Avivas Leadership Power and Motivation - Lab Report Example

 Aviva’s Leadership, power, and motivation Introduction Aviva is a British Insurance company headquartered in London, but has operations across sixteen countries and focuses on provision of life insurance, general insurance and asset management services through direct and online channels, independent vendors such as brokers and via corporate partners such as banks and other financial institutions. Currently, life insurance business segment accounts for 68 percent of the activities, general insurance and health accounts for 29 percent while fund management services account for the other 3 percent of the company business (Aviva 2014). Aviva is the largest general insurer in UK and has close to 31.5 million customers spread across the 16 countries. According to the company website, the company attained 2.2 billion UK pounds in profits after tax in 2013 compared to 2.9 billion pounds reported in 2012 (Aviva 2014). The cash remittances grew by 40 percent to reach 1.3 billion UK pounds while the new business increased by 13 percent to 835 million during the year 2013. In the current 2014 financial year, Aviva is focused on improving the cash remittances while improving the life insurance business segment through differentiated pricing and building strategic partnerships in emerging markets (Aviva 2014). Aviva’s strategic framework is focused on investment, customer, distribution and people Aviva has attained excellent performance in five metrics that include cash flow management, operating profits, value of new business, expenses and combine operating ratio due excellent leadership and people management. Aviva has a diverse product portfolio and highly talented employees that cater for the changing financial planning and insurance needs of both rural and urban customers (Aviva 2014). Leadership is a critical aspect of Aviva’s success since the management is committed to the organisational goals and has outlined a clear vision that is focused on increasing returns to the fund investors and satisfying the insurance customers. Another key aspect that has fostered Aviva’s growth and profitability is motivation since the employees are committed to higher performance in their jobs. The report will discuss the success of Aviva using organisational theories and concepts on leadership and power. The second element of organisational design and management of people that will be the motivational strategies that have been used by the company to ensure high employee performance. Leadership and power Mumford (2010) asserts that the organisational design and structure must facilitate effective leadership styles that ensure subordinates remain committed to the overall organisational objectives. Leadership is defined as the ability of the superiors to influence the efforts and behaviour of subordinates and persuade them to remain committed to a certain course of action within the organisation (Pareek 2006). Proper leadership styles facilitate job coordination and communication with an organisation. Leadership transforms the potential of human talent in to reality and is a key factor in the life and overall success of the organisation. Accordingly, the leadership style of the senior management influences effective planning since inclusive planning process enables the subordinates to identify with the goals of the organisation and take personal responsibility for the attainment of the shared objectives (Mumford 2010). Furthermore, effective leadership and proper management of power in any business organisation is critical since it innovation and creativity of the subordinates thus leading to new idea generation that will meet the changing market conditions (Pareek 2006). Leadership will enable the managers to cultivate close working relationships with their subordinates and facilitate the resolution of conflicts within the organisation. According to trait theories of leadership, effective people management require leaders to exhibit certain in-born traits such as trustworthy, assertiveness, intelligence, decision-making traits and self-confidence (Pareek 2006). The management of Aviva has effective leadership qualities that include self-confidence, self-awareness, and integrity as evidenced by the high ethical values that are incorporated in the business operations. The organisation has benefited from the emotional stability that is displayed by the confidence and calmness during challenges and the good interpersonal traits of the management that has facilitate building of cordial relationships within the organisational structure. The management has the capacity to inspire the subordinates due to excellent charisma that has led to development of the values of hardwork and commitment to the organisational goals (Pareek 2006). Kurt Levin outlined three types of leadership that include autocratic leadership style, democratic leadership style and laissez-faire leadership style. The autocratic leaders do not allow for employee participation in decision making unlike democratic leaders who allow the employees to provide their ideas regarding a certain problem (Pareek 2006). The laissez-faire considers the perspectives of the subordinates, but the ultimate decision rests with the leader. Aviva has a democratic and participative leadership approach whereby subordinates contribute towards the overall organisational goals thus enhancing the motivation of the employees and enabling the subordinates to feel part of the company (Beck 2004). Hersey and Blanchard’s situational (contingency) theory of leadership focuses on the situation and considers the nature of the tasks, and quality of relationships in order to determine the appropriate style for each unique situation (Daft 2014). Aviva has well developed people relations thus democratic and participative leadership is more appropriate for the company. In many instances, the decision-making responsibility is decentralised while tasks and responsibility is delegated due to the flatter organisational hierarchy. Although transactional leadership is important in setting up clear structures, lines of command, and source of power and authority in an organisation, the flatter organisational structures at Aviva has necessitated the company to implement transformational leadership style that focuses individualised consideration of the subordinates, inspirational motivation, intellectual stimulation and idealizsd influence (Mumford 2010). The company has articulated a clear vision and inspired the subordinates to commit their efforts in attaining the vision. Furthermore, the top management people such as Mark Wilson and Nick Amin are considered role models by the subordinates due to their charisma and support for relationships within the company. Power refers to the ability to influence others and some of the sources of power in an organisation include the legitimate power, coercive power, reward power, expert and referent power sources. Stanford (2012) claims that the personal sources of power are the main determinants of employee job commitment, job performance and satisfaction and entail the referent, charismatic power and expert power. The top management has utilised their position power to steer the company vision and articulate shared goals while using the reward power to recognise the subordinates who excel in their work. The experts are willing to share knowledge and skills with co-workers while the executives are considered role models due to their referent power. According to the perceptions of the employees, the power is evenly distributed across the company since each individual is accountable for the success of his or her job and takes responsibility for their tasks (Daft 2014). Some of the power tactics that are used at Aviva to influence the behaviour of employees include inspirational appeals that are geared at appealing to the values, ideals and interests of the subordinates and rational persuasion that is made to outline the vision of the company. Personal appeals and ingratiation are evident since leaders at the company praise the subordinate and demonstrate friendly behaviour (Stanford 2012). Aviva has attained high excellent people management due to participative and transformational leadership that inspires and influences the efforts of the subordinates towards the attainment of the shared company goals. The flatter organisational structure facilitates supervision, communication, delegation of tasks and responsibility while allowing for decentralisation of the power. Motivation Motivation refers to the employees’ intrinsic enthusiasm and drive to accomplish work-related activities. The motivational activities of the management of Aviva are aimed at energising, maintaining and controlling behaviour of the subordinates in order to improve job performance and employee job satisfaction. This is an essential component of people management since it empowers employees, provides regular feedback for employee recognition, instills respect for employees, links the rewards to performance and facilitates employee self-fulfillment (Beck 2004). According to Maslow’s hierarchy of human needs theory of motivation, Aviva has managed to motivate its staff through fulfillment of the unique needs of the employees. The organisation pays fair salaries and rewards that have enabled the employees to meet their psychological needs such as food, shelter and clothing (Daft 2014). In this case, the company provides house allowances and has cafeterias where employees can eat subsidised lunch during working days. The next level is the safety needs and the organisation has fulfilled these needs by provision of security of tenure, and safe working environment that is free from work-related accidents (Beck 2004). Furthermore, employees have social needs such as sense of belongingness and the company fulfills the social needs through encouraging employees to form informal groups, enhancing the cooperation of co-workers and participative leadership style. The next level of needs is the esteem needs that are catered for by the high job autonomy and responsibility accorded to each individual employee (Daft 2014). The company has a well structured promotional policy and recognises employees for excellent performance thus fulfilling the esteem needs of the staff. Lastly, the company has catered for self-actualisation through providing challenging and creative work and enabling employees to implement creative and innovative ideas in their tasks. For instance, Aviva Customer Cup enables the employees to compete in developing ideas, challenge the status quo and take ownership of the ideas thus leading to self-actualisation (Beck 2004). Herzberg two-factor theory of motivation, the two sets of factors that influence motivation ate the hygiene factors and motivator factors. The hygiene factors such as company policies, salaries, supervision styles, interpersonal relations and working conditions that may cause work dissatisfaction if not properly addressed (Daft 2014). Aviva has a laid down employment policy that aims at attracting and retaining qualified human talent, safe working conditions and job security that enhances job satisfaction. The motivator factors facilitate individual growth and actively influence the behaviour and efforts of the employees. The factors include the career advancement opportunities, recognition, job status, sense of individual achievement and stimulating tasks. Aviva has enhanced the motivator factors through job design that allows for job enrichment and enlargement, promotions on the basis of merit and recognition of high performing employees during the annual awards thus contributing to highly motivated workforce (Beck 2004). The goal-setting theory of motivation is also applicable at Aviva since the management encourages the subordinates to set goals that are clear, achievable and challenging and work towards attainment of their respective. The company provides the required training and tools for employees to attain the goals in the workplace. Alderfer’s ERG theory asserts that employees are motivated by three needs that are existence, relatedness and growth. The existence goals are fulfilled by the safe working environment while relatedness needs related to sense of identity and belonging and have been fulfilled through treating employees with respect and dignity. The growth needs are highest needs are have been fulfilled through enabling employees attain a sense of achievement and personal fulfillment (Beck 2004). McClelland outlines the motivator factors as sense of achievement, affiliation and power of the employee thus employees are motivated by affiliation to a certain group. The employees have the power to influence and control their job and are motivated by the regular feedback provided by the management on their progress towards attaining challenging goals (Daft 2014). Motivation of employees has enabled Aviva to attain higher financial performance, high customer relationships management and improvement in the service quality. In addition, the company has been able to minimise the industrial disputes and complaints about the working conditions. Aviva has been able to attract and maintain qualified talent due to the efficient communication channels, effective work coordination, excellent job design and effective leadership skills of the supervisors that have motivated the subordinates (Beck 2004). Conclusion The organisational design and structure influences the appropriateness of leadership and power in the company and Aviva has flatter organisational structure that caters for inspirational and participative leadership. The management has inspired the followers to remain committed to the shared organisational goals and treats all subordinates with respect and dignity. In addition, the management have excellent communication and interpersonal skills that has facilitated the building of relationships across the organisation. The leadership styles have catered for the unique needs of the staff and allows employees to enhance their creativity through taking responsibility of the outcome of their tasks. In this case, the high market share, good relations and high employee retention is attributed party to the effective leadership within the company. Aviva has motivated its workforce through monetary and non-monetary motivators. The company pays fair salaries, wages and bonuses and allows the staff to participate in share-ownership schemes. The company provides challenging tasks and career advancement opportunities that are based on employee performance. The employees have a sense of belonging and individual creativity and achievement is encouraged through various programs that allow the staff to attain self-actualisation through implementing and taking ownership of innovative business ideas. Motivation is a critical aspect of Aviva’s organisational design since the flatter organisational structure, efficient informal and formal communication channels and participative decision-making has enhanced the job satisfaction and employee retention and ultimately led to increase in the overall organisational productivity. Reference List: Aviva. (2014). ‘About us’, Accessed on 19th July, 2014 from www.aviva.com. Beck, R.C. 2004. Motivation: theories and principles. London: Pearson. Daft, R. 2014. The leadership experience. London: Cengage Learning. Mumford, M.D. 2010. Leadership 101. New York: Springer Publication. Pareek, U. 2006. Organisational leadership and power. Hyderabad: Icfai University Press. Stanford, N. 2012. Organization design. 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