Human Resource Management: Leadership Styles

In the global economy there is a competition especially in the retails sector. The customer satisfaction is a major driver for the organizational performance. The important determinant for customer satisfaction in the retail sector is about the employee attitude (Heskette et al., 1991). In the retail industry there cannot be satisfied customers when served by unhappy employers (Heskette et al., 1997). The organizational commitment of employees results in lower attrition rates and improves customer satisfaction (Marshall et al., 2001). One of the key determinants to employee attitude is attitude and leadership style of the immediate supervisor. Some of the leadership styles prevail upon the employees resulting job satisfaction and organizational commitment.

2.1 Human Resource Management

Human Resource Management (HRM) plays a vital role in all organization’s management. The importance of Human Resource Management is to increase the productivity form manpower resources day by day and it became a factor in the organizational strategic management. It gradually increases the human capital and organizational performance by managing them effectively (Delaney et al., 1997). The HRM must attract the well trained and skilful employees, training; provide guidelines to improve the efficiency of the work force and organization.

The title “human resource management” has been generally known from the past ten or fifteen years. Even, the term is commonly used as “personnel management”. Dessler (1991) defined that there is no discrimination among “personnel management” and Human Resource Management and found that final as current extended adaptation of “traditional personnel management” because of the technological existence in work place changed social values.

Torrington and Hall (1998) argued that the personnel management and the Human Resource Management are different because he divided the personnel management based on workforce center and HRM based on manpower resources.

Guest (1987) concept on HRM is that human resource management is the alter not an alternative to the personnel management but it particularly concentrated on some elements of workers such as employee flexibility, commitment, integration and quality. But here is no any exact define for human resource management and so many definitions are existed

Armstrong (1995) described HRM is a strategic and logical practice of the organizational management and it’s a main valuable asset. And HRM is used as employees participate as individual and also jointly to contribute their work to achieve particular organizational goals.

2.3 The Importance of HR as a Source of Competitive Advantage

Today, organizations considered that the human resources are the most valuable assets for competitive advantage and to sustain in a long time in the business. Many of work force assets are theoretically reviewed as “resource based view” (RBV) by (Barney, 1986, 1991, 1995). The (RBV) theory realized instead of build up a competitive advantage, they should shift to generate resource such an approach that the approach no one can imitate their style, rare, and no one can be substitute. But Pfeffer (1994), Barney (1986, 1991, 1995), Youndt and Wright (1996), Snell, Wright and McMahan (1992) are disagreed with the above statements the reason is that the history proved that the competitive advantage is frequently possible to imitate. And the organizational human resources can effectively influence and existence of the competitive advantage.

The organization’s RBV theoretical process is followed by the strategic management field. RBV revealed that the attributes and resources of an organization very essential for effective competitive advantage than organizational formation and also competition from rival firm (Barney, 1997). Resources are defined as “an organization search and implement its strategies by using tangible as well intangible assets. (Barney, 2001). The above definition consists of all the organizational, financial, physical, human resources. Pisano and Shuen (1997) Barney (1991) and Teece have summarized that suppose a resource might measured a source to continue competitive advantage. So this assumption required some factors such as valuable resources, uncommon, incomparable and non replaceable. Organizations can obtain value form, natural resources economies and technologies, But RBV was not agreed because those resources are easily available to everyone and everywhere so anyone can imitate from anyone, whilst defined human resources are “the group of human resources under the organization’s direction in straight employee relations” (Wright & McMahan, 1992) can become competitive advantage to the organization from their competitors.

Initially this process adds value to the organization’s productivity. The result would be positive by the contribution of the employees as a pool. Generally the inputs of the all employee are not equal so the outputs in the market are limited. So these kinds of resources cannot be easily imitated by the other organizations. But it’s very difficult for firms to understand which is the correct source to adopt their competitive – advantage. So, this resources are cannot be simply replaceable.

The management scientist Barney (1991) argued that firms cannot gain the highest efficiency from the employees who are working in their firms due to their employee’s commitment is less so they are not interested to put their maximum efficiency. It was found organizations must motivate the employees by motivating them and develop their knowledge, skill set, and abilities by adopting HRM practices.

2.5 Approaches of HRM

Examining the importance of HR practices in organizational performance, the major activities of human resources implemented RBV method (Barney, 1991, Delery, 1998). Adopting this technique the firm may obtain the competitive advantage. Although every firm may not obtain this competitive advantage by adopt these human resource practices. But the organization can minimize the rate of attrition (Delery, 1998). Anyhow this theoretical frame work and practices can affect the organizational relations as well as the practices.

HRM and firm performance.

According to Huselid (1995) found the results of using the thirteen Human Resource practice on organizational performance. He found tow types methods of HR practices. The first method concerned with skills & firm’s structures. This was based on practices to improve abilities, skills and performance of the job responsibilities of the employee. The second method was to motivate the employee. For this they were approached to understand the behavior of the employee. Therefore they focused on employee satisfaction levels toward his job. However he found significantly the both methods results effects were positive on organizational performance.

Therefore the number of researchers examined and revealed the relations between the firm performance and HR practices and various approaches are adopted. Finally the HR practices helps in organizational performance to enhance skills of the employees as well as motivate them towards their role by using positive approaches (Delery & Doty, 1996).

2.2 Leadership

2.1 Defining Leadership

Hemphill’s (1994) defined leadership in his simple way and in a very appropriate way. For this he summarized the classical definitions as leadership is to directing his group this one sentence he summed up the basic definition and dynamics of all leadership–the directing of group achievements. He stated that the leader is the superior and the followers are subordinates even roles are concerned. Therefore the efficient leader delivers the effective process. Though, definitely the effective leadership administers the organizational achievement and performance positively.

The leadership is one of important aspect human behaviours and well studied subject in the recent times. There are several forms definitions in the literatures for the leadership. The more accepted form of definition is influence theme. The leaders who influence people are to achieve the goals and increases organisational performance. It does not translate to that leader having control over his followers to achieve the goals which leader wants to achieve. The followers emulate the leader’s attitudes to achieving desired goals. The leader is expected to leader the process of planning and execution of activities to achieve the organisational goals. There is a difference between the management and leadership, the management is concerned about the short-term issues in a company, where as leaders adopt and look into broader prospective.

Most of the leadership theories are emerged in organizations to achieve their organizational objectives as well as their goals. The theories are focused on behaviours, traits, controlling and circumstances(Mintzberg, 1973). However the current theories are correlation centered. Where as the co operation between the leader and followers. The trait theory and behavioral theory could not clarify the effect of the leaders on followers. , behavioural can not explain the influence of leaders on the followers not only that there is no understanding among the definitions and measurement of effective leadership.

The organizations realized that the effective leadership is required to lead and survive their business in the market. The recent development in the leadership type is transformational leadership which most suitable in the contemporary times. The transformational leadership also integrates the trait, behavioral and situational approaches (Figure 1). The transformational leadership recognizes that there are some traits in the people and they can observe, developed and learnt. The leader influences the followers behaving in certain ways. The relationship between the leader and follower is dictated by various situational factors. The central them to transformational leadership is that leader behavior is not solely based on the tangible inducements, rather based on the development of followers in their interest in resulting group productivity.

In specific areas like educational institutes, business, family, hospital and political organization require an energetic leadership. The energetic and dynamic leadership is ready to offer quality of service. These dynamic leaders find new ideas and creativity get in to practice.

3. Leadership Styles

The types of leadership styles considered who is a leader, says and how he directs the followers. This study used in approach of authority and decision making. However an assessment on few selected leadership styles reveals a degree of leader’s accountability with his employees.

Lall and Lall (1979) listed the five leadership styles as follow:

3.1 Autocratic Leadership style:

The current generation of employees is resistant to autocratic leadership and hence received lot of criticism from academicians. This type of leadership style is applicable in certain situations where the staff is not well trained. In some cases where staff does not respond to other forms of leadership can be dealt with autocratic leadership. The autocratic leadership should not be used in where are staff would like to contribute with their inputs and knowledge based projects.

The approach of autocratic leadership style concerned with the decision making power. This leadership style doesn’t obtain contribution of their followers and they always fix that the staff accept their decisions. These leaders suggest only structured and inflexible rewards but they wouldn’t support performance related compensation. These leaders must not concern of follower’s justifications even if they took wrong decisions. They often punish their sub-ordinates and they have fixed behavior. Therefore the staff cannot feel they are the part of the organization and there will not be any correlation. So the employee cannot contribute his maximum effort.

The recent generation avoids this kind of leadership style. But this leadership style work out in some critical situations when the employees are not trained well and when the subordinates are not responding to other leadership styles. However this leadership style must not use where the employees are contribute with their skills, knowledge and willingness to work.

Benefit: This leadership style usually get work done .

Drawback: The sub ordinates just depend on the leader’s decisions and there is no participation in making decisions. The follower’s personal growth put in risk.

Bureaucratic Leadership Style

This leadership style strictly follows the policies, rules, procedures and regulations blindly. This leadership style success where the repetitive work will be done frequently. In this style if the decision making is not according to the policies and procedure then they will go for another level of decision making. This kind of leadership well exist where dealing with accounting and cash in each section. But the staff may disinterest towards their work. This is well applicable to those who have minimum skills and the performance is not up to the mark.

Benefit: Here every problem contains solution instantly without any practice.

Drawback: this is well organized and has a tendency to depersonalize their group.

3.3 Charismatic Leadership style

In this leadership style, the leader concentrates on himself and try to be a charismatic. The subordinates transformed to champions of the cause

Benefit: This kind of leadership needs many followers to support the leader’s views, look after his origin.

Drawback: This leadership style has a tendency to bend towards bureaucratic leadership style.

3.4 Laissez Faire Leadership style

This kind of leadership style doesn’t influence the subordinate by guiding and directing. These leaders make their sub ordinate to make decisions without restrictions and the followers or subordinates make their decisions. This is the current leadership style where the organizations are following. In this style the leader must aware of the knowledge of their subordinates. Here the leader assumes, the staff is trained enough, intelligent and qualified. In the organization where knowledge based for e.g. software companies employees are enjoy working their own and solving problems. However this style of leadership may not worked out where the job security is low. The group members are competitive but tere is no any guidance and direction for the group therefore it creates problems.

Benefit: each and every group member get the chance to make decisions.

Drawback: This kind of leadership makes confusion among the team members as well as the leader.

3.5 Democratic Leadership styles:

This kind of leadership style is a contribution leadership. Here the leaders consider their subordinates efforts while decision making. The leader educates their group regarding the activities in which they are involving. Though the team participate form the beginning to execute it. It supports the group members in any situation. This democratic leadership performs as a coaching and motivating their group members in all areas. Although the staff contribution as a role. Therefore the employee compensation and reward will be based on his performance.

The democratic style of leadership is most useful if the sub-ordinates are active and active participates in making decisions. However the multi type projects need contribution from other divisions and other employees. The technology based projects require the huge support form other divisions and also they are up to date. But the problems are not appropriate for these leaders. This kind of leadership strategies are obtained from collection of group employees

Finally the democratic leadership is form of a participatory leadership where the leader takes into consideration of sub-ordinates inputs while making the decisions. The staff is well informed before hand regarding about the activities they are involved and the matter concerned to them. The staff has participatory role starting from planning, design and execution. This enables the staff to effectively deal with any problems during the execution. The democratic leaders act like a coach motivating the staff and instil the team culture in the organisations. The team work results in the large volumes of work in the short period of time. The democratic leaders receive support form staff and appreciate the importance given to their inputs. The democratic leader place trust on their staff allowing to them make decisions and develop their goals. These leaders allow professional growth of their staff and encourage career growth based on their performance. The employee reward and compensation is linked to the individual performance.

Benefit: the growth of individuals developed through involvement in organizations operations.

Drawback: the leader must support the decisions according the majority of the group.

2.3 Employee Job Satisfaction

The job satisfaction can defined as employee total attitude towards the work organisation and working conditions. The academicians focussed on the job satisfaction when the employment became significant part of the society. In the early days academicians focussed on studying the job satisfaction in the industrial environment and job satisfaction termed as work output. However over the period time job satisfaction definition transformed to attitudes of employees towards various situational factors in the work environment (Bullock, 2003).

There is a great interest in recent times about the job satisfaction of the employees. The basic reason is that people deserved to be treated with respect and fairly and the job satisfaction directly reflects the treatment. The job satisfaction shows that emotional well-being and physiological health. Secondly the job satisfaction results in the organisational commitment and performance. The management concern is about the well-being of their workforce (Aryee 2009). The organisations like to measure the job satisfaction of employees at regular intervals to gauge employees’ attitudes.

The aspects which effect the job satisfaction are:

Personal aspects: The personal aspects consist of the gender, culture, education, social, economic situations, family etc.

Jon inherent Factors: These aspects consist of the supervisors, workers; skilled workers frequently want to be directed by their convict on their daily job activities.

Organizational Factors: The management aspects consist of ‘supervision’, ‘job security’, ‘remuneration’, ‘career growth opportunities’ and ‘responsibilities’. Their existence usually motivates the employees and gives them ‘job satisfaction’.

The organizations main motive is to concentrate on job design. It facilitates to improve employee hob satisfaction and productivity. Therefore when the job satisfaction is increase the attrition rate will be decreased (castor and spector, 1987). When the organizations not satisfied the employee’s jobs then automatically the absenteeism increases as well the productivity decreases.

Gap 1-The Causes of Employee Attitudes

The major factor in employee job satisfaction is the employee’s attitude, that depends on the management practices, working conditions, wages, and other fringe benefits, often employees are looking for extra benefits from the employer. Then the gasp exist between the employee expectation and the employee’s satisfaction towards his job. The culture is also one of the important factor influences the job satisfaction of the employee.

Cultural Influences

Culture aspects such as beliefs, values, food habits, traditions, these are affecting the employees. The globalization of companies faces so many problems to Human Resource practitioners. Therefore the cross cultural studies could assist those organizations. (Erez, 1994; house, 1995: Triandis, 1994) and the other social factors such as individualism, collectivism, uncertainty avoidance versus risk taking, power distance, masculinity/femininity are mostly play a major role in employee job satisfaction.

Gap 2- The Results of Positive or Negative Job Satisfaction

The second factor is the positive or negative job satisfaction of the employee. Often the organizations believe that the organizational productivity depends up on the satisfaction of the employees. Human Resources practitioners always put their maximum effort to reduce the cost incurring in employee job satisfaction and the organizational out comes completely depends up on the employee satisfaction.

Gap 3-How To Measure and Influence Employee Attitudes

The 3rd Gap focuses on the measures of employee attitude and influence. But number of methods existed attitudes of the employees such as conducting interviews, surveys. Form the above methods the attitude survey method most popular and well constructed method. This method is used to understand employee attitude whether it is positive or negative. Form that, we able to understand the attitudes of the employees.

Authoritarian Style

Democratic Style

All policies are determined by leader

Strategies for goal relation determined by leader; no future direction.

Leader dictates work task to team

Leader is personal in his praise and critics without objective reasons.

Leader maintains distance from members

All policies are determined by the group

Explanation of overall processes give in the beginning; technical advice sought and given

Members are free to choose work companion and division of tasks

Leader is objective and fact minded in praise and criticism.

Leader participate in the group

Source: Kurt Lewin (1943)

Autocratic versus Democratic Leadership

There is always a controversy between the leadership style which is effective, whether the autocratic leadership style or democratic style of leadership. Daft (1999) said the autocratic leaders are one who lean to centralize power and compel power from the particular location, controlling the rewards. The system is initiated in responding to the on going situation in some European countries in those days. A study conducted by Lewin, White, & Lippitt (1939); Lippitt & White (1943) on autocratic, democratic and laissez-faire a group of boys and girls under guidance various leadership styles. The outcomes revealed that the group has imitated their leaders’ style of leadership. Under autocratic leadership style the leaders controlled in all the situations. In this leadership style they are very directive and scarcely appraising their group members and followed by-book leadership. The authoritarian team members are did not get the opportunity to make their own decisions and they always depend on their leaders in decision making.

The democratic leadership style of leaders provides their team a lot of opportunity to express their views confidently. The team members exposed social, impulsive and participative behavior in all the situations. The laissez-faire is measured as a ‘light-weight’ leadership style. Leaders are very rarely influence their team. And there is no any direction to their teams and there is no any encouragement as a democratic style. This is like a captain less ship.

Shaw (1955) observed by his study that the authoritarian leadership style team members are very speed, accuracy and efficient in their views. In the other hand the satisfaction of the team leaders are high. Tannenbaum & Schmidt (1973) extended the democratic vs. autocratic leadership style perception by bring out Leadership variety.

2.4 Leadership and Job Satisfaction

There is a relationship between the job satisfaction and leadership style of the immediate supervisor (Bass, 1985). In another study Chionk (2001) established a positive correlation between the leadership style, job satisfaction and employee commitment. The manager should leadership qualities to produce the organisational outcomes. The leadership style and vision can influence the employee job satisfaction internally as well as externally (Gaziogly and Tansel, 2006). On the contrary Chang and Lee (2005) showed that there is no significant relationship between the leadership style and job satisfaction. In general transformational leadership results in the employee willingness to organisations and desired organisational outcomes.

While viewing the job satisfaction in the context of leadership there are several prediction can be derived (Bass, 1985). The transformational leadership can foster a more job satisfaction due to sense of ownership and intellectual stimulation. The transformational leader encourage in more freedom and responsibilities for their employees. The work also provides a more accomplishments and job satisfaction. The transformational leaders also encourage development of their employees, hence employees feel that their needs are also cared and carried out. While the employees who do not like the transformational leadership may feel that reward system is not good enough for them. The people who believe in management by exception feel that transformational leaders are searching for deviations and are not happy in their jobs (Solomon, 2007)

The employees are more satisfied with the managers who are supportive compared managers who are critical of employees. The employ undergo stress to work with leaders who are unsupportive and show a hostile behaviour towards employees. The employees expect guidance and directions in situations where they can’t make decisions. The negative leadership style results in the reduced productivity, increased turnover rate and absenteeism (Ribelin, 2003). The studies conducted by Robbins (2003) it is revealed that employees retention is higher with transactional leadership as compared transformational leadership. The transformational leadership helps employees to improve their skills increasing the job satisfaction and organisational commitment.

Job Satisfaction and Retail Leadership:

Hammer (1996) says that from the past two decades, the employee behaviors are changing frequently. Because of the improved multiple job opportunities the employee has the wide choices.

Therefore the retention of employee is a crucial thing for the organizations (Chowdhury, 2000). This study tells what the organizations are going to practice satisfy the employee and what are the emerged theories on employee job satisfaction.

But in the current business environments the money is not very important for the employees. Although the peer study revealed that the main reason for employee job satisfaction is the behavior of the manager or managers’ behavior. There it review that the leadership and the support or co operation of the leadership play a key role in employee job satisfaction. Then the organization must support the employees through the organizational cultures, policies that exist effective in the work place. But some studies say that the satisfaction of the employee is linked with employee job satisfaction. Where as the employee get motivated by customer satisfaction in certain environments such as retail industry and direct marketing organizations. The study explained that the job satisfaction will be resultant by five basic characteristics:

Task variety,

Task identity,

Task significance,

Autonomy

Feedback.

People want to have more control and meaning in their work-lives, and not just perks and benefits.

Theories found in the literature which pertain to job satisfaction include:

Equity Theory:

Two-factor theory of job satisfaction:

Value Theory:

Social Information-Processing Model:

Dispositional model:

Equity theory:

Mostly this theory defined that the employees can be satisfy and get motivated with their jobs when they have the healthy industrial relations among their work group. Here they must feel that every employee is same and equal. The satisfaction levels decrease when the recriminations rise among the employees. Therefore the organizations must maintain the equality among their employee.

Two-Factor Theory of Job Satisfaction (Herzberg)

Herzberg theory states that dissatisfaction effect on the employee satisfaction it directly results on the employee out put and productivity. Generally the employees satisfaction with their job and perform a positive result on the organizational productivity. The motivational factors that are influence on employees, such as rewards, promotions, achievements, by adding responsibilities and recognition by his skills.

Value Theory:

The modern theory (1997) defined that the job satisfaction is formed in daily building up the positive attitude on the employees’ job. Where the employee gets the opportunity and value to achieve a particular goal and also the job provides that opportunity to accomplishment of such goal, then mostly the employee feel the job satisfaction. When the employee finds the organization go against to the employee regarding his role so the dissatisfaction of the employee may occur.

Social Information Procession Model

This model recommends that the co employee’s attitudes and behaviors result on the job satisfaction of the employee. Therefore where the employee surrounded the people who have positive attitudes and views regarding the opportunities which the organization provides and never bother about job security then automatically the employee satisfy with his current job. So the co – employee’s attitudes and motivation effect the other employees.

QUESTIONNAIR

The satisfaction of my job is