Topics HRM: Leading teams

1. Topics HRM: Leading teams

3. Goal-oriented theories of leadership • Assumption 1: Process theory of motivation  Motivation = Value x Instrumentality x expectancy  Motivation driven by maximizing expected utility • Assumption 2: Psychological importance of goals • directing attention • energizing action • strengthening persistence • activating knowledge and action strategies • Two approaches: • Path-goal theory • Goal-setting theory

4. Path-goal theory (Evans, 1970; House, 1971/1996) • The manager's task is to develop team members' expectations, values, and instrumentalities towards achieving the company's goals. • Criticisms: • overrationalization of behavior • manipulation of employees' goals and decisions

5. Goal-setting theory(Locke & Latham, 1990, 2003) 3. • Moderators • Knowledge and ability • Complexity of task • Participation • Commitment • Feedback 1. 2. • SMART goals • Stretching • Measurable • Achievable • Results-based • Time-specific • Mediators • Attention • Energy • Persistence • Knowledge Productivity

6. Goal-oriented leadership in practice:Management by objectives(Drucker, 1954) • Systematic alignment of individual and organizational goals • Cascading strategic goals down to all operational levels (taking task interdepencies into account) • Participative agreement on SMART goals for everyone • Clear timelines for goal achievement • Constructive feedback and performance appraisal • Link goal attainment with pay-for-performance systems and personal development • But: "MbO is just another tool, it is not the great cure for management inefficiency. It works if you know the objectives, 90% of the time you don't."

7. MbO Cycle (Dinesh & Palmer, 1998)

8. Goal definition • SMART goals (Shaw, 2004) S: specific, stretching M: measurable A: achievable R: results-oriented T: time-based • „Stretch goals“ (Latham, 2004) • Specific and tough but not unrealistici

9. Types of goals • Individual versus group goals: • if tasks highly interdependent esclusive use of individual goals should be avoided (Mitchell & Silver, 1990) • Learning versus performance goals: • for very complex tasks, learning goals are more effective than performace goals (Winters & Latham, 1996) • Behavior versus outcome goals: • behavior goals are more difficult to measure, but are more concrete and can be influenced more directly by the individual

10. Link rewards to goals:Pay-for-performance(Locke, 2004) • Option 1: Goals and rewards tightly coupled • Define (multiple) performance goal(s) and bonus for each goal before the fact • Option 2: Goals and rewards loosely coupled • Define goals but make decision about bonus rewards after the fact by taking into account context factors, e.g.: • How did the company as a whole perform? • How difficult were goals really – in the light of market conditions, available resources etc.?

11. Consequences of MbO for employees + more autonomy in goal setting and in operational goal attainment + Recognition of personal effort - Direct impact of market and customer pressures - Danger of quantitative and qualitative overload

12. MbO: Paths to failure • Goal incongruence across hierarchical levels, and units, teams, and individuals • Interdependencies among levels, units, teams, and individuals are not taken into account • No clear priorities and posteriorities • Employees have no control over objectives • Short-term goals can reduce long-term thinking • MbO can undermine collaboration and helping behavior • Setting challenging goals over an extended time period can lead to exhaustion

13. MbO: How to make it work • Coherent company strategy • Increasing personal resources through job design and personnel development for dealing with complex goals and tasks • Sufficient control over the work situation (transparency, predictability, means of influence) • Leadership through coaching instead of command-and-control • Systematic, transparent and participative goal agreement and evaluation of goal attainment • Rules for handling conflicts

14. Psychological contracts ... complement and super-impose legal contracts. contain reciprocal, though not necessarily correspon-ding expectations and offers between employee and employer. are derived from verbal agreements as well as from behaviors of contract partners and other members of the organization. Complementing MbO: Designing psychological contracts • The more corresponding and • the more explicit the agreement • the sounder the psychological contract.

15. Formerly Today Employee Firm $ Legal contract $ + Goals Employee Firm t t + Goal achievement Job security Employability Employee Psychological contract Firm Employee Firm Hard Work Loyalty Hard Work Loyalty Work flexibility, Downsizing Legal and psychological contracts

16. Flexible working: Change from a traditional to a new contract? (Raeder & Grote, 2001)

17. (Mis-)Fit of employer offers and employee expectations (Wittekind, Raeder & Grote, 2005)

18. (Mis-)Fit of employee offers and employer expectations(Wittekind, Raeder & Grote, 2005)

19. Psychogical contract as crucial influence on job satisfaction(Schweizer HR-Barometer, Grote & Staffelbach, 2007)

20. Using the psychological contract to handle employment uncertainties • Communicate and match reciprocal expectations and offers • Early, comprehensive information also on uncertain developments (individual and organizational) • Support employability through training, job design, and systematic career management • Distribute risks between organization and employee according to individual coping capabilities • Further organizational commitment which allows for flexibility and "thinking in options"