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Leadership & the Team Dynamic Action Research: Application of Contingency Theory to Leadership and the Team Dynamic By: Team Leadership & Motivation A Stajkovic Leadership & the Team Dynamic Introduction: As the focus of our final project, we have identified an issue within one of our team member’s organizations where a mismatch exists between the leadership style of the current Vice President of Human Resources and the environment in which he operates. We will use Fiedler’s contingency theory model as support for our argument.
Background: The subject, who will be known as ‘Sam’, was recently hired as the Vice President of Human Resources (VP/HR). He was the favored candidate due to his HR experience, high self efficacy, and charismatic leadership style which enabled him to effectively network with senior executive leaders. In addition to his soft skills, Sam possessed expertise in structuring executive compensation and had extensive work experience with public company compensation committees (which are a subset of the profiled company’s Board of Directors).
Executive compensation is a critical component of any public company’s disclosure given the level of scrutiny it receives by the external market and investors alike. With that high level of scrutiny, comes an equally high potential for investor, political, and governmental pushback making the role of VP/HR a crucial one subject to high visibility. Sam’s combination of knowledge, skills, and abilities has allowed him to effectively manage up the corporate chain on matters of executive compensation.
However, his position also calls for directing his team in the development and implementation of global compensation and benefits programs for corporate professionals in entry-level, management, and director positions. Current observation and experience of Sam’s team has revealed that his Relationship Motivated leadership style, while effective with senior executives, is ineffectual when dealing with his subordinates. Leadership & the Team Dynamic Subordinate & Task Structure:
The structure of Sam’s team consists of four managers and over 20 support staff whose main work centers around development, implementation and maintenance of the company’s global compensation program, which is highly task-driven. The team’s work affects approximately 99% of the total workforce. It is under Sam’s direction that these duties are to be carried out; however Sam only devotes approximately 5% of his total effort to this cause, with the remaining 95% devoted to the 1% of executive compensation issues.
Misalignment Effects: The misalignment between Sam’s leadership style and his team’s need for a task-based leader has resulted in following consequences: • • • • • • • • Failure by Sam to provide his team needed answers and direction in compensation plan development. Without his leadership, any developed plans are not socialized among Sam’s peers and senior managers for necessary support. Sam’s team lacks the power base to manage upwards; however with no direction, they are forced to implement compensation plans for those in higher level positions.
Lack of Sam’s response has resulted in pushback from other HR business partners to the point of their refusal to be actively involved in compensation plan development. Team frustration and disillusionment. Team perception that Sam will be advanced in the organization due to his C-Suite connections. Undermining the future political value of Sam’s team members. Lack of organizational benefit from Sam’s expertise. Sam’s team is not the only one affected.
In addition to providing structured, task-based operations and support to his staff, Sam has the responsibility to discharge intensive task laden plans to his peers (VPs). Due to his lack of involvement, neither action has occurred. Leadership & the Team Dynamic Moving Forward: There is no question that to be successful, anyone in Sam’s position must have a solid ability to manager upwards. However, a successful candidate must also have the same passion and ability to establish the corporate-wide compensation vision and operational implementation.
As a result two questions remain. ‘Is Sam the right fit to lead an entire global compensation and benefits function? ‘ And ‘Can the Compensation team function without a leader? ‘ To answer this, we will use Fiedler’s Contingency Model of Leadership Effectiveness as the methodology to verify Sam’s leadership capabilities within the three subgroups he interacts with on a daily basis – executives, his peer VPs, and subordinates. The Analysis: Fiedler’s Contingency Theory centers on a ‘leader-match’ ideal in which leaders are matched to an appropriate situation(s).
Leadership style is determined by the Least Preferred Co-Worker Scale (LPC), whose results determine if a leader is task (those with low LPC scores) or relationship motivated (those with high LPC scores). That leadership style is then compared to three situational variables making up the contingency model: 1) Leader-Member relations, 2) Task Structure, and 3) Position power of the leader. In addition, Fiedler has surmised that based on the situational outcomes; there is a preferred leadership style that will excel over the other.
Leaders with low LPC scores fare better in extreme work situations where conditions are running smoothly, or are very chaotic. Leaders with high LPC scores do better in neutral work environments. Figure 1. 1, depicts, based on observation, the outcome of the situational variables supporting contingency theory amongst the three groups in which Sam interacts. Figure 1. 2, places these outcomes Leadership & the Team Dynamic in Fiedler’s Contingency Model. Based on the situational variables related to Sam’s team, a task? motivated leader is the preferred leadership style to direct the Compensation team.
Through observation and interaction, it can be surmised that Sam has a high LPC score indicating that he has relationship? motivated style which does not meld well with his direct reports. In addition, Contingency Model suggests that based on the current variable mappings of Sam’s work team, the overall situation can be viewed as out of control best served by a leader with low LPC scores adding support to our claim that Sam is not in the right role. This can be seen in figure 1. 3 The Contingency Theory Model w/ Sam’s Tendencies per working group which utilizes a Venn?
Logic overlay to enable a graphic comparative “fit” of Sam’s leadership style to the three situational variables he encounters on a daily basis. It should be observed , neither of the LPC or HPC traits have the required alignment with all three environmental considerations to be successful. Recommendations: While it has been determined that the Compensation group cannot be a self? managing/directed team, we recommend the organization’s executive team appoint a second VP tier manager; a task? based leader, who can implement the strategic plan details and oversee damage control.
Those at the executive level need to intervene quickly as the politically sensitive nature of compensation requires a carefully scripted message that will address the cognitive and environmental elements existing throughout the organization. Per the contingency theory and observed application, Sam should continue to concentrate on the C? Suite compensation delivery. The firm will realize the greatest benefits from the alignment of Sam’s strengths and from that distribution of assignments. Leadership & the Team Dynamic Figure 1. 1 Situational Variable Outcomes per Workgroup
Element Leader? member Relations (Group atmosphere, team confidence, loyalty, attraction for leader) Task Structure (Degree to which tasks are clear and spelled out) Leader Position of Power (Leader authority to reward/punish followers) Organization level Executives Peers Subordinates Executives Peers Subordinates Executives Peers Subordinates Outcome Good Good (enough) Poor Unstructured Unstructured Unstructured Poor Neutral/Strong Strong * Legend: ` Executive Interaction Peers (VP ) Interaction Subordinates (Team ) Interaction Sam’s LPC is different as it relates to the different employee groups with which he leads and interacts. Note: Adapted from F. E. Fiedler, A Theory of Leadership Effectiveness, 1967, New York, McGraw? Hill. Leadership & the Team Dynamic Figure 1. 2 Situational Matrix ? Contingency Theory (LPC) ` Leader/Member Good Relations Task Structure Good Good Good Poor Poor Poor Poor High High Low Low High High Low Low Leader Position of Power Strong Weak Low LPC’s / Middle LPC’s Strong Weak Strong Weak Strong Weak Preferred Leadership Style