Report

On
Understanding Leadership and Motivation

Prepared by
**** name *****

*********** Institute**********

Summary

Managing Without Managers

By
Ricardo Semler

Ricardo Semler is the president of SEMCO which is one of the top companies in Brazil.
Its production includes marine pumps, digital scanners, commercial dishwashers etc. Its
customers are Alcoa, Saab and General Motors. The major competitors are AMF, Worthington
industries, Mitsubishi heavy industries etc.
 Ricardo joined this company in 1980 when the revenues level was low and employees
numbered less. The first most strategy was to professionalize and diversify the company. For this
they bought seven licenses to manufacture the already made products by others. Initially they
had to pass through acquisition phase with high expenditures, no aids and losses.

The success and survival of the company afterwards owes to the changes brought in the
management theories which focused on:

Being democratic
Share profits
Sharing information

By being democratic means that there must be involvement of workers which clearly boosts
up their confidence and interest in their work. Four hurdles were initially faced in its
implementation:

Huge size
Complex hierarchy
Lack of motivation
Ignorance

To reduce the size of the units, it was proposed was to divide big departments into 3 sub-
units, with each unit having separate entrances, inventories and technical stuff. Initially it
resulted in high expenditures due to doubling of the things but later on there was a successful
increase in sales, quality and productivity. It reduced gaps among the employees and
communication level enhanced among them.

The initial pyramid sort of organizational structure was converted to a circular one. It
comprised of 3 concentric circles:
The inner one consists of five counselor including Ricardo himself.
The second one consists of 8 divisional heads called as partners.
The outer one consists of all employees including associates and coordinators.
 The employees are involved in various matters of hiring, voting, evaluating others
etc. They are treated as adults who have full liberty to decide their professional issues
themselves. The rules were remade on the basis of commonsense, letting each worker
decide his matters himself. Dress code was removed so that anyone can wear anything in
which he feels himself comfortable. Company rules related to travel expenses, security
checking etc. were demolished. Job rotation is appreciated to insure job insecurity. Every
department has different tasks, products and hence timings to carry out their work
independently.

Ricardo found out various mammoths roaming around in the organization which
needed to be demolished such as of no quality of wok but long working hours. He suggested cure
for them by reducing working hours, taking out time for relaxation, going through important
documents once in a week etc.

In SEMCO, every department has a separate profit sharing program. 23% of after-tax
profit is evenly distributed among employees, or as they decide, twice a year. This results in
low employer turnover, competitive pay, absence of paternalism and gives more
opportunities to employees to criticize the decision made by management.

Every employee has full access to companys balance sheets, profit and loss analysis and
cash flow statements and is properly taught to how to read and analyses them. If they are
working for earning profit for the company and then they must know every sort of
information related to it too. At first, the accounting system of SEMCO was praised even by
the American companies, but soon they realized that it was resulting in high expenses and
complex calculations. This was resolved by introducing a simpler accounting system
providing limited but relevant information that is easy to be grasped.

Moreover, they keep bringing changes in the budget. Several events were expected
before-hand and then matched with the result later on. They paid workers on monthly basis.
SEMCO arranges survey of salary market once or twice a year. All employers are given full
liberty to ask for pays as much as they want and consider themselves eligible for. Even
management and employees are given titles for which they demand.

In nutshell, employees are allowed to fully participate to give them control; profit is
shared which gives them a reason to do so and information is given to let them know what all
is going on. It simply let them see the connection between productivity and profit themselves
and act upon it accordingly.

DIFFERENT STYLES OF LEADERSHIP:

SEMCO implements following two leadership styles:

1. Democratic leadership style.
2. Delegative leadership style.

By democratic leadership style it means that this organization involves leaders

along with employees in decision making. This makes the employees respect and honor
the leaders more. It is implemented here because employees and leaders share the
information. This makes the knowledgeable and skillful employees to participate in
making decisions and hence become a part of effective team work.
 Delegative leadership style is also known as laissez faire style. This is well noticed
in SEMCO where in various matters the employees are given authority to make
decisions. This is done so because the employees are able to analyze the situation and
determine themselves that what need to be done. This style reflects trust and confidence
in the work force (Leadership style, 2010).

EFFECTIVENESS OF THESE LEADERSHIP APPROACHES

Above mentioned leadership approaches has following positive effects on employees

and organization both:

Democratic leadership within SEMCO inspires better cooperation among the

employees. Employees have a better understanding of the decisions made since
they are a part of its making. When the workers see that their opinions also matter
a lot, then show more commitment to the final decision even if it was not in the
first place.
The supportive democratic leadership enhances creativity among the employees.
It is made possible because workers are given liberty to share their views and
ideas.
These leaderships result in setting workable goals for the company. This is often
termed as setting SMART goals. It is made possible by sharing them with
others. This process involves an open communication between management and
employees who determine the best strategy to achieve goals as desired by the
workers themselves.
The management acts like coaches, rather than being bosses, and hence this
makes the employees feel themselves valued for the leaders.
The laissez-faire style empowers the employees. It boosts morale, increase
productivity, encourage innovation and inspire the desires of the workers to work
hard (ehow, n.d.).
 PRINCIPLES AND PRACTICES OF ORGANIZING AND MANAGEMENT AT
MY ORGANIZATION i.e. PTCL

PTCL has a vast infrastructure in which organizing practices and management

approaches are accomplished in the following manner [6]:

1. ORGANIZATIONAL APPROACHES:

The organization of PTCL has a vertical hierarchy in which large number of levels
is involved from top management to the lower one. This gap affects the
accomplishment and coordination of organizational activities in it.

As I experienced, following issues were seen to be existed within the organization

related to many important concepts as follows:

Tasks assigned to the workers are not done in proper time due to inefficiency
and less training of the workers.
There is a long chain of commands, rules and regulations that creates a
complex and stressed environment.
The higher authorities of PTCL has all the rights of making decisions, dealing
with issues and making managerial changes as they consider etc.
Span of control is confined to the top management only.
The hierarchy within PTCL is highly centralized.

2. DEVELOPMENT OF MANAGEMENT :
The structure of management in PTCL is bureaucratic.
The roles and responsibilities are clearly defined and formalized.
Each department has separate assigned tasks. There is manager for supervising
each sections activities.

3. CAREER PLANNING AND DEVELOPMENT:

 Management and employees are partners in career management.
Different local training sessions are arranged to enhance skills and capabilities
of employees.
Necessary financial and educational assistance is given.
Several opportunities are given to go on international tours and enhance
technical skills.

4. MANAGERIAL DEVELOPMENT TECHNIQUES:

Job rotation is allowed to widen the managers perspective about organization.
Several internal and external committees are designed to observe problems,
reports and proposals etc.
Workshops, seminars, conferences are arranged for skills enhancement.
Annual performances evaluation and reports are presented.

5. NATURE OF HR PRACTICES AT PTCL:

The HR department at PTCL has following strategies that they follow:
o Maintain customer loyalty
o Introduce new corporate culture
o Do retention of critical human resources
o Take steps for motivation of employees

6. HR PLANNING:
Conduct job analysis
Restructure organization.
Designing a performance management system
Keep information related to employee to be used for decision making [7].

7. PAY SCALE AND OPPORTUNITIES:

Its offers pay quite less than other private sectors.
The compensations and allowances are rewarded according to rules of
government. Financial and non-financial rewards are given.
There is a designed leave policy to be followed by each employee.
Medical facilities are given also,

MOTIVATIONAL THEORIES:
Maslows Hierarchy of Need

This theory highlights the physiological needs of human i.e. water, air, nourishment,
shelter and sleep. If such needs are not fulfilled then self-esteem and self-actualization is not
attained. It means that each need is if substantially satisfied and the next need becomes
dominant.

Herzbergs Motivation- Hygiene Theory

He presented factors leading to job satisfaction and named them as motivators and
factors leading to job dissatisfaction called as hygiene factors. The former included factors like
achievement, recognition, work itself, responsibility, advancement and growth; and the later
included factors such as company policy, supervision, and relationship with bosses, work
conditions, salaries and relationship among employees (NetMBA, n.d.).

Vroom and Expectancy theories

This theory states that employees can be motivated by making them believe (Management
and Motivation, Vroom, V.H., 1983).
Positive correlation between efforts and performance.
Rewards will be given for higher performances.
The desire to satisfy the need is strong enough to make the effort worthwhile.

Maccoby, McCrae and Costa- personality dimensions

This theory presented the 5 universal personality dimensions and traits, they are:
Emotional expressiveness
Agreeableness
 Consciousness
Neuroticism
Openness

APLICATIONS OF ABOVE MENTIONED MOTIVATIONAL THEORIES IN

PTCL

1. Maslows hierarchy of need theory is not applicable in PTCL. It is due to the fact that it is
not necessary that all needs of employees are fulfilled at the same time just because the
employees do not demand all of the needs together at all. There are chances that if their
pays are not according to the desire, then do are given other rewards, medical aids and
trainings for skills enhancement. This shows that at some extent the needs are fulfilled
but not up to the full mark and is simply not possible in a professional organization.
2. The Herzbergs motivation theory is found to be applicable in PTCL. It can be described
by facts such as:
Job satisfying features are considered. For achievements in various fields, the
employees are awarded promotions and incentives. There is demand of quality
work which is rewarded afterwards. The sense of responsibility is of most
importance to cope with the future scenarios. Various opportunities are provided
to workers to advance their skills and attain higher education.
Similarly, the job dissatisfying factors are also avoided such as companies policies
are made to be easily followed by all. The supervisors have a friendly behavior
with the subordinates. Working hours and salaries packages etc. are designed such
that they match the potential and capabilities of the employees.
3. Vroom and Expectancy theory is also not applicable in PTCL since rewards are presented
to the employees but not always and up to their standard of task done. Their needs are
satisfied but up to a certain extent which somehow lowers the morale of workers.
4. The theory by McCrae and Costa presents a direct relation between personality of the
employees and the environment of their work place. It is not present within PTCL due to
the centralized structure, management control in decision making, strict policies, less
 communication results in stress, less emotional expressiveness, anxiety and narrow range
of interests in the work itself.

RELATIONSHIP BETWEEN MOTIVATION THEORY AND THE PRACTICE OF

MANAGEMENT

Motivational theories greatly impact the management practices and results in

organizations success or failures. It can be well understood by considering above
theories and considering their outcomes:

Maslows hierarchy of need theory if followed, the workers will be more satisfied and
happier in their work and work environment. For this, management must be
concerned about fulfilling the main demands and needs of the workers in every
possible way.
Herzbergs motivation theory presents factors leading to either job satisfaction
(motivators) or dissatisfaction (hygiene). This might result in either more production
via more energetic workers or can result in failure by less concerned workforce.
Vroom and Expectancy theory if followed will result in boosted morale and high
spirits of employees. For this the management must be active in providing bonuses,
monetary or non-monetary rewards, incentives etc.
The theory of personality dimensions require the management to be conscious abut
providing the best possible work environment to the workers that is not much hectic,
strict, against policies or biased. If such environment is presented, then employees
will be happy to come and perform their tasks by being more concentrated as
demanded.

RECOMMENDATIONS

The leadership strategies and motivational theories implemented in PTCL

needs to be changed as stated below:
 PTCL is overstaffed. It must be downsized or distributed into various sections to
divide the tasks and thus generate more production without being delayed.
Employees must be motivated by employing Maslows hierarchy of need and
Vroom and Expectancy and the theory by McCrae and Costa within the
management system.
More communication among management and employees.
A proper appraisal system to boost up the morale of the workers.
All sort of information must be shared among all employees.
Employees must be motivated to share and present their views, ideas and
comments on the issues going on.
Creativity must be developed within employees through concerned management.
A proper feedback system must be there to get the views of workers related to
companys status and success etc.

CONCLUSIONS:

Leadership and motivation are the two pillars that hold the organization in
order to cope with the advancing world. The management and employees have a
crucial and vital relation with each other that is best achieved by managers
presenting a role model and best working environment to the employees to
develop their interest and satisfaction in their work. If the management handles
power, authority, coordination and control in such a way that considers employees
as adults, as mentioned by Ricardo Semler, then best outcomes can be achieved.
There is always a need to implement best possible motivational theory that helps
to strengthen the employee and manager professional relation. When motivational
theories are implemented with ideal leadership in the organizational culture, then
best results comes forward in the form of loyalty from workers and success for the
organization.
 WORK CITED

1. Leadership style, June 13, 2010, accessed May 28, 2012

<http://www.nwlink.com/~donclark/leader/leadstl.html>
2. Ehow n.d.,
<http://www.ehow.com/info_7756143_effects-democratic-leadership-employees.html>
3. Ehow n.d.,
<http://www.ehow.com/info_8399492_characteristics-laissezfaire-management.html>
4. Netmba, n.d.,
<http://www.netmba.com/mgmt/ob/motivation/herzberg/>
5. Management and Motivation, Vroom, V.H., Deci, E.L., Penguin 1983 (first published 1970)
<http://psychology.about.com/od/personalitydevelopment/a/bigfive.htm>
6. http://www.ptcl.com.pk/
7. http://www.ptcl.com.pk/w_human_resourses.html