Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 21-1

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 21-1

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 21-2

Chapter 21

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.

Leadership: the process of influencing and inspiring others to work to achieve a common goal and then giving them the power and the freedom to achieve itEffective leaders empower and embolden

employees to act in the best interest of the business

Symphony orchestra conductor vs. jazz band leader

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Business leaders should be:InnovativePassionateWilling to take risksAdaptable

Management vs. leadership

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Effective leaders:Create a set of values and beliefs for employees and

passionately pursue themEstablish a culture of ethicsDefine and then constantly reinforce the vision they

have for the companyRespect and support employeesCreate a climate of trust in the organizationFocus employees’ efforts on challenging goals and

keep them driving towards those goals

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Effective leaders (continued):

Celebrate workers’ successUnderstand that leadership is multidimensionalCreate and environment in which people have

the motivation, the training, the resources, and the freedom to achieve the goals they have set

Communicate with employeesValue the diversity of workers

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Effective leaders (continued):

Value new ideas from employeesUnderstand that success really is a team effortEncourage creativity and risk taking throughout

the organizationBecome a catalyst for changeDevelop leadership talentMaintain a sense of humorKeep an eye on the horizon

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Leadership is a key determinant of a company’s successBut, there is no “single” best style of leadershipWorkers tend to respond more to adaptive,

humble leaders who are results oriented and who take the time to cultivate other leaders Servant leadership

Leaders have to earn their followers

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To be effective, entrepreneurial leaders must:1.Hire the right employees and constantly improve their

skills2.Build an organizational culture and structure that allows

both workers and the company to reach their potential3.Communicate the vision and the values of the company

effectively and create an environment of trust among workers

4.Motivate workers to higher levels of performance

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The impact of a single hire on a small company is significantHiring mistakes are expensiveSurvey: 69% of business owners have made

at least one bad hire during the last yearHBR: bad hiring decisions cause 80% of

employee turnover

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How to Hire WinnersCommit to hiring the best talentElevate recruiting to a strategic position in

the company

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Elevate recruiting to a strategic position in the companyLook inside the company firstEncourage employee referralsUse multiple channels to recruit talent

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Sources of Recruiting Employees


Elevate recruiting to a strategic position in the companyLook inside the company firstEncourage employee referralsUse multiple channels to recruit talentRecruit on campusForge relationships with schools to gain access to

internsRecruit “retired” workersConsider using offbeat recruiting techniquesOffer what workers want

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the companyCreate practical job descriptions and job

specificationsJob analysis

1. Job description2. Job specification

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Linking Tasks from the Job Description to the Traits Needed to Perform a Sales Representative’s Job



the companyCreate practical job descriptions and job

specificationsScreen resumesCheck referencesPlan an effective interview

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Plan an effective interviewInvolve others in the interview processDevelop a series of core questions and ask them of

every candidateAsk open-ended questionsPresent hypothetical situationsProbe for specific examples in the candidate’s past

work experience that demonstrate the necessary traits and characteristics

Inquire about recent successes and failuresCreate an informal setting

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Interview Questions for Candidates for a Sales Representative Position


How to Hire WinnersConducting the interview

Breaking the iceAsking questions

Puzzle interviewSituational interviewPeer-to-peer interview

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Is It Legal?


A Guide for Interview Questions


How to Hire WinnersConducting the interview

Breaking the iceAsking questionsSelling the candidate on the companyBackground checksEmployment tests

Valid testReliable test

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Why Employers Do Not Hire Based on Content of Candidates’ Social Media Pages


Company culture: the distinctive, unwritten code of conduct that governs the behavior, attitudes, relationships, and style of an organization“The way we do things around here”


Effective executives know that building a positive organizational culture has a direct, positive impact on the financial outcomes of an organizationNeed to hire employees who share the

organization’s values


Principles to create a productive, fun workplace:1. Respect for the quality of work and a

balance between work life and home life2. A sense of purpose3. Diversity4. Integrity5. Participative management6. Learning environment7. A sense of fun8. Engagement


Managing Growth and a Changing CultureA company’s culture changes as the

organization growsImportant to balance the need for growth with

an effort to retain company culture


Team-Based ManagementCorporate grows requires a shift from top-

down, single-leader structure to one that is team basedSelf-directed work team

Be aware of groupthink and the Abilene paradox


To ensure the success of teams:Make sure that teams are appropriate for the company

and the nature of the workForm teams around the natural work flow and give

them specific tasks to accomplishProvide adequate support and training for team

members and leadersInvolve team members in determining how their

performances will be measured, what will be measured, and when it will be measured

Make at least part of team members’ pay dependent on team performance


The Stages of Team Development


Effective communication is essential to a successful companyStudy: ROI over the last 5 years in

companies with effective communication is 47% higher than in companies with the least effective communication


Improving communicationNeed to communicate the company’s vision

to everyone in the company and to empower employees to accomplish the vision within the framework of the company’s culture

Technology is making it possible to build a good communication system even when office space isn’t shared


Communicating effectivelyBarriers to effective communication:

Managers and employees don’t always feel free to say what they really mean

Ambiguity blocks real communicationInformation overload causes the message to get lostSelective listening interferes with the communication

processDefense mechanisms block a messageConflicting verbal and nonverbal messages confuse

listeners


How to be a better communicator: Clarify your message before you attempt to

communicate itUse face-to-face communication whenever possibleBe empatheticMatch your message to your audienceBe organizedEncourage feedbackGet out of the office and talk to employeesTell the truthDon’t be afraid to tell employees about the business,

its performance, and the forces that affect it


ListeningAn essential part of the communication processUse PDCH:

Identify the speaker’s purposeRecognize the details that support that purposeSee the conclusions they can draw from what the

speaker is sayingIdentify the hidden meanings communicated by

body language and voice inflections


The Informal Communication Network: The “Grapevine”An important link in the communication network

Study: up to 70% of all organizational communication comes via the grapevine

Can also be an excellent source of organizational feedback


Motivation: the degree of effort an employee exerts to accomplish a task; it shows up as excitement about workFour aspects of motivation:

1. Empowerment2. Job design3. Rewards and compensation4. Feedback


EmpowermentEmpowerment: involves giving workers at

every level of the organization the authority, the freedom, and the responsibility to control their own work, to make decisions, and to take action to meet the company’s objectives


Job DesignStudy: only 47% of employees are satisfied

Work design and the job itself can affect job satisfactionJob simplificationJon enlargement (horizontal job loading)Job rotationJob enrichment (vertical job loading)

FlextimeJob sharingFlexplace

Telecommuting


Rewards and CompensationCash is an effective motivator…up to a point

Pay-for-performance compensation systemsProfit-sharing system

To be effective, these systems need to be:Performance basedRelevantSimpleEquitableInclusiveTimely


The Feedback Loop


Performance AppraisalPerformance appraisal: the process of

evaluating an employee’s actual performance against desired performance standards360-degree feedback

Peer reviewUpward feedback


Performance appraisals have three goals:1. To give employees feedback about how they are

performing, which can be an important source of motivation

2. To provide entrepreneurs and employees the opportunity to create a plan for developing employee skills and abilities and for improving their performance

3. To establish a basis for determining promotions and salary increases


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Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 21-1