Rensis Likert and his colleagues at the University of Michigan in the United States studied the patterns and styles of managers for three decades and came up with what is now known as Likert Management System
According to this theory there are four system of interaction between managers and their team.
Exploitative – Authoritative System
In this system the ultimate power lies in the hands of the manager. In this system there is a little to no communication between the top management and their subordinates. It is task oriented and does not consider the human element.
The leaders in the system of exploitative-authoritative have a lower level of concern for their employees. They use threats or methods that involve fear to achieve their work. The method of threat works well and the employees work efficiently upon entering the organization. The leaders are ignorant of the psychological feelings of the employees and the communication between them is almost nil. The monetary benefits and work satisfaction in this type of system is very less.
Benevolent Authoritative System
Under this system of Likert’s, the superiors have a small amount of confidence and trust in the employees. A limited amount of decisions are made by middle or lower management with rewards or possible punishment used to motivate the employees But the ultimate power lies in the hands of the superiors. Communication is still very little and the employees do not feel free to share their work experience with the superiors.
This is the third style of leadership given by Likert. In this system, Likert has stated that responsibility and authority are spread widely throughout the organization. It uses reward and teamwork involvement for motivation. The subordinates in the different levels of the organizations are given different responsibilities. The employees and subordinates work as a team on certain decisions. There is fair communication between the employees and the superiors. However, the power to form policies and rules lies in the hands of the top management.
This is the last style of leadership given by Likert and he considered it the most effective system. Under this style, Likert states that the power and responsibility to achieve the goals of the organization is distributed among all the employees and subordinates in the organization. There is trust between the manager and subordinates, as well as excellent productivity
The employees are made to participate in the decision-making process of the organization. The communication flow both ways. The employees are provided with a healthy work environment and they are motivated continuously by their superiors. I believe there is a time and place to use each system. System 4, seems to be an ideal system, but you cannot always operate in that system. The same goes to other systems as well. Operating in System 1 has its rewards but to be always using this system is not a good idea and can be counter-productive