Leadership and its Impact on Employee Motivation: A Study of Small and Medium Enterprises in Leicestershire

This thesis addresses paucities in the literature by providing comprehensive coverage on the subject matters of leadership, employee motivation and small and medium enterprises (SMEs). The research makes an empirical and knowledge contribution by proposing a new conceptual framework titled “The Ladders of Leadership and Employee Motivation”. This framework provides a mapping tool to measure the leadership levels of owners and managers in SMEs, and the motivation levels of employees within SMEs. By utilising the framework, weak and deficient aspects of the owners or managers’ leadership can be identified and subsequently addressed, and aspects which can improve and enhance the leadership of owners and managers can also be pinpointed. Furthermore, the framework can recognise precise issues that are having adverse effects on the motivation levels of employees, and aid in resolving these issues. Through the framework, a focus can also be placed on the improvement of the employee’s motivation, as specific areas of growth and fulfilment of the employee can be concentrated upon. Ultimately, the conceptual framework provides guidance to SMEs, which is critical, as SMEs are in desperate need of guidance with regards to preventing business failure as well as operating optimally and efficiently. This research tested “The Ladders of Leadership and Employee Motivation” at 6 inspected SMEs in Leicestershire by conducting 13 semi-structured interviews with owners, managers and employees. The research found that leadership did have an impact on employee motivation, since the level of motivation that an employee can reach is predicated upon the leadership level of their owner or manager of the SME. Furthermore, certain aspects of leadership impacted specific elements of employee motivation, such as the following: the vision of the leader led to the fulfilment of 3 employee needs such as involvement and recognition. Owners and managers utilising collaboration and collectiveness to engage with staff also resulted in the Acceptance Needs of employees being satisfied. Moreover, this study discovered that high order motivational needs of employees (such as having scope for advancement, achieving potential and other Personal Realisation Needs) were difficult to satisfy within SMEs. Additionally, factors uniquely common to SMEs (such as lack of resources, financial constraints, limited capabilities, and having a small reach) can also cause low levels of employee motivation.