We develop a theory of leadership that focuses on the role managers play in motivating employees through their attitude towards employees. We model a manager's attitude as her perception about employees' abilities of successfully completing challenging tasks. We show that a positive attitude motivates employees who are driven by monetary rewards. A negative attitude may motivate employees who are driven by concerns about their reputation for being able. When employees are driven by monetary rewards and care about their reputations, an increase in the reward for successfully completing challenging tasks may lead employees to shy away from these tasks.

Giffen goods, principle-agent, reputation, task choice, worker motivation
Asymmetric and Private Information (jel D82), Personnel Economics: Other (jel M59)
Tinbergen Institute
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

Kamphorst, J.J.A, & Swank, O.H. (2010). When Galatea cares about her Reputation: How having Faith in your Workers reduces their Motivation to shine. Discussion paper / Tinbergen Institute. Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/21863