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Prep 3 SS · Economics and Business Administration
Business and management model · Human resource management

Management, Leadership, and Motivation

At a taco shop in Guadalajara, two branches pay the same and sell the same. At one, the team has been together for years and comes to work motivated. At the other, eight people quit every year and new ones have to be hired and trained. What makes the second one different? It is almost never the pay: it is how people are managed and what they are offered besides money. At the end of the page you will come back to this question.

The management function and its styles

Being a boss, a manager, and a leader are not the same thing. The boss has formal authority because of their position. The manager handles resources and processes. The leader is followed voluntarily by others. A person can be a boss without being a leader (a supervisor who is obeyed only out of fear of losing their job) and can be a leader without any title (the coworker everyone asks for advice and who cheers up the group).

Comparative diagram of the three traditional management styles: authoritarian, democratic, and laissez-faire. Authoritarian decides alone Democratic consults and decides Laissez-faire lets them do
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The management function is usually summarised in four tasks: planning, organising, leading, and controlling. Explain what each consists of with an example applied to a…

The management function is usually summarised in four tasks: planning, organising, leading, and controlling. Explain what each consists of with an example applied to a clothes shop owner preparing the January sale campaign.

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Being a boss, a manager, and a leader are not the same thing. Explain the differences between holding a position with formal authority (boss), managing resources and…

Being a boss, a manager, and a leader are not the same thing. Explain the differences between holding a position with formal authority (boss), managing resources and processes (manager), and being voluntarily followed by others (leader). Reason, with an example for each case, whether a person can be a boss without being a leader and whether they can be a leader without holding any formal position.

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Three bosses manage very differently: one decides everything alone and gives rigid orders (authoritarian), another consults and decides with the team (democratic or…

Three bosses manage very differently: one decides everything alone and gives rigid orders (authoritarian), another consults and decides with the team (democratic or participative), and a third barely intervenes and leaves them to it (laissez-faire). State which style fits best in each situation and why: a construction crew where a mistake could cause an accident, a team of veteran designers creating a new collection, and a group of expert researchers accustomed to working independently.

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Maslow's pyramid in the company

Maslow's pyramid of needs with five levels: physiological, safety, belonging, esteem, and self-actualization. self-actualization esteem belonging safety physiological

What the company can offer at each level:

Level Example in the company
Physiological Sufficient salary, breaks, meals
Safety Stable contract, IMSS, safe environment
Belonging Good team, social events, communication
Esteem Recognition, promotions, employee of the month
Self-actualization Challenging projects, training, autonomy

Now practice with an incomplete pyramid: in the following figure one level is missing, marked with "?". To find it, review the order of the five levels.

Maslow's pyramid applied to the company with one level marked with a question mark: the fourth level from the bottom. projects and development ? good team and social events stable contract and IMSS sufficient salary and breaks
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The figure shows Maslow's hierarchy of needs applied to the company, with what the company can offer at each level. Identify the missing level, marked with "?", and give…

The figure shows Maslow's hierarchy of needs applied to the company, with what the company can offer at each level. Identify the missing level, marked with "?", and give an example of what a company can do to satisfy it.

self-actualisation: development and creativity esteem: recognition, promotions ? belonging, colleagues, team safety: stable contract and prevention physiological: salary, rest, and working conditions
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Herzberg: hygiene factors and motivators

Classification of Herzberg's theory: hygiene factors and motivating factors. Hygiene salary, conditions prevent dissatisfaction Motivators recognition, challenge drive people to give more
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According to Herzberg, there are hygiene factors (if missing, they cause dissatisfaction, but having them is not enough to motivate) and motivating factors (those that…

According to Herzberg, there are hygiene factors (if missing, they cause dissatisfaction, but having them is not enough to motivate) and motivating factors (those that truly drive people to do more). a) Classify these six: salary, cleanliness of the workplace, recognition for a job well done, relationship with colleagues, taking on more responsibility, and the possibility of promotion. b) Using this theory, explain why a pay rise alone rarely turns an unmotivated employee into a committed one.

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McGregor and situational leadership

Comparison between McGregor's Theory X and Theory Y on workers' attitudes and management style. Theory X control and fear Theory Y trust and challenge
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McGregor described two opposing types of manager: Theory X believes that people are naturally lazy and only work if controlled and feared; Theory Y believes that people…

McGregor described two opposing types of manager: Theory X believes that people are naturally lazy and only work if controlled and feared; Theory Y believes that people want to work well and seek responsibility. a) Describe how each would manage the same team: controls, deadlines, communication, rewards, and punishments. b) Explain what the "self-fulfilling prophecy" means in this context: what happens in the long run to a team that is always treated according to Theory X.

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The same manager faces three situations in one week: an urgent safety warning that forces an evacuation of the plant, a team of veteran and highly qualified technicians…

The same manager faces three situations in one week: an urgent safety warning that forces an evacuation of the plant, a team of veteran and highly qualified technicians assigned to a new project, and a group of newly arrived interns who do not yet know how to do the job. a) Recommend which management style is suitable in each situation and why. b) Conclude what situational leadership says about the idea that there is "one best style" of management for all cases.

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Incentives and employee turnover

Types of work incentives: economic and non-economic, with examples. Economic commission, bonus, PTU reward for goals Non-economic recognition autonomy, promotion

The cost of people leaving

Turnover is the proportion of employees who leave and have to be replaced. Every departure costs money: posting the vacancy, selecting, training the new hire, and in the meantime producing less. That is why spending on retention (training, better shifts, promotions) can be cheaper than replacing those who leave. If replacing a delivery courier costs, for example, $\$6{,}000$ and 20 leave each year, turnover costs $\$120{,}000$: with that money you can pay for an improvement that reduces it.

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A delivery company loses 40% of its couriers every year. It pays the minimum wage, route managers only appear to shout when something goes wrong, there is no training or…

A delivery company loses 40% of its couriers every year. It pays the minimum wage, route managers only appear to shout when something goes wrong, there is no training or possibility of promotion, and shifts change every week without notice. a) Diagnose the problem using Maslow's hierarchy (which needs it satisfies and which it does not) and Herzberg's theory (which factors are missing). b) Propose three measures to reduce staff turnover, one financial and two non-financial, justifying each with the previous theories. c) Reason why reducing turnover can be profitable even if it costs money (recruitment costs, training new recruits, errors, and poor image).

Solve

The financial side of decisions

Managing people also means deciding with numbers. Hiring, training, raising salaries, or paying bonuses are decisions that cost money, you have to decide how they are paid for, and they are expected to deliver a return: for example, less turnover and more sales. In addition, accounting records what the company has, what it owes, and what it earns. Without that information, managing is flying blind: you would not know whether the bonus you paid was offset by the sales it brought in.

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Design a motivation plan for a sports shop with six sales assistants earning little more than the minimum wage and who have been doing exactly the same job for years.…

Design a motivation plan for a sports shop with six sales assistants earning little more than the minimum wage and who have been doing exactly the same job for years. Include: a) two specific financial incentives (for example, sales performance pay or a performance bonus) explaining how they would work; b) three non-financial incentives (training, autonomy, recognition, flexible hours, internal promotion), indicating which need or motivating factor each addresses; c) a way to measure after one year whether the plan has worked.

Solve

Summary

Go back to the beginning: the branch that loses people usually fails in management and in motivators, not just in pay; retaining people costs less than replacing them.

See all the exercises in this section