Friday, June 7, 2013

Using Path-Goal to Enhance Organizational Performance

Path-goal leadership is a process of helping employees find appropriate paths to meet goals that align with organizational objectives. Leaders who have the ability to inspire their employees and develop these mental connections between performance, paths, and rewards can expect to see higher levels of organizational achievement. Yet defining the right strategies without the right leadership does little if employees are not empowered to act and progress to new levels. 

Path-goal theory has two main objectives such as a) identifying roles and behaviors of effective leaders and b) exploring situational contingencies that modify those behaviors (Barling et. al, 2011). In essence, the leader’s behavior becomes a primer to the situational context in which employees exist. When the leadership behavior is effective and the situational contingencies are positive and in alignment there should be a corresponding increase in performance.  

The theory is often further defined into situational factors and employee characteristics. The situational factors are those that create the right environment for performance while employee characteristics are those qualities that are inherent within the employees themselves. The situational factors are often defined as task structure, role ambiguity, stress, need for autonomy, locus of control, need for achievement and perception of abilities while attributes can be age, gender, qualifications, rank, experience, and length of service (Malik, 2012). 

We may have the desire to discount the nature of leadership and its influence on employees. A previous study concluded that 45% to 65% of total factors that cause success or failure within a company are often directly influenced by leaders (Bass, 1990). This means that leadership has more than half of the influence in organizational productivity and growth. Without the prompting and decision making of leaders employees are left to their own devices as part of the situational contingencies in which they work. 

The management team and the leadership team have important functions within an organization. The leadership team gives direction for the organization and the management team gives direction to employees within their department. Management and leadership both influence organizational members toward goal attainment with management ensuring order and stability (Campbell, 2004). It should be stated that since management is closely associated with employees it is there that many employees take a majority of their behavioral and performance cues. 

At study conducted by Malik (2012) helps further understand how path-goal theory works in terms of how leadership impacts employee performance. A total of 200 employees from four different companies were asked about the perception of their leader’s behavior and their own job expectations. A total of 20 questions were used that measured directive, participative, supportive and achievement-oriented leadership behavior.  The research broke job expectancies into two categories which included 1.) putting forth energy to produce quality output and 2.) the company gives employees recognition for producing strong output.


-The reward system within the cellular companies gives enough power to managers to reward subordinate behavior. 

-Weak associated between leader behavior (except in the case of supportive leadership) and effort leading to quality.

-When employees perceive that there is no difference between high and low performance in terms of reward individuals stop putting forward effort.

-Subordinate characteristics such as age, gender, qualification, rank, experience, and length of service didn’t impact job expectancies of effort/quality and recognition for quality output.

-Rank and position did have an impact on recognition for quality output which indicates that employees were very aware of job expectations and what they can expect to receive.

-Situational factors such as task structure, role ambiguity, stress, need for autonomy, locus of control, needed for achievement, perceptions of abilities affect effort/quality as well as recognition of quality output.

-Management appeared to influence individual behavior and take cues from management to determine how the environment is responding to them.

Business Analysis:

The study helps shed the light on the concept of participative leadership as an important part of improving organizational performance. Management is seen as the first line where employees learn expectations and rules of behaviors. When management is poor there is also likely to be poor levels of performance. When reward systems are so restrictive and motivating higher performance employees will simply put forward less effort thereby creating equity in effort and reward. The longer employees stay within the organization the more they become engrained into the particular expectations of the position. At times it may be necessary to provide new management teams to create newer patterns of thinking and performance. Employees naturally seek to be stronger masters of their work and when trained appropriately they can increase their autonomy which enhances both performance and feelings of recognition. It is possible to use autonomy as a reward for self-management. Executive leadership influences management which influences employees.

Taking a larger view of this study it is possible to see how complacency kills within organizations. All organizations much change their management structure from time to time to ensure that employees are not moving into a path of complacency. Yet such performance is based upon cues provided by the management team and their expectations. When employees become aware of the reward system they will adjust their performance to create equity. It is necessary to develop strong structure within organizations with enough flexibility to reward performance based upon merit to send the right signals to employees about expectations. All rewards should be based on performance versus loyalty. 

Bass, B. (1990). From Transactional to Transformational Leadership: Learning to Share the Vision. Organizational Dynamics, Winter, 272-273.

Barling, J., Christie, A. and Hoption, A. (2011). Leadership. In S. Zedeck(Ed.), APA Handbook of Industrial and organizational psychology. Vol 1: Building and developing the organization  (183-240). Washington, DC: American Psychological Association.

Campbell, N. (2004) The Practice of Management and the Idea of Leadership: An Overview of Theory and Practice. [Online] Retrieved June 7th, 2013

Malik, S. (2012). A study of relationship between leader behaviors and subordinate job expectations: a path-goal approach. Pakistan Journal of Commerce & Social Sciences, 6 (2).

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