On the Road to Employee Engagement Increase: The Role
of Transformational Leadership
Magdalena Kalaydjian (12030082)
Master’s Thesis
Graduate School of Communication
Corporate Communication
Dr. James Slevin
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stFebruary 2019
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Abstract
This paper concerns the topic of employee engagement. Globally, work engagement levels are diminished and this poses a potential threat to the wholesome functionality of organizational units. Specifically, according to academic literature, there is a direct link between engagement and job performance, implying that the decrease of engagement levels can have a detrimental effect on employees’ performance levels as well. Thus, throughout this thesis, the factor proposed to alleviate the decline of engagement, and subsequently performance levels, is transformational leadership. The latter is a type of management opposing the traditional hierarchical leadership systems and instead pushing towards organizational successfulness on the basis of understanding and complying with employees’ individual desires. Eleven
interviews were conducted in a Western-European company as to get a better understanding on the topic at hand. The results conveyed that engagement and job performance are
interconnected, such that when the former goes up, the latter increases too. Additionally, most participants recognized transformational leadership as a tool for increasing engagement. Qualities such as being “approachable”, considering subordinates’ individual needs and listening to their feedback were listed as characteristics of leaders who successfully engage their employees. Participants noted that their individual performance is too positively influenced by a transformational leader as such management motivates them to put extra effort in the execution of tasks. Few participants did not feel that their performance is
influenced by their leader as they considered it their own obligation. Yet, generally the results conveyed that employees value the guidance of a transformational leader and confirmed the presence of positive outcomes under such management. Hence, it is advisable that
organizations turn their attention to this type of leadership by establishing lectures or trainings which proclaim the benefits of transformational leadership and encourage superiors in
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subordinates and regularly establish meetings in which work progress is discussed and potential challenges are tackled jointly. Breaking down communication barriers between leaders and subordinates and establishing more personal relationships between the two parties could facilitate the process of overcoming the problem of employee engagement.
4 Table of Contents Abstract ... 2 Introduction ... 6 Background ... 6 Theoretical Framework ... 8
Employee Engagement & Job Performance ... 8
The Job Demands-Resources Model ... 11
Transformational Leadership & Engagement ... 13
Transformational Leadership & Job Performance ... 14
Framework ... 15
Methodology ... 16
Research Method ... 16
Company Background ... 16
Research Design & Sample ... 17
Results ... 19
Conclusion ... 25
Restatement of Research Problem & Main Theoretical Findings ... 25
Employee Engagement & Individual Job Performance ... 26
Transformational Leadership, Job Resources & Engagement ... 27
Transformational Leadership & Individual Job Performance ... 29
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Putting Results into Practice ... 30
Limitations & Directions for Future Research ... 32
Final Remarks ... 33
References ... 34
Appendix A. Engagement results Company X ... 40
Appendix B. Employees’ names & occupations ... 41
Appendix C. Interview Guide ... 41
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Introduction
Background
Employee engagement has occupied a central position in effective organizational functioning within today’s global market. The concept of employee engagement refers to “a fulfilling, work-related state of mind that is characterized by vigor, dedication and absorption” or one’s contentment with their job as well as excitement about it (Schaufeli & Bakker, 2004, p. 295; Jones & Harter, 2005). An engaged workforce is a strong asset for any organization as it results in various positive outcomes such as increased performing ratings, uplift in sales, etc. (Xu & Cooper Thomas, 2011). Specifically, high engagement levels are considered a particularly competitive advantage in achieving what is categorized as “one of the most important outcomes in the work context”, namely job performance (Ohme & Zacher, 2015, p. 162).
Yet, worldwide, engagement levels seem to be diminished, implying that workers generally do not experience feelings of satisfaction with their jobs. Statistics from Gallup’s state of the Global Workplace Report indicate that on a global level, only 15 % of employees report being actively engaged in their work activities (Gallup, Inc., 2017). Decline in work engagement is problematic as such disengagement could negatively influence job
performance ratings (Ohme & Zacher, 2015; Gallup, Inc., 2017). Low levels of job
performance are detrimental to the entire functionality of any corporation and its stakeholders as they could compromise the achievement of “organizational goals” (Ohme & Zacher, 2015, p. 162). Job performance is considered an essential factor – one which organizational
successfulness is highly dependent on, and one which employers are continuously faced with the challenge of maximizing (Korschun, Bhattacharya, & Swain, 2014).
Considering the weakened employee engagement statistics in today’s business world, and the negative impact they could have on job performance ratings, it is worthy to consider
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tactics which could gradually alleviate this issue. Something which has been formerly studied in relationship to employee engagement is the concept of transformational leadership. Earlier studies have established that transformational leadership contributes to employees’
“psychological safety” and “psychological availability”, in turn resulting in higher
engagement with their job (Zhu, Avolio, & Walumbwa, 2009, p. 593). Moreover, some of the main transformational leadership traits, such as a leader’s ability to encourage its
subordinates, mentally challenge them and express personalized concern towards each of them, are key ingredients for the achievement of ideal organizational performance ratings (Hoon Song, Kolb, Hee Lee, & Kyoung, 2012: Para-González, Jiménez-Jiménez, & Martínez-Lorente, 2018).
Throughout this study, employee engagement is predicted to have a positive effect on job performance. Namely, when employee engagement increases, job performance levels are expected to rise too. Engagement is a crucial factor for organizational successfulness as people are a unique element which could hardly be replicated by opponents in the field. Thus, if shaped and governed adequately, employees serve as a powerful organizational tool
(Anitha, 2014). Despite its prominence, however, work engagement is globally on decline. This is specifically observable in Western Europe where engaged employees constitute only 10 % of all workers – a percentage lower than the global average (Gallup, Inc., 2017). Seeing that Western Europe is “one of the most socially and economically developed regions in the world” it seems almost paradoxical that engagement levels are very much weakened (Gallup, Inc., 2017, p. 79). The element proposed to boost work engagement and job performance ratings throughout this paper is transformational leadership, by giving employees the feeling of being cared about, supported and encouraged on their way to paving organizational successfulness. Therefore, the following research question is posed:
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“How does transformational leadership serve as a tool for enhancing employee work
engagement and in turn improving individual job performance?”
Regardless that a number of studies have been formerly conducted in the field of engagement, the issue rests unresolved. Therefore, it is important that new knowledge is generated as to better tackle the unfavourable situation in present days. Additionally, there is an abundance of quantitative studies concerning engagement and transformational leadership, but fewer from qualitative nature (Tims, Bakker, & Xanthopoulou, 2011; Xu & Cooper Thomas, 2011). The latter could generate more elaborate or previously overlooked insights on the topic at hand. Specifically, the research field could benefit from an individual qualitative case study conducted in a Western European company, where work engagement is
particularly diminished. Conversations with employees about their personal experiences regarding employee engagement and leadership might serve as a manual for understanding how engagement could potentially be increased by certain managerial practices. If proven that transformational leadership indeed has the power of boosting engagement and performance levels, further steps should be taken as to integrate this management style in organizational units and educate both employees and employers on how they can benefit from it.
Furthermore, strictly hierarchical management systems should be replaced, given that the organizational structure allows it, with more relationship-based leadership styles, promoting collaborative partnership between superiors and subordinates.
Theoretical Framework
Employee Engagement & Job Performance
The concept of employee engagement has been gaining steady prominence amongst researchers and specialists in recent years (Halbesleben & Wheeler, 2008; Macey &
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Schneider, 2008). Highly engaged employees report feelings of excitement and satisfaction with their work activities, devotion to improving one’s self in order to be a better asset to their higher-ranking counterparts and striving towards the successfulness of the whole
organizational entity (Dalal, Baysinger, Brummel, & LeBreton, 2012; Macey & Schneider, 2008). Throughout academic literature, work engagement has often been categorized by “vigor”, “dedication” and “absorption” (Schaufeli & Bakker, 2004: Leiter & Bakker, 2010). Independently those characteristics imply that workers report being invigorated while being on duty, finding meaning in the tasks carried out, feeling further motivated by them as well as being absorbed by their work activities and thus not keeping track of time (Leiter & Bakker, 2010).
Yet, one of the most prominent factors which work engagement has been shown to be particularly beneficial to is job performance - the execution of organizational tasks with the objective of achieving excellence in the results (Anitha, 2014). Studies demonstrate that engaged employees are a vital indicator of increased task performance and overall benefactor of the achievement of organizational goals (Macey & Schneider, 2008). This could be
explained by the fact that higher engagement entails one’s willingness to dedicating more energy into their work (Brown, 1996: Macey & Schneider, 2008). Furthermore, it is suggested that the positive link between an engaged workforce and increased job performance could be due to employees perceiving their job as an enjoyable factor, which motivates them to seek new inspirations and generate fresh ideas (Bakker, 2009: Bakker et al., 2014).
Engagement often translates into employees’ commitment to a company (Salanova, Agut and Peiró, 2005: Bowden, 2009). However, it should be acknowledged that the
relationship between engagement and performance could be shaken when additional factors are considered. For instance, loyalty to a company or work position is not the only way to
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achieve increased performance, as “career commitment” could have a bigger influence on performance (Bashaw & Grant, 1994, p. 52). Nevertheless, the following is proposed:
There is a positive association between employee engagement and individual job performance, such that when employee engagement is high, individual performance increases
as well.
N.B. The current study considers employees’ perception of their individual job performance, instead of
managers’ assessment of it!
The Concept of Transformational Leadership
Next to having an engaged workforce and enhanced performance ratings, leaders could be perceived as the driving force of organizational units as they have the power of influencing their subordinates, the decisions they make and the tasks they carry out by simultaneously encouraging and supporting them throughout the execution of the previously mentioned (Babcock-Roberson & Strickland, 2010).
One leadership style that has attracted scholars’ interest in recent times is transformational leadership (Wang, Oh, Courtright, & Colbert, 2011). This type of management differs from transactional one which embraces more “instrumental” and
hierarchical managerial behaviour, by emphasizing on material incentives or retributions as a way of motivating or disciplining subordinates and achieving organizational excellence (Hoon Song et al., 2012, p. 69). In contrast, leaders implementing transformational management aim at reaching perfection in the execution of organizational tasks by placing a strong emphasis on understanding employees’ individual desires, both personal and work-related, and ultimately pushing towards enjoyable work experiences (Hoon Song et al.,2012). Such leaders project themselves as someone whom employees can relate to and who mobilizes and guides its
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subordinates in an inspirational fashion, which ultimately produces effective work outcomes (Hogg, 2001; Walumbwa, Avolio, & Zhu, 2008). Additionally, this type of leadership is best portrayed by the four I’s, namely a.) idealized influence, implying that a leader is valued and perceived as a role-model by its employees; b.) inspirational motivation, meaning that a leader inspires and pushes its followers’ vision of achieving organizational excellence; c.)
intellectual stimulation, conveying a leader’s ability of encouraging its employees to reflect
on ideas critically and to be able to think outside the box, and d.) individualized
consideration, meaning that employers recognize employees’ diversity and own set of desires
and capabilities and comply with them (Avolio, Waldman, & Yammarino, 1991; Bass, Avolio, Jung, & Berson, 2003).
The Job Demands-Resources Model
A theory often employed in relationship to work engagement is the job demands-resources model (JD-R). According to the latter, work features tend to be categorized as either job demands or job resources. The former is an example of negative work experiences, such as time pressure or unbearable workload. Job resources, on the other hand, refer to the positive characteristics of a job (Trépanier, Fernet, Austin, Forest, & Vallerand, 2014). Specifically, the resources which will be touched upon throughout this study are employees’ autonomy, flexibility, involvement in decision-making, opportunities to learn and grow, receiving managerial support and recognition (Ter Hoeven, van Zoonen, & Fonner, 2016;
Halbesleben & Wheeler, 2008; Martinussen, Richardsen, & Burke, 2007; Bakker &
Demerouti, 2007). Ultimately, employees use job resources as a way of alleviating negative work aspects, namely job demands (Trépanier et al., 2014). Resources are recognized as tools for boosting employee engagement - even if a job is considered challenging, with the right
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amount of job resources employees still report higher engagement. Likewise, job demands are then diminished (Ter Hoeven et al., 2016).
Given the interrelatedness of employee engagement and job resources, it is worthy of linking them to transformational leadership as to analyze whether such leadership style could increase job resources. Indeed, previous literature indicates that transformational leadership decreases negative work aspects, such as time pressure, when completing a task (Syrek et al., 2013). In turn, leaders are recognized as having the ability of increasing the amount of job resources for their employees, as a result of which the levels of both work engagement and job performance rise as well (Breevaart, Bakker, Demerouti, & van den Heuvel, 2015). More personal and top-notch relationships with their leaders are valuable to subordinates as higher-ranking individuals could create a feeling of psychological care and comfort and hence alleviate the negative impact of job demands (Bakker, Demerouti, & Sanz-Vergel, 2014). As a result, it is hereby proposed that 1.) transformational leadership will have a positive effect on job resources 2.) the increase of job resources will strengthen the relationship between transformational leadership and employee engagement. Namely, if an increase in job resources is realized, the positive effect of transformational leadership on employee engagement will be enhanced. Accordingly, the following propositions are made:
Transformational leadership serves as a tool for increasing job resources.
Job resources will strengthen the effect of transformational leadership on employee engagement.
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Transformational Leadership & Engagement
As touched upon, transformational leadership could cause an increase in employee engagement (Hoon Song et al., 2012; Tims et al., 2011). Transformational leaders recognize subordinates’ desires for career growth and stimulate their active involvement in decision-making processes (Tims et al., 2011). This contributes to employees feeling that they are being listened to, gives them a sense of independence and keeps them motivated (Dvir, Eden, Avolio, & Shamir, 2002). The combination of those factors translates mundane work
experiences into more pleasurable ones, the result of which is the increase in work
engagement levels (Tims et al., 2011). Leaders adopting transformational management go beyond the idea of material rewards and instead tap into employees’ needs and emotions and thus pave the way to a more humane, rather than strictly hierarchical, relationship between leaders and followers (Woodcock, 2012; Masood, Dani, Burns, & Backhouse, 2006). Additionally, employers practicing transformational leadership have the power of
encouraging subordinates to independently generate new ideas and have a critical approach, instead of taking things at face value. The outcome of those practices is employees’ ability to better “self-manage” themselves which in turn results in them being engaged in the errands they are carrying out (Bass & Avolio, 1990; Avolio & Gibbons, 1988: Dvir et al., 2002, p. 736). Work engagement is often categorized as a job outcome encompassing employees’ psychological and emotional values, instead of being driven by material incentives. The latter goes hand in hand with the principles of transformational leadership, which convey leaders’ ability to reflect on subordinates’ personal needs and desires as a way of motivating them to accomplish greater success.
Nevertheless, it has been shown that a manager’s “intellectual stimulation” towards employees could result in the opposite of engagement, namely burnout, as they are
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pressure and exhaustion (Seltzer, Numerof, & Bass, 19898; Podsakoff, MacKenzie, & Bommer, 1996, p. 135: Stordeur, D’hoore, & Vandenberghe, 2001). Yet, the support for a positive connection between transformational leadership and engagement prevails, thus the following is proposed:
Transformational leadership increases employee engagement levels.
Transformational Leadership & Job Performance
As mentioned, the concepts of work engagement and job performance are interrelated, such that when engagement rises, performance levels supposedly increase too. In a similar vein, it would be expected that through serving as a tool for increasing engagement,
transformational leadership will be beneficial to boosting performance levels as well. In fact, a theory which supports this notion is the social exchange theory. Developed by sociologist George Homans, the social exchange theory suggests that human relationships are “mutually-rewarding” and based on “exchange of actions” (Emerson, 1976, p. 336). Translating this theory into an organizational setting, workers who feel encouraged and reinforced in their job would be more likely to reciprocate those favourable work attitudes and repay their
organizational unit by performing better and achieving more (Walumbwa et al., 2008). In a study conducted by Braun and colleagues, transformational leadership is shown to mobilize and unite employees, by generating feelings of collectivity and trust amongst them. A transformational leader will play the role of motivating its employees to create shared objectives and rely on each other’s support in critical situations. Subsequently, teams who are navigated by such managers are more likely to display increased levels of job performance and exceed organizational expectations (Braun, Peus, Weisweiler, & Frey, 2013).
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Nonetheless, it is important to note that transformational leadership will not necessarily always have the same effect as the notion of it can be deciphered differently across different cultures (Bass, 1997). Thus, such leadership could result in negative
performance results, instead of favourable ones. Likewise, the effect can differ according to employees’ personal characteristics – some possess “professional ambition” and aim at
excellency at all times (Schaarschmidt and Fischer, 2003; Kieschke and Schaarschmidt, 2008: Baethge, Rigotti, & Vincent-Hoeper, 2017, p. 3). This implies that their performance can be driven by their trait of outperforming themselves, and less by their leader. Regardless, the following is proposed:
Transformational leadership increases individual job performance.
Framework
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Visual representation of the propositions throughout the framework, presented in order. The broken line concerns proposition 3, which suggests that job resources will strengthen the relationship between transformational leadership and employee engagement. As this proposition involves three factors, instead of two, a broken line is included so that Proposition 3. could be differentiated from the rest.
Methodology
Research Method
This study adopted a qualitative research method. The latter is deemed desirable for the current research as it allows measurement of employees’ perceptions and feelings about the topic at hand - factors which could hardly be quantified.
The selected sample has previously participated in a survey which indicated that in the chosen for analysis department engagement levels are considerably high, hinting at
employees’ satisfaction with their job (Figure 1. Appendix A.) Regardless of the high
engagement figures, however, those numbers fail to unveil additional reasoning of employees for being engaged due to the survey’s rigid nature. Seeing that employee engagement is on decline in Western Europe, it was deemed important for interviewees to have the opportunity of conveying their own thoughts and experiences, as a more exhaustive explanation on this matter could prove useful to other organizational units in learning how to achieve better engagement results.
Company Background
The research was conducted in a Western-European company from the fast-moving consumer goods’ sector. For confidentiality reasons, the name of the company has been replaced with the name “Company X”.
The argumentation for selecting this company specifically is that it serves as a good example for successful employee engagement – not only in the analyzed department, but globally (Figure 2. Appendix A.) It was considered suitable to develop a case study which presents a favourable example of employee engagement as participants were expected to
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share positive experiences which can ultimately serve as an inspiration or set an example of how employees and their superiors in other fields/companies can work together on improving engagement levels. A bad example, namely a company with diminished engagement results, was deemed less appropriate as then employees would perhaps discuss hypothetical scenarios of improving employee engagement and in this study more concrete examples are sought.
Research Design & Sample
This research employed semi-structured interviews. The latter are often compared to a casual dialogue between individuals, the only difference being the inclusion of a premade by the interviewer questionnaire with the topics discussed (Fylan, 2005). It was essential to have this type of interview structure as it was expected that during the interviews participants might start discussing insights which were not expected by the interviewer or follow up questions which were not written down could occur. For the purpose of this research, it was suitable for participants to have the opportunity of addressing the topic at hand in the way they best fit, even if that resulted in occasional shift from the original set-up of the questionnaire. That would only allow for supposedly intriguing and previously overlooked insights to arise. In contrast, structured interviews allow less deviation from the topic and are more rigid in nature, which could potentially make interviewees feel uncomfortable and result in them not responding in the best and sincerest way possible (Fylan, 2005).
The interviews were conducted in the Global Rewards department dealing with compensations and salary calculations for Company X’s senior managers globally. Global Rewards includes the Global Mobility department too, which deals with the movement of Company X’s expatriates from one location to another. The Global Rewards department was selected due to the high engagement levels it score in the 2018 Global Climate Survey, namely 80 % (Figure 1. Appendix A.). The sample size for this research was aligned with the
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number of people present on a daily basis within the department. Ten interviews were conducted with employees from the department and one interview was carried out with the Employee Engagement Advisor as it was considered worthy for the topic researched. The participants chosen were deemed a good fit for the research as they all took part in the 2018 Global Climate Survey and demonstrated high employee engagement results. Thus, it was assumed that they would express positive feelings about the topic and further disclose their personal experiences, which could serve as an example.
The nature of this study is explorative; hence most interview questions were
constructed in a broader manner which provided participants the opportunity of expressing their own thoughts on the matter. For instance, when inquiring about engagement or
transformational leadership, interviewees were given guidance on what those concepts imply, but mostly they were offered the chance of constructing and communicating their own
understandings of them. Some questions did not require any elaboration and could easily be answered with a simple yes or no. The questions were mostly formulated by the researcher instead of being “borrowed” from prior studies as that way they could better fit the frame of the present research and guarantee its validity by measuring something specific. The
questions were divided in five sections and followed the structure and order of the propositions presented in the theoretical section. For instance, participants were inquired about whether engagement is related to their individual job performance, whether those depend on their leader and in what ways if so. Questions about the four I’s, which are mentioned as key features of transformational leadership in the theory section, were
formulated as to observe to what extent participants perceive their leader as a transformational one. Additionally, detailed questions about certain job resources were asked as they are listed as factors which could increase engagement. The beginning of the interview dealt with
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prior to delving deeper into the topic. Appendix B. lists the name of all participants and their occupations.
Results
Eleven interviews were conducted with employees from Company X. Below is a brief description of each participant which will facilitate the process of familiarization of the reader with the characters throughout this section. As to preserve participants’ anonymity, all names have been changed.
Sally is a management assistant to the director of the Global Rewards department. She arranges the director’s e-mails, meetings, agenda, etc. She has been in the company for six years.
Alexandra is a Global Mobility coordinator who is currently working for two teams. She has been in the company for almost two years.
Marsha is a Compensation Analyst in the Global Rewards department, operating with data and running processes. She has been in the company for two years, one of which she spent with Global Mobility.
Kelly is an Employee Engagement Advisor, who is in charge of the Global Climate Survey through which employees’ engagement, performance, etc. are measured. She has been in the company for almost six years.
David is a Global Mobility Financial Analyst who deals with “invoices” and “recharges” from operating parent companies. He has been in the company for nine months.
Lora is part of the Executive Compensation team, responsible for the running of processes. She has been in her current position for four months.
Henry is part of the Global Rewards department and deals with “job grading for senior management” of the company. He has been with Company X for nearly six years.
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Maria is a Global Mobility coordinator in charge of region Asia Pacific. She has been in Company X for three months.
Anna is a Global Mobility advisor, responsible for region Europe. She has been in the company for two years.
Sophia is a Compensation Officer, allocating shares to senior managers of the company. She has been with Company X for one year.
Betty is a Global Mobility coordinator in charge of region Europe. She has been in the company for ten years, seven of which she spent on a different position.
As this research concerns the topic of employee engagement it was essential to first understand interviewees’ definition of it. Formulation of engagement was relatively similar throughout interviewees’ answers. The words “committed” and “happy” often sprung up. Kelly states that to feel engaged means, “…you feel excited about the work that you are doing
and committed to something - so you are willing to do the work, not necessarily because you are paid for it, but because you want to deliver for this bigger thing.” Similarly, Lora sees
engagement as being, “…happy to work for the company you are working for and you have a
sense of pride in what you do…like what I am doing here actually contributes to something”.
Mostly participants classified engagement as being content with work activities, achieving desired end results, seeing the value in what they do and its contribution to bigger
organizational goals. All participants classified themselves as engaged.
Subsequently, it was discussed whether engagement could influence employees’ individual performance and in what ways. Again, participants were consistent in their thoughts. Marsha indeed believes that “…the more you are engaged, the more effective you
are”. Interviewees predominantly stated that their job performance would change in terms of
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engaged I would do less, because there are definitely things that you have to do that will be escalated upon if they are not done. But there are some things that could slip through the cracks and if I was not engaged with my work I could just skip it.” Likewise, Kelly points out
that when engaged she is “…motivated to make sure that things are done correctly…done on
time, I am willing to take on extra work, because I feel loyalty to my manager and to my team.” Overall, respondents felt that when engaged, their performance rises as they are
willing to go the extra mile and put additional effort in their work as to achieve better results. Alternative thoughts were presented too. Anna stated that the way she executes her tasks would not change significantly as, “…I personally have that drive to do everything for an A+
and I am not happy with a B minus. I am perfectionist so even when I knew that I was going to leave my previous job still then, until the last minute…I am like, you know, driven to succeed
and make sure that my handover is perfect.” Even though Anna agreed that engagement
positively affects performance, in this case her performance was mainly dependent on her personal trait of being a “perfectionist”.
Next, participants were inquired about job resources and demands, whether one category prevails over the other and if the allocation or alleviation of such depends on their managers. Interviewees offered mixed opinions, but most of them agreed that resources and demands are in “balance”, as Sophia defines it. Even though some employees agreed that job resources are appointed by their managers, others perceived them as their own responsibility or built in their positions. Marsha shares, “…it is mostly your responsibility. If you need to go,
I can go, but it doesn’t mean that my deadlines will be shifted.” Alexandra thinks that, “…being autonomous is so clear that is needed in my job, that it is of course part of it…”
Others were not convinced about the extent to which managers can freely distribute resources as they pointed out that this depends more on the organization as a whole, “…she can
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project that will get the workload down a bit. But it is limited because you cannot control everything.”, says Anna. Likewise, Alexandra thinks that manager’s control over delivering
resources is reduced as, “…my manager is following the rules of the company. So I disagree
with the structure of the company…” Mostly, participants listed flexibility, autonomy,
management support and taking employees’ feedback into consideration as main job resources experienced. For example, Lora finds it important that, “…my advice is taken
seriously…when I speak to her she asks me for advice, I feel more valued.” Henry adds, “…she frequently asks “What can I do for you in this case?” or “Do you need me to do anything?”.
When asked whether leaders could reduce job demands, participants suggested that they aim at minimizing them by assisting with work tasks, communicating with workers, hiring additional staff when needed or allocating tasks accordingly within the team. Yet, most participants felt that reducing job demands is often out of the hands of a manager as those negative aspects are usually embedded in their work and their decrease can be dictated by the organizational unit itself. Marsha illustrates this point by saying, “…she tries to do her best,
what she can do, but she cannot rebuild the entire ways of Company X…” Regardless, some
participants felt that despite not having full control on reducing job demands, leaders’ communication with employees could serve as a way of reducing stress or overload. Henry shares, “…, it is not only work that we are talking about, but also, how do you feel…” Others pointed out that it is not solely under manager’s control to boost job resources or decrease demands as some of those are experienced within the team. For example, Lora experiences negativity and pressure within her team as her colleagues often express discouraging thoughts in regard to reaching deadlines - something she finds “counterproductive”. As for job
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between each other the allocation of tasks as well as availability and it is thus less dictated by the manager.
Finally, when asked whether job resources strengthen the relationship between transformational leadership and engagement, participants were mostly positive that it does.
“If like the resources are all in balance, I think there's not a lot in addition to that...”, says
Maria. Some believed that there are additional aspects to making this relationship stronger, such as Henry who thinks, “…leader should also have it in them to be this transformational
leader, so it is not only the ability of certain resources, but also as a manager being able to use those resources or translate it in how you are engaging or developing or triggering your team.”
On the topic of transformational leadership, some participants fully classified their manager as such, whereas others were more hesitant by appointing some transformational qualities to their managers, but leaving others out. For the most part, participants classified a transformational leader as being “approachable”. Most interviewees saw their leader as projecting individual consideration towards employees, motivating them and involving them in decision-making – qualities assigned to transformational leadership. The latter were listed by employees as factors that boost their engagement levels. Marsha shared that her manager offered her assistance in finding a position in a different department as she could see that she was not currently enjoying her job and experiencing too much pressure. Henry mentioned that his manager would regularly ask for his advice first as she considers him competent and experienced. Kelly was positive about her manager motivating and encouraging her, “…he
stresses to me the importance of the work that I am doing…he tries to push me to become more strategic…” Generally, most participants agreed that their leader has the ability to
engage them both on personal and work level. Yet, a few expressed that their leader engages them on a work level, but not on a personal one. Betty shares that her manager engages her…,
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“On Global Mobility, but not really on the person”. Few did not feel that they are actively
involved in decision-making or that team goals are clearly communicated.
When asked what qualities should a transformational leader have in order to engage its team, the following were listed. According to Sally “open door” makes the manager
approachable and open for questions. Alexandra perceives an engaging manager as someone who “proactively listens”. Marsha finds it important that a manager knows its employees as that way he/she can properly allocate tasks within a team so that everyone is satisfied. Similarly, Kelly lists a manager’s ability to be approachable and “care about personal development” of its employees as vital. Employees mostly defined their relationship with managers as a mixture of professional and relationship-based, implying that work-related aspects are dealt with, but employees could also engage in informal conversations with their manager, without feeling distanced or intimidated by them.
Finally, opinion on whether transformational leadership could increase employees’ individual performance was sought. Participants confirmed previously stated thoughts. Kelly believes her performance exceeds because, “…I have someone like that believing in me and
telling me that I am doing a good job.” Most participants were united about the fact that
under the guidance of a transformational leader they were willing to go beyond regular work activities, whereas if under the guidance of a less transformational or transactional leader they were doing only what it was required by them without putting additional effort. Marsha shares her experience with a less transformational leader, “…if I do my best and spend nights at
work or do really 50 % of what I need it is the same.” Few participants believed that their
performance is not strictly influenced by their leader. Alexandra thinks that, “…employees
should be mature enough to perform the best they can no matter which kind of manager they have…” She also makes a point about culture playing a significant role as an “easy-going”
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and “too friendly” manager can be perceived negatively in countries such as China or Japan and decrease workers’ performance instead.
Conclusion
Restatement of Research Problem & Main Theoretical Findings
The research problem posed throughout this thesis concerned employee engagement. Namely, worldwide engagement levels are in decline, indicating that employees are not satisfied with their work activities (Gallup, Inc., 2017). In turn, decreased engagement levels might have a detrimental effect on employees’ performance as according to academic
literature the two concepts are connected (Ohme & Zacher, 2015). As to tackle this problem a certain tool needed to be proposed. The tool proposed throughout this research was
transformational leadership. Transformational leaders drive and encourage the
accomplishment of organizational goals, while simultaneously being involved and committed to their subordinates (Bass et al., 2003). As to resolve the posed research problem of low engagement and potential impact on performance levels, what was sought throughout this thesis was whether transformational leadership could facilitate the increase of employee engagement and hence improve individual job performance. The following research question was formulated:
“How does transformational leadership serve as a tool for enhancing employee work
engagement and in turn improving individual job performance?”
Five propositions were formulated in support to the research question. Additionally, eleven interviews were conducted in a Western-European company, as engagement results in this region were particularly diminished (Gallup, Inc., 2017). The results of the study provided an
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extensive answer to the proposed research question, the analysis of which is presented below, structured by the propositions made throughout this paper.
Employee Engagement & Individual Job Performance
Results indicated that workers’ definition of engagement was relatively aligned with the definition by Bakker (2017) and Leiter and Bakker (2010). Employees classified
themselves as indeed being dedicated to their work, happy with what they do and finding significance in it in a sense that they feel their work contributes to bigger organizational purposes. Workers recognizing themselves as being devoted and finding value in their work activities as main features of being engaged is in line with one of the three factors of
engagement, namely “dedication” (Schaufeli & Bakker, 2004: Leiter & Bakker, 2010). Additionally, as mentioned by Bakker et al. (2014), engaged employees express positive feelings towards their work and those feelings were confirmed by interviewees who were united in their opinion of coming to work with an overall positive, rather than a negative feeling.
It was expected that engagement will be positively related to job performance as higher engagement is a predictor of higher task performance (Macey & Schneider, 2008). Results confirmed that engagement leads to improved performance, but not necessarily concerning execution of day to day tasks, but rather activities which exceed regular work. Employees felt encouraged to ensure that their work is done accurately and on time and were willing to take additional work. This outcome could be explained by the fact that workers feel happy with their work and overall express positive feelings towards what they do, which confirms that engaged workers are keen on outperforming themselves and putting additional effort in their work (Bakker, 2009: Bakker et al., 2014; Brown, 1996: Macey & Schneider, 2008). Yet, some employees felt that it is their personal obligation to always strive for
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excellence and be pedantic in their work, regardless of being engaged or not, confirming that performance can be driven by additional factors, such as personality traits (Baethge et al., 2017). This implies that performance could not solely be measured through one dimension, as additional factors might play a role too.
Transformational Leadership, Job Resources & Engagement
Throughout this thesis an emphasis was put on job resources, namely positive work aspects, as they are often linked to higher engagement (Ter Hoeven et al., 2016). Specifically, it was sought whether transformational leadership could increase employees’ resources. Previous studies support the theory of transformational leadership reducing job demands and subsequently increasing job resources (Syrek et al., 2013; Breevaart et al., 2015). This notion was not fully confirmed throughout the results, which showed that a number of employees believe that job resources, such as autonomy and flexibility, are ingrained in their job positions. Workers felt autonomous in deciding when to dedicate time to working and when to get a day off, indicating limited manager’s control in that case. However, this could be interpreted in a positive manner as teams being able to independently “self-manage” themselves and appoint their working schedules could entail that their transformational leaders believe in their ability of applying their knowledge and ideas in the way they best see fit; such autonomy of action results in workers’ higher engagement (Dvir et al., 2002, p. 736). Similar line of thinking was applied regarding job demands. Workers felt that demands, such as work overload and time pressure, are embedded in their jobs and are dictated by the daily work flow and organizational unit itself and not so much by leaders. Additionally, employees stated that their job resources and demands are in balance and that the presence of one does not result in the absence of the other. This is in conflict with academic literature, suggesting
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that abundance of job resources translates into decline of job demands (Ter Hoeven et al., 2016).
Workers, however, felt strong managerial contribution regarding two other resources, namely management support and recognition. They saw their managers as someone who is open to helping and communicating with them when feeling under pressure or overloaded, taking their feedback into account and involving them in decision-making, which overall gave them a feeling of being valued and recognized in their work. This is in line with what Bakker et al. (2014) propose, namely forming more personalized relationships between leaders and followers leads to workers’ comfort and psychological ease. Establishing more relationship-based connections with employees, by acknowledging their needs for personal development and individual desires, is a main transformational leadership feature (Woodcock, 2012; Masood et al., 2006). Those aspects were recognized by employees as something that
increases their engagement. In fact, employees experienced strong managerial contribution to job resources connected to the human side of management, such as feeling supported and recognized.
It was also expected that job resources will make the relationship between transformational leadership and work engagement stronger. While employees generally agreed that more positive work factors improve this relationship, some thought that there are additional aspects to this. One worker noted that transformational leadership does not solely depend on distribution of job resources, but rather on a leader’s character and whether he/she has the qualities needed to distribute those resources in a way that truly engages and makes a team progress. This thought corresponds with one of the core characteristics of
transformational leadership, namely individualized consideration and the importance of leaders’ familiarizing themselves with subordinates and their needs as a way of guaranteeing them a pleasurable work experience, instead of automatically applying the same treatment to
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everyone (Bass et al., 2003). In fact, employees listed a transformational leader’s ability of getting acquainted with its subordinates, recognizing their individual needs and facilitating their professional growth as important factors for the increase of employee engagement. Likewise, recognition of employees’ aspirations for career development and their opinion being valued are key ingredients of transformational leadership and ones which contribute to engagement boost (Tims et al., 2011). Similarly, a transformational leader’s power to
motivate and encourage employees in executing their tasks, what is referred to by Bass et al. (2003) as inspirational motivation, was also considered an important point for engagement by participants.
Transformational Leadership & Individual Job Performance
As engagement is linked to performance, it was expected that a transformational leader’s ability to boost engagement will likewise result in better individual performance. Overall, employees stated that the ways of performing their tasks would not change significantly, but activities beyond regular work would. Namely, under the guidance of a transformational leader employees were keen on investing more time and energy in activities which are not necessarily required by them. They were willing to go above and beyond as they felt the support and approval of their manager and were inclined to reciprocate the good deed by outperforming themselves. This confirms the idea advocated by the social exchange theory, proposing that relationships are grounded in “exchange of actions”, meaning that a manager’s positive and encouraging attitude towards its subordinates results in their harder work (Emerson, 1976, p. 336).
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Discussion
Putting Results into Practice
What this research made visible is that indeed transformational leadership could serve as a tool for increasing engagement and in turn, performance. This is important because transformational leadership could be used as a powerful instrument for increasing diminished engagement ratings and hence its value should be strongly emphasized in today’s business world. Accordingly, the following recommendations are proposed.
First, as the “exchange of actions” theory suggests, relationships are grounded in reciprocity of actions (Emerson, 1976). Favourable managerial attitude will be mirrored by employees and thus, as demonstrated by the results of this research, they will be eager on delivering better outcomes. In order for this relationship to be durable, however, leaders adopting transformational qualities should turn such management into a continued practice – one which should not be terminated once managers recognize the success or high engagement of their teams. Instead, they should stimulate and challenge employees regularly and use their managerial style as a way of teaching and aspiring subordinates of adopting the same
practices.
Secondly, as confirmed by both literature and the results in this study, the presence of job resources intensifies employees’ engagement (Ter Hoeven et al., 2016). More specifically, results showed that resources relating to the human side of management, such as being
offered support from leaders and feeling that their opinion is valued, were listed as key factors for engagement by workers. Thus, it is crucial that leaders regularly provide their followers with such resources. This can be achieved by establishing meetings on a weekly basis between workers and managers. Such meetings would allow both parties to express and
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collectively discuss ideas and it would ultimately provide leaders’ the chance of keeping track of team’s progress and thus identify whether their assistance is required. Through regular communication and familiarization with employees’ work, leaders can try minimizing issues by allocating tasks differently or reducing the workload. Moreover, regular communication breaks barriers between superiors and subordinates, which allows the latter to more easily relate to their managers and turn to them for help when needed, instead of being reluctant to ask and inform themselves due to being intimidated by them.
Furthermore, special trainings for leaders should be arranged as to enlighten them on transformational leadership aspects and emphasize their value for achieving positive work outcomes. They could be carried out by more experienced leaders who are perceived by employees as transformational ones. Such training programs becoming the norm might encourage managers to reconsider their ways of leading and ultimately raise engagement and organizational effectiveness on a broader scale. However, those practices should be tailored in a way which takes into account different cultures and the discrepancy in outcomes such leadership could produce.
Finally, new policies should be introduced in companies which operate on the basis of strictly hierarchical structures. As research shows, transformational leaders are involved with their subordinates – they attend to their professional development needs and take their
perspectives into account, which in turn pushes towards higher engagement (Tims et al., 2011). The results of this study confirmed this too. Thus, more personal contact between leaders and subordinates is needed as to conquer engagement decline. Personalized communication between leaders and followers, however, is less likely to thrive in more hierarchical organizational systems. Therefore, such policies should introduce alternative leadership structures, requiring managers to actively involve their subordinates in decision-making and take their feedback into account when possible and needed.
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Limitations & Directions for Future Research
A limitation of this study is the relatively small amount of participants, determined by the number of employees in the studied department and limited amount of time to conduct the research. Provided that the number of participants was higher, alternative and more diverse opinions could have been conveyed. Another limitation was that a number of aspects, which could potentially tilt the results’ scale in a different direction, were not included. One such factor is culture. As one participant rightfully noted, transformational leadership could be perceived unfavourably in East Asian countries and could result in drop of job performance or engagement due to cultural discrepancies.
Thus, future studies might consider employing a bigger number of participants as a broader sample could result in more significant results. It is also important to include
additional aspects which may affect the relationship between transformational leadership and engagement/job performance. Such factors could be culture, age, personal characteristics (e.g. is an employee more sensitive or laid-back). Likewise, future research may study the effects of transformational leadership on other work-related aspects, different from engagement and performance. Additionally, it would be worthy to conduct a similar type of research in a different organizational setting as in the current research most participants reported being autonomous and flexible in their work and this made a manager’s role in some cases redundant. In fact, such study could be conducted with younger, or less experienced employees who might feel more dependent on their managers than employees with longer experience, who have already established their place in a company. Finally, conducting a case study in a company with negative engagement levels might elicit different and
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Final Remarks
The results of this research showed that employees strongly value the human side of management – that includes being encouraged to perform effectively, their voice being heard and their professional and personal needs being attended to. This implies that leaders need to turn their attention to performing human management. Transformational leaders’ ability of projecting individual consideration towards employees by supporting and listening to them as well as acknowledging their efforts were all perceived as factors which boost engagement as well as individual performance. Thus, such practices should be recognized and executed on a broader scale as to overcome the challenge of low employee engagement.
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Appendix A. Engagement results Company X
Figure 1.
“Company X 2018 Global Climate Survey” Global Rewards employee engagement results. Due to confidentiality reasons, only the statistics relevant to the topic of research are presented.
Figure 2.
“Company X 2018 Global Climate Survey” global employee engagement results. Due to confidentiality reasons, only the statistics relevant to the topic of research are presented.
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Appendix B. Employees’ names & occupations
In the interest of preserving participants’ anonymity, all names have been changed. Name of employee Job position
Sally Management Assistant to the Director of Global Rewards
Alexandra Global Mobility Coordinator
Marsha Compensation Analyst
Kelly Employee Engagement Advisor
David Global Mobility Financial Analyst
Lora Executive Compensation employee
Henry Global Rewards employee
Maria Global Mobility Coordinator
Anna Global Mobility Advisor
Sophia Compensation Officer
Betty Global Mobility Coordinator
*Jessica Manager – does not participate in interviews, but is referred to by interviewees by name, thus her name has been changed as well
Appendix C. Interview Guide
Thank you for participating in this interview! The topic that I am investigating throughout this research is employee engagement and whether it could be increased by transformational leadership. Additionally, I am also interested in whether transformational leadership could increase individual job performance levels. In case you are not familiar with the previously mentioned concepts, a definition will be provided during the interview.
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This questionnaire consists of 44 questions. You have previously familiarized yourself with the questions, but if at any point you feel that you are not comfortable answering a question, please do not hesitate to tell me to skip to the next one. Please keep in mind that your anonymity is guaranteed and not at any point throughout this research will your identity be disclosed.
We will begin with more general questions regarding your job role, duration of your stay in the company and personal experiences about it.
1. Could you tell me about your current job position in the company – what do you do on a daily basis?
2. How long have you been working for Company X?
3. What would you list as one of the main reasons (or several reasons) that made you stay in the company?
Thank you for providing me with some background about your work position and the tasks you carry out on a daily basis. I will now ask you specific to the topic at hand questions. Please feel free to ask me on elaborating or repeating any of the questions in case you have difficulty answering them.
Topic 1:
As previously discussed, the topic of this research is employee engagement and the potential role that transformational leadership serves as to increase engagement levels. The results for the Company X 2018 Climate Survey indicate that globally engagement levels amongst Company X employees are high, namely 79%. For the Global Rewards department, those statistics are consistent, even slightly higher, namely 80%. The definition of employee
