MB0043 Human Resource Management Set2

Human Resource Management | Set 2 Page 1 of 16

Sikkim Manipal University | MBA-Spring 2010 | MB0043 Human Resource Management | Sem 1

ASSIGNMENT – 02/02NameAyaz Anis AnsariRegistration No.511025251Learning CentreKarrox Technologies

(Borivali Centre, Mumbai) Learning Centre Code03092CourseMBASubjectHuman Resource Management - Set 2SemesterSemester 1Module No.MB0043Date of SubmissionMay 8,

2010Marks AwardedDirectorate of Distance EducationSikkim Manipal UniversityII Floor, Syndicate House,

Manipal – 576 104

_________________Signature of Coordinator

__________________

Signature of Center

_________________

Signature of Evaluator


Q. 1. It is assumed that high morale leads to high productivity. Explain

what morale is and how it is related to productivity?

Ans. Morale is also known as employee engagement in the modern day technology companies.

Morale Defined: Morale has been variously defined by different authors. Professor Ralph C. Davis says,

"Good organizational morale is a condition in which individuals and groups voluntarily make a reasonable

subordination of their personal objectives for their organization". According to Dale Yoder and Paul D.

Standohar, "Morale means evident commitment, that is, demonstrated spirit, enthusiasm, and confidence in

the organization’s policies, programmes, and accomplishments. Morale is revealed by what individuals and

groups say and do to show an interest in, understanding of, and personal identification with work-team

survival and success.” Edwin B. Filippo has described morale as “a mental condition or attitude of

individuals and groups which determines their willingness to co-operate. Good morale is evidenced by

employee enthusiasm, voluntary conformance with regulations and orders, and a willingness to co-operate

with others in the accomplishment of an organization’s objectives. Poor morale is evinced by surliness,

insubordination, a feeling of discouragement and dislike of the job, company and associates."

According to Haimann, "It is a state of mind and emotions affecting the attitude and willingness to work,

which in turn, affect individual and organizational objectives." Joseph D. Mooney describes morale as "the

sum total of several psychological qualities which include courage, fortitude, resolution, and above all,

confidence."

Importance of Morale

In keeping with the definitions discussed above, morale directly impacts the working of an individual in a

team towards the realisation of common objectives. Morale therefore is individual specific as well as

general. Unfortunately building of morale is not a mechanical problem that could be solved by either

rewards or punishments. The best way to manage it is to proactively do a lot of employee related

interventions that will together impact morale positively. Morale can be broadly divided into three categories:

the first concerns, off-the job satisfaction that is expected from work such as income, security, and stature

in the community, the second concerns on-the-job satisfaction for example-job interest, opportunity for

advancement and status within the organization, and the third group concern personal satisfaction from

the job such as growth, achievement powers, job expertise etc. Each category has its impact and can

damage employee morale to varying degrees. It can result in employee behavior that ranges from engaging

in simple gossip to the employee exiting the company. One other ill effect of low employee morale is the

bad-mouthing that the employee might engage in outside the workplace with friends and might even

engage in negative press reporting. This could be very harmful for the market perception about the

company and even impact sales and revenue.

Morale can also be understood as the spirit and confidence with which the employee performs his job. It is a

complex psychological quality that is impossible to force on someone, difficult to measure, and easily

destroyed. The level of morale is a result of the degree to which the overall needs of the individual are

fulfilled.



The important factors which have a bearing on employee’s morale can be classified as relating to:

The employee’s background-which includes his levels of intelligence and education and his type of personality –

largely determines the way in which he seeks to fulfil his needs for belonging, esteem, and self-realization.

Morale hinges on the satisfaction of these needs.

An employee’s personal environment encompasses his relations with his family, friends, and neighbours. The

employee brings his thoughts of his home and social life with him when he goes to work and they influence his

thinking and attitudes while on the job.

Management practices influencing morale include manager behaviour, company policies and procedures with

respect to salaries, promotion methods, employee services and benefits, working conditions, handling

employee issues etc.

At the bottom of it all, employee morale is all about the perception of the employee’s expectations vs. reality.

The closer the individual’s environment comes to providing the kinds of rewards he expects; the better will

be his morale. And as this is unique to each individual’s expectations, all of the 3 categories mentioned

above need to be proactively redressed in order to best manage morale.

Morale and Productivity

It is assumed that high morale and high productivity/ high quality and creative work all go hand in hand.

Since morale manifests itself in the attitudes of employees, it is important to know about the results of high

and low morale. One of the most unpredictable effects of the level of morale is its impact on employee

productivity. The productivity of a group is a composite of many factors, at least one of which is the general

state of mind or the commitment of the group. Formerly it was thought that high morale resulted in high

productivity. Research is repeatedly proving that this correlation is not as simple. Various studies have

revealed that the group having the highest morale need not always be the highest in productivity. As morale

is made up of so many factors, so is productivity, the result of a series of complex factors. When a group is

convinced that high productivity will result in its getting the things it wants most, it is reasonable to believe

that productivity will be high. It is likewise reasonable to believe that if the group’s satisfactions in the work

situation are high and high productivity will enable it to get the things it wants most, the productivity may be

high.

Though high morale may not be the single cause of the high productivity, a high-producing group nearly

always has a reasonably high morale, in terms of the company as a whole. Morale development is almost

certain to accompany successful operations where the individuals can relate their respective endeavours

and objectives to the success of the enterprise as a whole. "A morale-building organization tends to utilize

fully the skill, initiative, judgement, and training of its members, and through such utilization succeeds in

building up these and other qualities in everyone, so that the abilities of all constantly expand, and the

organization thus is able to succeed and grow."



Q. 2. “Coxen” is a medium size, plastic manufacturing company. In this

Company, workers have developed grievances against management. For

past 2 years, in spite of making profit, company is not paying bonus to

workers. It is expected that, if the grievances are not dealt with, it might

lead to severe consequences. Imagine this situation and explain the

grievance handling procedure, list each steps of the procedure. Suggest

few measures to avoid grievances.

Ans. The Grievance Handling Procedure

Principles suggested by the Indian Institute of Personnel Management for addressing the grievance are as

follows:

A grievance should be dealt within the limits of the first line manager.

The appellate authority should be made clear to the employee so that if he cannot get satisfaction from his

immediate manager, he should know the next step.

The grievance should be dealt with speedily.

In establishing a grievance procedure, if the grievance is against an instruction given by a superior in the

interest of order and discipline, the instructions must be carried out first and then only employee can register his

protest.

There should be no recourse to official machinery of conciliation unless the procedure has been carried out

without reaching any solution.

Grievance Machinery

Grievance machinery is usually thought of in connection with a company that deals with a labor union. Though

the union must be given some credit for stimulating the installation of such procedures, all companies, whether

unionized or not, should have established and known methods of processing grievances.

To establish new grievance machinery, workers in each department and each shift shall select, from among

themselves and for a period of not less than one year at a time, departmental representatives, and forward the

list of persons so selected to the management. Where the unions in the undertaking are in a position to submit

an agreed list of names, recourse to election may not be necessary. Nor will this be necessary when a Works

Committee is functioning satisfactorily, for the Works Committee’s member of a particular constituency shall act

as the departmental representative.



Grievance Handling

The details of the grievance procedure vary from industry to industry and from trade union to trade union

because of the variations in the size of organizations, trade union strength, the management philosophy, the

company traditions, industrial practices and in the cost factor. An important aspect of the grievance machinery is

the reassurance given to an individual employee by the mere fact that there is a mechanism available to him

which will consider his grievance in a dispassionate and detailed manner, and that his point of view will be

heard and given due consideration. An employee’s conception of his problem(s) may be quite biased. Venting

his grievance and being heard gives him a feeling of being cared for. He gets it "off his chest", so to say, and it

does a lot of good for his morale as revealed by the famous Hawthorne Studies.

Initial step

The greatest opportunity for the settlement of a complaint or grievance lies in the initial step of the procedure. If

there is no formal procedure and the firm announces an open-door policy, then it is possible that the manager

may get bypassed by the worker who would take his grievance directly to the higher levels of management. But

such bypassing not merely undermines the manager’s authority, who loses face, but also creates an

atmosphere of win-or-loose in which both the worker and manager will try to prove the other wrong.

Intermediate step

As the figure indicates, the next step on the management side of the procedure is to submit the dispute to

middle management. Involving the manager’s, middle and senior-line managers in the grievance process helps

in two ways. Initially, the social barriers between the various categories are, to some extent, broken by personal

contact and mutual understanding. Secondly, the problem-solving approach integrates the various levels in the

organization into a team to jointly overcome the problem which concerns not only the worker but the manager

as well. . However, it is important to ensure that the line management assumes prime responsibility for the

settlement of a grievance. In many organizations, the Personnel Department is injected into the procedure as a

decision-making power. On the union side, intermediate levels are represented by higher personnel in the union

hierarchy. In most of the organizations, the business agent, a full-time negotiations specialist of the union, takes

over the intermediate and sometimes the final step.



The presence of a business agent may explain why management is often outmaneuvered by the union.

Business agents are specialists in union-management negotiations, and it is also their full-time job. The line

manager often considers grievance processing a minor, incidental, and distasteful duty. This lack of

specialization and interest on the part of line management has led to the situation in which the staff personnel

department is given authority to make decisions about grievances.

Final Company-union step

Usually, the final step to be undertaken by the company and union is a discussion of the grievance between

representatives of top management and top union officials. For management, it may be the President in

important grievances, a Vice-president, or a high-level Industrial Relations Executive but, for the union, it may

be the President of the local union, the Union Executive Committee, or a representative of the International

Union. It is difficult to secure an integration of interests at this high level.



Q. 3. Write a brief note on Succession planning.

Ans. Succession planning involves having senior executives periodically review their top executives and those

in the next-lower level to determine several backups for each senior or key position in the firm. It takes years of

grooming to develop effective senior managers and this is a talent challenge that all organizations face today.

Traditionally succession planning was restricted to senior-level management positions and this was either an

informal or formal process.

Over the years succession planning has established itself as a key HR activity in most organizations with formal

processes that ensure it is reviewed regularly and scientifically. In smaller organizations it is yet an informal

succession planning process where the individual manager identifies and grooms his or her own successor.

Succession planning involves an examination of strategic (long-range) plans and HR forecasts for all identified

key positions in an organizations. It includes positions that are critical for the business and for its continuity and

not just the senior level positions. It includes a review of the data on all potential candidates who might be able

to move to these positions either right-away or in the near future. The objective is to identify employees with

potential and increase managerial depth as well as promoting from within the company. This is usually an

exercise undertaken one a year and usually runs parallel to the performance appraisal process. This exercise is

carried out by the senior management team of the unit/subsidiary and facilitated by the HR team. Usually

committees of top managers’ work together to identify high potential candidates within their team and then out-

line developmental activities for them. They may also include a formal assessment of the performance and

potential of candidates and written individual development plans for candidates.

All member’s voice opinions about the potential candidates that are proposed and disagreements are openly

debated, before the final document is signed off. The succession planning process includes determining and

clarifying the requirements of the managerial position and development plans for how these potential

candidates can be groomed to occupy these positions in the eventuality they fall vacant. These development

plans then translate into the individual’s development plan and HR along with the immediate manager work with

the individual to execute the same.

A succession planning exercise concludes with an organization chart of all key positions with listing of possible

potential candidates and the readiness rating for each potential candidate. For example a position that can

immediately be filled is rated higher than a position which does not have a ready-now candidate. Other

components include performance appraisal of these employees, and individual development plans and

management development programs. Additionally, the factors rated as most important in selecting specific

internal/external potential candidates for grooming includes: past job performance, past positions or prior

employment, perceived credibility, area of expertise and career paths and values and attitudes.



Benefits: There are many benefits of having a formal Succession Planning System:

Provides a clear context to strategic business planning as the key positions for the business’s success are what

are being planned for.

Provides a more systematic basis to judge the risk of making particular succession and developmental moves.

Bring focus to systematized succession a plan that scientifically identifies potential candidates to ensure

business continuity.

Enables the identification of high potential and future leaders, whereby the thereafter the manager/HR can

engage with them for leadership development initiatives.

Reduces randomness of managerial movements.

Helps anticipate problems before they get started – and thereby avoid dysfunctional situations.

Provides scientific approach for arriving at succession decisions as part of the overall human resource planning

exercise – connecting formats (data, timing) with process (judgment, discussions, analyses)

Helps plan for internal promotion opportunity

Provides early warning if succession does not exist for a position allowing for lateral hiring from the market.

Regardless of what type of succession planning program is used (formal or informal); most successful programs

obtain the support of top management.



Q. 4. Think of a situation in which an employee is to be dismissed from

the organization, what will be the fair steps of dismissal followed by the

organization?

Ans. Dismissal and Discharge of an Employee

According to Article 311 of the Indian Constitution, which states that “no person shall be dismissed or removed

from service until he has been given a reasonable opportunity to show cause as to why the proposed action

should not be taken against him?"

The Model Standing Orders, similarly states that, "before an employee is dismissed, he should be given an

opportunity to explain the circumstances against him."

The following steps are followed for dismissal of an employee:

Charge Sheet is Framed and Issued: The first step in the procedure is to have in-place a written complaint

against the employee in question, and which contains details of the offence with which he is charged, policy

breach and the allegation of misconduct made against him, and indicating the time limit within which a reply to

the charge sheet should be submitted to the due authorities. The employee is called to put forth his case why a

disciplinary action should not be taken against him.

The contents and implications of the complaint/charge sheet may be explained to him in his own

language and in the presence of some reputable witness, before a copy of it is handed over to him. If he

refuses to accept it, it should be sent to his residential address "registered post with acknowledgement

due". If the employee refuses to take delivery of the registered letter, or when it has been returned

undelivered, it should be published in a local paper to ensure its wide publicity.

Explanation Receipt: The employee provides his explanation within the scheduled time allotted. He can also

ask for an extension of time for its submission, all in good faith.

Issue of Notice of Enquiry: Upon receipt of the explanation from the employee it is reviewed. If found

unsatisfactory, a notice of enquiry, mentioning the time, date and place, has to be given to him in which the

name of the person or officer conducting the enquiry would also be mentioned. The employee is required to be

present at the appointed time and place, together with his witness, if he has any.

Conducting the Enquiry: On the appointed day and at the appointed place and time, the enquiry is held by the

Enquiry Officer in the presence of the employee. The contents of the charge sheet and an explanation of the

procedure to be followed at the enquiry are communicated to the worker. If he pleads his innocence, the enquiry

proceeds; but if he pleads guilty, unconditionally and in writing, the enquiry is dropped.



Sharing Findings: Once the enquiry is over, the Enquiry Officer has to give his findings, which should

invariably contain the procedure which was followed, the employee’s statements, all of the documents produced

and examined, the charges made and the explanations given and the evidence produced. The officer should

then record his own findings on each of the charges and the grounds on which he has come to a particular

conclusion. He should specifically mention which charges have been proved and which have not been proved.

He then submits his findings to the authorities empowered to take the disciplinary action against the employee.

He, however, is not required to make any recommendations.

On receiving the report, the executive authorized to take a decision thereon passes an order of action

Communication of the decision.

A copy of the orders is then handed over to the employee.

In terminating the employment of a employee the following conditions must necessarily be complied

with for misconduct.

The misconduct of the employee is of such a nature as to indicate that his discharge or dismissal would be an

appropriate punishment and that this kind of punishment has been provided in the companies policies or per

statute

A fair and open enquiry must be held by the employer into the misconduct which an employee has been

charged with.

The enquiry should be held in such a manner as to ensure that it would be fair and proper and in conformity

with the principles of natural justice. The employee must be given an adequate opportunity to defend himself

and to present witness in support of his contention or case.

The person holding the enquiry should not be someone who’s known to be biased has personal/vested interest

or was in anyway associated with the misconduct.

The order must be sensitively communicated to the employee against who it has been passed.



Q. 5. Describe the process of wage fixation and the machinery available

for it.

Ans. The main purpose of wage and salary administration is to establish and maintain equitable wage and

salary programs. The secondary objective is to design and implement an equitable labor-cost structure.

Therefore payout cannot be out-of-sync with the organizations ability to pay it needs to be able to satisfy the

employees as well as employers, profits maximized and conflicts minimized.

Wage and salary administration is concerned with the financial aspects of needs, motivation and rewards.

Managers, therefore, analyse and interpret the needs of their employees so that reward can be suitably

designed to satisfy these needs. We will now review a few of the important theories that support the design of

wage systems.

The word ’salary’ is defined in the Oxford Dictionary as ‘fixed periodical payment to a person doing other than

manual or mechanical work’. The payment towards manual or mechanical work is referred to as wages. The

word pay refers to the payment for services done which would include salary as well as wages.

Wages are commonly understood as price of labor. In ordinary parlance, any remuneration paid for services is

etymological wage. Benham defines wage as “‘a sum of money paid under contract by an employer to a worker

for services rendered.”

Labor was always looked upon as a commodity governed by the law of supply and demand. Certain theories

were propounded for determination of wages but these could not stand the test of time. A few theories are

discussed below:

Subsistence theory: This theory, also known as ‘Iron Law of Wages’, was propounded by David Ricardo

(1772-1823). According to this theory, wages tend to settle at a level just sufficient to maintain the workers and

his family at minimum subsistence levels. The theory applies only to backward countries where laborers are

extremely poor and are unable to get their share from the employers.

Standard of living theory: This theory is a modified form of subsistence theory. According to this theory, wages

are determined not by subsistence level but also by the standard of living to which a class of laborers becomes

habituated.

Residual claimant theory: Francis A. Walker (1840-1897) propounded this theory. According to him, there

were four factors of production/ business activity viz., land, labor, capital and entrepreneurship. Wages

represent the amount of value created in the production which remains after payment has been made for all

these factors of production. In other words, labor is the residual claimant.

The wage fund theory: According to this theory, after rent and raw materials are paid for, a definite amount

remains for labor. The total wage fund and the number of workers determine the average worker’s share in the

form of wages.

Demand and supply theory: According to this theory, wages depend upon the demand and supply of labor.

Marginal productivity theory: This is an improved form of demand and supply theory. Wages are determined

by the value of the net product of the marginal unit of labor employed.



Purchasing power theory: According to this theory the prosperity, productivity and progress of industry depend

on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. A large

pact of the products of industry is consumed by workers and their families and if wages are high, demand will

be good. However, if wages and the purchasing power of the workers are low, some of the goods will remain

unsold; output will go down, which will result in unemployment.

The bargaining theory of wages: John Davidson propounded this theory. According to him, wages are

determined by the relative bargaining power of workers or trade unions and of employers. When a trade union

is involved, basic wages, fringe benefits, job differentials and individual differences tend to be determined by the

relative strength of the organization and the trade union.

The Tribunals and Wage Boards have generally followed the-principles laid down in the Fair Wages

Committee’s Report on fixing wages. The Committee, in its report, has focused on wage differentials and has

identified the following factors for consideration for fixation of wages:

The degree of skill.

The strain of work.

The experience involved.

The training involved.

The responsibility undertaken.

The mental and physical requirements.

The disagreeableness of the task.

The hazard attendant on the work, and

The fatigue involved.

Classification of wages: The International Labor Organization (ILO) in one of its publications, classified wages

as under:

The amount necessary for mere subsistence;

The amount necessary for health and decency; and

The amount necessary to provide a standard of comfort.

In India, wages are classified as below :

Minimum wage

Fair wage; and

Living wage

Minimum wage: A minimum wage has been defined by the Committee as "the wage which must provide not

only for the bare sustenance of life, but for the preservation of the efficiency of the worker. For this purpose, the

minimum wage must provide for some measure of education, medical requirements and amenities". In other

words, a minimum wage should provide for the sustenance of the worker’s family, for his efficiency, for the

education of his family members, for their medical care and for some amenities. It is very difficult to determine

the minimum wage because conditions vary from place to place, industry to industry and from worker to worker.



However, the principles for determining minimum wages were evolved by the Government and have been

incorporated in the Minimum Wages Act, 1948, the important principle being that minimum wages should

provide not only for the bare sustenance of life but also for the preservation of the efficiency of the workers by

way of education, medical care and other amenities.

Fair Wage: According to the Committee on Fair Wages, "it is the wage which is above the minimum wage but

below the living wage." The lower limit of the fair wage is obviously the minimum wage; the upper limit is set by

the "capacity of the industry to pay". Between these two limits, the actual wages should depend on

considerations of such factors as:

The productivity of labor;

The prevailing rates of wages in the same or neighbouring localities;

The level of the national income and its distribution; and

The place of industry in the economy.

Living Wage: This wage was recommended by the Committee as a fair wage and as ultimate goal in a wage

policy. It defined a Living Wage as "one which should enable the earner to provide for himself and his family not

only the bare essentials of food, clothing and shelter but a measure of frugal comfort, including education for his

children, protection against ill-health, requirements of essential social needs and a measure of insurance

against the more important misfortunes including old age". In other words, a living wage was to provide for a

standard of living that would ensure good health for the worker, and his family as well as a measure of decency,

comfort, education for his children, and protection against misfortunes.

Generally, ascertaining wages and deciding who to pay what is a activity undertaken in the beginning when a

organization is set up. Thereon it is annual reviews to make corrections per the country’s economic and

market/industry trends. The management considers the state of the labor market and takes into account of what

he can afford to pay and the value of the worker to him. The workers’ willingness for employment at the rate

offered implies that they agree to work at that rate, though they have had no part in fixing it.

Collective Bargaining: Collective bargaining is still in the initial stage in India. Although it is a desirable

development in the relations between management and labor, it cannot be imposed upon either side by

compulsion and should evolve naturally from within.

Voluntary Arbitration: In voluntary arbitration, both parties agree to refer their dispute to mutually agreed

arbitrator and his award becomes binding on the parties.

Wage Legislation: Wages are fixed according to law in some industries. The Central Government and State

Governments may fix minimum wages under the Minimum Wages Act of 1948 for industries in which workers

are exploited or too unorganized to protect their own interests. In order to advise them in the matter of fixing

minimum wages, the Governments appoint Minimum Wages Committees and the Advisory Boards. The

Committees and the Advisory Boards consist of equal number of workers and employers representatives and

also independent members whose number should not exceed one- third of the total number of members.



Conciliation: The Industrial Disputes Act, 1947, provides for consideration in case of disputes between

employers and workers. If an agreement is reached in the course of conciliation proceedings, it becomes

binding on the parties and takes effect from the date agreed upon or from the date on which it is signed by the

two parties. In case no agreement is reached, the Conciliation Officer sends a full report of the proceedings. On

receipt of this report, the government may decide to refer the case to Industrial Tribunal for award.

Adjudication: Labor courts and Industrial Tribunals are set up under the Industrial Disputes Act, 1947. On

studying the awards one gets the impression that the adjudicators are attempting to justify their decision in

social and ethical terms. At the same time, there is a desire to satisfy both parties to the dispute, and therefore,

economic factors such as capacity to pay, unemployment, profits, condition of the economy or welfare of the

industry concerned, are given due prominence.

Wage Boards: The boards are appointed by the Government and usually consist of seven members – two

representatives of management, two of labor, two independent members and a chairman. The board is

expected to take into account the needs of the specific industry in a developing economy, the special features of

the industry, the requirements of social justice, and the necessity for adjusting wage differential in such a

manner as to provide incentives to workers for advancing their skill. Its recommendations may be accepted by

the Government either completely or partly, and may be statutorily imposed on the industry in question, or may

be rejected.

In a nutshell, wages are influenced both by social and economic factors. In one case, economic factors may

play a major role, whereas in another, social factors may be predominant. Thus, wages are product of both

social and economic factors.



Q. 6. Write short notes on:

Charismatic Leadership

Participative Leadership

Delegative Leadership

Transformational Leadership.

Ans. Charismatic Leadership points out that charisma is a personal trait. Often it is confused and interpreted

as the highest form of transformational leadership, but increasing research supports a different thought.

Charismatic or ‘heroic’ leaders easily build allegiance in followers but do not necessarily change the

organization.

(1) Inspirational motivation: the degree to which the leader articulates a vision that is appealing and inspiring

to followers. Leaders with inspirational motivation challenge followers with high standards, communicate

optimism about future goals, and provide meaning for the task at hand. (2) Intellectual stimulation: The

degree, to which the leader challenges assumptions, takes risks and solicits followers’ ideas. Leaders with this

trait stimulate and encourage creativity in their followers. (3) Individualized consideration or Individualized

attention: The degree to which the leader attends to each follower’s needs, acts as a mentor or coach to the

follower, and listens to the follower’s concerns and needs. This also encompasses the need to respect and

celebrate the individual contribution that each follower can make to the team (It is the diversity of the team that

gives it its true strength).

Transformational leadership and charismatic leadership theories have a lot in common and complement each

other in important ways. Another research however suggests that charismatic leaders create dependent

followers, whereas transformational leaders support follower empowerment, which reduces leader dependency.

Participative Leadership (Democratic)

Lewin’s study found that participative (democratic) leadership is generally the most effective leadership style.

Democratic leaders offer guidance to group members, but they also participate in the group and allow input from

other group members. While it is possible that this style productivity is lower than the that in the authoritarian

group, but the contributions were of a much higher quality. This could also be more time taking. Participative

leaders encourage group members to participate, but retain the final say over the decision-making process.

Group members feel engaged in the process and are more motivated and creative.

Delegative (Laissez-Fair)

Delegative leaders offer little or no guidance to group members and leave decision-making entirely to group

members. While this style can be effective in situations where group members are highly qualified in an area of

expertise, it often leads to poorly defined roles and a lack of motivation.



Transformational Perspective of Leadership: The term transformational leadership was first coined by J.V.

Downton in 1973. James MacGregor Burns (1978) first introduced the concepts of transformational and

transactional leadership in his treatment of political leadership, but this term is now used in organizational

psychology as well. According to Burns, the difference between transformational and transactional leadership is

what leaders and followers offer one another. This is a leadership perspective that explains how leaders change

teams or organizations by creating, communicating and modelling a vision for the organization or work unit, and

inspiring employees to strive for that vision. This is best understood then compared with the transactional

leadership, which is defined as leadership that helps organization achieve their current objectives more

efficiently such as linking job performance to valued rewards and ensuring that employees have the resources

needed to get the job done. Transformational leaders are change agents who energize and direct employees to

a new set of corporate values and behaviours. These leaders steer the organization onto a better course of

action. It is best suited in organizations that need significant alignment with the external environment. Key

elements of transformational leadership include (1) Creating a Strategic Vision – reflect a future for the company

or work unit that is accepted and valued by organizational members, creating a higher purpose/super-ordinate

goal that energizes and unifies employees, (2) Communicating the Vision – elevating the importance of

visionary goals to employees, by bring it to life through symbol, metaphors, stories and other vehicles that go

beyond plain language and where the leader ‘walks the talk’ and model the visionary behaviour that is expected

from the employees, and (3) Building Commitment to the Vision – such leaders create in employees’ a ‘can do’

attitude by including them in the vision process. Their persistence and consistency reflects an image of honesty,

trust and integrity.


Documents

MB0043 Human Resource Management Set2