The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change

8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change

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The Impact of Contingent Reward, Charismatic Leadership and Individualized Support

on Commitment to Change


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CHAPTER 1: INTRODUCTION

1.1 Introduction

The purpose of this stud0 is to e3amine different factors that affect a compan0,

organization or even an individual4s commitment to change' These varia)les, when

carefull0 controlled can )e the determining factors for success' 5irst we will anal0ze the

effects of Charismatic Leadership on an organization4s level of commitment'

The effect of good leadership on initiatives ta6en for change have since long )een

ignored )0 the Academia' At the same time, studies done on organizational )ehavior

during times of change within an organization have failed to lin6 with more e3tensive

theories a)out leadership 7Ps0cholog0 Toda0, (8!19 In order to understand the impact of

change and how successful emplo0ees can cope to said change initiative, we will loo6 at

the emplo0ee4s )ehavior from two different angles: one is rooted in Leadership literature

and the other has its )asis in $rganizational literature' 5or now we shall onl0 discuss the

former: what leadership st0le is )est suited in a changing environment; How does it ma6e

an organization )etter understand the change, imposed on it; According to wide level' Ta6e the e3ample of /artin Luther ?ing @r'


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Through his intense rhetoric and charismatic personalit0, he was a)le to hold great

influence over the population of the &SA, )lac6 and white' Ta6e the e3ample of andhi

and /r' @innah from the su)>continent' Through their charismatic personalities: andhi

with his calm personalit0 and @innah with his sharp and cunning tactics were a)le to end

almost a centur0 of colonialism in India and more importantl0, the0 were a)le to

influence and reason with an impulsive nation li6e the Indians' The0 were a)le to defeat

the


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add real value to the tas6 at hand, in order to further encourage his followers to e3cel )0

providing them with recognition, this has the added )enefit of encouraging the rest of the

emplo0ees, who do not have the will to e3cel' Another important 2ualit0 of a

transformational leader is his a)ilit0 to stir the emotions of his followers, to trul0 ignite

their emotions and motivate them to do the tas6 at hand with great passion and

enthusiasm' .hile doing this he compels his followers to loo6 )e0ond their self>interest

and loo6 at the )roader picture, to thin6 of the )enefit of people other than his own'

Lastl0, )ut most importantl0, it is imperative for a transformational leader to set unreal

goals for his followers, this ma0 sound weird )ut this is as a matter of fact the onl0 wa0

for one4s emplo0ee4s to actuall0 improve and )uild hisBher s6ills'

5rom this we conclude that in order to commit one4s emplo0ees to change, one

must )ecome a charismatic leader and in order to )ecome a charismatic leader one must

hone the s6ills of a transformational leader' However li6e all theories there are certain

downsides: if we an organization is dependent on a leader4s a)ilit0 to lead then so will the

emplo0ees a)ilit0 to wor6 )e dependent on said leader' If for some unforeseen reason the

leader decides to leave the organization or is a)sent from wor6 for a few da0s then the

organization and the wor6ers will )ecome handicapped and their productivit0 will

drasticall0 decrease, the wor6ers will get demotivated and the organization in turn will

suffer'

Another factor which determines an individual4s commitment to change is the

reward he will get from it' It is natural for human )eings to )e selfish, whenever an

emplo0ee does something for the organization he does so e3pecting some reward in some


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form, it can either )e material or something as simple as a pat on the )ac6 )ut a reward

must )e there for the ta6ing 7.ilson, (88*9

#ow, each compan0 strives to develop a culture and it is in the compan04s )est

interest to develop such a culture which will increase the output of said compan0, if such

a culture is to )e developed then a proper rewards and recognition s0stem is a

compulsion' .h0 is it important to tailor a compan04s culture as such; The answer to that

lies in the fact that in toda04s e3tremel0 competitive environment it is )ecoming

increasingl0 necessar0 to have emplo0ees who can asses and manage ris6, the0

organizations need their wor6ers to )e proactive and wor6>centric and )e a)le to produce

results that show' $r if we consider a )roader e3ample, li6e that of a political part0 then

in this case a part0 needs its emplo0ees to )e motivated and dedicated to the cause, then

the0 must give their wor6er some reward in an0 form, something heBshe can cherish and

value' Thus it is imperative for an0 organization, not matter how )ig or small to reward

its emplo0ees, to show them that their wor6 is valued and the0 as a dedicated mem)er of

the organization add value to the compan0 and help in enhancing the output' If a certain

compan0 wants its emplo0ees to em)race change and welcome it with open arms then

the0 must offer some incentives, these offerings on )ehalf of the compan0 can help the

can help said compan0 enforce its changes at a more faster pace'

However, with this too there are certain pitfalls and draw)ac6s' 5or e3ample, if

we offer cash )onuses to hard>wor6ing emplo0ees then this is the onl0 a temporar0 short

term solution, this will not )u0 his long term lo0alt0 and will onl0 ma6e his wor6

dependent on that reward' 5urthermore, if an organization rewards a selected few and not

the rest then this can create enmit0 or hatred amongst colleagues' Also one must ta6e into


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account the fact that in large organization this practice can )ecome ver0 tedious as

loo6ing for sa0 a dozen individuals in a thousand can prove to )e a ver0 tedious tas6

7/c/ahon, (8!89'

The last factor or varia)le that shall )e discussed is the effect of an individual4s

attention on the performance of an emplo0ee and his willingness to accept and commit to

change' As mentioned a)ove, a charismaticBtransformational leader is he who gives

individual attention to his follower, which in turn motivates him to strive for e3cellence

which indefinitel0 will help him to commit to a change' 5urthermore, when an

organization is going through changes then it is imperative to engage the emplo0ees with

individual support' .hat this does )asicall0 is solve the issues of an organization from

the grass root level, which in turns strengthens the organization altogether providing a

more concrete platform for the emplo0ee to commit to change' This strateg0 helps us

implement the change from a )ottom up approach' Gou change the individual, his

mindset, his thin6ing in order to change the organization and ma6e it grow' To this too

there are certain draw)ac6s, individual support is not a ver0 practical idea for large

organizations which emplo0ee thousands, one would have to esta)lish a proper portfolio

for the cause which can prove to )e a ver0 costl0 venture'

.e have discussed * 6e0 independent varia)les which determine a dependent

varia)le, namel0 Commitment change' .hat we4ve concluded is that in order for a

wor6er to full0 em)race the idea of change, all three factors i'e' Charismatic Leadership,

Rewards and Individual support are ver0 important' .hat we4ve concluded is that a

change can never )e full0 implemented in an organization if one of these 6e0 factors is

missing' Rewards will not )e appreciated if the person who rewards 0ou is not


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charismatic, individual support is of no use if there are no rewards to )oost morale and

the chain goes on and on 7Steinhardt'n0u'edu, (8!19'

Industry:

#ow the 2uestion arises, how do these varia)les affect the automo)ile industr0;

And when we tal6 a)out change in the automo)ile industr0, what is it e3actl0 that we4re

tal6ing a)out; In the past *8 0ears the automo)ile industr0 has transformed rapidl0, with

the demand rising one must rethin6 the entire )usiness modal on which the industr0

operates, although the old tried and tested methods have their significance )ut it is those

companies who thin6 out of the )o3, who persist and stand the test of times' Here is

where true leaders come in, charismatic leaders who )elieve in transformation and who

can ma6e their wor6ers )elieve, so are the ones who can trul0 commit to the success of a

compan0' 5or e3ample, in the (8 th centur0, cars were )uilt as high performance machines

with high tor2ue and acceleration, the demand for such vehicles was high'


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1.2 Problem t!tement

$rganizational changes are planned and organized to ensure the growth and

development of organizations' Changes are meant to happen, which will help in )ringing

positivit0 in the organizations 7?lein ?night, (8819' Commitment to change refers to

the desire to provide support to the organizational changes, which can promote growth,

development, and success of the organization' Innovation and creativit0 are the two 6e0

factors that influence changes in an organization 7Teare Ra0ner, (88(9' It is not

necessar0 that changes alwa0s lead to success, at times, the implementation of plans

result in failure, )ut that does not mean that changes are avoided at different stages'

Changes are important part of the organization, which pla0 an important role in preparing

the organization to achieve the strategic goals and targets 7Choi Price, (8819'

According to commitment theor0 which was developed )0 Richard .alton: emplo0ees

perform )est when the0 are given )roader responsi)ilities, encourage contri)uting and

helped to ta6e satisfaction in their wor6' uest 7!DD9 in support of commitment theor0

descri)e the significance of )inding of emplo0ees to the organization and o)tain their

)ehavior outcome of increased efforts and cooperation'

$rganizational undergo different processes to )ring changes in their functions,

operations, s0stems, hierarch0, culture, and policies 7/e0er Allen, !DD!9' The process

of change includes the steps that help in converting an organization from the current state

to the desired state 7Sinclair et al', (8819' There are some prominent organizational

change models that are used )0 the managers and leaders to achieve the desira)le changes

and developments in the organization' Commitment towards change can help in )ringing


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relevant changes, and it is the responsi)ilit0 of the leaders and managers to )ring

effective changes in the organization 7arvin, (8889' 7Herscovitch and /e0er (88(9:

present a practical solution that affective commitment to change refers to a desire to

support a change, continuance commitment to change is )ased on a recognition that there

are costs associated with resisting change, and normative commitment to change reflects

a sense of o)ligation to )e supportive' Contingent reward offer tangi)le and intangi)le

support to their followers, set directions, and determine the reward for goal achievement

7.alum)wa et al', (88E9 and it impact will directl0 influence emplo0ees to perform his

)est effort to achieve organizational goals and organizational commitment level' /ost of

emplo0ee are not commitment to their +o) and the reason )ehind is lac6 of Leadership

and reward whereas there are various studies which consider that the leaders emphasize

on providing emplo0ees with a satisfactor0 and challenging environment, which helps

motivating emplo0ees and motivated emplo0ees will perform )etter as compared to

others, which results in )etter performance and organizational commitment

The individual4s perspective towards change might differ from the organization4s

point of view' mplo0ees are important part of the organization, and it is essential that

the0 accept the changes and show their commitment towards it 7Henning>Thurauet'al,

(88(9' The leaders use different leadership st0les to motivate individuals to focus towards

)ringing changes' The process of change is highl0 affected and influenced )0 the

leadership st0le and planning process, which depends on the goals and o)+ectives of the

organization' Charismatic leadership is one of the commonl0 used leadership st0le, which

helps the leaders in influencing their own )eliefs, ideas, values, thoughts, and perceptions

on others 7Paton /cCalman, (8889' Toda0, leaders are tr0ing new models and


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innovative st0les to lead their organizations, unli6e implementing the traditional

leadership st0les and models' The charismatic leaders transform the needs and desires of

their team mem)ers and emplo0ees, and ma6e them understand the importance of

change, innovation, creativit0, and development 7Lehesvirta, (889'

ffects of commitment to change var0 across career stages' The importance of

attention for commitment towards change is represented )0 its relation to contingent

reward and Leadership 7


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Thus the o)+ectives are esta)lished as"

!' To e3amine the relationship among Charismatic leadership, Reward,

Individualized support and Commitment to Change

(' To anal0ze the impact of Charismatic leadership, Reward, Individualized

support on Commitment to Change

Rese!rc" %uestions:

So as to accomplish previous research o)+ectives, this stud0 will answer the

2uestion stated )elow"

!' Is there an0 relationship among Charismatic leadership, Reward, Individualized

support and Commitment to Change;

(' %oes Charismatic leadership, Reward, Individualized support have a significant

impact on Commitment to Change;

1.& O'er!tion!l De(initions:

#ow we will tr0 to define the a)ove stated varia)le in terms of Pa6istan and how

the0 affect the local demographic'

A charismatic leader in the Pa6istani societ0 is one who trul0 )elieves in his

wor6ers B followers B emplo0ees, who will loo6 onto him without )iasness, irrespective of

his caste, color, creed and religion' Adding to that our societ0 accepts one to )e a man of

charisma if he possesses high morals and has e3cellent wor6 ethic' A manager at an


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automo)ile factor0 should )e highl0 motivated, positive and down to earth, in order to

connect to his emplo0ees, most of which are from decent )ac6grounds 7Hairston, !D=19

.hen we tal6 a)out rewards, Pa6istan as a nation is not as materialistic as the

.est, 0et, as mentioned earlier, most of the local la)or )elongs to the poor )ac6grounds'

5or them, mone0 is motivation' Thus, the most effective wa0 to reward an emplo0ee,

especiall0 in the automo)ile factor0 is to give him a cash )onus, this ma0 include an e3tra

id )onus or an0thing appropriate'

#ow a)out individual support, this I )elieve is the 6e0 factor when considering

the Pa6istani demographic' It is an intrinsic propert0 of human nature to 0earn for

personal attention, to )e felt special' If an emplo0er in Pa6istan can do that, sa0 an

automo)ile factor0 reall0 wants his emplo0ees to commit to a change then this is the onl0

wa0 to go a)out it'

Let4s conclude with the last most important varia)le, Fcommitment to change4'

People in Pa6istan are not ver0 receptive to an0thing out of the norm: the0 li6e to stic6 to

their conservative traditions and lifest0les' Same is the case with an emplo0ee' 5or

e3ample if an automo)ile upgrades, an emplo0ee might feel his s6ills have )ecome

irrelevant' In order to overcome this reluctance of the emplo0ee, the factors a)ove are of

critical importance'


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CHAPTR (" LITRAT&R R-I.


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CHAPTER ): REEARCH *ETHOD

3.1 Pro'osed T"eoretic!l +r!me,or-

Richard Walton (1985) Theory of commitment is considered as a

relevant tool to model the commitment towards change by providing

worers broader responsibilities! enco"rage contrib"ting and helped to

tae satisfaction in their wor# The theory contends with high evidence

that employee attit"de and behavior towards organi$ational change

shows a most important factor for s"ccess (%rmenais! 199&)#

Transformational leadership behavior ('erold! 8*+eo! 1, -"

et#al! ) and .ndivid"ali$ed +"pport (%rmenais and 'arris! 9!

/edor! 0, +mollan et!al! 0) has been fo"nd to positively aect

employees2 commitment to change moreover the leader sets rewards

in res"lt for best performance for which contingent reward plays a

main role in oering tangible and intangible s"pport to their followers!

set r"les! and determine the reward for goal achievement (3ass! 1998

* Wal"mbwa! 8)# Commitment to change has attracted many

researchers in the past! giving rise to vario"s de4nitions and models of

change# Coetsee (1999) describes commitment to change as the 4nal

phase of acceptance of change# 'e believes it to be a prod"ct of


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nowledge abo"t change! information abo"t change! empowerment!

rewards and recognition for changing and shared visions#

The theory of commitment to change (CTC) proposes three

concept"ally independent variables! these variables incl"des

charismatic leadership! contingent reward * individ"ali$ed s"pport# %s

a general r"le! the more transformational leadership style and s"pport!

the more perceived o"tcomes of an individ"al in a shape of reward

which as a res"lt directs an individ"al intention to "nderstand the

importance of change (ehesvirta! 6)# +ee /ig

Figure 3.1

Proposed Theoretical Framework

).2 Hy'ot"eses

'a17 Contingent Reward has a signi4cance relationship with

commitment to change#

Contingent Reward

Commitment to

ChangeCharismatic

Leadership

Individualized

Support


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'a7 Charismatic eadership has a signi4cance relationship with


'a&7 .ndivid"ali$ed +"pport has signi4cance relationship with


'a67 Contingent Reward! Charismatic eadership * .ndivid"ali$ed

+"pport have a signi4cant impact on commitment to change#

).) Rese!rc" Desin

The research is eplanatory research# Researchers foc"s on

identifying and eamining factors that aect employee commitment

towards change by providing charismatic leadership! contingent

reward and s"pport#

).).1 Ty'e !nd N!ture o( tudy

.n this st"dy "antitative method has been "sed to "antify the

relationship and to eamine the impact of contingent reward!

individ"ali$ed s"pport and charismatic leadership on Commitment to

change#

3.3.2!m'lin !nd Desin

/or this st"dy we will collect data thro"gh a 4eld s"rvey method

whereas all "estionnaires will be self:administrated# The respondent

of this st"dy will be the employees woring in an a"tomobile ind"stry


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acc"racy and relevancy of information gathered as the responses are

obective! standardi$ed and comparable (Dim"nd! 3abin! Carr! *

@riBn! 1, +earan * 3o"gie! 1)# This framewor is an

appropriate tool to model the commitment towards changes thro"gh

leadership! reward and individ"ali$ed s"pport# Therefore Walton!

(1985) theory has been "sed in this st"dy#

%n adaption of commitment to change E"estionnaire (CCE) has

been "tili$ed for the st"dy taen by dierent so"rces as mentioned in

/ig # The "estionnaire is divided into two sections % * 3# +ection %

consist of "estions of three independent variables i#e# Charismatic

leadership! .ndivid"ali$ed s"pport * Contingent Rewards whereas

+ection 3 consist of one dependent variable i#e# Commitment to

change# %ll scales in this st"dy were meas"red by "sing 4ve points

iert scale ranging from 1 with strongly %gree to F strongly disagree

(%llen * ?eyer! 199)#

The constr"ct! sections! n"mber of items and so"rces are listed in /ig

Figure 3.2

Variables Sectio

n

Scale

Items Source

eadership % 10 Wal"mbwa ! 8

Reward % 5 +ims and +$ilagyi2s! 19F5


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.ndivid"ali$ed

+"pport% 8 Wal"mbwa ! 8

Commitment to

change

3 1 %llen * ?eyer! 199

).).& Procedure o( D!t! Collection

.nitially! the "estionnaire will distrib"te to 6 employees of

a"tomobile ind"stries in ;arachi# A"ring the data collection process!

self:administered "estionnaire! incl"ding a covering letter will deliver

to respondent# /"rthermore the instr"ment m"st be converting in a

soft copy by "sing @oogle Aocs and then will be circ"lated to all

concern respondents# .n addition to data collection hard copy of

"estionnaires will be circ"lated to related organi$ations in ;arachi

after getting permission by the respective manager in organi$ations#

The "estionnaires incl"des "estions abo"t fo"r factors, Charismatic

eadership! Contingent Reward! .ndivid"ali$ed +"pport and

Commitment to Change)#

).)./ t!tistic!l Tec"ni0ues

%ll statistical analysis were performed by "sing +=++ 19##

Aescriptive analysis of ?ean * +tandard deviation! Correlation analysis

* ?"ltiple Regression analysis will be applied on data! overall 6 data

will be analy$ed# 'ypothesis 1! and & will be analy$e by "sing

correlation analysis and hypothesis 6 will be analy$e by "sing


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regression analysis! hence all data will be analy$e on signi4cance level

of 95G#


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RE+ERENCE

Documents

The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change