Organisational Behaviour

A research paper that examines to what extent has leadership style and job incentives have affected employee motivation at Cutting Edge Creations Ltd. Prepared for: Anglia Risking University/ School of Accounting and Management. Organizational Behavior. Date of Submission: 1 7th January 2015 Abstract. This report will analyze leadership style, the high employee retention rate and how these affect motivation at Cutting Edge Ltd. A leadership style refers to a leader’s characteristic behaviors when directing motivating, guiding, and managing groups of people.

According to psychologist Kurt Lenin who has highlighted the three major leadership styles they are as follows: authoritarian, democratic or laissez-fair leader. Additionally there are six other leadership styles which are: Transactional Leadership, Transformational Leadership, Quiet Leadership, Bureaucratic Leadership, Charismatic adhering and Situational Leadership. Individuals are positively motivated in many different ways hence, motivation is the process that account’s for an Table of Contents individual’s intensity, direction and persistence of effort towards attaining a goal (Robins Judge and Campbell 2010).

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Cutting Edge has established as the leader in the special effects and merchandising industry setting itself apart from its competitors. The organization has one central location but it satisfies customer needs in any part of the country. The entertainment industry is growing at a rapid rate and the company is poised to grow with it. This report will analyze leadership style and employee retention and how these affect motivation and how it encourages company growth and profitability. This report will also highlight what motivational problems, which exist, and those, which can be addressed.

It was a break away from Sky’s the limit a special effects company with a merchandising background. The two bothers went there separate ways after a dispute with the managing director and formed their own company. At the time the brothers had limited capital. The work had to be done by the two directors and more so by Adrian Chandler who was the managing director as Christian was themes employed. So that, capital was a serious challenge that faced the new company. The pair sought a loan from Ended and together with their savings they invested in whatever equipment they could’ve afforded at the time.

This provided the platform for them to propel from. Through hard-favor, dedication and plough back profits the company has emerged as the top special effects company in the country and perhaps the region, as their services are requested throughout the Caribbean with a plethora of modern services and products being offered using State of the art equipment. Cutting Edge continues to grow as the entertainment sector has catapulted by its insatiable demand, thereby requiring seen/ices and products of the nature offered by the company.

The growth of Cutting Edge is not without its trials and tribulations and so problems have arisen over the years, such as equipment and company property damage, employee turnover, employee suitability and job incentives has affected motivation in the company. Leadership style, job incentive and how they affect employee motivation are the issues that will be critically examined in Cutting Edge Creations Ltd. A study of the organization is accessory to gain the requisite information. 1. 4 Research Question.

To what extent has leadership style and job incentives have affected employee motivation at Cutting Edge Creations Ltd. 1. 5 Research Objectives. The research aims at the following objectives To evaluate the relationship between leadership style and how it affects employee motivation To assess the impact of job incentives on employee motivation. 1. 6 Methodology to be employed The primary data collection source was gathered from a self-administered questionnaire, conducted at Cutting Edge Creations Ltd through delivery and election.

The questionnaire was used to assess the thoughts and opinions of the employees relative to motivation, as it is affected by the leadership style and job incentives. It was given to the 50 employees of the company who were asked to return them in a box provided to give them anonymity. Individuals tend to express their opinions freely in anonymous questionnaires (Fiddler, W¶alert, Dauber & Hess, 2013). The secondary data source used was documentary written materials such as published books journals and articles. 2. 0 Findings, Interpretation and Analysis. 2.

The factors that were selected to analyze the effect of leadership and job incentives on motivation were: leadership style, remuneration, management systems, employee benefits, vacation and sick leave, communication, promotion, and employee appreciation. 2. 1. 1 Findings Issues Strongly Agree Neutral Disagree Good Leadership style and qualities in Managing Director 90% Good Remuneration package 5% 20% Good promotion opportunities 25% 15% Good flow of knowledge and training 85% Good employee participation in decision making 55% 26% Good employee benefits 16% Good hours of work Good employee appreciation 52% 28% % Table 1. . 1. 2 Interpretation and Analysis through Application of Theory The data collected from this questionnaire shows that there are mixed reviews about motivational issues in the organization but Cutting edge’s leadership style is well received for the most part. If a leader is to achieve the goals of his organization, he must have an understanding of motivation in the course of the leadership process (Debate 2004) 2. 1. 3 Leadership and Motivation Leaders establish direction by developing a vision of the future; then they align people by communicating this vision and inspiring them to overcome hurdles.

Leadership is defined as the ability to influence a group toward the achievement of a vision set of goals (Robins Judge and Campbell 2010). 2. 1. 4 Leadership Styles. Authoritarian Leadership These Leaders also known as Autocratic Leaders provide clear expectations for what needs to be done, when it should be done and how it should be done. This style of leadership is strongly focused on both commands by the leader and control of the followers. Autocratic managers tend to motivate employees by establishing confidence in the manager’s ability to make accurate and productive decisions.

Employees become comfortable with the manager’s knowledge of the industry and the company processes and derived motivation from the manager’s ability to keep the department focused on achieving company goals. (Hayes et al. 2013). Participative/ Democratic Leadership This type of Leadership often offers guidance to group members, but they also participate in the group and allow input from other group members. Participative leaders encourage group members to participate, but retain the final say over the decision-making process.

This can affect motivation by a democratic leader is inclusion: The employees are part Of the decision-making recess that keeps the department running smoothly. Employees take an emotional interest in the success of the department because they have helped to craft departmental policies and processes (Theater et al. 2014) Delegation (Laissez-pair) Leadership These leaders offer little or no guidance to group members and leave decision-making up 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. (Operate-Gaillardia & Gallerias-New? 2010) Charismatic By far the most successful trait-driven leadership style is charismatic. Charismatic leaders have a vision, as well as a personality that motivates followers to execute that vision. Charismatic leadership provides fertile ground for creativity and innovation, and is often highly motivational.

With charismatic leaders at the helm, the organization’s members simply want to follow (Robins Judge and Campbell 2010). Transformational Leadership A transformational leader goes beyond managing day-to-day operations and crafts strategies for taking his company, department or work team to the next level of performance and success. Transformational leadership styles focus on team-building, motivation and collaboration with employees at different levels of an organization to accomplish change for the better. Bureaucratic Leaders Bureaucratic leaders create, and rely on, policy to meet organizational goals.

Policies drive execution, strategy, objectives and outcomes. The danger here is that leadership’s greatest benefits are motivating and developing people, these are ignored by bureaucratic leaders. Situational Situational leadership theory suggests that the best leaders constantly adapt by adopting different styles for different situations or outcomes. This theory reflects a relatively sophisticated view of leadership in practice and can be a valuable frame of reference for experienced, seasoned leaders who are keenly aware of organizational need and individual motivation. . 1. 5 Identifying the Leadership Style. Fred Fielder developed the first comprehensive contingency model for leadership. His theory proposes that effective groups depend on a proper match between a leader’s style Of interacting with subordinates and the degree to which the situation gives control and influence to the leader. Fielder believes that a key factor in leadership success is the individual’s leadership Tyler. (Robins Judge and Campbell 2010).

The Managing Director would be described as a transactional leader who guides and motivates his employees in the direction of established goals by clarifying role and task requirements, also as a transformational leader, as depicted by Figure 1, one who inspires his employees to transcend their own self-interests, as he is capable of having a profound and extraordinary effect on his employees, simply because he can relate to the employees on their level, in fact he actually goes out on jobs and works with them motivating them to be more diligent.

He pays attention as a deader to the concerns and needs of his employees and therefore is able to inspire the employees to put out the extra effort. This is applicable to Cutting Edge because when the employees and the managing director get to a job site to work, he allows them latitude at times when erecting the different zones at a venue. The findings reflect that most employees are satisfied with the leadership style and communication between themselves and the managing director and also the level of training that they receive.

The issues, which can be considered, are the dissatisfaction with remuneration, the hours Of work and promotion opportune ties. The remuneration package offered by the company is by far superior to what it is being offered in the market today and in addition to which, some employees keep company vehicles, they are rewarded through bonuses and receive paid vacation and sick leave. Figure 1 . Transactional vs. Transformational Graph The Path-goal theory developed by Robert House extracts elements from the Ohio State leadership research on initiating structure and consideration and the expectancy theory of motivation.

The theory is that it is the leader’s job to assist followers in attaining their goals and to provide the necessary direction ND or support to ensure that their goals are compatible with overall objectives of the group or organization. House identified four leadership behaviors. The directive leader lets followers know what is expected of them, schedule work to be done and gives specific guidance as to how to accomplish tasks. The supportive leader who is friendly and shows concerns for the needs of followers. The participative leader who consults with followers and use their suggestions before making a decision.

The achievement-oriented who sets challenging goals and expects followers to perform at their highest level. In contrast to Fielder, House assumes leaders are flexible and that the same leader can display any or all of these behaviors depending on the situation. (Robbins Judge and Campbell 2010 peg. ) This statement applies to the Managing Director of Cutting Edge as he embodies all of these traits. Figurer Path Goal Theory showing traits of M. D. 2. 1. 6 Job Incentives and Motivation Remuneration is a core aspect Of any business.

It is the reasoning behind the age-old bartering principal of exchanging goods/services for something of value in return. Employees agree to fulfill specific function and duties for a price I. E their salaries or wages. Promotion is also an area that affects motivation at Cutting Edge because after becoming a senior supervisor there is little room for growth because the company is still very small and growing. The basic motivational factors influencing needs must be considered in any incentive scheme design. The classic motivational theories are included and are key to recognizing employee contributions or performance.

In the Measles Hierarchy of needs, this theory shows that a fulfilled need has a low motivation value. Measles hierarchy of needs theory, show that individuals have five needs which are: physiological, safety, social, esteem and self- actualization. The lower order needs satisfies externally such as an individual’s physiological and safety needs; self-actualization in employees is the drive from managers that influences their capability of becoming what they want them to be and in the higher-order needs individuals are satisfied internally such as social and esteem.

This shows that individuals will have the need to be creative, respectful and recognition of others, stability and security, economic security and the need to belong therefore positively motivating them. The employees at Cutting Edge whilst satisfied with having secure job are not satisfied with their remuneration even though it is at the top of the market scale, which negatively affects motivation in the organization. See the figure below. Figure 3. Moslems Hierarchy of needs theory.

In the Herbage’s Two-Factor Theory he explains that work satisfaction is the result of the presence of intrinsic motivation, while work dissatisfaction is dependent on the presence of extrinsic factors. Fifth hygiene factors are present, workers will not be unhappy with their work situation. The optimal condition for a motivated workforce is when the hygienic factors are satisfied and when motivators are in place. See the figure below. Figure 4 Herrings two factor theory.

Perhaps the most applicable and ideal theory of motivation applicable to Cutting Edge is Victor Brooms Expectancy Theory which argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness to that individual. Therefore, employees will be motivated to exert a high level of effort when they believe it will lead to a reward such as bonuses, which Cutting Edge employees are given annually or even salary increases when justified. See the figure below.