Topic 4 – Motivation and

Leadership

Higher Business Management

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Learning Intentions / Success Criteria

Learning

Intentions

Motivation

and

Leadership

Success Criteria

Learners should be able to describe and explain the following

aspects to do with motivation and leadership:

• motivation theories - Maslow, Hertzberg, McGregor

• methods of motivating employees, including the benefits of

motivation

• uses of employee participation and their costs and benefits,

e.g. works councils, worker director, consultative committees

• the role of management in motivating employees

• styles of leadership and their costs and benefits e.g.

autocratic, democratic, laissez-faire

• use and justification of leadership styles in a given business

scenario. 2

Motivation

It is in any organisation’s best interest to have motivated staff.

The advantages of having motivated staff include:

• less absenteeism

• better performance

• lower staff turnover

• better employee relations.

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Motivation Theories

Theories of motivation can be used to help

understand what motivates people. They can be

applied in an organisation to motivate

employees. Different theorists have different

ideas about what motivates people at work.

• Maslow’s hierarchy of needs

• Hertzberg’s hygiene and motivational theory

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Maslow’s Hierarchy of Needs

• Maslow suggested that there are five levels of human

needs that can be satisfied.

• Each level must be satisfied before someone can

progress to the next level, starting at the bottom of the

pyramid.

• If something is not satisfied at one level, they cannot

progress to the next.

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Hertzberg’s Hygiene and Motivational

Theory

• The two-factor theory states

that there are certain factors

in the workplace that

cause job satisfaction, while

a separate set of factors

cause dissatisfaction.

• According to Hertzberg, job

satisfaction and job

dissatisfaction act

independently of each other.

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Leadership Theories

Leaders in an organisation attempt to influence

people to encourage them to work towards

achieving organisational goals. A leader might be

a manager, but might not.

• McGregor X and Y (Leadership)

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McGregor’s Theory X and Theory Y

McGregor suggested that there were two different types

of managers:

• Theory X

• Theory Y

Each type of manager makes different assumptions

about their employees and this influences how the

leader behaves.

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Theory X

• The Theory X leader

believes that employees do

not like work and try to

avoid it.

• It is assumed that employees

have no drive or ambition

and are not interested in

being given responsibility or

empowerment.

• As a result, the leader has to

exercise tight control over

what is going on and make

all the decisions.

Theory Y

• The Theory Y leader

believes that work provides

people with satisfaction and

a sense of achievements.

• Employees are happy to

work hard towards

achieving the goals of the

organisation.

• As a result, the leader

provides opportunities for

development and

empowerment.

• The leader delegates

responsibility to employees

where they can. 10

Methods of Motivation

• Providing fair pay for the work that employees do

• Empowering employees with responsibility for carrying out a

particular task or duty

• Avoid the use of temporary contracts if possible

• Provide opportunities for continuing professional development

• Offer incentives (e.g. bonuses) for achieving targets

• Having an open door policy

• Good working conditions

• Staff appraisals

• Recognition

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Leadership Styles

Iowa leadership studies – Lewin, Lippit and

White carried out a study at the University of

Iowa. They believe that there are three types of

leaders:

• Autocratic

• Democratic

• Laissez-faire

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Autocratic

• Authority and power rests with the leader.

• Decisions are made by the leader and are implemented using

fear of punishment.

• Communication tends to be one directional and there is no

opportunity for employee involvement, empowerment or

delegation.

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Advantages/Disadvantages of

Autocratic Leadership

Advantages

• There are clear

expectations of what

needs to be done.

• Decisions can be made

quickly.

• This works well when the

manager is the most

skilled or knowledgeable

in the team.

Disadvantages

• There’s no opportunity for

delegation or

empowerment, de-

motivating some staff.

• There’s a lack of

creativity in decision-

making as it is retained

with senior management.

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Democratic

• The democratic or participate leader believes in consultation

and communication with their employees.

• The leader believes that people are important and all have a

valuable contribution to make towards decision-making.

• This type of leadership is seen as motivating and can improve

decision-making, as many people are involved in the process.

• However, it can mean that decision-making takes longer.

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Advantages/Disadvantages of

Democratic Leadership

Advantages

• Employees feel

motivated ass they have a

say in decision-making.

• The manager has the final

say but employees can

contribute, which can

encourage creativity and

help solve complex

problems.

Disadvantages

• Mistakes can be made if

workers are not skilled or

experienced enough to

participate in decision-

making.

• Some employees can be

less productive than they

would be under an

autocratic manager.

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Laissez-faire

• The laissez-faire leader does not exercise any control over

their employees and people are really left to get on with things

themselves.

• Support and guidance are only provided by the leader when

requested.

• There is little direction given to the group, which can lead to

limited achievement of organisational goals.

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Advantages/Disadvantages of Laissez-

faire Leadership

Advantages

• Employees are highly

empowered to make

decisions and only seek

manager’s assistance

when they need help,

which motivates

employees.

• This can create a very

relaxed work

environment.

Disadvantages

• Lack of direction can lead

to objectives not being met.

• This can only work in

highly professional

environments where

workers are self-motivated,

such as technology

companies or creative

industries.

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Factors affecting Leadership Styles

• The task – direction from management deciding on a new company policy

(autocratic) or designing new packaging (laissez-faire).

• Time available – little time to complete a project which means less time for

discussion how to achieve it (autocratic).

• Skills of staff – highly skilled and competent staff which means less supervision

and direction (democratic).

• Motivation of staff – Theory Y employees can be trusted to make their own

decisions and complete tasks without instructions and supervision (laissez-faire).

• Leader’s own personality – leaders may lack personable qualities (autocratic).

• Group size – large groups need direction (autocratic).

• Corporate culture – managers encouraged to use open and relaxed environment

(laissez-faire).

• Availability of finance – spending to departments or individuals (democratic and

democratic) and lack of finance (autocratic).

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