The type of power involves having the ability to administer to another things he/she desires or to remove or decrease things he/she does not desire (French & Raven 1959).
It is based on the agent's/manager's ability to control rewards the target/employee wants. The common, e.g., of it are managers control rewards of salary increases, bonuses and promotions. This power is based on old saying that 'wealth is power'.
For supervisors in an organizational setting, it is the perceived ability to present subordinates with outcomes that are valued in a positive manner (Hinkin & Schriesheim 1989). This type of power in based on the idea that we as a society are more prone to do things and to do them well when we are getting something out of it. Social exchange theorists as well as Power-Dependence theorists continue to focus on the idea of reward power (Molm 1988). The most popular forms are offering raises, promotions and simply compliments. The problem with this according to Mindtools. com is that "when you use up available rewards, or the rewards do not have enough perceived value to others, your power weakens. One of the frustrations with using rewards is that they often need to be bigger each time if they are to have the same motivational impact. Even then, if rewards are given frequently, people can become satisfied by the reward, such that it loses its effectiveness."
Reward power depends upon the ability of the power wielder to confer valued material rewards, it refers to the degree to which the individual can give others a reward of some kind such as benefits, time off, desired gifts, promotions or increases in pay or responsibility. This power is obvious but also ineffective if abused. People who abuse reward power can become pushy or became reprimanded for being too forthcoming or 'moving things too quickly'.
Coercive Power (The Stick)
This type of power is based upon the idea of coercion. This involves forcing someone to do something that they do not want to do. The ultimate goal of coercion is compliance. According to Changingminds.org "demonstrations of harm are often used to illustrate what will happen if compliance is not gained". French & Raven (1959) state that "other forms of power can also be used in coercive ways, such as when reward or expertise is withheld or referent power is used to threaten social exclusion". The power of coercion has been proven to be related with punitive behavior that may be outside one's normal role expectations (Hinkin & Schriesheim 1989). However coercion has also been associated positively with generally punitive behavior and negatively associated to contingent reward behavior (Gioia & Sims 1983). This source of power can often lead to problems and in many circumstances it involves abuse. Mindtools. com states that "coercive power can cause unhealthy behavior and dissatisfaction in the workplace". These type of leaders rely on the use of threats in their leadership style. Often the threats involve saying someone will be fired or demoted.
Coercive power means the application of negative influences onto employees. It might refer to the ability to demote or to withhold other rewards. It's the desire for valued rewards or the fear of having them withheld that ensures the obedience of those under power. Coercive power tends to be the most obvious but least effective form of power as it builds resentment and resistance within the targets of Coercive Power.
The power which holds the ability to administer to another certain feelings of obligation or the notion of responsibility (Hinkin & Schriesheim 1989). "Rewarding and Punishing subordinates is generally seen as a legitimate part of the formal or appointed leadership role and most managerial positions in work organizations carry with them, some degree of expected reward and punishment" (Bass 1990). Legitimate power is typically based on one's role, people are traditionally obeying the person holding this power solely based on their position or title rather than the person specifically as a leader. Therefore this type of power can easily dissolve with the loss of a position or title. This power is therefore not strong enough to be one's only form of influencing/persuading others.
Expert power also called "Legitimate Power" refers to power of an individual because of the relative position and duties of the holder of the position within an organization. Legitimate power is formal authority delegated to the holder of the position. It is usually accompanied by various attributes of power such as uniforms, offices etc. This is the most obvious and also the most important kind of power.