What is the type of power a person receives as a result of his or her position in the formal hierarchy of an organization?

What is power? Whether we like it or not, we all exercise power over each other every day. We use our position, status, knowledge, or influence to get people to do what we want.

Table of Contents Show

Reward power
Coercive power
Legitimate power
Referent power
Expert power
Informational power

Social psychologists have identified different types of power at work in both our personal and professional lives. Naturally, not all types of power are created equal, and as a leader, you have to make sure you develop your power style appropriately to have the best influence.

For example, people are more likely to follow leaders who seem knowledgeable and respectful, and less likely to stand behind leaders who rely on fear and rigid power structures to get things done.

But what's your leadership style, and what kind of power do you exert? Read on to learn more about power as you find new ways to lead and inspire.

Most research on social power today is based on a very influential paper published by John French and Bertram Raven in 1959. They wrote extensively about the forms of power people use, touching on the psychological changes and effects these powers bring in broader social contexts.

When French and Raven talk about the basis of power, they refer to the dynamic relationship between O, the one who exerts it, and P, the person (or group) upon whom that power is exercised. They allude to many possible dynamic bases but only define the five most common:

Reward power
Coercive power
Legitimate power
Referent power
Expert power

The first three are known as 'positional power', as they rely upon your position in the social hierarchy. The remaining two are types of 'personal power', which involve interpersonal skills and exerting a more positive form of influence.

Let's have a look at each of these types of power, and how you can best make use of them.

Reward power

French and Raven define reward power as "power whose basis is the ability to reward." In the modern workplace, these rewards come in many shapes and forms – think raises, promotions, paid vacation, simple compliments; the list goes on. We're all much more inclined to do the things we're told if we know we'll be getting something in return.

Here are some reasons why you may want to use reward power in the workplace:

It motivates employees and encourages them to try harder. The condition here is to make sure most team members consider the reward offered desirable. For example, a three-day paid vacation for top-performing employees provides enough incentive to increase productivity across the board.
It promotes teamwork and healthy competition. Reward power often accompanies challenging tasks that require quick and innovative thinking. If one strategy results in better overall performance (and thus better rewards), it gives people a good reason to learn from it and adapt their own approach.

That said, reward power isn't always the best solution:

Finding the balance between cost and desirability is more complicated than it seems. If you don't know your employees well, you might spend too much money just to offer something that's not desirable enough.
It can demotivate people who don't top the scoreboard. Not winning the prize might motivate many to try harder, but it can be demoralizing for people with low self-esteem who are easily disheartened.

So how do you use reward power correctly? First, you need to know what you're trying to achieve with these rewards. You also should know enough about your team members to introduce rewards they'll find interesting.

For example, let's say you want to incentivize collaboration, and your teams consist of high-performing individuals who have trouble communicating. Introducing personal rewards might not be such a good idea - appropriate team rewards would make a lot more sense.

Coercive power

Coercive power gets a bad rap, mainly because it's often abused by those who find themselves on top of power structures. Those who exercise coercive power use fear, threats, and punishment as tools for conformity.

Coercive power can establish boundaries and force compliance. It can be used to prevent harassment and discrimination (e.g., a boss threatens to fire someone who's consistently bullying and harassing a colleague), but it's also helpful in dealing with disobedient employees who have fallen out of line (by taking longer breaks, arriving late at work, etc.).

Admittedly, coercive power comes with many disadvantages:

It lowers job satisfaction and promotes toxic work environments. No one likes being punished; no one likes bosses who threaten employees.
It ruins retention rates. Why would anyone want to work for a company that abuses power structures to keep the wheel turning?
When abused, it's a ticking time bomb. Coercive power might help you keep people compliant for a while, but it's not a good long-term solution. If you keep punishing people, you'll have to find ways to deal with high turnover rates. If you become more lenient without introducing new forms of power, you'll slowly lose your authority.
It hurts innovation. There's little room for experimentation, creativity, and innovation when everyone fears punishment. It isn't easy to find passion and excitement in a job that doesn't give you room to grow and express yourself.

In moderation, coercive power kind of works. You can use it to minimize negativity, improve working conditions, and cross out insubordination. Careful, though – leading through fear is highly unpopular among employees, and it's bound to raise some eyebrows.

Legitimate power

Legitimate power is perhaps the most prevalent and ubiquitous form of power in society. It refers to the formal authority given to a person as a result of their position in a hierarchical system. Such systems include governments, religious denominations, businesses, and other organizations. Your position within a hierarchical system determines the power you have over people who find themselves below you.

It's important to note that your legitimate power disappears if you lose your position. At its core, legitimate power is built on a perception – it's only valid as long as the people who comprise the system accept its structure.

Legitimate power is necessary:

It offers clarity and provides stability. In hierarchies, everyone knows who has authority over whom.
It is often reinforced by strict rules and laws. For example, employees can face disciplinary action if they don't do as they're told.

As a thought leader who wants to inspire and influence others, you should be wary of legitimate power – it can never encourage employee loyalty on its own. The same is true for the other two formal powers we've already touched on. And as is the case with all three positional powers, it lends itself to plenty of abusive practices.

Think of the boss who forces employees to comply with a controversial decision without offering much clarification or justification. Everyone has to comply because "that's what the boss said."

Think of the new HR director who's friends with the boss but whose performance is substandard. There's nothing anyone in HR can do about it.

Referent power

Now that we've discussed all three formal powers, it's time to introduce you to the personal powers all effective leaders take advantage of. According to French and Raven, referent power has its basis in the identification of P (the 'receiver') with O (the one wielding the power), where identification is defined as a feeling of 'oneness' between the two.

In other words, someone who exerts referent power does so because they inspire respect and admiration. Leaders with formal power use fear and coercion to get things done, whereas referent leaders lead by example.

Because it doesn't draw on traditional forms of hierarchical power, referent power is unique in its ability to create meaningful and resilient bonds in the workplace. It can quickly shift the established power dynamics, giving people more room to work together.

Great leaders know that referent power can:

Boost morale and increase productivity. Because they lead by example and act with integrity, referent leaders don't intimidate subordinates. They are role models that everyone respects and looks up to, contributing to a pleasant and desirable work environment.
Instill trust. Referent leaders are approachable, and people reach out to them for advice, suggestions, and feedback. They are often aware of internal issues long before anyone else can tell something's wrong. The same can't be said about leaders who rely only on their job title to run their business.
Improve staff retention. The reverence gained by a leader who has strong interpersonal relationship skills is crucial to creating a strong sense of community. Charismatic leaders are the glue that holds companies together, even – and especially – when things don't go as planned. If you're working for an abusive boss, you've got no reason to keep supporting their business during a crisis – you'll just walk out. But if you feel you're part of a community, you're much more likely to keep supporting the people you admire and respect.

Knowing how to develop referent power is a valuable leadership skill. That said, there are a few things you should keep in mind:

Referent power is not as effective in organizations with very rigid hierarchical structures. If you can't reach the bottom of the organization, you can't exert your referent power on a large scale.
You can't develop referent power during times of crisis. Quick turnarounds require prompt action, and there's not enough time to build trust when you're in troubled waters.

Expert power

Expert power is another personal power that can be present without a formal title. According to French and Raven, the strength of the expert power of O varies with the extent of the knowledge or perception which P attributes to O within a given area. In short, it's power or influence exerted as a result of one's attributed knowledge or expertise.

Note also how this power lies with P's (the person upon whom power is exerted) perception of O's knowledge. What does that mean for you? Well, being knowledgeable isn't enough to develop expert power. You need to convince others of your expertise - and that's the real challenge here.

If you have expert power, you can offer guidance and help your teams grow. Once you've established yourself as an expert, people are much more likely to put their trust in you. If you're not a leader already, expert power will offer you a solid power base upon which you can build your reputation as you aim higher.

But expert power also has its disadvantages:

As you share your knowledge with others, your expert power slowly diminishes.
To maintain your expert power, you need to make sure you're constantly learning and evolving.
When experts assume leadership roles, they tend to see their business through the lens of their expertise, often disregarding others' opinions and even missing the bigger picture altogether.

Informational power

Although not part of the original five powers, informational power was later added to the list by Raven in 1965. It turns out information is power, after all. Someone who exerts informational power either a) has access to more data than others on a specific subject or b) knows something that can be used as leverage to make others comply.

Unlike the other five powers we've already mentioned, informational power has short-term effects. It can be positional or personal, depending on who uses it and how.

For example, think of a big company that announced an imminent downsizing action plan without going into details. Directors who know who will be laid off have informational power due to their position. Now, think of a laid-off manager who is hired by a competitor. They have personal informational power if they know a lot about their ex-employer's data, future plans, etc.

In any case, informational power is bound to the content of a specific situation. It's transitory and situational – it can't be used consistently, and it goes away once it's shared.

As you can probably tell, all powers have their uses. The two personal powers (expert and referent) can help you build trust and loyalty, which is why they appear time and time again in numerous leadership theories.

Formal powers can help you assert your leadership power, but you should always make an effort to use them in moderation. Excessive use of positional power might simplify decision-making, but it will undoubtedly render you highly unpopular with your subordinates – no one likes tyrants.