Effect Of Leadership On Employees

Effect Of Leadership On Employees This paper tries to research the impact of different variables of leadership on employee motivation. Leadership Style, Leaders Motivation, Leaders Gender and Leaders Skills were taken as the independent variable and Employee Motivation was taken as the dependent variable. Data was gathered through the use of questionnaires. The results showed that Leadership Style, Leaders Skill and Leaders Motivation had a significant impact on the Employees Motivation whereas Leadership Gender had no significant impact of the Employees Motivation. The research is concluded with a detailed analysis of the result with conclusion. This chapter introduces some of the important features of the topic. It will give an overview of the different variables involved in leadership and how they effect employee motivation. The broad topic of my research is Human Resource Management. Human Resource Management is a new emerging concern for the organizations in Pakistan. Locally we can see many firms without a proper Human Resource department. Lately the Human Resource practices which are conducted in Pakistan are mostly carried out in the manufacturing sector but recently we have experienced a trend of Human Resource being adopted in the services sector. This topic has managerial as well as academic value. An overview of leadership Leaders in an organization play the pivotal role of founding and promoting values and ethics in the work environment. The influence leaders will have on employees in any given organization is immense and it is this influence that is in fact also vital to its functioning. Their interaction with workers casts the modality of operations and depending on the leaders behaviorism and style promotes or decreases motivation in the work place. The study of leadership is an abstract one and that leaves many loose threads, it is situation specific and no blue prints for the perfect type are available. And yet the brunt of the goal oriented characteristic of motivation also lies with the leader and it is he/her who must take on the responsibility of molding his/her style to suit the employees motivation needs. This research looks in to the intricacy of the relationship between leadership and motivation and studies the linkages between the two. The purpose is to study the effects of factors like a leaders gender, style, behaviorism, quality, rewards, workers agreeability etc on subordinate motivation leading to conclusive results about the contingency of the two. Furthermore this paper attempts to address the underlying importance of linking and studying leadership and motivation for an organization and how it is vital for the functioning of the two roles of the subordinate and the leader. Background Information Leadership entails several tasks key of which are the basic ones of mobilizing resources, coherency and fluidity of purpose and values; and influencing processes. Tracing the origins of leadership would necessitate drawing upon the history of how mans earliest ancestors lived in communities. Secondly the study of the history of leadership requires a much broader definition of the term and a lesson in the anthropological progression of mankind. The evolutionary view of leadership stipulates the need for drawing contextual references for leadership as it is today. Organizational hierarchy exists in every species of living sort. Roles in it based on the simple principle of survival are assigned. Similarly in a man- eat- man world individuals are honed and prepared from an early age to take on survival or predatorily roles in an organization be it a pre- historical community of hunter gatherers; agrarian tribes; an industrial society or even a contemporary organization in this age of information. It is only through consciousness and learning that the old instinctual primordial roles have been cast and people from a diverse background have successfully (or not) attempted to take up the challenge of leadership. The study of leadership in organizations is thus a vastly rich field of research and study and commands much importance in the building of the hierarchy of any organization. Millions are spent each year in training managers to become effective leaders and leaders to be even more effective at what they do. Motivation became a focus of research because it is a vital component of factors affecting worker productivity, job satisfaction, etc. motivation in itself has been a key area of concern for social scientists for more than a century. What is the most efficient way to get work done was a problem slave drivers in ancient Egypt even dealt with. The contingency between the concepts of motivation and leadership have come to the fore with mans need for sustainable production and efficacy. Thus in preserving the workers motivation leaders have persevered themselves. 1.3 Academic and Managerial concerns pertaining to research The academic concern of my topic is that it is an untapped area with respect to Pakistan. Anyone who wished to further research on this topic can use this thesis. The managerial concern is that it is a key issue in the organizations of Pakistan. They need to find the best possible leader for them to motivate all the employees. It will help them improve efficiency and enhance productivity. Definitions of Variables and Keywords Leader: a person who rules or guides or inspires others. Motivation: Motivation is the activation or energization of goal-oriented behavior. (en.wikipedia.org/wiki/Motivation) Autocratic Leader: This style states that the leader solves the problem or makes the decision using information available to him or her at that time. In some cases, the leader may consult with subordinates to obtain information, but at no time does subordinate input include decision making. The decision is passed on to subordinates for implementation. Â  (Ralph Nader, 2002) Democratic Leader: The leader shares the problem with subordinate and gets their input. Subordinate involvement is seen as either a collective or individual request for information which may or may not influence the decision. The leader reserves the right to make that decision. (Ralph Nader, 2002) Group Leader: The leader shares the problem with subordinates as a group, obtains their collective input and tries to reach consensus on the solution. The leader acts as a facilitator or chairman, trying not to influence input and accepting and solution that the group may suggest. (Ralph Nader, 2002) Emergent Leader: The leaders who earn leadership position through their expertise, skills, abilities to influence others, or personal acceptability by the group. ( Ralph Nader, 2002) Assigned Leader: The leaders who are given power to exercise influence through appointment. (Ralph Nader, 2002) Extrinsic: A reward, such as food, that is tangible and visible to others, and external (as opposed to an intrinsic reward). Intrinsic: Rewards that are associated with the job itself, such as the opportunity to perform meaningful work, complete cycles of work, see finished products, experience variety, and receive feedback on work results. Transactional Leader: Transactional leaders believe that people are motivated by reward or punishment. These leaders give clear instructions to followers about what their expectations are and when those expectations are fulfilled there are rewards in store for them and failure is severely punished. They allocate work to subordinates whether resources are there or absent. Transformational Leader: Transformational leadership is a leadership approach that is defined as leadership that creates valuable and positive change in the followers. 1.5 Study objectives: The purpose of this research is to shed light on an imperative aspect of organization management that has hitherto not been focused on in the context of firms and organizations in Pakistan. The effect of leadership on employee motivation has a directly proportional impact on the employees productivity, job satisfaction and consequently worker retention. The kind of leadership traits a companys management portrays will determine not only the working environment but even employee turnover rates. Effective leadership as a case in study has been much overlooked in the general practice of organizations in Pakistan. This research looks into how company leaders in Pakistan are mostly appointed not on the basis of qualification, aptitude or skill but rather through inheritance and nepotism. Nepotism in particular is an endemic practice in Pakistan which has pervaded every job sector, be it corporate or even bureaucratic. Assigning leaders based on favoritism and family connections instead of appointing them through set procedural means gives no guarantees that the heads leadership style will be conjunct to the requirements of the assigned sector. Just like a charismatic leader will be wasting his or her talents in a firm that requires minimal intervention by its management, an overbearing leader with a direct involvement in employees work can corrode their motivation merely with the way they direct them. Thus this paper seeks to underscore the importance of studying the correlation between leadership styles and worker motivation, especially in the setting of a country like Pakistan where leadership appointment is more erratic and seeped in nepotism. Leadership of any organization provides the driving force behind the productivity and working environment, all of which have direct bearings on worker behavior and motivation. If this psychology remains untapped and unstudied this has and will increasingly have dire repercussions for companies in Pakistan. Chapter 2 Literature Review This section covers the literature review that has been conducted after thorough analysis of several articled written by other scholars. The main purpose of including the literature review over here was to support the topic with proper referencing from work done by other researchers. This not only enhances the topic but also highlight a few more points related to the topic which have proved beneficial. Martin G Evans, tried to analyze the impact of leaders behavior on the motivation of his subordinates, in his article Leadership and Motivation: A Core Concept, 1970. Martin conducted a research based on the two theories on motivation. The first theory is the Maslows hierarchy of needs and the second is the Path-goal approach to motivation. Martin carried out his research on two organizations; a utility and a hospital. Questions were asked to study the importance of different goals to the employees. The questions also tried to collect information on the effect of high or low productive work on the motivation level of the subordinates. To test the Path-goal theory, questions were asked whether following each of the paths helped them attain their goals. The result supported the two theories. It showed that following high quality and high productive work led to the subordinates goals while low quality and low productive work led away from the subordinate goals. Job security was also see n as a very important factor to drive motivation confirming the hierarchy of needs model. In the end Martin highlights the managerial importance of the research and proposes that to have a strong motivation in the employees, the leader should create a strong relationship between the employees goals and the organizational goals. Arthur G. Jago claims in his research Leadership: Perspectives in Theory and Research, 1982 that despite years of systematic experiential research on the defining traits of leaders that distinguish them from non leaders, scientists of the soft science of behaviorism in organizations have yet to come up with conclusive data and results owing to the multifarious interpretations of the phenomena that does shed light on the role of a leader but leaves the topic of inter organizational relations and connections open to debate. The article discusses several theories and definitions that provide us with the premises used to build on tabulating a set of universal leadership traits and physical factors which is the first of four typologies drawn on the dominating assumptions of prior research in this field and Jago in some ways comments on their redundancy and limited approach owing to their limited set of assumptions. Jago discusses various and conflicting behaviorisms of leadership and the corresponding situations contingent on these traits and hence focus on a set of universally appropriate leadership traits and their reliance on situations to provide its second and third typology. The final typology looks at situationally contingent behavioral styles. Jago examines organizational prescriptions that follow from the typologies he had employed to argue the insufficiency of old methods used in the research of these traits and typologies and discusses and prescribes new and novel research methods in the study of leadership behaviorism. Kirkpatrick and Locke in their research Leadership: Do Traits Matter?, 1991 acknowledge the fact that different situations require different types of leadership, that the topic is so vast and complex that to determine the exact ingredients for the perfect leader would be fool-some. They acknowledge that a leader in a business organization will require a different mix of traits than say a military leader. They furthermore differentiate between skills and traits and back their claims with evidence from actual case studies. Six traits they identify that distinguish leaders from non-leaders are: drive, the desire to lead, honesty/integrity, self-confidence, cognitive ability, and knowledge of the business. Kirkpatrick and Locke then go on to discuss secondary characteristics that may not be easily backed with evidence nor be required in every situation but are nonetheless indicators of a good leader, these include Charisma, creativity/originality, and flexibility. The authors go on to as sert that apart from the core traits that provide the potential for good leadership, the following factors help them actualize their potential: skills, vision, and implementing the vision. Each factor is discussed in detail and how their effects are implicated at the level of the management and employees. The article finally talks about the grave responsibilities that come with the mantle of leadership and where the rare mix of traits and characteristics does come together to make an effective leader, the credit must be given to the individual. Where Kirkpatrick and Locke consider charisma as secondary and necessary but an insufficient trait for leaders, Shamir, House and Arthur, in The Motivational Effects of Charismatic Leadership: A Self-Concept Based Theory, 1993, on the other hand argue that charismatic leadership has profound effects on employee motivation and illustrate this claim with empirical evidence from several studies. After establishing the importance of charismatic leadership the authors point towards a problem in research on leadership and motivation, that is, absence of an account of the process that helps translate charismatic leadership onto its effects on employees. The authors use previous studies to list down a number of effects charismatic/ transformational leadership has on employees. These effects include elevating workers needs to a higher tier on Maslows hierarchy, achieve higher levels of morality, transcend their needs and goals to take the entire team into consideration, etc. By using a self c oncept based theory, Shamir, House and Arthur point at various processes that are set into motion in the context of a powerful and charismatic leadership. Leadership sets the tone for worker performance; by providing employees with a vision the leader makes them espouse his own values and higher goals. The authors point at factors like increasing the intrinsic valence of effort, increasing effort-accomplishment expectancies, instilling faith in a better future, etc to demonstrate the processes that come into play with the introduction of charismatic and transformational leadership in a work space. The authors identify classes of leadership behavior that set the certain processes into motion and discuss other external factors (organizational factors that provide a conducive environment for effective leadership and employee responsiveness). The authors thereby provide a theory that links transformational leadership and employee effects through employee self concepts. The nature of lea dership in question activates certain employee self concepts that hence affect motivational mechanisms. In Leadership and Motivation- The Effective Application of Expectancy Theory, 2001, Robert G. Isaac, Wilfred G. Zerb, Douglas C. Pitt, discuses Vrooms Expectancy Theory and its application in providing a practical tool in helping individuals in leadership roles. The authors trace a direct link between the underlying and explicit assumptions and variables in the expectancy theory and leadership concepts to draw the correlation of leader interactions with employees and motivational working environments. The authors then assert that motivational working environs aid employees in traditional job posts to achieve self actualization and transcend their roles to become leaders in themselves. The article discusses the complex relationships between employees and leaders within an organization and situation based antagonism that exists. It emphasizes distinctions between leaders and managers and stipulates the removal of these distinctions to help overcome the antagonism parameters in the rela tionship completely to increase motivation levels. The article examines several other relationships and linkages between behaviorisms and output in the context of motivation levels in an organization. Finally concluding that boss-worker distinctions should be eliminated and that everyone in an organization should strive to be a leader and influence should be a two way process and this, the authors propose can be achieved using the principles from the Expectancy Theory. Douglas F. Cellar, Stuart Sidle, Keith Goudy, Daniel OBrien in Effects of Leader Style, Leader Sex and Subordinate Personality on Leader Evaluations and Future Subordinate Motivation, 2001 examines the long standing evaluation of gender influences on motivation and employee response. The authors use the agreeability factor, a dichotomous leadership style variation (autocratic vs democratic) and gender differences to conduct a three way study with leadership evaluation, future interest and effort as dependant variables. The hypothesis was that agreeability affects inconsistent gender behavior and this by extension affects employee productivity and output. A self designed questionnaire was used. Subordinate behavior was analyzed with the expectation of leaders adhering to gender stereotypes and results of the study concluded that it was indeed the case. Where leaders deviated from stereotypical expectations disagreeable subordinates reacted and penalized the leaders for the deviation. Agreeable employees however did not. The purpose is basically to show the effect gender stereotypes have on the motivational levels of employees based on their behavioral profiles. According to different studies, transformational leadership has a significant positive impact on the employee satisfaction. Bass (1985) states that transformational leadership would result in followers performing beyond the expected levels of performance as a consequence of the leaders influence. Hatler and Bass (1988) state The dynamics of transformational leadership involve strong personal identification with the leader, joining in a shared vision of the future, or going beyond the self-interest exchange of rewards for compliance (Hatler and Bass, 1988, p.695). Nurdan Ozaralli tried to investigate the effect of transformational leadership in his research Effects of transformational leadership on empowerment and team effectiveness, 2002. The data for the research was collected from a sample of 152 people in different sectors in Turkey. Snowball technique was used for data collection and to measure transformational leadership, Bass and Avolios multifactor leadership questionnaire (ML Q) was used. The results showed that a transformational behavior of leaders has a positive relation with subordinate empowerment and with team effectiveness. Subordinates who worked under transformation leadership were more group oriented and had a higher level of performance. Creativity is higher when the subordinates work under a transformational leader as they are more empowered. In the end Nurdan suggests that there is a very significant effect of team empowerment on employee performance so the managers should identify the teams with low empowerment and should try to raise their level of empowerment. Nader in Leadership and Motivation, 2002 discusses two important determinants of individual performance in organizations: the type of leadership in that organization and personal motivation of employees in an organization. He draws on theories in general; data collected from empirical research on the subject to and the premises of people being the same as each other and yet being different to collate his findings and providing some general theories and analysis that determine behavior and leadership traits. Nader provides comprehensive definitions and analysis of the concept of motivation and discusses it in the context on theories like Maslows hierarchy of needs, McClellands theory of needs etc; ending his study of motivation by discussing motivational goals and categories these fall into. He then continues with a discussion of leadership theories, factors and leadership styles; and concludes with a list of leadership qualities that according to him help determine roles people can b e assigned to, based on their profiles. After the exposure of a few business scandals and the unveiling of irresponsible leaders, Nicola M. Pless in her research Understanding Responsible Leadership: Role Identity and Motivational Drivers, 2007 tries to find the prototypes of a responsible leader. The author does this by analyzing the biography of Anita Roddick; a responsible leader. The key learnings from the biography were that a responsible leader is driven by a values based vision of the future. Other findings include that a responsible leader make fundamental decisions with a long term effect on people, environment and future of the organization. A responsible leader should act as an active citizen. The leader should have ethics and desire to serve others. They should be close to the stakeholders and maintain good relations with them. A responsible leader is developed over time; they have values rooted in them that are reinforced and further developed by life experience. Another very important prerequisite to become a leader are ability and willingness to learn. Abass, Qaisar and Sara Yaqoob in Effect of Leadership Development On Employee Performance In Pakistan, 2009 carried out a research to prove whether or not leadership skills and traits have an effect on employee performance in Pakistan. Leadership theories have been an integral part of the field of business/management research since the proliferation of trait theories. Geert Hofstede in his article Motivation Leadership and Organization- Do American Theories Apply Abroad underscores the importance and reality of cultural conditioning and how it provides employees and leaders cultural lenses to view the world from. Abass and Yaqoob build on the theory of cultural conditioning to study how much of an impact leadership variables have on employee performance in the context of Pakistan. The factors of leadership they examine include: coaching, training and development, empowerment, participation and delegation. The purpose was to find a correlation between leadership development and worker performance, using an exploratory style research which would help determine what percentage of employee performance is directly influenced by the organization leader. Their findings show a staggering 50% positive correlation, with the remaining 50% being influenced by attitude, commitment, motivational factors, and trust in the organization, and other factors such as compensation, reward and bonuses etc. According to their finding for example training and development as part of leadership development had the greatest impact among all the variables of leadership. Thus this article delves into leadership research with fixed well defined leadership variables in the context of Pakistan. Chapter 3 Methodology Analytical Choices This section will cover the methodology for my research. It will deal with the methods used to analyze the research and the sample size considered for the research. The tools and techniques used to process the data will also be included in this section. Theoretical framework will also be included followed by the Hypothesis and expected findings. 3.1 Research type There have been numerous researches conducted on the effect of leadership on employee motivation but they are not applicable in Pakistan due to cultural differences. Therefore my research will be primary in nature and will be based on the data obtained through questionnaires. The research will also be applied in nature and will have managerial as well as scholarly applications. The sector that will be focused in the research will be the MNCs operating in Pakistan. 3.2 Population As my research is focused on the MNCs, my population will include all the Multinational Corporations operating in Pakistan. 3.3 Sample Size Due to budget and time constraints, the research will not be able to include the whole population. This research will focus on two MNCs; Packages and Tetrapack. These were chosen by using random probability sampling technique. Approximately 100 questionnaires will be floated in both the MNCs. There will be two questionnaires; one for the leaders of the MNC that will measure the independent variables like leadership style, leaders motivation, etc and the other questionnaire will be for the employees which will measure the independent variable that is the Employees Motivation. 3.4 Sample Time The time period considered in this research is from March 2011 to April 2011. 3.5 Hypothesis H0: Â  To test the hypothesis that leadership style has an insignificant effect on employee motivation. H1: To test the hypothesis that leadership style has a significant effect on employee motivation. H0:Â   To test the hypothesis that leader gender has an insignificant effect on employee motivation. H1: To test the hypothesis that leader gender has a significant effect on employee motivation. H0: To test the hypothesis that leader motivation has an insignificant effect on employee motivation. H1: To test the hypothesis that leaders motivation has a significant effect on employee motivation. H0: To test the hypothesis that leader skills have an insignificant effect on employee motivation. H1: To test the hypothesis that leader skills has a significant effect on employee motivation. 3.6 Theoretical Framework Leader Gender (Douglas F Cellar, 2001) Male -Female Leader Skills (Ralph Nader, 2002) Self Confidence -Charisma -Dominance -Administrative -Ability -Intelligence Leader Motivation (Ralph Nader, 2002) High motivation to lead -Moderate motivation to lead -Low motivation to lead Employee Motivation Leader Style (Douglas F Cellar, 2001) Directive -Democratic Theoretical framework shows the relationship of different independent variables with the dependent variable. In this case the major variables under discussion are Leader Gender, Leader Style, Leader Quality and Leader Behavior. All the independent variables considered in the theoretical framework are linked to motivation and have been studied on by different scholars. All of the variables have been identified in different articles for the literature review. Leader Style plays a vital role in the motivation of employees as does all the other variables that he been considered in the research. 3.7 Data analysis tools and techniques The data will be collected by floating questionnaires. The questionnaires used for this research have been used by previous scholars which ensure the authenticity of the questionnaires. Two questionnaires are designed for my research. The first questionnaire will be for the leaders of the organization and will measure the independent variables like Leadership Style, Leader Skills, Leader Motivation and Leader Gender. The other questionnaire will be for the employees of the organization and will be used to measure the dependent variable which is Employee Motivation. Data will be collected from 10 employees per leader and average will be taken to evaluate the overall motivation of the employees. The data collected through the questionnaires is then coded and standardized. To test the significance and relationship between the different variables, multi variable linear regression will be used. 3.5 Expected Nature of Findings It is expected that leadership does have an effect on employee motivation. Leadership Style, Leaders Motivation and Leaders Skills are expected to have a significant relationship with employee motivation whereas the effect of Leaders Gender on employee motivation is unknown. Chapter 4 Estimation, Analysis and Conclusion 4.1 Profile of Respondents The Questionnaire was filled by 10 leaders and 7 (70%) were male wheras 3 (30%) were female leaders.4 (40%) of the leaders were highly motivated, 2 (20%) were moderately motivated and 4 (40%) lacked motivation according to the questionnaire. Similarly 2 (20%) leaders had high leadership skills, 5 (50%) had moderate leadership skills and 3 (30%) were lacking leadership skills. 6 (60%) leaders had a democratic leadership style wheras 4 (40%) had autocratic leadership. The leaders age varied from 39 years to 48 years. The average age of the leaders was 42 years. The major reason for this is because mostly you get to a leading posirtion in an organization after your 40s when u r mature. All the leaders chosen has 10 plus years of experience in their desired field and were working in the same firm for atleast 2 years so that the employees motivation could reflect their leadership and not the leadership of the previous leader. The Questionnaire was filled by 100 employees. The age of the employees varied from 25 years to 32 years. The average age of the employees was 28 years.5 (50%) of the firms had highly motivated employees, 2 (20%) had moderately motivated employees and 3 (30%) had low motivated employees. Estimated results Multiple regression was used with employee motivation as the dependent variable and Leadership Style, Leaders Motivation, Leader Gender and Leaders skills as the independent variable. The estimated results are given in the Appendix A. Analysis of findings In the leadership style column, 1 was used to represent democratic style of leadership wheras 2 was used to represent autocratic style of leadership. In the Leader Gender column, 1 was used to represent male leaders wheras 2 was used to represent female leaders. In the Leaders Skills column, 1 was used to represent high skills, 2 was u