Theoretical framework
Motivation
This paragraph first gives insight on what motivation is. Thereafter, different theories on this concept are explained, namely: the need theory, the hierarchy of needs and the self-determination theory. Lastly, the theory on motivation of Herzberg that is used in this paper will be broadly discussed.
Motivation comes from the Latin word ‘movere’, which means to move (McShane & Glinow, 2011). There are various definitions of motivation. To give a little insight in this phenomenon, several definitions are given below.
Motivation can be defined as “the choices made by individuals regarding which goals to achieve (direction), how much effort they invest in achieving a certain goal (intensity of action) and how long a person can maintain effort (persistence)” (Diefendorff & Seaton, 2015; (McShane & Glinow, 2011). Kamery (2004) defined motivation as an art “motivation is a process of changing one’s willingness to exert effort” (p. 92). Reiss (2004) states that motivation is simply “the reasons people hold for initiating and performing voluntary behaviour” (p. 179). Kardes, Cronley and Cline (2014) defined motivation as “a driving force that moves or incites us to act and is the underlying basis of all behavior. Individuals are driven to satisfy their needs, wants and desires” (p. 168). From the previous given definitions can be concluded that motivation is an attitude that drives people to exhibit certain behavior.
Having motivated employees is beneficial for organizations. Firstly, motivated employees have proven to be more creative, productive and are more likely to deliver high-quality work, which has a positive influence on performance (Amabile, 1993). Secondly, research also found that employees who are motivated are also more likely to share their knowledge with others in the organization (Lin, 2007). Knowledge sharing can lead to a competitive advantage for organizations (Kearns & Lederer, 2003). Furthermore, Hoogbergen, Steenhuis and Verhoeff (2017) found that a lack of motivation to work is associated with a burn-out. A burn-out is a type of work related stress which causes employees to absent at work. The absence of employees is detrimental to the organization and can be very costly. For the above stated reasons, is it important to get a better understanding of this concept.
4.1.1 Theories on motivation
Over the years, various theories have been created about motivation. One of the first theories was that of David McClelland (1987), he introduced the need theory. This theory identifies three types of needs which influence a person’s motivation and effectiveness. The first need is the need for achievement, which is the drive to excel. Secondly, the need for power, which refers to the desire to make others behave in a way they would otherwise not have. The last need is the need for affiliation, which is the desire for friendly and close relationships (Robbins and Judge, 2012). A need only becomes a source of motivation when it is unsatisfied (Sashkin & Burke 1987).
One of the well-known theories of motivation is the hierarchy of needs of Abraham Maslow. He states that humans have certain needs and when those needs are not being met it puts people into action to fulfill those needs. In other words, it will motivate them to fulfill those needs. This theory recognizes five levels of needs: physiological (breathing, food, sleep), safety (security of body, employment of property), love and belongingness (friendship, family), esteem (self-esteem, confidence, achievement) and self-actualization (morality, creativity, spontaneity) (Kardes et al., 2014; Maslow, 1954). The first two needs are lower-order needs and are satisfied externally. Whilst social, esteem and self-actualization are higher-order needs and are satisfied internally (Maslow 1943, 1954). When a need is satisfied, the next one becomes dominant. For example, when people buy a house, they have fulfilled their need for safety. Now they will seek for the next level of the pyramid which is love and belongingness (Robbins & Judge, 2012; Maslow, 1954).
Another theory on motivation is the self-determination theory, which builds on the theory of Maslow. This theory makes a distinction between intrinsic and extrinsic motivation. Intrinsic motivation is the desire to pursue an activity or goal for ones’ own sake (Kardes et al., 2014). The motivation comes from within the person or from the activity itself, it is not driven by an extrinsic reward (Deci & Ryan, 2010). Intrinsic motivation is high when people feel like they have a free choice (autonomy), are part of a group (belongingness) and feel like they are very good at what they do (competence). Extrinsic motivation on the other hand, is the desire to perform an activity to receive rewards and praises or to avoid punishment. The motivation comes from outside the individual (Pintrich & Schunk, 1996; Kardes et al., 2014). This theory states that people who pursue intrinsic goals are more creative, hard-working and content.
The theory on motivation that is used in this paper is the two-factor theory also known as the motivation-hygiene theory of Herzberg. This theory is a combination of the hierarchy of needs by Maslow and the self-determination theory of Deci and Ryan and adds more depth to these theories by looking at different aspects which drive motivation. This theory was developed on basis of the work of Mayo, Coch and French (Herzberg, 1954). They found that the relationship between managers and their subordinates has the biggest impact on the output of a worker (Herzberg, 1959). Herzberg elaborated their theory with the two-factor theory. This theory measures job satisfaction and dissatisfaction which explain motivation. Organizations should strive for job satisfaction, because it is positively related to organizational commitment, organizational citizenship behavior, worker turnover and performance (Fruend, 2005; Mannheim & Papo, 2000; Chiu & Chen, 2005; Kirkman & Shapiro, 2001).
The two major sources of job satisfaction and ultimately motivation are motivators and hygiene factors (Herzberg, 1966). Motivators are satisfiers that intrinsically motivate an individual. The motivation a person has comes from the work itself. Herzberg identified 5 intrinsic aspects of the work itself: achievement, advancement, work itself, recognition and growth. When these factors are present, basic needs are satisfied, positive feelings are activated and performance is improved (Miner, 2015). In contrast, hygiene factors are dissatisfiers and results from extrinsic factors which characterize the context in which the work is performed. These factors are: the company’s policy, supervision, job security, salary and interpersonal relationships. These two terms are no continuum, but two totally independent concepts. The opposite of satisfaction is no satisfaction and the opposite of dissatisfaction is no dissatisfaction (Miner, 2015). As stated earlier this theory can be compared to the theories of Maslow, Deci and Ryan. Motivators and hygiene factors are in line with the hierarchy of needs. Motivators are intrinsically achieved and can be perceived as higher needs. Whilst hygiene factors can be compared to the lower level needs, since they are achieved extrinsically. This distinction between extrinsic and intrinsic motivation is also being emphasized in the self-determination theory.
Organizations need to focus on the scores of motivators and keep them high. These are the factors that can positively influence performance. Dissatisfiers on the other hand need to be good, but only benefit to a certain point. These dissatisfying factors cannot generate intense positive feelings or high levels of performance (Herzberg, Mausner and Snyderman, 1959). Furthermore, hygiene factors are not reliable, they are short-term motivators and constan
tly require external rewards, which can be costly. Besides, scoring low on hygiene factors is not enough. People search for higher level psychological needs, referring to Maslow’s pyramid. People start with satisfying external needs, while continuously reaching to a higher-level intrinsic need (Maslow, 1954; Miner, 2015). Besides that, motivators are valued higher than hygiene factors. When there is a lack of motivators, people will try to compensate with hygiene factors. To provide the same level of performance a continuous higher dose of hygiene is needed to compensate. For these reasons, companies need to focus on building motivators (Herzberg, 1966).
4.2 Leadership
As mentioned earlier, the success of an organization in achieving its goals and objectives is highly dependent of leadership (Mohammad Mosadegh Rad & Hossein Yarmohammadian, 2006). This paragraph contains literature concerning leadership in general and the different leadership styles as defined by Lewin, Lippitt and White (1939). The first part contains different definitions of leadership based on existing literature. Thereafter, the definitions of the different leadership styles will be given, namely: autocratic, laissez-faire and democratic leadership.
For centuries scholars and practitioners have tried to define the term leadership (Northouse, 2012). Leadership is considered as one of the most complex and multifaceted phenomena’s in organizational research (Van Seters & Field, 1990). Until today, no universal consensus has been reached on the definition of leadership (Wirba, 2017). Stogdill (1974) states that there are almost as many different definitions of leadership as there are people who have tried to define it (p. 7). The next definitions provide a brief oversight of the evolution of leadership definitions. In 1927, Moore defined leadership as “the ability to impress the will of the leader on those led and induce obedience, respect, loyalty and cooperation” (p. 124). Five decades’ later leadership was more than just an ability and was viewed as a process. Burns (1978) defined leadership as “a reciprocal process of mobilizing by persons with certain motives and values, various economic, political and other resources, in a context of competition and conflict, in order to realize goals independently or mutually held by both leaders and followers” (p. 425). Robbins and Judge (2012) on the other hand viewed leadership more as an influence and define leadership as “the ability to influence a group toward the achievement of as vision or set of goals” (p. 368). Despite all the different definitions, the following concepts are mainly present in the definitions of leadership: leadership is a process, it involves influence, it occurs in groups and involves common goals.
Although there is no consensus about the definition, this paper will make use of the definition of Northouse (2012):
‘Leadership is a process whereby an individual influences a group of individuals to achieve a common goal.’
This definition can be seen as a combination of the different definitions, which contains all three most common used terms.
Leaders can adopt different styles of leading their followers. The different styles will be discussed in the next section.
4.2.1 Leadership styles
Eccles (1993) emphasizes the importance of employee involvement in decision-making. He states that participation is beneficial for the employees as well as the organization. Decisions made by employee involvement will be of higher quality than when decisions are merely made by management. This is advocated by the fact that employees are closer to the process and therefore are better able to gauge how problems can be solved. Also by involving them, they will be more motivated to solve problems, because they have taken part in the
decision-making process and thus agree with how it will be solved. Employees will be more motivated than when they only execute the assigned solution, which may not be in line with how they would prefer to do it. Lastly, employees are closer to the customer and have more knowledge about their needs and preferences. Concluding that involving employees in decision-making is essential.
This paper lays its focus on three leadership styles that highlight decision-making identified by Lewin, Lippitt and White (1939): autocratic, laissez-faire and democratic.
4.2.2 Autocratic
Leaders with an autocratic style do not include followers in decision-making, they solely provide clear expectations about what needs to be done and how it should be done. They lead without asking anyone for input and can be considered dictators. Subordinates simply have to execute the goals that are set by their manager (Morsidi, Sian, Shahrill & Abdullah, 2015; (Van Vugt, Jepson, Hart & De Cremer, 2004; Nurmi, 1996). Referring to Eccles (1993),
the subordinates of autocratic leaders will be less motivated. They are not being included in any decision-making and are basically pawns that are being controlled by their leader.
Spector (1986) found that employees that have autonomy and perceive a level of control in the organization are more satisfied, committed and motivated. Since this is not the case with the employees of autocratic leaders, the following hypothesis can be proposed:
Hypothesis 1: Autocratic leadership in startups will negatively influence employee motivation
4.2.3 Laissez-faire
Another extreme is laissez-faire leadership. Leaders engaging the laissez-faire style are little or not involved in decision-making. Bass and Avolio (2003) described this leadership style as ‘the absence of the leader’. A laissez-faire leader does not seek control over his employees, so they are free to decide what they do (Morsidi, Sian, Shahrill & Abdullah, 2015). Giving subordinates full responsibility has disadvantages for the members of the organizations and thereon the performance of the organization. According to Lewin et al. (1939), this style of leading results in chaos and causes frustration, stress and a feeling of being overwhelmed and lost. The subordinates of these leaders are dissatisfied with their job, leader and the effectiveness of their leader (Bass & Avolio, 1994; Judge & Piccolo, 2004; Yammarino, Spangler, & Bass, 1993). Supported by previous research I propose that too much autonomy and involvement is not good either. People need some degree of direction. For this reason the second hypothesis is:
Hypothesis 2: Laissez-faire leadership in startups will negatively influence employee motivation.
4.2.4 Democratic leadership
Besides the two extremes mentioned above, there is also a medium called democratic leadership. Democratic leaders have an active role in decision-making, but they also involve their followers, require them to take responsibility of their action and encourage them when they take risks and mistakes. This leadership style develops employee’s self-esteem (Morsidi, Sian, Shahrill & Abdullah, 2015). There are two types of democratic leaders: participative and consultative. Participative leaders make a collaborated decision. They first discuss the problem or idea together with their subordinates, thereafter a final decision is made together. Whereas a consultative leader talks to his subordinates about their opinions, takes them in account, but the final decisions are made by the leader himself.
Democratic leadership is the balance between strictness and autonomy. Employees are being involved, while given directions at the same time. I propose that the subordinates of democratic leaders are more satisfied with their job, because they have a say in what is happening in the organization. It can be compared to the ‘IKEA effect’, which proposes that when people make products themselves, those products are valued higher (Norton, Mochon & Ariely, 2011). Thus, when employees have a say in what happens in the organizatio
n, they will value their assigned tasks higher, which in turn may lead to an increase in motivation. Therefore, the third hypothesis is:
Hypothesis 3: Democratic leadership in startups will positively influence employee motivation.
The next figure shows the conceptual model of the previously mentioned hypotheses. This model assumes that the independent variable leadership style influences the dependent variable employee motivation. Since leadership style is dependent of the characteristics of the situation, leadership style may differ in each life cycle phase. This study will look at the relationship between leadership style and employee motivation in the context of startups.
Figure 1. Conceptual model
5. Methodology
5.1 Design & Sample
In this paragraph the methods used to conduct this research and way of data collection are discussed. Quantitative research was done to analyze the relationship between leadership style and the motivation of employees. The sample was collected through several startup websites and personal contacts (I Amsterdam, n.d.; Dutch Startup map, n.d.). The startups have been collected based on two criteria: 1) The companies exist no longer than four years. 2) The companies consist of a team between 2 and 25 employees. The sample consisted of 21 complete duos. The response rate was 36.67%. Each duo consisted of a manager (N= 21) and one employee (N= 21). In total there were 42 respondents of which 18 were female. The sample of managers contained 6 females, whilst the employee sample consisted mainly of females, namely 12. The participants are employed in startups in different sectors like hospitality, fashion and IT. Managers’ age varied between ‘under 21 years and 41 years and older with an average age between 31 and 35 years, while employees’ age varied between ‘under 21 years and 41 years and older’ with an average age between 26 and 30 years. Managers’ and employees’ experience ranged from ‘less than 6 months to longer than 36 months, with a mean managerial tenure of 19 months (M= 19 months) and a mean of employee tenure of 9 months (M= 9 months). There were two different surveys, one for the manager and one for the employee. The managerial survey contained questions about himself, while the employee survey contained questions about himself and his or her manager.
5.2 Measurements
5.2.1 Motivation
Motivation, the dependent variable, was measured with a 14-item scale based on the motivation-hygiene theory of Herzberg (1954; 1966). Six questions measured the factors that predict job satisfaction, named the motivators. Whilst, 5 questions measured the factors which predict job dissatisfaction, called hygiene factors. The questions have been answered through a 5 point Likert scale. This scale is ranged from (1) strongly disagree to (5) strongly agree. The other three questions were self-made and measured the degree and sources of motivation of an employee. These questions were multiple choice and were stated as follows: ‘How motivated are you at your current job?’, ‘How important is independence to your motivation?’ and ‘What sort of leadership style motivates you the most?’.
The data on motivation has been collected through the survey filled in by employees. An example of the items asked about motivators is: “I am empowered enough to do my job”. A high score means that an employee is highly satisfied about his job and is therefore motivated. The questions asked about the hygiene factors are positively asked. Which means that a high score on hygiene is positive and a low score is negative. An example of an item asked on hygiene is: “I am encouraged to work harder because of my salary”. A low score means that an employee is highly dissatisfied about his job and is therefore not motivated.
5.2.2 Leadership style
Leadership style, the independent variable, was measured twice. Once by the manager and once by the employee about his manager. This has been done to check if the employees perceive their leader the same as the leader states to be. The questionnaire of the manager contained 18 questions in total. Each different leadership style contains 6 questions. The questions have been answered on a 5 point likert scale. This scale ranged from (1) strongly disagree to (5) strongly agree. An example of a question asked on the autocratic section is: “I tell my employees what needs to be done and how it is done”. Measurement of laissez-faire leadership was done by questions like: “In general, it is best to leave subordinates alone”. The questions on democratic leadership were stated like the following: “I ask for employee’s ideas and input on upcoming plans and projects”. A high score on these items means that a leader highly adopts a certain leadership style.
The questions in the employee’s survey about leadership style contains in total 16 questions: 5 about autocratic leadership, 5 about a laissez-faire leadership style and 6 about democratic leadership. The same questions of the managerial survey have been used, but they have been put in the perspective of the employee. An example of a question on autocratic leadership is: “I am told what to do by my manager and how to do it”. Laissez-faire leadership was measured by questions like: “I carry out the decisions on the job”. The questions on democratic leadership were like the following: “I am asked to give ideas and input on upcoming plans and projects”. These questions are also based on a 5 point likert scale, ranging from (1) strongly disagree to (5) strongly agree.
The questions on leadership style and motivation were randomized and contain a different order in each survey. This has been done to prevent bias. The complete survey can be found in the appendix.