Chapter 7: Principles of Leadership & Management PDF

Principles of Leadership & Management CHAPTER 7: GOALS & MOTIVATIONAL LEADERSHIP Unless otherwise noted, this work is licensed under a Creative C ommons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. Feel free to use, modify, reuse or redistrib...

Principles of Leadership & Management CHAPTER 7: GOALS & MOTIVATIONAL LEADERSHIP Unless otherwise noted, this work is licensed under a Creative C ommons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. Feel free to use, modify, reuse or redistribute any portion of this presentation. Learning Outcomes Upon successful completion of this chapter, you will be able to: Appraise the nature of goals and objectives and why they are important. Determine how our thinking about goals and objectives has evolved. Analyze what characterizes good goals and objectives. Apply the roles of goals and objectives in employee performance reviews. Determine relationships among economic, social, and environmental goals and objectives. Develop and manage your own goals and objectives. Compare need-based theories of motivation with process-based theories of motivation. Describe how fairness perceptions are determined and their consequences. Assess how performance appraisals can be used in a motivational way. Analyze how to apply organizational rewards in a motivational way. Develop your personal motivation skills. 7.1 Case in Point: Nucor Aligns Company Goals With Employee Goals Manufacturing steel is not a glamorous job. The industry is beset by many problems, and more than 40 steel manufacturers have filed for bankruptcy in recent years. Most young employees do not view working at a steel mill as their dream job. 7.2 The Nature of Goals and Objectives I What Are Goals and Objectives? Goals and objectives provide the foundation for measurement. While the terms are often used interchangeably, goals are outcome statements that define what an organization is trying to accomplish, both programmatically and organizationally. 7.2 The Nature of Goals and Objectives II Goals and Objectives One of the major challenges is that goals and objectives is that they are often not tied to strategy, and ultimately to vision and mission. Instead, you may often see a laundry list of goals and objectives that lack any larger organizing logic. Broadly speaking, goals and objectives serve to: Gauge and report performance Improve performance Align effort Manage accountabilities 7.2 The Nature of Goals and Objectives III Goals, Objectives, and Planning Planning typically starts with a vision and a mission. Then leaders develop a strategy for realizing the vision and mission, and must communicate this well; their success and progress in achieving vision and mission will be indicated by how well the underlying goals and objectives are achieved. 7.2 The Nature of Goals and Objectives IV 7.3 From Management by Objectives to the Balanced Scorecard I Management by Objectives MBO is a systematic and organized approach that allows leaders to focus on achievable goals and to attain the best possible results from available resources. MBO aims to increase organizational performance by aligning the subordinate objectives throughout the organization with the overall goals that leadership has set. 7.3 From Management by Objectives to the Balanced Scorecard II MBO is about setting goals and then breaking these down into more specific objectives or key results. MBO involves: Setting company-wide goals derived from corporate strategy Determining team- and department-level goals Collaboratively setting individual-level goals that are aligned with corporate strategy Developing an action plan Periodically reviewing performance and revising goals (Greenwood, 1981; Muczyk & Reimann, 1989; Reif & Bassford, 1975) 7.3 From Management by Objectives to the Balanced Scorecard III The Balanced Scorecard The Balanced Scorecard is a framework designed to translate an organization’s mission and vision statements and overall business strategy into specific, quantifiable goals and objectives and to monitor the organization’s performance in terms of achieving these goals. 7.3 From Management by Objectives to the Balanced Scorecard IV The Balanced Scorecard. 7.4 Characteristics of Effective Goals and Objectives Eight Characteristics of Appropriate Goals and Objectives Less is more Tie measures to drivers Don’t just measure the past Take stakeholders into account Cascade goals into objectives Simplify Adapt Base objectives on facts. 7.5 Using Goals, Objectives and Feedback in Employee Performance Evaluation I Goals, Objectives, and Performance Reviews Since leadership is tasked with accomplishing things through the efforts of others, an important part of your principles of management tool kit is the development and performance evaluation of people. A performance evaluation is a constructive process to acknowledge and provide feedback on an employee’s performance. 7.5 Using Goals, Objectives and Feedback in Employee Performance Evaluation II Role and Limitations of Performance Evaluations Most organizations conduct employee performance evaluations at least once a year, but they can occur more frequently when there is a clear rationale for doing so—for instance, at the end of a project, at the end of each month, and so on. For example, McKinsey, a leading strategy consulting firm, has managers evaluate employees at the end of every consulting engagement. 7.6 Integrating Goals and Objectives with Corporate Social Responsibility I Corporate Social Responsibility The corporate social responsibility (CSR) movement is not new and has been gathering momentum for well over a decade (Crawford & Scaletta, 2005). CSR is about how companies manage their business processes to produce an overall positive effect on society 7.6 Integrating Goals and Objectives with Corporate Social Responsibility II Specifically, the Dow Jones Sustainability Index looks at competence in five areas: Strategy Financial Customer and Product Governance and Stakeholder Human 7.6 Integrating Goals and Objectives with Corporate Social Responsibility III CSR and the Balanced Scorecard “One of the fundamental opportunities for the CSR movement is how to effectively align consumer and employee values with strategy to generate long- term benefits—a better understanding of precisely with whom, what, when, where, how and why an enterprise makes a profit or surplus. CSR requires more holistic strategic thinking and a wider stakeholder perspective. Because the Balanced Scorecard is a recognized and established management tool, it is well positioned to support a knowledge-building effort to help organizations make their CSR values and visions a reality. (Crawford & Scaletta, 2005) 7.7 Your Personal Balanced Scorecard I 7.7 Your Personal Balanced Scorecard II Using SMART Criteria For personal objectives and performance measures to be most effective, you might try seeing how they measure up to SMART criteria. These characteristics, based on specific, measurable, attainable, realistic, and time bound yield the acronym SMART (Drucker, 1954). 7.7 Your Personal Balanced Scorecard III Personal Improvement Activities 7.8 Motivation I Motivation is defined as “the intention of achieving a goal, leading to goal-directed behavior” (2021). When we refer to someone as being motivated, we mean that the person is trying hard to accomplish a certain task. Motivation is clearly important for someone to perform well. 7.8 Motivation II According to this equation, motivation, ability, and environment are the major influences over employee performance. 7.9 Need-Based Theories of Motivation I Maslow’s Hierarchy of Needs. 7.9 Need-Based Theories of Motivation II ERG Theory 7.9 Need-Based Theories of Motivation III Two-Factor Theory of Motivation 7.9 Need-Based Theories of Motivation IV Acquired Needs Theory Among the need-based approaches to motivation, Douglas McClelland’s acquired needs theory is the one that has received the greatest amount of support. According to this theory, individuals acquire three types of needs as a result of their life experiences. These needs are need for achievement, need for affiliation, and need for power. All individuals possess a combination of these needs. 7.10 Process-Based Theories I Equity Theory 7.10 Process-Based Theories II What Are Inputs and Outputs? Inputs are the contributions the person feels he or she is making to the environment. In the previous example, the hard work Marie was providing, loyalty to the organization, the number of months she has worked there, level of education, training, and her skills may have been relevant inputs. Outputs are the rewards the person feels he or she is receiving from the situation. 7.10 Process-Based Theories III Fairness Beyond Equity: Procedural and Interactional Justice Equity theory looks at perceived fairness as a motivator. However, the way equity theory defines fairness is limited to fairness regarding rewards. Starting in the 1970s, researchers of workplace fairness began taking a broader view of justice. Equity theory deals with outcome fairness, and therefore, it is considered to be a distributive justice theory. 7.10 Process-Based Theories IV Expectancy Theory 7.10 Process-Based Theories V Reinforcement Theory 7.10 Process-Based Theories VI Job Characteristics Model 7.10 Process-Based Theories VII Goal Setting Theory Goal setting theory (Locke & Latham, 1990) is one of the most influential and practical theories of motivation. It has been supported in over 1,000 studies with employees, ranging from blue-collar workers to research and development employees, and there is strong evidence that setting goals is related to performance improvements (Ivancevich & McMahon, 1982; Latham & Locke, 2006; Umstot et al., 1976). 7.10 Process-Based Theories VIII Why Do SMART Goals Motivate? There are at least four reasons why goals motivate (Latham, 2004; Seijts & Latham, 2005; Shaw, 2004). 7.11 Developing Motivation Skills I Guidelines for Giving Feedback in a Performance Appraisal Meeting Before the meeting, ask the person to complete a self-appraisal. This is a great way of making sure that employees become active participants in the process and are heard. Complete the performance appraisal form and document your rating using several examples. Be sure that your review covers the entire time since the last review, not just recent events. 7.11 Developing Motivation Skills II Five Guidelines for Seeking Feedback 1. Consider seeking regular feedback from your boss. 2. Be genuine in your desire to learn. 3. Develop a good relationship with your manager as well as the employees you manage. 4. Consider finding trustworthy peers who can share information with you regarding your performance. 5. Be gracious when you receive unfavorable feedback. 7.12 Key Terms I Autonomy is the degree to which the person has the freedom to decide how to perform tasks. Balanced Scorecard is a focused set of key financial and nonfinancial indicators. These indicators include leading, pacing, and lagging measures. Benevolents are individuals who give the expectation of something in return. Corporate social responsibility (CSR) is the manner by which companies manage their business processes to produce an overall positive effect on society. Continuous schedules describe reinforcement that occurs when rewards are provided following all instances of positive behavior, such as providing a sales commission every time a sale is made. Distributive justice refers to the degree to which the outputs received from the organization are fair. Esteem needs refer to the desire to be respected by one’s peers, feeling important, and being appreciated. ERG theory modifies Maslow’s hierarchy of five needs into three categories that can impact an individual at the same time, namely existence, relatedness and growth. Existence needs as part of ERG theory correspond with Maslow’s physiological and safety needs. Equity theory is based on the idea that individuals are motivated by a sense of fairness determined by comparisons; specifically, we compare our inputs and outputs with those of a referent (someone else’s inputs and outputs). Perceptions of inequity create tension within us and drive us to action that will reduce perceived inequity. Equity sensitivity individuals expect to maintain equitable relationships so experience distress when they feel they are over rewarded or under rewarded. 7.12 Key Terms II Entitleds who expect to receive a lot without giving much in return. Expectancy is the perception that high levels of effort will lead to desired outcomes. Extinction is a method of reducing the frequency of undesired behaviors by ignoring the behavior with the expectation that the behavior will cease as a result of receiving no reinforcement. Feedback is communication about our behavior and its effects on others, including ourselves, colleagues, clients and the organization itself. Fixed ratio schedules describe reinforcement that occurs when rewards are provided after a specific number of times that the right behavior is demonstrated, such as giving a sales bonus once sales hit a $10,000. Fixed interval schedules describe reinforcement that occurs when rewards are provided after a specified period of time, such as a monthly sales bonus. Feedback refers to the degree to which the person learns how effective he or she is at work and may come from other people such as supervisors, peers, subordinates, customers, or from the job itself. Goals are outcome statements that define what an organization is trying to accomplish, both programmatically and organizationally. Growth needs as part of ERG theory correspond with Maslow’s esteem and self actualization. Hygiene factors are elements of a job causing dissatisfaction of workers and include company policies, supervision, working conditions, salary, safety, and security on the job. High need for affiliation is an individual who wants to be liked and accepted by others. Interactional justice refers to the degree to which people are treated with respect, kindness, and dignity in interpersonal interactions. Instrumentality is the degree to which the person believes that performance is related to secondary outcomes such as rewards. 7.12 Key Terms III Job specialization entails breaking down tasks to their simplest components and assigning them to employees so that each person would perform few tasks in a repetitive manner. Job rotation involves moving employees from job to job at regular intervals to build skills, crosstrain, and relieve the monotony and boredom prevalent in repetitive jobs. Job enlargement refers to expanding the tasks performed by employees to add more variety. Job enrichment is a job redesign technique that allows workers more control over how they perform their own tasks, giving them more experience and responsibility. Job characteristics model describes five core job dimensions (skill variety, task identity, task significance, autonomy and feedback) leading to three critical psychological states (meaningfulness, responsibility and knowledge of results), which can result in positive work-related outcomes related to motivation, performance, satisfaction, absenteeism and turnover. Lifestyles of Health and Sustainability (LOHAS) is a group of ethical consumers of goods and services focused on health, the environment, social justice, personal development, and sustainable living and demand the necessary data to make informed decisions. Measures are the actual metrics used to gauge performance on objectives. Motivation is the process whereby an individual is moved to action to accomplish their goals. Motivators are elements of a job causing satisfaction of workers and encouraging them to increase their performance such as achievement, recognition, interesting work, increased responsibilities, advancement, and growth opportunities. Need for power is an individual with the desire to influence others and control their environment. Negative reinforcement is a method of increasing the frequency of desired behaviors by removing negative consequences. Objectives are very precise, time-based, measurable actions that support the completion of a goal. Organizational Behavior Modification (or OB Mod) is a systematic application of reinforcement theory to modify employee behaviors consisting of five stages: (1) identifying the behavior that will be modified(2) measuring the baseline level of behavior, (3) determining the behavior’s antecedents and outcomes, (4) implementing an intervention, and (5) evaluating and maintaining the behavior. 7.12 Key Terms IV Performance management systems include a continual process of improvement through which organizations assist employees to create performance plans and assist them in achieving their goals. Performance evaluation is a constructive process to acknowledge and provide feedback on an employee’s performance. Physiological needs refer to the need for air, food, and water. Procedural justice refers to the degree to which fair decision-making procedures are used. Positive reinforcement is a method of increasing the frequency of desired behaviors by rewarding positive behavior with positive consequences. Punishment is a method of reducing the frequency of undesired behaviors by presenting negative consequences (imposing a penalty and taking away something desirable) following unwanted behaviors. Reinforcement Schedules is the idea that the timing or schedule on which reinforcement is delivered has a bearing on behavior. Relatedness needs as part of ERG theory correspond with Maslow’s social needs. Referent in terms of equity theory, is the comparison person or group of people used to determine the input-to- output ratio in a given situation. Reinforcement theory is based on the idea that behavior is a function of its consequences and describes four interventions to modify employee behavior: positive reinforcement, negative reinforcement, extinction and punishment. Two of these are methods of increasing the frequency of desired behaviors while the remaining two are methods of reducing the frequency of undesired behaviors. Safety needs refer to feeling safe from anything that would threaten one’s security. 7.12 Key Terms V Social needs refer to the need to bond with other human beings, to be loved, and to form lasting attachments. Self-actualization refers to “becoming all you are capable of becoming.” SMART goals are considered most effective because they ensure that goals are “S” specific, “M” measurable, “A” achievable, “R” realistic, and “T” timely. Skill variety refers to the extent to which the job requires the person to use multiple high-level skills. Triple bottom line (TBL) measures an organization’s economic, social, and environmental performance (people, planet, profit) and is related to its corporate social responsibility. Task identity refers to the degree to which the person completes a piece of work from start to finish. Task significance refers to whether the person’s job substantially affects other people’s work, health, or well-being. Valence the anticipated satisfaction of the value of the rewards that will result from an outcome. Variable ratios describe reinforcement that occurs when rewards are provided in a random pattern, such as giving a sales bonus every time the manager is in a good mood.