Dr.

Rensis Likert

An American Educator & Organizational Psychologist.

Best known for Research on Management Styles & for producing a survey scale known as the Likert Scale.

Central Aspects of Likert Theories

In the 1960s, Likert outlined 4 systems of management to describe the relationship, involvement, and roles of managers and subordinates in industrial settings.

He based the systems on studies of highly productive supervisors and their team members of an American Insurance Company.

Likerts Management Systems

System I
Exploitative/ Authoritative

System II
Benevolent/ Authoritative

Consultative

Participative

System III

System IV

Likerts Management Systems

Characteristics System 1 System 2 System 3 System 4

Trust

No trust

Master-servant relationship i.e always cautious Rewards & punishment

Substantial but not complete trust Rewards, punishment & some involvement
Moderate interaction

Complete trust

Motivation

Fear, threats & punishment

Goals based on participation & improvement

Extensive interaction, friendly

Interaction

Little interaction

Little interaction,

Responsibility

Only at higher level

Till managerial level More at higher level then lower level

At all level

Likerts Management Systems

Characteristics Decision making System 1 Top level decision making & control System 2 Top level decision making & control System 3 Decision making & control are at primary level but employees are consulted & their views considered System 4 Every employee have decision making power

Communication

Downward and inaccurate communication

Limited communication

Both communication up & down

Extensive vertical & horizontal communication

Team work

No

Relatively little

Moderate

High

Likerts Management Systems - End Results

End results
Employee loyalty Performance goals Conflict Cooperation Technical assistance to peer Feeling of unreasonable pressure Employees attitude towards managers

System 1, 2
Less Low More Less Less High Less favorable

System 4
Great High Less Great More Low More favorable

Motivation
Sales volume Cost of sales

Lower
Lower Higher Lower

Higher
Higher Lower Higher

Quality of business sold

Advantages of Likerts System

Able to quantify the results of the work done in the field of Group dynamics.
Helped in measurement of the soft areas of management , such as trust & communication.

Eg. An American company, Weldom which adopted Likerts ideas, showed dramatic improvements in terms of increased profits and productivity and lower rates of labor turnover, two years after changing from System 2 to System 4.

Conclusion

The nearer the behavioral characteristics of an organization approach system 4,the more likely this will lead to
Long-term

improvement in staff turnover i.e. more loyalty High productivity Low scrap Low costs Higher motivation High earnings & more profits The organization will achieve optimum effectiveness .

Thank you