Likert's Management Systems
Rensis Likert's Management Systems are powerful theories of leadership which highlight various organisational dynamics and characteristics.
Social psychologist Rensis Likert first described his famous management systems in the 1960s, based upon his observations of employee-manager relationships in organisational settings. His four systems are designed to highlight various organisational dynamics and characteristics built around interactions between individuals. Notably, the systems explore various soft management skills such as trust-building and their effects on the broader dynamic of the organisation itself.
The four management systems as identified by Likert were:
In his view, the closer the organisational characteristics are to the Participative system, the more satisfied and therefore more productive the employees will be. On top of productivity, the organisation will receive numerous other benefits, including staff retention increased profitability and generally reduce costs over the long term.
How Do You Identify these Systems in Your Organisation?
As a leader, one can identify the system present in their organisation through observation, but also through interviews or questionnaires answered by employees.
Exploitative Authoritative systems are extremely hierarchical, with power and responsibility lying at higher levels within the organisation.
Individuals lower down the system (non-managers) do not influence the decision-making whatsoever and are not involved in the process by their superiors - this is due to a lack of trust between managers and employees. Communication is delivered top-down and roles are dictated, rather than it being a two-way conversation. Higher management considers themselves responsible for achieving organisational objectives but will hold employees responsible for any mistakes that are made at lower levels.
A summary of the system characteristics:
- Decision-making and responsibility at upper levels of the organisational hierarchy
- Little to no trust in employees
- Decisions and roles are imposed on employees
- Employees cannot openly discuss decisions and roles with managers
- Employees may engage in counter-productive behaviour
- Motivation by punishments and threats - play on fear
- Teamwork and communication are minimal
- Decision-making extended to middle-managerial levels
- More trust towards employees, though somewhat condescendingly
- Responsibility still lies near the top of the hierarchy
- Limited employee consultation on decisions
- Employees still cannot discuss their roles with managers
- Team members may compete for rewards
- Rewards for performance, but also still a threat of punishment
- Teamwork and communication are minimal
- Decision-making extended to lower-levels when it significantly affects their role
- Substantial trust in employees
- Responsibility often shared with some team members
- Decisions can be formed through employee consultation processes
- Employees discuss job-related issues horizontally, and sometimes vertically
- Teams are more co-operative - communication and teamwork are good
- Motivation primarily through reward, but sometimes punishment
- Decision-making, responsibility and values are free-spread across all tiers
- Complete confidence and trust in all employees
- Decisions are formed through group participation and consultation
- Communication is free and managers actively try to understand issues
- Employees are co-operative and openly accountable
- Motivation is provided through monetary rewards and involvement in goal-setting
- Teamwork, satisfaction and therefore productivity, are high
In a Benevolent Authoritative system, responsibility also lies at the upper echelons of the organisation. However, instead of inducing performance through the threat of punishment, and therefore fear, employees are instead motivated through a reward system. Superiors have more trust in their employees than do managers in an Exploitative Authoritative system, and therefore are more willing to reward individuals for good performance.
There is more two-way communication between employee and line-manager however, upwards communication is more limited and tends towards only positive information, not queries or requests. Employees will not suggest any new ideas or recommendations which can make them more productive or satisfied and therefore the result is a lack of communication and teamwork.
A summary of the key characteristics is as follows:
In a Consultative System, managers have yet greater trust in their subordinates and demonstrate as such by implementing ideas or beliefs that they share with their team members.
There is an open level of communication throughout the hierarchy of the organisation and team members are often consulted during the decision-making process, particularly when any changes will affect them substantially. However, the ultimate power of decisions still remains with those at the highest levels within the organisation.
Employee motivation is fuelled by incentives, including both rewards and the possibility of involvement or even responsibility for specific tasks. In this style, employees are given greater freedom and involvement in meaningful tasks are used to boost intrinsic motivation.
A summary of the key aspects:
Likert considered the Participative System to be the most satisfying for lower-level employees. Upper management has full trust in their subordinates and actively works with them as part of the decision-making process. Employees are free to discuss any issues or ideas with their superiors, knowing full well that their discussions may be conducive to at least some kind of change.
Rewards within a Participative System are common, and teams are happily co-operative with no direct competition between employees. The level of communication is high, both horizontally and vertically, and teamwork is regular. This system is generally more common in flatter organisations, or those which are smaller with lower tiers of the hierarchy, though it can be employed within any company.
A summary of the key aspects:
There are several important concepts which form the basis of all of Likert's Management Systems, notably:
Motivation can be used both positively (through rewards and incentives) and negatively (through punishment and threats).
Both are generally implemented in Likert's systems, with Exploitative Authoritative and Benevolent Authoritative more primarily focussing on punishment, whilst Consultative and Participative are angled more towards a system of reward, though none is committed to any one approach.
Rewards can come in the form of monetary bonuses, extra responsibility, opportunities for development, or the improvement of employee relationships with superiors.
During the development of his systems, Likert also examined various leadership styles. These are highly variable and include autocratic leadership, servant leadership, authentic leadership, situational leadership, transactional leadership and transformational leadership, to name a few.
Each of these has an impact upon management and leadership, at both lower and higher levels of the organisational hierarchy.
The way in which communication is utilised is incredibly enlightening with regards to the way power and authority is distributed throughout an organisation.
In Exploitative Authoritative Systems, communication is nearly entire one-way, with decisions being dictated directly from higher management to subordinates, whereas in Participative Systems, communications are horizontal, with employees being involved in the day-to-day decision-making process.
Related to the levels of communication within an organisation, the levels of influence employees have can be indicative of the managerial system being employed.
In Benevolent and Exploitative Authoritative Systems, subordinates are generally not consulted with regards to decisions, even those that relate to their role, whereas in Participative Systems, employees are actively encouraged to take part in discussions about the business, some of which may influence the direction of the organisation and their stance towards subordinates.
When employees are asked their opinions and ideas regarding the running of the business, they may indirectly influence the decision-making of their superiors, with their thoughts, ideas and values being included in any strategic planning.
However, in either of the Authoritative Systems, the final decision is made by individuals at the upper levels of the organisational hierarchy. Alternatively, in Consultative Systems, the employees are given a role in the decision-making process through consultation and in a Participative System, subordinates may have as much influence in decision-making and goal-setting as does their manager.
Linking Pins are an important facet of Likert's management concepts. He described these as individuals who are spread across two or more teams, and can, therefore, be used to facilitate the integration of these when required. These
are generally just one individual who finds themselves within two teams, often due to higher levels of responsibility, or a broad skill-set which allows them to move between different departments or operational teams within the organisation.