Case Analysis: The Luggers Versus the Butchers February 22, 2011 Case Analysis: The Luggers Versus

the Butchers The Food Merchandising Corporation warehouse has an efficient productive structure that is working for them based on bottom line productivity. However, from the employees perspective, it is a dysfunctional structure. This dysfunctional structure has ineffective management with inequity distribution, which is causing conflict among management and employees. Structure The Food Merchandising Corporation warehouse in northern New Jersey stocks certain goods and then ships them out on order to various stores. Their biggest and most expensive commodity is beef that is received in the form of two hindquarters and two forequarters with each weighing approximately two hundred pounds. The warehouse has two distinct groups to process the beef, one being the warehousemen (luggers) that transport the beef within the warehouse to freezers to await the butchering process handled by butchers. It is imperative that the process be expedited in order to move the product out as quickly as possible to meet demand. The company goals are easily identified as maintaining efficient interdependent groups that work together to achieve success. The luggers transport and stock the beef for the butchers, who then butcher the meat into smaller wholesale cuts. The meat is then restocked and ready for shipping out based on order requests. If all groups fulfill their job tasks and work jointly to expedite process it is a win-win situation for all. However, that is not the case as the

2 organizations structure is faltering due to everyone having their own agenda while management is sitting on the sidelines as observers rather than active participants. The luggers have taken control of their environment and restructured it to their advantage. They turned the tables on the butchers, which as skilled employees once held the higher-esteemed position with higher wages and less physical labor. Thru innovative transport rails and team effort, the luggers now have more earning potential than the butchers and exert less physical effort then previously required to completer their tasks. Management, once a strong presence, has now been placed on the sidelines due to a change in political power that was diluted by the presence of the union and managers and employees that have formed alliances. From an organizational perspective, the warehouse is producing and meeting production goals, but from a structural standpoint the warehouse foundation is faltering and in danger of collapsing if the butchers walk out due to their job dissatisfaction. The organizations hierarchy should be from top to bottom, warehouse manager, foreman, and then warehousemen. They also should have union support and representation from the union representative and the shop steward. However, the luggers have changed the standard operating procedures and routines and when the butchers complain, their concerns are not heard as management has lost control of the luggers in addition to being in alliance with them. Design (structure) drives the way strategies are formulated or formed, and determines whether and how they can be implemented. Firms recognize the need for adaptation, determine its course, and put change into effect by this vehicle. The framework enables and allows collective behavior to occur. It is not the only challenge confronting organizations, but it is a challenge that is fundamental and universal that is a focal interest of organization theory that must be the understanding of how to organize people and resources in order to collectively

3 accomplished desired ends (Greenwood & Miller, 2010). Structure or lack thereof does not necessary mean an unsuccessful organization; however, it can be a contributing variable that negatively affects how problems are solved. Major Issues Leadership Path-goal theory maintains that one of the strategic functions of the leader is to enhance the psychological states of subordinates that result in motivation to perform (House & Dressler, 1974; Ilies, Judge, & Wagner, 2006). There are three types of leadership styles: transactional, transformational, and servant. The transactional style is the exchange between the leader and follower. They influence each other in a way that both parties receive something of value (Humphreys, 2002). Transactional leadership is usually characterized by the factors of contingent reward and management-by-exception (Bass, 1985). A more active transactional leader typically employs a style of contingent reward (reward is contingent upon the follower meeting an agreed upon, and mutually understood goal) whereas a more passive transactional leader tends to practice avoidance of corrective actions (managing-by-exception) as long as goals are achieved (Humphreys, 2002) Transformation leaders operate out of deeply held personal value systems. By expressing these personal standards, transformational leaders are able to unite their followers and more importantly, actually change their followers goals and beliefs (Bass, 1990a; Burns, 1978; Deluga, 1988). Transformational leaders gain acceptance of the organizational mission by developing the ability within followers to look beyond their own self-interests. Bass (1985) asserts that this is accomplished by employing one or more of the factors associated with transformational leadership: charisma, inspirational motivation, intellectual stimulation, and

4 individual consideration (Humphreys, 2002). Like transformational leadership, the concept of servant leadership also emerged from the heritage of charismatic leadership theory (Graham, 1991). Compared to transformational leadership, servant leader research is practically nonexistent (Bass, 2000). Many have defined servant leader behavior as actions that honor the individual self-esteem and self-worth of followers, and increase the desire to become servant leaders as well (Spears, 1998; Humphreys, 2005). The common concept in every journal article used for this analysis was that the primary function of a leader was to motivate his or her followers and it is done through leader behavior. The premise being that leaders do not use influence triggers to motivate follower behavior but instead used behaviors and communication that are interpreted by followers and lead to influence triggers (Barbuto, 2000). Steers et al. (1996) asserts that behavioral issues in the workplace simply cannot be analyzed without considering the dual factors of motivation and leadership. Further, Jacobson (2001) declares it self-evident that leaders and followers are part of one interrelated system (Humphreys & Einstein 2004). There is evidence transformational leaders enhance follower effort, satisfaction, commitment, and performance (Lowe, Kroeck, & Sivasubramaniam, 1996; Podsakoff, MacKenzie, Moorman, & Fetter, 1990; Yammarino, Spangler, & Bass, 1993). More recently, Ehrhart and Klein (2001) offered findings that indicate follower values and personality could be useful predictors of motivating leader behaviors. In essence, they assert leader behaviors deemed motivating by individual followers are very much driven by a followers characteristics and values. Wofford et al. (2001) state that leaders must be aware of the motive patterns of followers and adapt their behaviors to match those patterns. Further, Shamir et al. (1993)

5 suggested there must be a congruency between a leaders communication and a followers values (Ehrhart & Klein, 2001). Humphreys and Einstein (2004) believe this concept of congruency is both crucial and missing from previous models. They are referring to the concept that effective leaders offer communication and other forms of behavior that are consistent with an individual followers identity and values (Humphreys & Einstein, 2004). Lord and Brown (2001) declare leadership works best when there is a match between the identity level of followers and the focus of leaders (Humphreys & Einstein, 2004). In Humphreys & Einsteins (2004) extended work motivation model they use temperament as one construct that is applied to the dyadic leader/follower relationship. They believe that within the work motivation process, enhancing follower motivation is a leadership responsibility that entails leader communication, feedback, and behaviors that are congruent to an individual followers information and engagement preference based upon temperament. The models four temperaments are based on individual preferences for receiving/perceiving information, evaluating that information, dealing with the outside world, and becoming energized. Platos (c340 B.C.) verbiage of Artisan, Guardian, Idealist, and Rational were used for these four fundamental patterns of human personality (Keirsey, 1998; Humphreys & Einstein, 2004). All four temperaments will be encountered in the organizational setting and all can make excellent followers. What is crucial, though, is that leaders realize, consider, and utilize the individual temperaments of followers to enhance communication and the dyadic relationship to augment follower motivation. Leaders also exhibit the core personality characteristics of these temperaments. The purpose of identifying the temperament of the leader as well as the follower is have the ability for leaders to comprehend a followers temperament, particularly when that

6 temperament is different from their own, and respond with behaviors, feedback, and communication that are congruent with the followers preference and perspective will enhance follower motivation to a greater degree than those leaders who either lack the capacity or will to do so (Humphreys & Einstein, 2004). Bass (1990a) defines Transformational Leadership as: (a) idealized influence (attributed and behavior): provides vision and sense of mission, instills pride, gains respect and trust, (b) inspirational motivation: communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways, (c) intellectual stimulation: promotes intelligence, rationality, and careful problem solving, (d) individualized consideration: gives personal attention, treats each employee individually, coaches, advises. Bass (1990a) defines Transactional Leadership as: (a) contingent reward: contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments, (b) management-by-exception (active): watches and searches for deviations from rules and standards, takes corrective action (c) management-by-exception (passive): intervenes only if standards are not met (Eppard, 2004). Common themes found in Transformational Leadership research include the leaders ability to: (a) motivate subordinates by focusing on the higher-order needs of purpose, values, and morality (Bass, 1985; Burns, 1978; Yukl, 1998); (b) create and articulate a vision-related goal (Bennis & Nanus, 1985); and (c) empower others to move toward the shared goal and attend to the concerns and developmental needs of followers (Robbins, 1996). Other promising elements of Transformational Leadership that have received less attention by researchers are: (a) the subordinates ability to deal with complexity, ambiguity and uncertainty (Robbins, 1996); (b) the transformational leaders bias toward action (Bennis & Nanus, 1985); and (c) the

7 transformational leaders ability to back decisions made by subordinates (O'Connell, 1995). Food Merchandising Corporation warehouses management team consists of Mr. Abram as manager and Hank as foreman. Mr. Abram usurps Hanks responsibilities and leads from a base of legitimate power. He uses his power to coerce the butchers to follow his directives under his close supervision and only because they are all in one central location. He does not interfere with the activities of the luggers as they are harder to manage as closely as he would like as they are in a larger area and harder to observe. He sees the task that the butchers perform as the essential variable to successful efficiency for his warehouse, therefore must monitor that time is not wasted in order to assure that orders are expedited. Hank on the other hand has lost his power as an effective leader. The change brought about by the union has rendered him useless as he is afraid to take measures that might produce union repercussions and then he is also powerless among the luggers that have lost respect for him. He has lost his ability to manage his followers, therefore is just a figurehead. The luggers and butchers are meeting production standards and do not need constant supervision to do their work. It should be noted that the luggers are highly motivated and take initiative to improve their work processes in order to be more efficient. Their creative change of using rails within their warehouse came about from the need to use so much physical energy to transport the beef within their warehouse, but they took it further when the opportunity came for them to create an enterprise on the side for their benefit. While this may not be ethical, they did not make a secret of it and it can even go back to supervision allowing them to do this for their own advantage, which is to unload loads faster and then produce more outputs once the butchers completed their process. However, the luggers and for that matter supervision failed to see that while this met their needs it did not take into consideration the impact on the butchers. The

8 butchers now have more work, for which they do not receive equal compensation, therefore, creating dissatisfaction and conflict. The most appropriate leadership method that should be considered for this organization is transactional leadership where there is contingent rewards and management-by-exception. If the luggers and butchers are provided with work standards, assignments, and task-oriented goals they will not have the need for constant supervision, which has been demonstrated by their past work history in efficiently meeting organizations goals. The major hurdle will be finding an equitable reward that is fair to both groups. The key reward desired by each group is primarily money; however, it is evident that status and power are also viewed favorably. Because the groups are interdependent, a system must be found to meet the needs of all parties. It does not necessarily have to be where extra monies are divided equally, but other rewards can be offered, such as fair equity distribution. Leadership Behaviors The Hersey and Blanchard situational leadership model suggests that successful leaders do adjust their styles. The key issue in making these adjustments is follower maturity, as indicated by their readiness to perform in a given situation (Hersey, Blanchard, & Johnson, 1996). Readiness, in this sense is largely based on two major factors: follower ability and follower confidence. The situational leadership model views leaders as varying their emphasis on task and relationship behaviors to best deal with different levels of follower maturity (Bass, 1990b). Task behavior is the extent to which the leader spells out the duties and responsibilities of the follower. It includes giving directions and setting goals. Relationship behavior is the extent to which the leader engages in two-way or multi-way communication. The situational model places

9 combinations of task and relationship behaviors into four quadrants. Each quadrant calls for a different leadership style. The four leadership styles are: 1. Delegating Style allowing the follower to take responsibility for task decisions; this is a low-task, low-relationship style. 2. Participating Style emphasizing shared ideas and participative decisions on task directions; this is a low-task, high-relationship style. 3. Selling Style explaining task directions in a supportive and persuasive way; this is a high-task, high relationship style. 4. Telling Style giving specific task directions and closely supervising work; this is a high-task, low relationship style. Managers using the situational leadership model must be able to implement the alternative leadership styles as needed. To do this, they have to understand the maturity followers in terms of readiness for task performance and then use the style that best fits. While management at the Food Management Corporation warehouse cannot have a specific management style across the board that applies to every employee or group, it can apply one that is fair and consistent with corporate policies and procedures. Delegating Style allowing the follower to take responsibility for task decisions; which is a low-task, lowrelationship style is one that can apply to both warehouse groups, however, based on past history it will need to increase the relationship factor for the luggers. The luggers have demonstrated that they have the initiative to streamline their tasks not only to improve the physical aspects of their job, but through their motivation for a higher monetary reward, regardless of whether they broke company rules or not. Their behavior in regards to breaking company rules is not the cause of the

10 organizations conflict, but the effect of lack of leadership, therefore, if management would oversee their actions more closely, this situation can be remedied. Management must reevaluate their current system to evaluate how to have an equitable level of supervision as it pertains to each group. Also, it cannot totally take away the monetary reward that the luggers get for their efforts, but it can incorporate it into the system to be fair for all groups and participants as each group is dependent on each other for efficiency purposes. Burns (1978) proposed that the leadership process occurs in one of two ways, either transactional or transformational. Transactional Leadership is based on bureaucratic authority and legitimacy within the organization. Transactional leaders emphasize work standards, assignments, and task-oriented goals. They also tend to focus on task completion and employee compliance and rely quite heavily on organizational rewards and punishments to influence employee performance. In contrast, Burns characterized Transformational Leadership as a process that motivates followers by appealing to higher ideals and moral values. Transformational leaders must be able to define and articulate a vision for their organizations, and the followers must accept the credibility of the leader. More recently, Bass and Avolio (1994) have developed a theory of Transformational Leadership that is a culmination and extension of earlier work by Bennis (1985), Burns (1978), Tichy and Cohen (1997), and others. Bass and Avolio (1994) proposed that Transformational Leadership comprises four dimensions: Idealized Influence. Described as a behavior that results in follower admiration, respect, and trust. Idealized influence involves risk sharing on the part of leaders, a consideration of follower needs over personal needs, and ethical and moral

11 conduct. Inspirational Motivation. This dimension is reflected in behavior that provides meaning and challenge to followers work. It includes behaviors that articulate clear expectations demonstrating commitment to overall organizational goals. In addition, team spirit is aroused through enthusiasm and optimism. Intellectual Stimulation. Leaders who demonstrate this type of Transformational Leadership solicit new ideas and creative problem solutions from their followers, and encourage new approaches to job performance. Individualized Consideration. This is reflected by leaders who listen attentively and pay special attention to their followers achievements and growth needs. Using the Multifactor Leadership Questionnaire (MLQ), Bass and Avolio (1994) have found significant relationships across a number of settings between a subordinates ratings of leader effectiveness and satisfaction with their leaders who are using transformational methods. In addition, there is some evidence that Transformational Leadership is significantly related to other relevant outcomes variables, such as followers perceptions of role clarity, mission clarity, and openness of communication (Hinkin & Tracey, 1994). It is still recommended that transactional leadership would best fit this organizations structure and culture; however, some features of the transformational leader should be implemented to motivate the warehousemen to focus on the higher-order needs of the organization and each of them as a group not as individuals or subgroups. However, this can only be accomplished if current supervision drastically reevaluates their own purpose, values and morality. Power

12 Power is the ability of one person influencing the behavior and/or attitudes of others. Power is not exclusive to leaders, yet authority power is in reference to position, therefore exclusive to that position. French and Raven (1960) give the most common description of power and divide it into five forms. They are coercive, reward, legitimate, referent, and expert power described as follows. Coercive Power This is the power to force someone to do something against their will. It is often physical although other threats may be used. Coercion can result in physical harm, although its principal goal is compliance. Demonstrations of harm are often used to illustrate what will happen if compliance is not gained. Coercion is also the ultimate power of all governments. Although it is often seen as negative, it is also used to keep the peace. Other forms of power can also be used in coercive ways, such as when a reward or expertise is withheld or referent power is used to threaten social exclusion. Reward Power One of the main reasons we work is for the money we need to conduct our lives. There are many more forms of reward, such as extrinsic or intrinsic rewards. Reward power is the ability to give other people what they want, contingent on receiving something in exchange. Rewards can also be used to punish, such as when they are withheld. The promise is essentially the same: do this and you will get that.

Legitimate Power

13 Legitimate power is that which is invested in a role. Kings, policemen and managers all have legitimate power. The legitimacy may come from a higher power, often one with coercive power. Legitimate power is also position power; power that is exclusive to a certain position. A common mistake that people in such roles can make is to forget that people are obeying the position, not them. Referent Power This is the power from another person liking you or wanting to be like you. It is the power of charisma and a foundation of the effectiveness of transformational leaders. Those with referent power can also use it for coercion. One of the things we fear most is social exclusion, and all it takes is a word from a social leader for us to be shunned by others in the group. Expert Power Expert power is having knowledge and skill that someone else requires. This is a very common form of power and is the basis for a very large proportion of human collaboration, including most companies where the principle of specialization allows large and complex enterprises to be undertaken. Expert power is that which is used by Trades Unions when they encourage their members to strike for better pay or working conditions. This conceptualization of relational empowerment has been criticized for neglecting the individuals' experiences in the empowerment process (Spreitzer, 1995; Thomas & Velthouse, 1990). Recent research has shifted focus to an individual level construct called psychological empowerment, fueled by Spreitzer's (1995) seminal groundwork which operationalized and validated the construct. Psychological empowerment is conceptualized as the result of

14 employees' positive cognitive assessment of their work context for meaning, self-determination, competency, and impact (Spreitzer, 1995). Employees perceive meaning in an activity when the objectives of the organization are assessed to be compatible with their own value systems (Brief & Nord, 1990). The perception of competence refers to the employees' conviction that they are able to produce a favorable outcome (Bandura, 1989; Spreitzer, 1995). Self-determination is defined as the discretion given to take necessary actions that are instrumental to the organization achieving its objectives (Conger & Kanungo, 1988; Thomas & Velthouse, 1990; Spreitzer, 1995). Employees perceive impact when they are aware of their ability to affect or influence organizational outcomes. According to Spreitzer (1995), these four factors act additively to determine the extent of psychological empowerment experienced by the employees and, thus, enable them to exercise their empowered role. Currently, Mr. Abrams is using legitimate and coercive power against the butchers. He closely monitors their actions and attempts to withhold breaks and even money from them if they do not do as he says. The butchers are not exactly always doing as he says with their activities; however, they do efficiently complete their tasks yet under a coercive environment that they are beginning to resent. This can only go so far, as they also have expert power and should they withhold their services, production will come to a standstill, which would have repercussions for the entire organization. The luggers are also using coercive power that they have manipulated illegally in the sense that they have obtained it by forming a strong team and thou not physically but nonetheless forceful using against those that do not form an alliance with them. They have gained favor from the organization for their work improvements and used it to control management and the grievance process would side with them if management or others threaten their territory. Management prefers to let them do as they please instead of dealing with them

15 and to some extreme fear them. The corporation would do better if they just replaced the current management staff. They have demonstrated that they are not capable of being efficient or successful leaders. Goals Earley and Kanfer's definition (1985), participative goal setting usually consists of the following steps: task presentation and discussion; goal setting; strategy development and evaluation by each individual; and strategy determination. The studies that have examined relationships between participation and its outcomes have provided mixed conclusions. Although many studies have reported strong positive associations (Greller, 1978; Schuler, 1976), others have shown near-zero relationships (Latham & Yukl, 1976; Rosenbaum & Rosenbaum, 1971). Research conducted in this area has concluded that individuals with participatively set goals have higher levels of performance than do those with assigned goals (Latham, Mitchell, & Dossett, 1978). However, it also suggests that people who participate in setting their work goals simply set higher goals than do those who have goals assigned. In contrast, the research has shown that goals assigned by the "boss" produce significantly higher levels of performance when compared to those of self-set goals (Locke & Latham, 1990). This research suggests that employee involvement in goal setting may be counterproductive. More recently, however, Latham, Winters, and Locke (1994) found evidence that when the task is complex, participation in decision making leads to higher performance. A series of experiments has since been conducted that showed when goal difficulty is held constant, performance is usually the same, regardless of whether the goal is assigned or set participative (Latham, 2004).

16 The tasks that the warehousemen are doing are not exactly complex, what is complex is the power struggle among the participants of this organization. It is important that goals be set and implemented, but it is more important that a strong management force be the one to do so as this employees would only set goals as they applied to self and in their best interest above that of the organization. Equity Distribution Managements inequitable distribution of justice between the luggers and butchers is creating conflict between the luggers and butchers and among the luggers two subgroups. The luggers have no repercussions for their bad behaviors, even when they are in violation of their union and company guidelines when they unload trucks during company work hours. The butchers are closely watched and supervised and do not receive the same privileges as the luggers. In addition, the luggers have more earning potential than the butchers which provide skilled labor. Theoretical research programs suggest that beliefs concerning group members taskrelated abilities emerge over time in task-oriented groups and determine the power and prestige order which develops (Berger & Fisek, 1974). Parcel and Cooks (1977). Theory suggests that the conditions Berger et al. (1974) specify as sufficient for the emergence of a power and prestige ordering are also sufficient to create differential reward allocation, and that group members concern for equity promotes this alignment. Status consistency and equity theories posit that a groups status and reward allocation hierarchies should be congruent. Status consistency theory suggests that over time reward ranks tend to equilibrate with the status ranks) or the power and prestige ordering) of group members (Kimberly, 1966, 1972). Kimberly (1972) hypothesizes that this will occur because economic rewards tend to be viewed as rewards for

17 performance in a position. Equity theory, as formulated in terms of exchange notions by Homans (1961, 1974) and Adams (1965), also suggests that rewards will be allocated on the basis of status when status is perceived as an input in the situation. According to the exchange formation, equity or distributive justice requires that rewards be allocated proportionally the inputs or investments of group members. The inequitable distribution of justice perceived by the butchers is the cause for conflict between them and management. While the luggers may not get along among themselves and then between them and the butchers, that is just an effect that has come about due to the inequitable distribution of justice perpetuated by management. Status consistency theory (Kimberly 1972) suggests that equilibration between status and reward ranks occurs because economic rewards tend to be defined as owed for task performance, thus also emphasizing the significance of task-related criteria. Adams (1965) distinction between the recognition of and input and its perceived relevance to an exchange implies that for an input to be weighted in the justice evaluation, it must be perceived as relevant to the exchange, presumably indicative of success on a task. The butchers provide skilled labor that is imperative to the success of the operation and while they could not do their task without the luggers providing them with their product, they perceive that their function holds more status, which has been the norm in the past. The luggers currently have more earning potential than the butchers and this earning potential has elevated their status, however, they have manipulated this through illegal power (working during normal work periods and creating an enterprise within the current organization). Management has neglected to enforce their legitimate power with the luggers as it benefits them to have product moved in faster to have more output, an output that impacts the task of butchers

18 yet all they get is tighter management control and less pay for more hours while the luggers do as the please and benefit financially. While the company benefits from the efficiency of the luggers, their inconsistent distribution of justice is creating conflict that is building up and can eventually collapse the whole organization if the butchers walk out or their perception of inequitable treatment leads to de-motivation. It is recommended that management assume their rightful place and distribute justice according to organization policies and procedures. It is also important to not de-motivate the luggers and acknowledge their enterprising methods; however, they must align their strategic methods with company standard operating procedures and avoid breaking company and union rules. It is also unacceptable to work for the trucking companies while on duty. Management must apply equitable distribute justice thru procedural justice and creating a reward system that that is fair and takes into consideration each groups task contribution. Procedural Justice Procedural justice has a process focus and is defined as the application of fair rules in decisions regarding ones outcomes (Folger & Greenberg, 1985; Leventhal & Fry, 1980; Thibaut & Walker, 1975). Accordingly, the procedural justice principle adds the element that fairness is also experienced through the way in which outcomes are determined and distributed. To the extent that methods used in assigning the outcome or otherwise arriving at a decision are seen as fair leads to the increased sense of justice and favorable work-related attitudes (Folger & Cronpanzno, 1998). Procedures may make less equitable distributions more palatable or even be themselves more satisfactory by the way they are communicated thoughtfully towards the recipient. In relation to the development of organizational commitment, the process utilized by the decision maker also is a sign of organizational supportiveness, perhaps even more than the

19 distributive elements. As Meyer et al. (1997) explain, employees affective commitment is more strongly influenced by how fairly decisions are made than by whether they always get what they want. Harvey & Haines, 2005). A fair process should be: Consistent in applying standards across people and over time Unbiased by self-interest Accurate, with decisions based on reliable information Correctable, in terms of allowing challenge or appeal against decisions Representative of the concerns of all involved Ethical (Leventhal, Karuza, & Fry, 1980; Mikula, 1980) Procedural justice matters because it has been shown to be a consistent predictor of employees reactions to their organization and to their bosses both in a positive and a negative sense. Breaches of procedural justice can result not just in withdrawal of citizenship behaviors, but in negative behaviors specifically designed to punish the organization and its representatives (Youngblood, Trevino, & Favia, 1992). Also, studies have shown a link between fairness perceptions a host of desirable outcomes like job satisfaction (Alexander & Ruderman, 1987), enhanced commitment to the organization and intentions to remain with the organization (Martin & Bennett, 1996; Olson-Buchanan, 1996), greater trust, and willingness to go beyond the call of duty (Kim & Mauborgne, 1991). Motivation David McClelland (1968) states that money is very important and an employee may think that they are working only for the money and management may think they are using it to persuade the employee to work, but that is not the complete picture. He adds that a reward or

20 incentive is an attention-getting mechanism. Several other variables contribute to motivating a person to desire to perform beyond performance expectations. Money is viewed as a motivator by managers as this is what they control, however, an employees desire to work cannot be easily controlled with money, at least not on a long-term basis. McClelland (1968) states that work situations involve four sets of variables that must be correctly identified before improvement efforts are launched: 1. The motives and needs of the workers handling the task. 2. The motivational requirements of the task they are performing. 3. The motives (or strengths and limitations) of the manager. 4. The organizational climate. Whether workers or managers are high or low in achievement, motivation makes a real difference in the effectiveness of financial incentives. Workers that are high achievers want to be rewarded financially, but, money is not always the motivation factor. However, workers with low achievement motivation can be influenced by monetary rewards. Money can be used as a motivator if that is what an employee wants, but money does not have the same impact on all employees, therefore, it does not always motivate them. Herzberg (2003) states that people are motivated by interesting work, challenge, and increasing responsibility. These intrinsic factors answer peoples deep-seated need for growth and achievement. His studies suggested that the factors involved in producing job satisfaction and motivation are separate and distinct from the factors that lead to job dissatisfaction. These two feelings are not opposites of each other. The opposite of job satisfaction is not job dissatisfaction, but rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is

21 not job satisfaction but no job dissatisfaction (Herzberg, 2003). Herzbergs theory states that these factors are independent of each other, but both must be taken into consideration in order to satisfy workers and also motivate them. The growth or motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility, and growth or advancement. The dissatisfactionavoidance or hygiene factors that are extrinsic to the job include: company policy and administration, supervision, interpersonal relationships, working conditions, salary, status, and security. The motivation-hygiene theory suggests that work be enriched to bring about effective utilization of personnel (Herzberg, 2003) David McClellands (1961) learned needs theory (Theory of Needs) argues that there are three basic needs in the workplace. These needs are acquired over time and are shaped by ones early life experiences. These needs can be classified as achievement, affiliation, and power. He found that a persons motivation and effectiveness in certain job functions are influenced by these three needs. Therefore, the importance of a particular need depends on the position. Achievement (n-ach) is the extent to which an individual desires to perform difficult and challenging tasks successfully. People with a high need for achievement:

Desire success and positive feedback that is related to their performance on tasks Seek to excel and thus tend to avoid both low-risk and high-risk situations Like to work alone or with other high achievers.

Predominantly achievement-motivated individuals avoid low-risk situations because they find easily attained success is not genuine achievement; rather they attribute it to the ease

22 of the task not their own effort. Similarly, they avoid high-risk projects, regarding success as the result of chance not their competence. Thus, individuals with high need for achievement are not gamblers, nor are they afraid to take risks. Rather, they calculate the degree of risk and select moderate risk options. McClelland (1961) suggested that people with high achievement need make good leaders, although they tend to expect those that they work with also to be result driven and may expect too much from them. Their aggressive realism makes them successful entrepreneurs. The need for affiliation (N-Affil) is the desire for harmonious relationships with other people. People with high need for affiliation:

Want to be liked and feel accepted by other people Tend to conform to the norms of their work group Prefer cooperation over competition Enjoy being part of a group.

High affiliation need individuals prefer work that provides significant personal interaction, and depends on successful relationships with others, such as customer service. They are concerned with whether people like them more than whether they are doing a good job. McClelland (1961) regarded a strong need for affiliation as undermining the objectivity and decision-making ability needed in management. The need for power (n-pow) is a desire for authority, to be in charge. It takes two formspersonal and institutional.

Those who desire personal power want to direct others; this need often is perceived as

23 undesirable

Those who desire institutional power (also known as social power) want to organize the efforts of others to further larger goals, such as those of an organization

In management, while the job requires directing others, those with a high need for personal power may become dysfunctional as their focus is on the directing of others rather than on the achievement of the company's goals. Managers with a high need for institutional power tend to be more effective than those with a high need for personal power, since they channel their need into accomplishing goals set by the organization. Those whom they direct are more likely to respond positively when they are being directed toward the larger goal. McClelland (1961) noted that people generally have all three needs; one need, however, tends to be dominant. This depends both on their internal make-up, their personality, and is learned through experience. In his later work, McClelland (1998) added a fourth need, avoidance which functions to motivate people to avoid situations and people with which they have, or expect to have, unpleasant experiences. These avoidance motives include fear of rejection, fear of failure, fear of success, and generalized anxiety. In this work he also stressed that there are both conscious and unconscious intents that affect a person's motivation. Porter and Lawlers expectancy model theory is that the motivation to perform an act is a function of the expectancy that performing that act will lead to some desired outcome, and the value of that outcome to the individual. More specifically, work motivation is viewed as a multiplicative relationship among three variables:

24 1. Value of job outcomes (valence) - the attractiveness, need utility, or importance which and individual places on potential outcomes (second-level outcomes or rewards) which could occur on the job; 2. Instrumentality the degree of belief one has that performing at a particular level will lead to the attainment of each job outcome; and 3. Expectancy the perceived probability that exerting a given amount of effort will lead to performance (Kesselman, Hagen, & Wherry, 1974). Porter and Lawler (1968) attempted to define the relationships among effort, performance, and satisfaction. The inclusion of role perception (in addition to ability) as a mediator of the effort-performance relationship represents an extension of the Value, Instrumentality, and Expectancy (VIE) expectancy core. They also distinguish between two kinds of second-level outcomes; those that are self-administered (intrinsic) and those that are administered by the organization (extrinsic). They also hypothesize feedback loops in their model, which indicate that satisfaction directly influences the value of rewards and that the contingency between performance and rewards affects the individuals perceived effort-reward probability (Kesselman, Hagen, Wherry, 1974). Kesselman, Hagen, & Wherrys (1974) test attempted to measure key variables associated with the Porter-Lawler expectancy model and described them as a series of links in a closed chain as follows: a. The expectancy that certain behaviors (expenditure of effort, quantity, and quality of production, etc.) will lead to certain rewards (pay, promotion, self-realization, etc.) will increase the probability that such behaviors will occur. The actual probabilities and choice of behaviors will be monitored or modified by role perception (based upon

25 setting, climate, etc.). This link might be called the input portion of the model. b. The behaviors engaged in will in turn lead to rewards which in turn will result in satisfactions (with pay, promotion, fellow workers, supervision, etc.). This link might be called the throughput portion of the model. c. The satisfaction derived from the rewards for past behavior will in turn modify the expectancies with respect to future outcomes. This link might be referred to as the feedback portion of the model. Applying Porter and Lawlers expectancy model in order to motivate the luggers and butchers, we must first determine valence, instrumentality, and expectancy for each one. The expectancy models theory is that if a reward that is valued by the follower is available and that he believes that performing at a certain level will get him that reward, he will be motivated to exert the extra effort to attain that reward and thereby attain satisfaction. Kesselman, Hagen, and Wherry (1974) found in their test that organization climate or setting and the nature of the position (job duties and opportunities) do have a marked influence upon the relative importance (size of loadings) of certain variables in the theory. This indicated that a supervisor must consider such factors as those mentioned above if he hopes to successfully apply the theory or to predict, how it will work for a given set of workers. This was in line with Houses (1971) contention that the theory has implications for leadership practices on the motivation of subordinates only to the extent that the leader can identify clarify, and facilitate the climate, expectancies, outcomes (and their valence), and satisfactions (or dissatisfactions) of those subordinates (Kesselman, Hagen, & Wherry, 1974). It is clear that money is a key motivator for the luggers and butchers, but there is also a desire for power by all parties to provide status. Management on the other hand has more of need

26 for personal power, which is why they are not looking at the impact of their actions in a longterm range, only for moment and how it impacts their personal goals. Incentives After reviewing employee needs it is easy to follow thru and review the reward system to see that it is congruent with employee needs or what they value. If employees are no longer motivated by the current reward system, then it is time to modify or change. Herzberg states that there must be some direct connection between performance and reward, whether extrinsic, as in recognition (money) or intrinsic as in naturally enjoyable work, to motivate employees to work harder and to improve their job satisfaction. Whatever reward is offered must be directly dependent on the output you want to achieve (McCrimmon, 2008). Expectancy motivational theory model, whereas, the motivation to perform an act is a function of the expectancy that performing that act will lead to some desired outcome, and the value of that outcome to the individual. Work motivation being viewed as a multiplicative relationship among three variables: value of job outcomes, instrumentality, and expectancy (Kesselman, Hagen, & Wherry, 1974). The concepts of Houses path-goal theory (1971) contends that the theory has implications for leadership practices on the motivation of subordinates only to the extent that the leader can identify, clarify and facilitate the climate, expectancies, outcomes (and their valence), and satisfactions (or dissatisfactions) of those subordinates (Kesselman, Hagen, & Wherry, 1974). Applying these two theories to motivate employees, however, it must acknowledge that it must modify the reward system to be one that is valued by each different group. Performance Evaluation

27 A performance appraisal is a controversial management tool searching for answers to ubiquitous problems in system design and administration (Thayer, 1987; Fox, 1991; Bowman, 1994). Genuine performance appraisal participation is a process that can mitigate many of the dysfunctions of traditional performance appraisal systems as well as engender a more humane and ethical human resource management decision-making process (Roberts, 1992). Critics of performance appraisal present a number of compelling arguments against its use. Anecdotal, empirical, personal experience demonstrates a multitude of problems with appraisal system practices. The main critiques are that individual performance appraisal assumes a false degree of measurement accuracy, engenders dysfunctional employee conflict and competition, assigns and inordinate amount of responsibility for poor performance to individual employees while undervaluing the overall work process, underemphasizes the importance of the work group, and often is used as a managerial Theory X control device (Deming, 1986). Critics of performance appraisal argue that there is a dearth of valid research to substantiate the claims of supporters (Roberts, 2002). The overall utility of performance appraisal participation was clearly demonstrated in a recent meta-analysis of 27 studies (Cawley, Keeping and Levy, 1998). Performance appraisal participation was strongly associated with desirable appraisal-related outcomes, such as higher levels of appraisal satisfaction and acceptance (Cawley, Keeping and Levy, 1998). The conceptual base supporting the efficacy of the participatory performance appraisal framework centers upon its cognitive and affective benefits (Latham & Wexley, 1981; Carroll & Schneier, 1982); Bernardin & Beatty, 1984; Daley, 1992). From a motivational standpoint, employee participation is a key element of intrinsic motivational strategies that facilitate worker growth and development. Intrinsically motivating employment entails jobs that possess task significance,

28 skill variety, task identity (a clear work product), performance feedback, and worker autonomy (Hackman & Oldham, 1980). Employee participation is an effective tool for enhancing jobrelated autonomy, a necessary precondition for employee growth. Intrinsic motivational approaches clearly communicate trust and confidence in employee abilities. A major moderating factor in the success of participation is the employees need for growth. Employees that are comfortable with traditional authoritarian management approaches are not directly motivated by increased input but may value another important attribute of participatory appraisal-employee voice. Appraisal participation provides employees with a voice into the appraisal process. Employee participation empowers them to rebut ratings, documentation, or verbal feedback with which they disagree (Folger, 1987; Greenberg, 1987). If employees are confident in the fairness of the appraisal process, they are more likely to accept performance ratings, even adverse ones. The third conceptual foundation derives from the assumption that employees possess valid, unique, and relevant performance information and insight that is unavailable or unobservable by the rater. Thus, when employees participate in the appraisal process, the quality and quantity of the performance appraisal information increases, leading to a more accurate and valid rating ((Roberts, 1992; Cotton, 1993). The fourth factor is that in a participatory appraisal system, the employee attains ownership over the process enhancing employee acceptance and manifests ego involvement as the rate manifests a stake in the success of the system (Dachler, & Wilport, 1978; Cotton, 1993). Employees frequently set higher performance goals than management when they possess the requisite level of autonomy, authority, and resource support (Latham & Wexley, 1981). The fifth element is that greater employee participation generates an atmosphere of cooperation and employee support, which encourages the development of a coaching or

29 counseling relationship, thereby reducing appraisal-related tension, defensive behavior, and rater-ratee conflict (Jordan, 1990; Daley, 1992; Tjosvold, & Halco, 1992). An effective performance appraisal system must include the participation of both parties involved, the person reviewing, and the one being reviewed; warehousemen an management. There is currently no type of appraisal system in place or if there is, it is one that follower would not trust based on current managements inability to apply equity distribution or procedural justice. Clear and specific standards of performance are major elements of a valid and reliable performance appraisal system (Bernardin and Beatty, 1984). The key is to develop standards that measure the essential job duties and responsibilities utilizing a balance of process, outcome, individual, and group-based performance standards. The development of reliable, valid, fair, and useful performance standards is enhanced by employee participation because workers possess requisite unique information essential for developing realistic standards (Roberts, 2002). The performance appraisal process culminates with the appraisal rating. Performance appraisal ratings are the product of an ongoing series of rater-ratee interactions valued by both intrinsically and extrinsically by employees. Intrinsic value derives from the validation of the employees performance efficacy. Extrinsic worth stems from the linkage with external recognition and personnel decision making (Bernardin and Beatty, 1984). The performance appraisal interview seriously tests the skills of the rater, and if this function is handled poorly, the benefits of an accurate appraisal can be lost, and employee motivation reduced. A quality performance appraisal interview includes sensitivity to employees need for privacy and confidentiality, giving employees undivided attention during the appraisal interviews, reserving adequate time for a full discussion of the issues, and preparation for the appraisal interview on the part of both the supervisor and the rater (Bernardin and Beatty, 1984).

30 A participatory appraisal interview style also entails a strong emphasis on employee performance counseling. Participatory systems facilitate discussion of employee strengths and weaknesses in a positive context where the goal is to help the employee improve his or her performance. Hence participatory appraisal reinforces communication and analysis related to employee training needs, promotional opportunities, and skills development (Nathan, Mohrman, & Milliman, 1991). A counseling approach also facilitates the identification of discrepancies in rater-ratee perceptions, which if left unchallenged, can lead to serious disagreement during the evaluation cycle. Isaac, Zerbe, and Pitt (2001) state that to enhance the effort-performance link, leaders must: 1. Provide challenging work that is valued 2. Consider the ability of the follower 3. Recognize the variances in follower self-esteem and self-concept 4. Articulate clear goals and performance outcomes 5. Understand the correlation between individual followers and job satisfaction. They also stressed three follower beliefs that strengthen the performance-outcome link: 1. The follower must have trust and believe that the leader will deliver a salient reward 2. The follower must receive equitable, predictable, treatment 3. The leader must give clear, honest feedback In reference to valence outcomes, three issues that must be addressed (Isaac et al., 2001): 1. Leaders must understand that the attractiveness of outcomes will vary with individual difference

31 2. Leaders must align the goals of followers with those of the organization 3. Leaders must understand that followers needs can change as they go throughout life (Humphreys & Einstein, 2004) Conflict Anderson (2009) states that conflict is a ubiquitous feature of groups in organizations that clearly affects groups performance. Big five personality traits (or specific facets), a the group level, affect the emergence of either task conflict, relationship conflict, or both Developing our understanding of how group personality composition affects both of these types of conflict is necessary to better enable groups to manage conflict, and thereby lessen potentially harmful outcomes resulting from conflict. Interpersonal conflict among members of workgroups in organizations arises whenever one persons actions interfere with anothers goals, wishes, or expectations (Ohbuchi & Fukushima, 1997). The unique assembly of mental faculties, biological composition, and previous life experiences that individual members bring to a group makes disagreement on goals, ideas, values, and wishes inevitable (De Dreu, Evers, Beersma, Kluwer, & Nauta, 2001; Zander, 1979). Conflict and its resolution is thus a fundamental aspect of group interaction. Since the acceptance of the Five-Factor Model of Personality (Digman, 1990; McCrae & John, 1992), researchers have begun to identify how the so-called Big Five personality traits relate o the use of conflict resolution style preferences and judgments of their effectiveness (Antonioni, 1998; Graziano, Jenzen-Campbell & Hair, 199a6, Moberg 1998, 2001; Park & Antonioni, 2007), but rarely have researchers examined how the Big Five personality traits affect the emergence of conflict and its nature in the first place. The distinction between the emergence of conflict and its resolution is crucial, as successful conflict management involves both (Rahim, 2002). This gap in understanding how personality affects conflict emergence may

32 partially be due to the fact that the emergence of conflict is inherently a group-level phenomenon. Studying the role of personality on the emergence of conflict therefore requires that one consider the personalities of the multiple people involved or aggregate personality to the group (or at least dyadic) level of analysis. Personality is know to affect group processes (Moynihan & Peterson, 2001), but an important gap exists regarding our understanding of the role of group-level personality in generating intra-group conflict. Conflict will come from lack of tolerance and failure to accept change, which will include personal conflicts between them and Larry due to their differences on this issue. It may also come from reaction to company acceptance and possibly even from Larry as his personality may change due to his physical and psychological changes. The culture may also change based on the amount of stress this change will incur. Group dynamics will change when one or more within the group do not agree or perceive as tolerance for something they do not accept. The organization should follow the normal rational problem solving process that states the following: Problem awareness Problem definition Decision making Action plan implementation Then follow through on action plan.

The key factor will be to manage conflict properly to avoid hostility, lack of cooperation, in some cases violence, destroyed relationships, and interference with company production. Two of the main sources of conflict they will encounter will arise from communication problems and personal differences. Therefore, it is imperative that communication be

33 effective and efficient. Personal differences are very common in these cases, but all that can be done is to empathize with the other conflict parties, but the organization must adhere to doing what is ethical, legal, and in the best interest of the organization. Violation of the psychological contract The psychological contract is described by researchers as an individual's beliefs regarding the terms and conditions of the reciprocal exchange agreement between that employee and the employing organization (Rousseau, 1989). One key issue in the psychological contract is the employee's expectation that the organization will live up to its promises. When an employee believes that the organization has not kept its promises, then the employee perceives psychological contract breach (Suazo, Turnley, & Mai-Dalton, 2008; Robinson & Morrison, 1997; Rousseau, 1995). Robinson and Morrisons (2000) report states that this perception, regardless of whether or not it is accurate, has been found to reduce employees trust, job satisfaction, intention to remain with the organization, sense of obligation, and in-role and extra-role performance (Robinson, 1996; Robinson et al., 1994; Robinson and Morrison, 1995). They further state that because of the potential for these negative effects, it is vital to understand the conditions under which perceptions of psychological contract breach arise. The perception that ones psychological contract has been breached is an inherently subjective phenomenon. In some cases a true breach occurs when an employee is promised something and then the organization fails to meet that obligation. However, there is also the perceived psychological contract where the employee may have read too much into what the organization stated or the organization was vague in their communication, yet the employee interpreted it as a promise and when the supposed promise is not kept, they perceive a breach in the psychological contract. In most

34 cases, it is impossible to ascertain which of these scenarios has occurred. That is, one cannot tell whether a promise was actually broken, or even whether an obligation was established. After the fact, the employee typically forms an attribution for the alleged breach (i.e., the employee may believe that he or she was purposefully deceived), but this may not reflect what actually occurred. Robinson and Morrison (2000) state that there are two root causes of perceived psychological contract breach: reneging and incongruence and a third important construct that contributes to perceived contract breach, vigilance. Reneging when agent(s) of the organization recognize that an obligation exists but knowingly fail to meet that obligation. Incongruence when the employee and organizational agent(s) have different understanding about whether a given obligation exists or about the nature of a given obligation. Vigilance the extent to which the employee actively monitors how well the organization is meeting the terms of his or her psychological contract (Morrison and Robinson, 1997). In cases where there is an actual discrepancy between what the employee has experienced and what the employee had previously expected based on his or her psychological contract, vigilance will increase the likelihood of employee detecting this discrepancy. An employee who is highly vigilant may also be more likely to perceive that the organization has breached the psychological contract merely as a function of the employee looking for instances of contract transgression. Employees who look for evidence that their organization has breached the

35 psychological contract may be more likely to perceive that a breach has occurred, even when objective evidence is unclear or lacking (Robinson & Morrison, 2000). According to Morrison and Robinson (1997), vigilance is related to three factors: uncertainty; the amount of trust underlying the employee-organization relationship; and the potential costs of discovering an unmet promise. Morrison and Robinson (1997) made a conceptual distinction between perceived contract breach, which is a perception, and the experience of contract violation which is an affective or emotional state that may or may not accompany that perception. The employee will attempt to try to understand why the violations occurred and one of the components of the interpretation process is the employees assessment of how fairly he or she was treated immediately preceding and following the perception of the contract breach. In particular, Morrison and Robinson (1997) argued that the interpretation of psychological contract breach will be heavily influenced by perceived interactional fairness (Bies & Moag, 1986), or employees beliefs about the interpersonal treatment that they experienced (e.g., honesty, respect, consideration, adequate explanation). Unfair interpersonal treatment signals to an employee that he or she is not valued or respected in the relationship (Brockner & Wiesenfeld, 1996). Robinson and Morrisons (2000) study states that employees that go through organization changes may be especially likely to perceive a breach of their current psychological contract regardless of the action of the organization. With such employees it may be particularly important to monitor and guide their perceptions of organizational obligations and their perceptions of how well the organization is fulfilling those obligations. Sometimes psychological contract breach is unavoidable, yet the destructive reactions that often follow are not. This study recommends managing the employees attributions for a perceived contract breach in order to

36 reduce feelings of anger and betrayal. If the organization has to renege for unavoidable reasons, offer the employee honest and adequate explanations about the situation. The results of the study indicate that even if an employee blames the organization for a perceived psychological contract breach, feelings of violation will be less intense if the employee feels that he or she was treated with fairness, honesty, and respect. A reduction in the intensity of felt violation may offset the lowered trust, reduced citizenship behavior, and turnover that have been shown to follow from feelings of violation (Robinson, 1996; Robinson & Morrison, 1995). The breach in psychological trust that is occurring with this organization is that management is perceived as not treating all warehousemen equally. The butchers feel they are being monitored at a higher level and held accountable to strict organizational standards not applied to the luggers. This perception is creating conflict for them as management will not validate their grievances or make any attempts to explain their actions. Conclusion When people work together in teams their social interaction is concerned with taskrelated issues as well as with relationship issues (Forsyth, 1983). As to the later, team members may like or dislike one another for personal reasons, and share or dispute one anothers political view, values and beliefs. One reason why teams can work together effectively is because they establish a positive, trusting group climate, based on interpersonal liking and shared norms and values (Zander, 1993). Likewise, one reason why teams fail to be productive is because they fail to develop a positive team climate and instead develop relationship conflicts conflicts related to interpersonal issues, political norms and values, and personal taste (Amason, 1996; De Dreu & Van de Vliert, 1997; Jehn, 1995, 1997). Bottom line, conflict is always present to some extent,

37 but what is relevant is how the parties involve handle it that will determine the outcome. It was even found that conflict is sometimes good as it can improve production based on competition. Overall, this organization appears to have many problems but most if not all issues can actually be considered the effect of the problem and not the cause. It is very important that managers determine cause and effect before they make decisions that may only serve to camouflage the real issue. In my opinion there is one major issue that if resolved could significantly improve the situation if not altogether fix the problems at this warehouse management and thereby leadership behaviors. Management encompasses planning, organizing, leading and motivation, and controlling (Humphreys, 2010). Current management is currently doing none of these functions. In fact if I had to pick one group that was managing it would be the six luggers that took matters into their own hand and began directing this functions. They did do it for their own interest, but they did show more leadership ability than current management. I reiterate that my recommendation would be to remove current management and replace it with people that not only can manage others, but are not afraid to risk failure in order to succeed. Current management is doing as little as possible to contribute to the success of the organization. They take a stand on weak issues such as heavy-handed measures with the butchers where they know they have less resistance than other areas, but are gradually pushing them beyond their limits and that will soon backfire on them too. They are afraid of the luggers, therefore prefer to side with them and avoid confrontations. This is not management; this is avoidance and lack of leadership abilities. A strong management team can plan the processes necessary for each group to know what their tasks and boundaries are; they can organize the functions of each department; they lead and motivate their followers, and thereby control the environment through strong leadership

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