CHAPTER SEVEN LEADER REWARD AND PUNISHMENT BEHAVIORS © Prentice Hall 2006 7-1 Learning Objectives After reading this chapter, you should be able to the following: Explain how leaders can use rewards and punishments to have positive influences on followers Explain why leaders’ use of rewards and punishments can sometimes have negative effects on followers Describe the skills and abilities that a leader needs to effectively use rewards and punishments Describe follower characteristics that can make leader reward and punishment behaviors highly effective and characteristics that make them ineffective © Prentice Hall 2006 7-2 Learning Objectives (cont.) After reading this chapter, you should be able to the following: Describe organizational and task situations where leader reward and punishment behaviors will likely be highly effective and where they may be ineffective Discuss how leaders can modify situations to increase the effectiveness of their reward and punishment behaviors Describe how leaders can modify followers’ work situations to make them less dependent on the leader’s reward and punishment behaviors © Prentice Hall 2006 7-3 Law of Effect A specific behavior will increase in frequency if it is followed by a reward A corollary is that a behavior which is not followed by a reward (or is followed by a punishment) will decrease in frequency © Prentice Hall 2006 7-4 Types of Leader Reward Behavior Pleasant Pleasant job job assignments assignments Recommendations Recommendations for for awards awards Leader Reward Behaviors Compliments Compliments High Highperformance performance evaluation evaluation © Prentice Hall 2006 Salary Salaryor orwage wage increase increase Informing Informingthe theboss boss about aboutoutstanding outstanding performance performance 7-5 Types of Leader Punishment Behavior Unpleasant Unpleasant job job assignment assignment Verbal Verbal reprimand reprimand Leader Punishment Behaviors Fines Finesfor for rule violation rule violation Low Lowperformance performance evaluation evaluation © Prentice Hall 2006 Reduced Reduced privileges privileges Extra Extrawork work 7-6 The Process of Social Exchange The use of rewards and punishments by a leader has been described as a process of social exchange between the leader and followers The leader wants certain behavior from a follower, such as attendance, a clean work area, responsiveness, or good performance The leader also controls certain items that followers either want (rewards) or would like to avoid (punishment) As long as both perceive the contract as fair and the benefits to each party outweigh their costs, they will tend to have a mutually satisfying and productive relationship © Prentice Hall 2006 7-7 Contingent Rewards and Punishments Rewards and punishments must be contingent on the follower’s behavior Making the follower aware of this contingency allows the follower to focus efforts on repeating the behavior or performance to obtain the reward again When the leader expresses dissatisfaction with a follower’s poor attendance and states that repeated poor attendance will result in the follower’s dismissal, the follower now has the knowledge needed to avoid further punishment © Prentice Hall 2006 7-8 Examples of What Is Hoped For versus What Often Gets Rewarded What is hoped for What gets rewarded Quality work Fast work Lasting solutions Quick fixes Creativity Conformity Cooperation Aggressiveness Simplification Complication Risk taking Risk avoiding © Prentice Hall 2006 7-9 Traits, Skills and Sources of Power that Help a Leader Effectively use Rewards and Punishments Self-confidence Self-confidence Preference Preferencefor formaking making their theirown owndecisions decisions and taking and taking responsibility responsibility Reward Rewardpower power Traits, Skills, and Sources of Power That Help a Leader Effectively Use Rewards and Punishments Coercive Coercivepower power © Prentice Hall 2006 Accurate Accuratemonitoring monitoring &&measuring measuringof of followers’ performance followers’ performance Connection/resource Connection/resource power power Legitimate Legitimatepower power 7-10 Major Effects of Leader’s Contingent Rewards and Punishments Follower Benefits Group or Organizational Benefits • • • • • • improved productivity • increased enthusiasm • cohesiveness improved performance compliance with requests satisfaction with supervision commitment to organization role clarity © Prentice Hall 2006 7-11 Enhancers of Leader Reward and Punishment Behaviors TASK TASK CHARACTERISTICS CHARACTERISTICS FOLLOWER FOLLOWER&&GROUP GROUP CHARACTERISTICS CHARACTERISTICS • Followers are members of cohesive work group with positive performance norms • Rewards are valued and expected by followers SITUATIONAL SITUATIONALFACTORS FACTORS THAT ENHANCE THAT ENHANCE LEADER LEADERREWARD REWARD&& PUNISHMENT PUNISHMENT BEHAVIORS BEHAVIORS LEADER LEADER CHARACTERISTICS CHARACTERISTICS • Leader control over important rewards that followers value • Leader works at high organizational level and/or has high status • Leader recognized as expert in followers tasks â Prentice Hall 2006 Accurate Performance measures clearly explained to followers • Performance primarily determined by skill and effort • Tangible rewards distributed fairly and timely • Large variety of tasks 7-12 Situational Factors That Neutralize Effectiveness of Leader Reward and Punishment Behaviors TASK TASK CHARACTERISTICS CHARACTERISTICS FOLLOWER FOLLOWER CHARACTERISTICS CHARACTERISTICS • Indifference toward organizational rewards • Observed others disobey the leader SITUATIONAL SITUATIONALFACTORS FACTORS THAT NEUTRALIZE THAT NEUTRALIZE LEADER LEADERREWARD REWARD&& PUNISHMENT PUNISHMENT BEHAVIORS BEHAVIORS • Job autonomy • Intrinsically satisfying tasks • Spatial distance between leader and followers GROUP GROUP&&LEADER LEADER CHARACTERISTICS CHARACTERISTICS ••Cohesive Cohesivework workgroup groupwith withanti-leader anti-leadernorms norms ••High degree of organizational formalization High degree of organizational formalization © Prentice Hall 2006 7-13 Process Model of the Leader Reward and Punishment Behaviors SITUATIONAL FACTORS INCREASING LEADER EFFECTIVENESS Enhancers • Tangible rewards are distributed fairly, timely, and contingently • Leader controls important rewards that are valued and/or expected by followers • Leader works at a high organizational level • Accurate measures of performance are used and clearly explained • Performance is determined by skill and effort • Leader is recognized as expert in followers’ tasks • Cohesive work group with positive performance norms Substitutes • High degree of follower professionalism • Years of schooling and work experience by followers • Intrinsically satisfying task • Indifference toward organizational rewards • Formal group or organizational reward system • • • • • • • LEADER PARTICIPATIVENESS Giving pleasant job assignments Giving compliments and recognition Recommending awards and promotions Increasing salary or wages Giving reprimands and criticism Giving unpleasant job assignments Giving low performance evaluations and demotions • Reducing privileges or giving extra work FOLLOWER/GROUP PSYCHOLOGICAL REACTIONS • Satisfaction of needs for recognition, selfesteem, achievement, and security • Role clarity • Satisfaction with supervisor & work • Commitment to organization FOLLOWER BEHAVIORS AND OUTCOMES • • • • SITUATIONAL FACTORS DECREASING LEADER EFFECTIVENESS Neutralizers • Spatial distance between leader and followers • Follower job autonomy • Intrinsically satisfying tasks • Indifference toward organizational rewards • Existence of cohesive work groups with antileader norms • High degree of organizational formalization Increased performance & productivity Quality of decisions Development of followers’ potential Time-consuming, expensive, possible resistance © Prentice Hall 2006 7-14 Applying the Model of Leader Reward and Punishment Behaviors DIAGNOSING THE SITUATION Does leader work at a high level in the organization? Are accurate measures of performance used and clearly explained? Are tangible rewards distributed fairly & timely? Is performance determined by skill & effort? Is the leader recognized as an expert in the followers’ tasks? Are there cohesive work groups with positive performance norms? If “yes” to one or more of these questions, followers will expect and value reward and punishment leader behavior If “no,” consider other leader behaviors or situational MODIFYING FOLLOWERS & SITUATIONS Leaders also act to: • Develop a high degree of follower professionalism • Provide additional schooling & task training for followers • Develop intrinsically satisfying tasks by modifying job structure PROVIDING DIRECTIVE LEADERSHIP Leaders demonstrate reward and punishment behaviors with followers by: • Pleasant job assignments • Compliments and recognition • Recommendations for awards and promotions • Salary or wage increases • Reprimands and criticisms • Unpleasant job assignments • Low performance evaluations and demotions • Reduced privileges and extra work © Prentice Hall 2006 7-15 ... followers • Develop intrinsically satisfying tasks by modifying job structure PROVIDING DIRECTIVE LEADERSHIP Leaders demonstrate reward and punishment behaviors with followers by: • Pleasant job