs in the hierarchy of needs are
identical to motivation factors suggested by Herzberg. Division of esteem need in two parts has become
necessary. Advancement and Recognition are considered to be motivational factors while, achievement,
work itself, possibility of growth and responsibility could be clubbed along with Maslow’s lower needs.
Maslow has achieved “Universality” in his strides. Any unsatisfied need, as per Maslow is a motivator,
irrespective of whether higher or lower order. Herzberg could not achieve the same; there is still a
deference of opinion regarding hygiene factors, which fails to motivate.

18
It has been observed that people get motivated when they achieve a feeling of being worth,
accomplishment and recognition for the good work done. Over a period of time the needs, demands and
expectation of employees have increased. They achieve greater satisfaction if there is a sense of
freedom in work place, which relates to authority. Young managers serve those organizations which
accord them two things one, opportunity for personal growth and two, development and opportunity to
achieve fast promotions. Prestige of the organization outside in the society is also a factor, which is
referred to by employees. They feel satisfied by virtue of being a part of an organization, which is
widely recognized world over for example “Microsoft” or “TATA” organizations. Pay, allowances job
security especially for old managers and perks that is being offered by the organizations promote
motivational level of employees. They, therefore, dedicate themselves to achieving organizational
objectives. These factors are applicable for high motivational level of various employees in
organization. However for managerial class, it has been seen that autonomy, higher responsibility,
promotion and growth opportunities are important and favored for motivation. Manager must therefore
create favorable conditions and environment in the organization to enable employees to fulfill their
aspirations and expectations so that the individual objectives are achieved and would lead to
achievement of higher organizational goals.
3. McGregor’s THEORY X AND THEORY Y
Douglas McGregor introduced Theory X and Theory Y which are diagonally opposite to each other.
McGregor is aware that human beings are rational in their thought process and they are social by
nature. They display very high degree of behavior relating to achieving self-actualization. There is
interaction of variety of need fulfillment phenomenon and complex nature displayed by an individual in
different situations.

Theory X
Theory X is a traditional theory of human being. McGregor assumed that, with respect to Managerial
action, management is responsible for organizing various element of an enterprise like money, material
equipment and people. With respect to people, it is a process of directing people, their efforts,
motivating them, controlling their actions, modifying their behaviors so that they fit in the
organizations. In Theory X McGregor assumed that people would be passive therefore management
must persuade, reward and punish the worker to achieve the desired behavior of workers.
Human nature –McGregor further stated that Human being have indolent nature, he works minimum.
McGregor summaries workers as lacks ambition, dislike responsibility, prefers to be led. An individual
is self centered and indifferent to organizational needs, by nature he resists change. Lastly, he gullible
and not very bright. In theory X, McGregor states that those who subscribe to the views expressed
above, the manager will have to structure, control and closely supervise employees.
External control has to be exercised towards immature and irresponsible behavior of the employees, so
that their energies can be regulated towards productive work. Theory X is applicable to traditional
organizational and characterized by centralized decision making hierarchical pyramid and external
control.
After Theory X was proposed, McGregor observed that some changes in human nature have taken
place. It was not due to the changes in human behavior and reactions to various situations but due to
change in industrial organizations, management policies and practices that have tremendous effect on
human nature. At this point he proposed. Theory Y as under:
Theory Y
(a) Expenditure of physical and mental efforts on the part of employees is as natural as play or rest. The
average human being does not inherently dislike work.

19
(b) Workers seek direction and exercises self control. He dislikes punishment.
(c) Commitment to organizational objective is associated with rewards like pay promotion etc, ego
satisfaction and satisfaction of self-actualization needs.
(d) Average human being learns under proper conditions. He accepts seeks responsibilities. At times, it
will be seen that certain individuals display phenomenon like avoidance of responsibility, lack of
ambition and lay undue stress on security. McGregor suggested that these are due to inherent
human characteristics.
(e) Capacity to exercise high degree of imagination, ingenuity and creativity is widely distributed
among workers that must be identified and fully utilized.
(f) Intellectual potential of workers is partially utilized. In the above situation McGregor recommends
that the organization should reorient based on the human behavioral change. More co-operations,
maximum output with minimum control and self-direction is predominant among workers. It is also
seen that there is no conflict between individual and organizational goals. The emphasis is on very
smooth running of organization with greater participation of individuals.
Assumption about human nature that underlines Theory X and theory Y propagated by McGregor

Theory X Theory Y

 Work is inherently distasteful to most people  Work is as natural as play.

 Most people are not ambitious, have little  People display extreme degree of self control
desire for responsibility and prefer to be which is necessary for achieving goals.
directed
 Most people have little capacity for creativity  The capacity of creativity in solving
in solving organizational problems organizational problems is widely distributed in
the population.
 Motivation occurs only at the physiological and  Motivation occurs at social, esteem and Self-
security need levels actualization need levels.

 Most people must be closely controlled and  People can be self-directed and creative at
often coerced to achieve organizational work.
objectives.

Analysis: Paul HERSEY has analyzed Theory X and Theory Y. He states that managers who accept
Theory X assumptions about human nature usually direct, control, and closely supervise people,
whereas Theory Y managers are supportive and facilitating. We want to caution against drawing such
consolation because it could level to the trap of thinking that Theory X is “bad” and Theory Y is
“good”. It is unusual to find exclusively Theory X people or Theory Y people in any organization.
There would always be a mix of both types of employees in varying proportions. Managers therefore
will have to tailor their motivational application in appropriate manner suiting behavioral patterns.
4. ERG THEORY OF MOTIVATION
Clayton Alderfer of Yale University carried out further studies on Maslow’s theory of need hierarchy.
He identified three basic needs of human being against five needs of Maslow.
These are as under:
(a) E-Existence need - There are related to provision of basic material requirement of human being and
are related to Maslow’s Physiological and safety needs.

20
(b) R-Relatedness - This need is related to desire of an individual to maintain sound interpersonal
relationship. It is related to Maslow’s, Social needs and external component of esteem needs i.e., status,
recognition and attention.
(c) G-Growth - Growth is an intrinsic desire for personal development. It is related to intrinsic
component of esteem need like advancement, self respect, autonomy, achievement and self-
actualization need.
Evaluation
(a) Alderfer advocated three need patterns of an individual as against five steps proposed by Maslow.
(b) Alderfer recommends that all the needs need not be in rigid stepwise progression. Any need may be
stronger and individual is forced to fulfill that need.
(c) More than one need may be operative at any one time. Its gratification of higher need is stifled; the
desire to satisfy lower level need may increase. ERG Theory contains a frustration — regression
dimensions (when there is a frustration in higher level need, lower level needs may get more
activated.). Alderfer recommends satisfaction - progression pattern of need i.e. when one level need is
satisfied then higher level need arises (satisfaction-progression).
5. EXPECTANCY THEORY-VROOM
Vroom has propagated Expectancy Theory based on employee expectancy. He believes that employee
is motivated to exert high level of efforts when he believes that efforts will lead to good performance
and therefore organizational rewards that will satisfy achievement of personal goals. The focus of the
theory has three elements.
(f) Efforts - Performance relationship. It is related to the probability perceived by individual that
exerting a given amount of efforts will lead to performance (Expectancy).
(g) Performance - Reward Relationship. The degree to which the individual believes that performing
a particular level will lead to attainment of desired outcome (Instrumentality).
(h) Reward-personal goal relationship. The degree to which an organizational reward will satisfy
individual needs and its attractiveness for the individual (Valence).
Individual invariably asks questions to himself like probability of good performance, assessment based
on the skill and non-performance criteria and personal likes and dislikes. In second stage he evaluates
performance-reward relationship in terms of award of seniority or the amount of co-operation he is
liked to get in the organization and lastly the rewards attractive enough to fulfill his personal goal of
promotion. Management must therefore identify individual goal pattern and lay down performance
criteria and reward system. The key is to understanding of an individual’s goal linkage between efforts
and performance, between performance and rewards, and between rewards and individual goal
satisfaction.

People exert Task Work related

work effort To achieve performance and realize outcomes

Valence
Expectancy Select Instrumentality
capable workers, Identify needs
Train them, Clarify possible rewards for
and match
support them, Set performance, give
rewards to needs
clear goals. performance- contingent
rewards
21
Figure 2: Key terms and managerial implications of Vroom’s Expectancy Theory
Victor Vroom’s expectancy theory posits that motivation is a result of a rational calculation. A person
is motivated to the degree that he or she believes that (1) effort will yield acceptable performance, (2)
performance will be rewarded, and (3) the value of the rewards is highly positive. Thus, some key
concepts are defined in terms of probabilities.
• The probability assigned by an individual that work effort will be followed by a given level of
achieved task performance is called expectancy. Expectancy would equal 0 if the person felt it were
impossible to achieve the given performance level; it would equal 1 if a person were 100 percent
certain that the performance could be achieved.
• Instrumentality is the probability assigned by the individual that a given level of achieved task
performance will lead to various work outcomes. Instrumentality also varies from 0 to 1. (Strictly
speaking, Vroom’s treatment of instrumentality would allow it to vary from –1 to +1. We use the
probability definition here and the 0 to +1 range for pedagogical purposes; it is consistent with the
instrumentality notion.)
• Valence is the value attached by the individual to various work outcomes. Valences form a scale from
–1 (very undesirable outcome) to +1 (very desirable outcome). Vroom posits that motivation (M),
expectancy (E), instrumentality (I), and valence (V) are related to one another by the equation: M = (E)
× (I ) × (V). This multiplier effect means that the motivational appeal of a given work path is sharply
reduced whenever any one or more of these factors approaches the value of zero. Conversely, for a
given reward to have a high and positive motivational impact as a work outcome, the expectancy,
instrumentality, and valence associated with the reward all must be high and positive.
Suppose that a manager is wondering whether or not the prospect of earning a merit raise will be
motivational to an employee. Expectancy theory predicts that motivation to work hard to earn the merit
pay will be low if expectancy is low— a person feels that he or she cannot achieve the necessary
performance level. Motivation will also be low if instrumentality is low—the person is not confident a
high level of task performance will result in a high merit pay raise. Motivation will also be low if
valence is low—the person places little value on a merit pay increase. And motivation will be low if
any combination of these exists. Thus, the multiplier effect requires managers to act to maximize
expectancy, instrumentality, and valence when seeking to create high levels of work motivation. A zero
at any location on the right side of the expectancy equation will result in zero motivation.
Expectancy logic argues that a manager must try to intervene actively in work situations to maximize
work expectancies, instrumentalities, and valences that support organizational objectives. To influence
expectancies, managers should select people with proper abilities, train them well, support them with
needed resources, and identify clear performance goals. To influence instrumentality, managers should
clarify performance–reward relationships and confirm these relationships when rewards are actually
given for performance accomplishments.
To influence valences, managers should identify the needs that are important to each individual and
then try to adjust available rewards to match these needs.
Analysis – Maslow’s theory is basically need satisfying concept. Vroom has gone one step ahead to
identify individual expectations from the organization, and its impact on work behavior of an
individual. If a system of performance appraisal and its resultant benefits are attractive, then the
individual will put up his best to achieve organizational objective. The behavior of an individual has

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been taken as rational. The theory helps managers to work beyond Maslow and Herzberg and create
work environment and set organizational goals in such a way that individual is stretched to achieve
higher performance. However the theory is difficult to implement because of the organizations inability
to provided required resources and time.
Expectancy theory does not specify exactly which rewards will motivate particular groups of workers.
In this sense, the theory allows for the fact that the rewards and their link with performance are likely to
be seen as quite different in different cultures. It helps to explain some apparently counterintuitive
findings. For example, a pay raise motivated one group of Mexican workers to work fewer hours. They
wanted a certain amount of money in order to enjoy things other than work rather than just more
money. A Japanese sales representative’s promotion to manager of a U.S. company adversely affected
his performance. His superiors did not realize that the promotion embarrassed him and distanced him
from his colleagues.

5.5. COMMUNICATION
Communication is one of the most important skills managers need for effective accomplishment of
management functions. It is when managers effectively communicate with the external and internal
stakeholders that the organizations can achieve their objectives.
Communication is the exchange of facts, ideas, opinions or emotions by two or more people. It is the
transfer of information from the sender to the receiver with the information being understood by the
receiver. It is the act of influencing & inducing others to interpret an idea. Every management function
involves communication. Therefore, understanding & proper use of communication are essential to
successful management. Managers at any level should know elements of communication, methods of
communication, barriers of communication & ways overcoming them.

The communication process

To be effective communicator, a manager should understand the basic framework of communication
process. The basic elements of communication are source; message; medium; receiver; and feedback.

Nois
e

Source Coded Receiver or

Medium of Decoded
message audiences
transmission message

Feed back

Fig: Communication Process Model

Source (Communicator)
 is the source that sends the message and it can be managers, non managers, department, & outside
public
Message

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 is what a manager or any communicator is communicating and it may take the form of verbal or
non verbal. It must be clear & precise.
Medium
 is the carrier of the message sent by communicator. It can be face to face, telephone, group meeting,
memorandums, etc.
Receiver
 is the second party to whom the source sends a message. Source & receiver are important element
in communication process. Effective communication is always receiver-oriented.
Feed back
 is the receiver’s response to the source. It reduces the potential or probability of distortion between
the intended & the received message in the communication process. Communication process should
involve the element of feedback so as to be effective. Feedback can be direct or indirect
o direct feedback is possible through face to face verbal exchanges between subordinates and the
manager.
o indirect feedback may be in terms of actual results which means increase or decrease in
productivity, absenteeism & turnover, lack of coordination between departments, etc.
Encoding and decoding
 are translating information into a message. Because the communicator's message must be translated
in to a common language which reflects the idea. To encode a message, the sender first decides
what to transmit based on the receiver's knowledge. Decoding refers to the process by which the
receiver translates the message into the terms that are meaningful to him

Communication Methods
Organizations used different methods of communications depending on the nature & purpose of the
message needed to be communicated; the characteristics of the receiver; the nature of the channel, etc
Therefore, the most common communication methods are
 Verbal communication
 Non-verbal communication

Importance of Communication
Communication is the means by which people are linked together in an organization to achieve a
common purpose. The importances of communication are;
1. An aid to managerial performance
With the help of communication, a manager can take appropriate decision; may solve problems without
difficulty; can get things done by subordinates; can impart the objectives of the organization to the
subordinates. Communication relates the organization with the external environment, and also
facilitates managerial functions.
2. Achieving coordination
Co-ordination among employees working on the basis of division of work obtained through
communication.
3. Helps in smooth working
Communication helps workers to know the real situation & perform their duties without any delay,
which leads to the smooth functioning of an organization
4. Increases managerial efficiency
Communication helps the manager to discharge his duties systematically & facilitates him to increase
his efficiency.
5. Helps in decision making

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Good communication system provides all the necessary information which enables the manager to take
quality decisions in the proper time.
Objectives of communication
Communication enables organizations to give & receive information (advice, order, suggestions,
persuasion, education, warning, motivation, etc.). it is impossible to speak about organization without
speaking about communication. Communication is indispensable in every managerial function.
Barriers to effective communication
Barriers are obstacles to the free flow of communication. Barriers can be classified into different types
according to their nature. They are generally grouped as:
 Physical barriers
o relate to defects in the system such as due to source, distance, time, physical noise,
source credibility, wrong choice of medium
 Semantics barriers
o Defects related with the language/ words’ meanings such as bad expressions, inaccurate
translations, words having different connotations,…
 Human barriers,
o Barriers are usually of human rather than technological origin. Human barriers are often
less visible but generally more consequential.
o Such as socio -cultural barriers, psychological barriers, organizational barriers
How to make communication effective
Communication is made effective by using the following stages.
1. create an environment of trust & confidence
2. be clear about the objective of communication
3. be sensitive to communication
4. be sensitive to the receivers frame of reference
5. listen empathetically
6. use feed back
7. utilize grapevine
8. introduce redundancy & repeat
Besides to the above mentioned points, applying principles of communication make communication
effective.
The principles of communication
The principles of communication are: commonly called the “7Cs”, i.e. clarity; completeness;
correctness; concreteness; conciseness; courtesy and consideration/ candidness.

5.6. PRINCIPLES OF DIRECTING

While directing a manager should understand the needs, motives and attitudes of his subordinates. The
following principles of directing may be useful to a manager.
(1) Harmony of objectives: Individuals and organization have their own objectives. The
management should coordinate the individual objectives with the organizational objectives.
Directions can integrate their objectives with organizational objectives.
(2) Unity of direction or command: An employee should receive orders and instructions only from
one superior. If not so, there may be indiscipline and confusion among subordinates and disorder
will ensue.
(3) Direct supervision: Managers should have direct relationship with their subordinates. Face to
face communication and personal touch with the subordinates will ensure successful direction.
(4) Effective communication: The superior must ensure that plans, policies, responsibilities and
orders are fully understood by the subordinates in the right direction.

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 (5) Follow through: Direction is a continuous process. Mere issuing orders or instructions are not an
end itself. Follow is necessary, so the management should watch whether subordinates follow the
orders and whether they face difficulties in carrying out the orders or instructions.

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