8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
1/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
2/22
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
3/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
CHAPTER 1: INTRODUCTION
1.1 Introduction
The purpose of this stud0 is to e3amine different factors that affect a compan0,
organization or even an individual4s commitment to change' These varia)les, when
carefull0 controlled can )e the determining factors for success' 5irst we will anal0ze the
effects of Charismatic Leadership on an organization4s level of commitment'
The effect of good leadership on initiatives ta6en for change have since long )een
ignored )0 the Academia' At the same time, studies done on organizational )ehavior
during times of change within an organization have failed to lin6 with more e3tensive
theories a)out leadership 7Ps0cholog0 Toda0, (8!19 In order to understand the impact of
change and how successful emplo0ees can cope to said change initiative, we will loo6 at
the emplo0ee4s )ehavior from two different angles: one is rooted in Leadership literature
and the other has its )asis in $rganizational literature' 5or now we shall onl0 discuss the
former: what leadership st0le is )est suited in a changing environment; How does it ma6e
an organization )etter understand the change, imposed on it; According to wide level' Ta6e the e3ample of /artin Luther ?ing @r'
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
4/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
Through his intense rhetoric and charismatic personalit0, he was a)le to hold great
influence over the population of the &SA, )lac6 and white' Ta6e the e3ample of andhi
and /r' @innah from the su)>continent' Through their charismatic personalities: andhi
with his calm personalit0 and @innah with his sharp and cunning tactics were a)le to end
almost a centur0 of colonialism in India and more importantl0, the0 were a)le to
influence and reason with an impulsive nation li6e the Indians' The0 were a)le to defeat
the
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
5/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
add real value to the tas6 at hand, in order to further encourage his followers to e3cel )0
providing them with recognition, this has the added )enefit of encouraging the rest of the
emplo0ees, who do not have the will to e3cel' Another important 2ualit0 of a
transformational leader is his a)ilit0 to stir the emotions of his followers, to trul0 ignite
their emotions and motivate them to do the tas6 at hand with great passion and
enthusiasm' .hile doing this he compels his followers to loo6 )e0ond their self>interest
and loo6 at the )roader picture, to thin6 of the )enefit of people other than his own'
Lastl0, )ut most importantl0, it is imperative for a transformational leader to set unreal
goals for his followers, this ma0 sound weird )ut this is as a matter of fact the onl0 wa0
for one4s emplo0ee4s to actuall0 improve and )uild hisBher s6ills'
5rom this we conclude that in order to commit one4s emplo0ees to change, one
must )ecome a charismatic leader and in order to )ecome a charismatic leader one must
hone the s6ills of a transformational leader' However li6e all theories there are certain
downsides: if we an organization is dependent on a leader4s a)ilit0 to lead then so will the
emplo0ees a)ilit0 to wor6 )e dependent on said leader' If for some unforeseen reason the
leader decides to leave the organization or is a)sent from wor6 for a few da0s then the
organization and the wor6ers will )ecome handicapped and their productivit0 will
drasticall0 decrease, the wor6ers will get demotivated and the organization in turn will
suffer'
Another factor which determines an individual4s commitment to change is the
reward he will get from it' It is natural for human )eings to )e selfish, whenever an
emplo0ee does something for the organization he does so e3pecting some reward in some
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
6/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
form, it can either )e material or something as simple as a pat on the )ac6 )ut a reward
must )e there for the ta6ing 7.ilson, (88*9
#ow, each compan0 strives to develop a culture and it is in the compan04s )est
interest to develop such a culture which will increase the output of said compan0, if such
a culture is to )e developed then a proper rewards and recognition s0stem is a
compulsion' .h0 is it important to tailor a compan04s culture as such; The answer to that
lies in the fact that in toda04s e3tremel0 competitive environment it is )ecoming
increasingl0 necessar0 to have emplo0ees who can asses and manage ris6, the0
organizations need their wor6ers to )e proactive and wor6>centric and )e a)le to produce
results that show' $r if we consider a )roader e3ample, li6e that of a political part0 then
in this case a part0 needs its emplo0ees to )e motivated and dedicated to the cause, then
the0 must give their wor6er some reward in an0 form, something heBshe can cherish and
value' Thus it is imperative for an0 organization, not matter how )ig or small to reward
its emplo0ees, to show them that their wor6 is valued and the0 as a dedicated mem)er of
the organization add value to the compan0 and help in enhancing the output' If a certain
compan0 wants its emplo0ees to em)race change and welcome it with open arms then
the0 must offer some incentives, these offerings on )ehalf of the compan0 can help the
can help said compan0 enforce its changes at a more faster pace'
However, with this too there are certain pitfalls and draw)ac6s' 5or e3ample, if
we offer cash )onuses to hard>wor6ing emplo0ees then this is the onl0 a temporar0 short
term solution, this will not )u0 his long term lo0alt0 and will onl0 ma6e his wor6
dependent on that reward' 5urthermore, if an organization rewards a selected few and not
the rest then this can create enmit0 or hatred amongst colleagues' Also one must ta6e into
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
7/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
account the fact that in large organization this practice can )ecome ver0 tedious as
loo6ing for sa0 a dozen individuals in a thousand can prove to )e a ver0 tedious tas6
7/c/ahon, (8!89'
The last factor or varia)le that shall )e discussed is the effect of an individual4s
attention on the performance of an emplo0ee and his willingness to accept and commit to
change' As mentioned a)ove, a charismaticBtransformational leader is he who gives
individual attention to his follower, which in turn motivates him to strive for e3cellence
which indefinitel0 will help him to commit to a change' 5urthermore, when an
organization is going through changes then it is imperative to engage the emplo0ees with
individual support' .hat this does )asicall0 is solve the issues of an organization from
the grass root level, which in turns strengthens the organization altogether providing a
more concrete platform for the emplo0ee to commit to change' This strateg0 helps us
implement the change from a )ottom up approach' Gou change the individual, his
mindset, his thin6ing in order to change the organization and ma6e it grow' To this too
there are certain draw)ac6s, individual support is not a ver0 practical idea for large
organizations which emplo0ee thousands, one would have to esta)lish a proper portfolio
for the cause which can prove to )e a ver0 costl0 venture'
.e have discussed * 6e0 independent varia)les which determine a dependent
varia)le, namel0 Commitment change' .hat we4ve concluded is that in order for a
wor6er to full0 em)race the idea of change, all three factors i'e' Charismatic Leadership,
Rewards and Individual support are ver0 important' .hat we4ve concluded is that a
change can never )e full0 implemented in an organization if one of these 6e0 factors is
missing' Rewards will not )e appreciated if the person who rewards 0ou is not
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
8/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
charismatic, individual support is of no use if there are no rewards to )oost morale and
the chain goes on and on 7Steinhardt'n0u'edu, (8!19'
Industry:
#ow the 2uestion arises, how do these varia)les affect the automo)ile industr0;
And when we tal6 a)out change in the automo)ile industr0, what is it e3actl0 that we4re
tal6ing a)out; In the past *8 0ears the automo)ile industr0 has transformed rapidl0, with
the demand rising one must rethin6 the entire )usiness modal on which the industr0
operates, although the old tried and tested methods have their significance )ut it is those
companies who thin6 out of the )o3, who persist and stand the test of times' Here is
where true leaders come in, charismatic leaders who )elieve in transformation and who
can ma6e their wor6ers )elieve, so are the ones who can trul0 commit to the success of a
compan0' 5or e3ample, in the (8 th centur0, cars were )uilt as high performance machines
with high tor2ue and acceleration, the demand for such vehicles was high'
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
9/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
1.2 Problem t!tement
$rganizational changes are planned and organized to ensure the growth and
development of organizations' Changes are meant to happen, which will help in )ringing
positivit0 in the organizations 7?lein ?night, (8819' Commitment to change refers to
the desire to provide support to the organizational changes, which can promote growth,
development, and success of the organization' Innovation and creativit0 are the two 6e0
factors that influence changes in an organization 7Teare Ra0ner, (88(9' It is not
necessar0 that changes alwa0s lead to success, at times, the implementation of plans
result in failure, )ut that does not mean that changes are avoided at different stages'
Changes are important part of the organization, which pla0 an important role in preparing
the organization to achieve the strategic goals and targets 7Choi Price, (8819'
According to commitment theor0 which was developed )0 Richard .alton: emplo0ees
perform )est when the0 are given )roader responsi)ilities, encourage contri)uting and
helped to ta6e satisfaction in their wor6' uest 7!DD9 in support of commitment theor0
descri)e the significance of )inding of emplo0ees to the organization and o)tain their
)ehavior outcome of increased efforts and cooperation'
$rganizational undergo different processes to )ring changes in their functions,
operations, s0stems, hierarch0, culture, and policies 7/e0er Allen, !DD!9' The process
of change includes the steps that help in converting an organization from the current state
to the desired state 7Sinclair et al', (8819' There are some prominent organizational
change models that are used )0 the managers and leaders to achieve the desira)le changes
and developments in the organization' Commitment towards change can help in )ringing
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
10/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
relevant changes, and it is the responsi)ilit0 of the leaders and managers to )ring
effective changes in the organization 7arvin, (8889' 7Herscovitch and /e0er (88(9:
present a practical solution that affective commitment to change refers to a desire to
support a change, continuance commitment to change is )ased on a recognition that there
are costs associated with resisting change, and normative commitment to change reflects
a sense of o)ligation to )e supportive' Contingent reward offer tangi)le and intangi)le
support to their followers, set directions, and determine the reward for goal achievement
7.alum)wa et al', (88E9 and it impact will directl0 influence emplo0ees to perform his
)est effort to achieve organizational goals and organizational commitment level' /ost of
emplo0ee are not commitment to their +o) and the reason )ehind is lac6 of Leadership
and reward whereas there are various studies which consider that the leaders emphasize
on providing emplo0ees with a satisfactor0 and challenging environment, which helps
motivating emplo0ees and motivated emplo0ees will perform )etter as compared to
others, which results in )etter performance and organizational commitment
The individual4s perspective towards change might differ from the organization4s
point of view' mplo0ees are important part of the organization, and it is essential that
the0 accept the changes and show their commitment towards it 7Henning>Thurauet'al,
(88(9' The leaders use different leadership st0les to motivate individuals to focus towards
)ringing changes' The process of change is highl0 affected and influenced )0 the
leadership st0le and planning process, which depends on the goals and o)+ectives of the
organization' Charismatic leadership is one of the commonl0 used leadership st0le, which
helps the leaders in influencing their own )eliefs, ideas, values, thoughts, and perceptions
on others 7Paton /cCalman, (8889' Toda0, leaders are tr0ing new models and
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
11/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
innovative st0les to lead their organizations, unli6e implementing the traditional
leadership st0les and models' The charismatic leaders transform the needs and desires of
their team mem)ers and emplo0ees, and ma6e them understand the importance of
change, innovation, creativit0, and development 7Lehesvirta, (889'
ffects of commitment to change var0 across career stages' The importance of
attention for commitment towards change is represented )0 its relation to contingent
reward and Leadership 7
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
12/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
Thus the o)+ectives are esta)lished as"
!' To e3amine the relationship among Charismatic leadership, Reward,
Individualized support and Commitment to Change
(' To anal0ze the impact of Charismatic leadership, Reward, Individualized
support on Commitment to Change
Rese!rc" %uestions:
So as to accomplish previous research o)+ectives, this stud0 will answer the
2uestion stated )elow"
!' Is there an0 relationship among Charismatic leadership, Reward, Individualized
support and Commitment to Change;
(' %oes Charismatic leadership, Reward, Individualized support have a significant
impact on Commitment to Change;
1.& O'er!tion!l De(initions:
#ow we will tr0 to define the a)ove stated varia)le in terms of Pa6istan and how
the0 affect the local demographic'
A charismatic leader in the Pa6istani societ0 is one who trul0 )elieves in his
wor6ers B followers B emplo0ees, who will loo6 onto him without )iasness, irrespective of
his caste, color, creed and religion' Adding to that our societ0 accepts one to )e a man of
charisma if he possesses high morals and has e3cellent wor6 ethic' A manager at an
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
13/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
automo)ile factor0 should )e highl0 motivated, positive and down to earth, in order to
connect to his emplo0ees, most of which are from decent )ac6grounds 7Hairston, !D=19
.hen we tal6 a)out rewards, Pa6istan as a nation is not as materialistic as the
.est, 0et, as mentioned earlier, most of the local la)or )elongs to the poor )ac6grounds'
5or them, mone0 is motivation' Thus, the most effective wa0 to reward an emplo0ee,
especiall0 in the automo)ile factor0 is to give him a cash )onus, this ma0 include an e3tra
id )onus or an0thing appropriate'
#ow a)out individual support, this I )elieve is the 6e0 factor when considering
the Pa6istani demographic' It is an intrinsic propert0 of human nature to 0earn for
personal attention, to )e felt special' If an emplo0er in Pa6istan can do that, sa0 an
automo)ile factor0 reall0 wants his emplo0ees to commit to a change then this is the onl0
wa0 to go a)out it'
Let4s conclude with the last most important varia)le, Fcommitment to change4'
People in Pa6istan are not ver0 receptive to an0thing out of the norm: the0 li6e to stic6 to
their conservative traditions and lifest0les' Same is the case with an emplo0ee' 5or
e3ample if an automo)ile upgrades, an emplo0ee might feel his s6ills have )ecome
irrelevant' In order to overcome this reluctance of the emplo0ee, the factors a)ove are of
critical importance'
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
14/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
CHAPTR (" LITRAT&R R-I.
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
15/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
CHAPTER ): REEARCH *ETHOD
3.1 Pro'osed T"eoretic!l +r!me,or-
Richard Walton (1985) Theory of commitment is considered as a
relevant tool to model the commitment towards change by providing
worers broader responsibilities! enco"rage contrib"ting and helped to
tae satisfaction in their wor# The theory contends with high evidence
that employee attit"de and behavior towards organi$ational change
shows a most important factor for s"ccess (%rmenais! 199&)#
Transformational leadership behavior ('erold! 8*+eo! 1, -"
et#al! ) and .ndivid"ali$ed +"pport (%rmenais and 'arris! 9!
/edor! 0, +mollan et!al! 0) has been fo"nd to positively aect
employees2 commitment to change moreover the leader sets rewards
in res"lt for best performance for which contingent reward plays a
main role in oering tangible and intangible s"pport to their followers!
set r"les! and determine the reward for goal achievement (3ass! 1998
* Wal"mbwa! 8)# Commitment to change has attracted many
researchers in the past! giving rise to vario"s de4nitions and models of
change# Coetsee (1999) describes commitment to change as the 4nal
phase of acceptance of change# 'e believes it to be a prod"ct of
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
16/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
nowledge abo"t change! information abo"t change! empowerment!
rewards and recognition for changing and shared visions#
The theory of commitment to change (CTC) proposes three
concept"ally independent variables! these variables incl"des
charismatic leadership! contingent reward * individ"ali$ed s"pport# %s
a general r"le! the more transformational leadership style and s"pport!
the more perceived o"tcomes of an individ"al in a shape of reward
which as a res"lt directs an individ"al intention to "nderstand the
importance of change (ehesvirta! 6)# +ee /ig
Figure 3.1
Proposed Theoretical Framework
).2 Hy'ot"eses
'a17 Contingent Reward has a signi4cance relationship with
commitment to change#
Contingent Reward
Commitment to
ChangeCharismatic
Leadership
Individualized
Support
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
17/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
'a7 Charismatic eadership has a signi4cance relationship with
commitment to change#
'a&7 .ndivid"ali$ed +"pport has signi4cance relationship with
commitment to change#
'a67 Contingent Reward! Charismatic eadership * .ndivid"ali$ed
+"pport have a signi4cant impact on commitment to change#
).) Rese!rc" Desin
The research is eplanatory research# Researchers foc"s on
identifying and eamining factors that aect employee commitment
towards change by providing charismatic leadership! contingent
reward and s"pport#
).).1 Ty'e !nd N!ture o( tudy
.n this st"dy "antitative method has been "sed to "antify the
relationship and to eamine the impact of contingent reward!
individ"ali$ed s"pport and charismatic leadership on Commitment to
change#
3.3.2!m'lin !nd Desin
/or this st"dy we will collect data thro"gh a 4eld s"rvey method
whereas all "estionnaires will be self:administrated# The respondent
of this st"dy will be the employees woring in an a"tomobile ind"stry
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
18/22
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
19/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
acc"racy and relevancy of information gathered as the responses are
obective! standardi$ed and comparable (Dim"nd! 3abin! Carr! *
@riBn! 1, +earan * 3o"gie! 1)# This framewor is an
appropriate tool to model the commitment towards changes thro"gh
leadership! reward and individ"ali$ed s"pport# Therefore Walton!
(1985) theory has been "sed in this st"dy#
%n adaption of commitment to change E"estionnaire (CCE) has
been "tili$ed for the st"dy taen by dierent so"rces as mentioned in
/ig # The "estionnaire is divided into two sections % * 3# +ection %
consist of "estions of three independent variables i#e# Charismatic
leadership! .ndivid"ali$ed s"pport * Contingent Rewards whereas
+ection 3 consist of one dependent variable i#e# Commitment to
change# %ll scales in this st"dy were meas"red by "sing 4ve points
iert scale ranging from 1 with strongly %gree to F strongly disagree
(%llen * ?eyer! 199)#
The constr"ct! sections! n"mber of items and so"rces are listed in /ig
Figure 3.2
Variables Sectio
n
Scale
Items Source
eadership % 10 Wal"mbwa ! 8
Reward % 5 +ims and +$ilagyi2s! 19F5
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
20/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
.ndivid"ali$ed
+"pport% 8 Wal"mbwa ! 8
Commitment to
change
3 1 %llen * ?eyer! 199
).).& Procedure o( D!t! Collection
.nitially! the "estionnaire will distrib"te to 6 employees of
a"tomobile ind"stries in ;arachi# A"ring the data collection process!
self:administered "estionnaire! incl"ding a covering letter will deliver
to respondent# /"rthermore the instr"ment m"st be converting in a
soft copy by "sing @oogle Aocs and then will be circ"lated to all
concern respondents# .n addition to data collection hard copy of
"estionnaires will be circ"lated to related organi$ations in ;arachi
after getting permission by the respective manager in organi$ations#
The "estionnaires incl"des "estions abo"t fo"r factors, Charismatic
eadership! Contingent Reward! .ndivid"ali$ed +"pport and
Commitment to Change)#
).)./ t!tistic!l Tec"ni0ues
%ll statistical analysis were performed by "sing +=++ 19##
Aescriptive analysis of ?ean * +tandard deviation! Correlation analysis
* ?"ltiple Regression analysis will be applied on data! overall 6 data
will be analy$ed# 'ypothesis 1! and & will be analy$e by "sing
correlation analysis and hypothesis 6 will be analy$e by "sing
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
21/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
regression analysis! hence all data will be analy$e on signi4cance level
of 95G#
8/9/2019 The Impact of Contingent Reward, Charismatic Leadership and Individualized Support on Commitment to Change
22/22
The Impact of Contingent Reward, Charismatic Leadership and Individualized Support
on Commitment to Change
RE+ERENCE