Organizational Leadership For Expected Selected Behaviour: Understanding The Expectancy And Equity Theories

1. Applying Expectancy Theory: Motivating Subordinates through Reward Strategies

Describe about the Organizational Leadership for Expected Selected Behaviour.

1. The expectancy theory describes that the behavior or related action of an individual is influenced by the motivated he gets to select a specific behavioral aspect within several behaviors, which is due to the expected results of that selected behavior (Yung Chou and Pearson 2012). Therefore, according to this theory, it can be said that the motivational strategy used by a leader can influence the behavioral aspects of subordinates. Karen Leary is the Vice president and general manager of the Adelaide office of Merrill Lynch Financial. Leary hired Chung as the financial consultant and he has developed his profile in the organization through his skilled performance. Based on his performance, he is seeking for his private office. Based on Chung’s performance, Leary have decided to give a private office to Ted Chung. According to the expectancy theory of motivation, “the organization should relate rewards directly to performance for ensuring that the rewards provided to the employee are those, which are deserved and wanted by the recipient” (Schunk et al. 2012). Ted has shown significant improvement in his work, he has opened the account of $6 million, after doing required level of research in this section. He is potential employee, who never holds back his ideas to chase a challenging goal (Hargreaves and Fink 2012). He has expressed the criteria of being an obedient and potential employee for the organization, who can bring significant success towards Leary’s changed organizational goals. Thus, he should be rewarded; according to the expectancy theory, he should be rewarded with what he expects to receive, which is his private office.

2. Ted Chung has shown significant growth and improvement in his business role. The general manager of Merrill Lynch, Leary hired him, while developing the business in Chinese market. Ted is china born and thus would be able to attract more people from china background. He opened a $6 million account of a Chinese industrialist. However, it has been revealed from thorough analysis, that the client is new in American market, thus it can be said that Chung’s investment is risky. He has been seen to focus on one account and not working for attracting more Chinese account, though he should focus more on hiring new Chinese clients. In addition, several performances related information in the last year made Leary worried about the sustainability of Chung’s performance. In a business, teamwork is very important, which is one of the weakest area of Ted Chung (Latham 2012). He likes privacy and do not interact with anyone in the office except his professional requirement, which shows his “stiff” formality towards is colleagues as well as seniors. This attitude is not required in a business environment. While reviewing the case of $6 million account, the client is from the same village, from where Chung belongs. Thus, he is not maintaining the professional boundaries, which can negatively affect the organization’s business (Kwon and Jang 2012). According to the expectancy theory, “when goals are set too high or performance expectations that are made too difficult, leads to low expectancy”. The goals set by Chung are difficult to meet, for which he is taking risky actions. On the other hand, the reward should be same for everyone and there were several FCs, who are working potentially in the organization for 5-6 years, without having a private office. Thus considering all the facts, Leary should not give a private office to him.

2. Balancing Risk and Performance: Evaluating Employee Behaviour in Teamwork

3. Ted Chung is a potential employee, who has shown noteworthy improvement in his business role. Unlike other new FCs, he had opened a $6 million account for the organization in after completing his training, which is the sign of his excellence and superiority from others. He has always been an obedient employee; unlike other employees, he never wastes time during office hours and focuses on his work. Other FCs are also pleased about Chung’s achievement, which again proved his excellence. He has always reviewed his job and improved in every step of his success ladder (Trautwein et al. 2012). He has depth knowledge about the Chinese market and has a commitment to enhance Merrill Lynch’s Chinese market share, which is also known to Leary. Therefore, it can be said that Chung is the most eligible candidate, who deserves  a private office, like other potential employees in the organization and once he got this reward, he will be motivated and more influenced towards his goal, as he prefers privacy (Al-Zawahreh and Al-Madi 2012).

4. According to the Equity theory, people should be motivated by fairness and inequities in input or output ratios are not required in teamwork or in an organizational environment. According to the equity theory, Ted Chung should get the equal rewards, which is received by the other employees. If he gets a private office, it will not be fair or justified to the other FCs, which can also demotivate others. Therefore, from that perspective, Ted Chung should improve more on his domain along with enhanced experience. He should seek some rewards, which is fair to be received by a new employee like Ted (Petri and Govern 2012). There are several employees, who are working for more than 5 to 6 years, but have not received their private office. Therefore, he should go through fair reward system and should seek higher designation or cash bonus, rather than a reward, which is not applicable for a new employee like him (Renko et al. 2012). It will both motivate him and other FCs to perform better further.  

5. Equity theory determines whether resources have been distributed fairly to business partners or not. This is decided by factors like cost-benefit analysis of each person. Equity is maintained by employees by their effort put in the job and the outcome they receive from it. Employees are motivated by fairness in their job (Ledbetter et al., 2013). Even if Chung get the private office, it is necessary to interpret the impact it will have on other financial consultants in office. Chung was hired mainly due to lack of Chinese in American system and mainly to develop the market. Chung was excellent in his work and in making contacts with people. Within the context of equity theory it can be said that conflict may take place between other financial consultants when they start to compare their input/output ratios with Chung’s input/output ratio. They may also start expecting a private place in office as they also work in the same position a Chung used to work in the Office. Hence, other consultants may perceive inequity in the office and it may demotivate them. They may resort to reducing their inputs in case of distorted outcomes prevalent in the office and a chaotic situation may arise. Hence, Chung been given a private office will have great implications for other financial consultants morale and productivity.

3. Recognizing Potential: Identifying Deserved Rewards for Employees

6. If Chung is given cash bonus in place of a private office this may work for him and other employees too. However he deserved more than that because his contribution as a financial consultant is more than his peers. Post his training, he did not went on attending cold calls like other trainees, instead he developed his approach according to the traditions of the market. Hence his responsible action showed that he had the potential to bring positive change in the company. His approach was to develop Chinese market by increasing his prestige first; however his first focus was on building good business relationship to get future benefits in the form of substantial accounts. Giving him a private office so early in his stint as a financial consultant may not work for the company due to the risk identified in his behavior towards need for privacy. It has been found that he does not allows people to work with him and clears all paper if the Leary approaches him. Due to this suspicious behavior, giving him a private office in such a small period may not work. There is a need to probe his actions further before a private office can be given to him. Although he had given enormous huge account to Merill Lynch, however his action towards investing in riskier stocks may also turn out be risky venture for the company.

7. Despite several risk involved due to his suspicious work in the Office, Chung’s joining a private office might also have lead to developing other objectives of the Office. It may help in getting a better hold in Chinese market through that private office. He may support by building more clients and getting more investments to the Company. Although Leary has urged him to develop other areas too, however through his private Office he may focus on excelling in one particular area only. Due to Chung’s Chinese background, he might enlarge his relationship with client and develop the Chinese market for the Company. Although Chung’s working style was different, however his unique approach to business may lead to spur in business too. Getting a private office is an important success symbol and the private office may only help to serve the purpose of seizing the Chinese market.

Reference List

Al-Zawahreh, A. and Al-Madi, F., 2012. The utility of equity theory in enhancing organizational effectiveness. European journal of economics, finance and administrative sciences, 46, pp.158-170.

Hargreaves, A. and Fink, D., 2012. Sustainable leadership (Vol. 6). John Wiley & Sons.

Kwon, S. and Jang, S.S., 2012. Effects of compensation for service recovery: From the equity theory perspective. International journal of hospitality management, 31(4), pp.1235-1243.

Latham, G.P., 2012. Work motivation: History, theory, research, and practice. Sage.

Ledbetter, A.M., STASSEN?FERRARA, H.M. and Dowd, M.M., 2013. Comparing equity and self?expansion theory approaches to relational maintenance. Personal Relationships, 20(1), pp.38-51.

Petri, H.L. and Govern, J.M., 2012. Motivation: Theory, research, and application. Cengage Learning.

Renko, M., Kroeck, K.G. and Bullough, A., 2012. Expectancy theory and nascent entrepreneurship. Small Business Economics, 39(3), pp.667-684.

Schunk, D.H., Meece, J.R. and Pintrich, P.R., 2012. Motivation in education: Theory, research, and applications. Pearson Higher Ed.

Trautwein, U., Marsh, H.W., Nagengast, B., Lüdtke, O., Nagy, G. and Jonkmann, K., 2012. Probing for the multiplicative term in modern expectancy–value theory: A latent interaction modeling study. Journal of Educational Psychology, 104(3), p.763.

Yung Chou, S. and Pearson, J.M., 2012. Organizational citizenship behaviour in IT professionals: An expectancy theory approach. Management Research Review, 35(12), pp.1170-1186.