Developing Productive Employee Behavior through Path-Goal Theory

Leaders often seek to influence the structures of their organizations in ways that produce specific meaningful activities. In many cases, this induced structure can come through additional definition of which paths/behaviors lead to which type of rewards. Other times it requires an overhaul of the entire system so that the right paths and pressures can be created. Professional and skilled labor level employees often interpret such induced structures differently based upon their current level of role ambiguity. Robert House’s path-goal theory helps define when and where induced leadership structure will be beneficial. 

Path-Goal Theory is derived from the roots of expectancy theory which indicates that actions are determined by a person’s assessment of the possible outcomes and the satisfactions derived from these outcomes. As a person perceives the possible outcomes and sets upon the obtainment of such an outcome they weigh and judge the satisfaction of that possible outcome in order to determine their motivational level and potential behavior. 

Expectancy theory is rooted in a subjective experience based in the persons perception of the possible outcomes and the feelings that person has toward those outcomes. What is important to one person may not be what is important to another. Yet despite these differences, cultures place values on particular outcomes and this can influence what a person sees as the possible outcome and the personal value of its attainment. For example, a worker from China and the U.S. may have different goals based in their cultural vantage points. 

In workplace situations, the leader has influence over both the structure and the job design. When intrinsically motivated behavior results in extrinsic rewards it can lead to greater motivation. Moving up in an organization allows one to master more skills and offers opportunities to expand upon the rewards available. The types of rewards an entry level worker and a senior administrator may receive are inherently defined by the organizational structure and the leader’s perception of comparative worth of their actions. 

This level of influence, and potential rewards, are based within the trust the employee has earned in terms of their abilities, position, and authority. Those employees who have mastered certain skills over their lifetimes have higher comparative worth thereby putting them into a position where they can have more selection over worthwhile rewards. The gaining of position and its possibilities is an external motivating force that when matched with intrinsic motivation can be a potent mix. 

Robert House’s research hypothesized the following:

• Leadership induced structure improves path instrumentality by reducing ambiguity.
• Leaders influence the subjective values groups assign to outcomes.
• Leadership induced structure will have different impacts on whether or not subordinates see the tasks as positive or negative as well as clear or ambiguous. 

House found a relationship between satisfaction, induced structure and higher level professional jobs. These jobs typically come with ambiguity and it isn’t always clear what employees need to do in order to ensure they receive rewards. When the leader implements a level of structure these ambiguous jobs become more defined and in the end raise the level of effort on defined paths. It is this collective effort that promotes work unit performance.

In the skilled labor realm, findings were more inconclusive. At the blue collar level where jobs are already defined and rewards are associated with particular tasks new structures by leaders were often resented. This may be one of the reasons why clearly defined union jobs have developed a level of resistance and immunity to changes proposed by new leaders. To change the nature of tasks and scope of work could lead to new methods of reward obtainment but would require adjustments in the predefined and often legally protected workplace structure. 

House’s path-goal work does open up some new possibilities for organizations with skilled labor that will require more knowledge based skills to stay competitive. Where jobs become increasingly ambiguous the need for leadership direction and structure will become more important in order to maintain momentum on specific goals. It will be this structure and direction that create paths of least resistance whereby employees will more likely choose those productive paths to reach their personal goals. Leaders will need to define what is expected, provide the path, and continue to adjust the skill requirements of jobs to stay competitive. Where personal expectancies and paths meet one would hope to find organizational success.

House, R. (1971) A path goal theory of leader effectiveness. Administrative science quarterly, 16 (3). 

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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.

Results:

-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 7^th, 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).