University of Amsterdam
Faculty of Economics and Business
Taking the lead to a happy productive workforce
Joyce J. Derksen
Supervisor: dr. C.T. Boon Student number: 10047794 June 2015
Statement of Originality
This document is written by Joyce J. Derksen, who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Preface
I wrote this thesis in order to complete my Master’s program in Business Administration at the University of Amsterdam. To accomplish this, I had much appreciated support from family, friends and colleagues. I would especially like to thank my supervisor Corine Boon, for all her feedback and tips during the whole process of writing it. Finally, thanks to all the participants from the Netherlands and Germany for filling in the survey. I hope you enjoy reading it!
Table of contents
Abstract 5
Introduction 6
Theoretical framework 9
Employee wellbeing and individual performance 10 Transformational leadership 12 The moderating effect of transformational leadership 13
Person-supervisor fit 14
The moderating effect of person-supervisor fit 15
Method 17
Design and sample 17
Procedure 18
Measurements of the different variables 18
Analyses and predictions 20
Results 22
Reliabilities and correlations 22 Results from regression analyses 23 Transformational leadership 24 Employee-rated person-supervisor fit 26 Manager-rated person-supervisor fit 27
Discussion 29
Summary 29
Unpredicted results 31
Link to theory and contributions 32
Limitations & strengths 35
Conclusion 35
References 37
Appendix A: Dutch manager survey 41
Appendix B: Dutch employee survey 44
Appendix C: German manager survey 48
Abstract
This study is dedicated to the relationship between employee happiness, measured as wellbeing, and the individual performance of the employee. It is proposed that transformational leadership and person-supervisor (PS) fit positively moderate the relationship between wellbeing and performance, such that when transformational leadership and PS fit are high, the effect of wellbeing on individual performance is stronger. Data for this study were collected through online surveys in triad form in the Netherlands and Germany. The final sample consisted of 403 participants, of which 278 were Dutch and 125 were German. Also, the sample consisted of 134 managers and 269 employees. The regression analyses showed that there is indeed a direct relationship between wellbeing and individual performance. Unfortunately, no moderating effect of PS fit was found. However, the regression analysis of the interaction of transformational leadership and wellbeing, showed marginally significant results. The contributions to the literature include an attempt to clarify the mixed results on the wellbeing-performance relationship. Moreover, this study aimed to address the different factors that might affect this relationship and provides suggestions for future research.
Introduction
‘The highest of all goods available by human action is happiness’. – Aristotle, Nicomachean
Ethics (1947).
According to Aristotle (1947) the pursuit of happiness is the key to a good life. His popular statement induced many researchers, and thereby organizations, to realize the importance of how employees feel in their work-environment. Therefore, it seems only logical that research about how to create a happy workforce has increased immensely over the past decades. A happy workforce is usually associated with a group of employees that is working productively together toward a collective goal (Campbell et al., 1993). The most common definition of the happy productive worker thesis is that a happy worker automatically is a productive worker (Wright & Cropanzano, 2000). Accordingly, a happy employee is a productive employee and should perform better than an unhappy one. Unfortunately, a great amount of early studies about the happy productive worker and performance relationship produced mixed results (Cropanzano & Wright, 2001). However, in most early studies the construct happiness was measured as job satisfaction and only for the past 15 years or so happiness has also been operationalized as wellbeing. Wright and Cropanzano (2000) argue that it is better to measure happiness using a broader wellbeing measure when looking at employees in an organization. Wellbeing, in contrast to job satisfaction, is not tied to a specific situation and therefore not dependent on the context (Kornhauser, 1965; Warr, 1987, 1990). Moreover, psychological wellbeing can be seen as a broader construct, because it includes the happiness in the employee’s life as a whole rather than job satisfaction, which refers just to the employee’s happiness in the work environment (Diener, 1984). Moreover, in the past decades wellbeing was split up into three different types: psychological, physical and social wellbeing (Nussbaum, 2001). It was established that
with the health component and social wellbeing with relationships (Grant, Christianson & Price, 2007). Therefore, in this study happiness will be operationalized as psychological wellbeing.
Psychological wellbeing is more than once proven to relate positively to job performance (Cropanzano & Wright, 2001; Wright & Staw, 1999; Wright & Bonnet, 1997). Cropanzano and Wright (2001) state that wellbeing is positively related to different measures of job performance and there might even be a causal relation. Moreover, Staw and Barsade (1993) conducted a laboratory experiment that suggested that high wellbeing results in better performance ratings. Staw and colleagues (1994) ensured a broader applicability of these results by conducting a follow-up longitudinal study. The results of both studies concluded that wellbeing predicts various indicators of performance. Additionally, Wright and Staw (1999) confirmed that there is a definite relationship between wellbeing and performance in an organizational setting as well. Nevertheless, Wright and Bonnet (1997) found that other variables might play a role in the relationship between psychological wellbeing and performance ratings. Furthermore, Taris and Schaufeli (2015) argue that the relationship between wellbeing and performance should be investigated from different perspectives and even in different contexts. Their paper states that wellbeing in relation to performance is definitely dependent on external influences and should therefore be studied in combination with different concepts.
Little known research was conducted regarding the external influences on the relationship between wellbeing and performance. Therefore, the contribution of this study is to see if and how external factors like supervisors or leaders influence how employees feel in the organization and eventually how they perform. According to Ilies and colleagues (2005), it is especially interesting to include different types of leadership, like transformational leadership. Moreover, Quick and Quick (2004) suggest in their paper that it is useful to
investigate the happy productive worker thesis in combination with positive authentic or charismatic leaders. More specifically, they state that transformational leaders, who tend to intellectually stimulate and inspire their followers to achieve more individually and collectively (Bass, 1991), might play an important role here. Transformational leaders tend to enhance a collective feeling by communicating a clear and attractive vision, which can result in employees having a more relevant sense of direction (Bass, 1991; Quick & Quick, 2004). This entails that employees who feel psychologically well in their organization and have a transformational leader, tend to have an even more positive effect on their performance because of the clear direction they are stimulated to go in. In other words, a transformational leader positively influences the relationship between employee wellbeing and individual performance by setting collective goals and creating a clear vision. Also, employees that have a transformational leader are generally more satisfied with their leader, which improves their emotional state and increases positive affect towards the leader and the organization (Bass, 1991). This can lead to employees aiming their positive affect towards the relevant organizational goals and therefore they have an even more positive effect of their wellbeing on their performance. Thus, the presence of a transformational leader increases the effect of employee wellbeing on their individual performance.
Another factor that may play a role as an external influence on the relationship between wellbeing and performance is person-supervisor (PS) fit. Namely, In order to create a happy productive workforce, it is important to see to it that workers fit to their jobs, the organization and their supervisors (Wright & Cropanzano, 2004). Moreover, Kristof-Brown and colleagues (2005) call for a more detailed research on PS fit in combination with other constructs. Accordingly, there has been little to no research about the relationship between wellbeing and performance and the effects of PS fit. Therefore, this study includes not only
between employee wellbeing and performance. As PS fit describes the congruence of the employee’s values and goals with those of their supervisor, it seems interesting to see if the relationship between them influences the effect of how employees feel on individual performance and thus their goals. The match of the employee’s values with those of their supervisor can create a positive interpersonal relationship, because of the easier cooperation and collaboration between them (Edwards & Cable, 2009). This positive interpersonal relationship leads to more positive feelings from the employee, which can be reciprocated towards the supervisor. These positive feelings will again make sure that the employee puts his or her positive energy towards the right organizational goals, and therefore leads to an increased link between wellbeing and performance. In sum, it is expected that employees perceiving a good fit with their supervisor or manager have a stronger effect of their wellbeing on their performance.
Obviously, the relationship between employee happiness and the employee’s individual performance needs some clarification in terms of potential external influences, in this case the plausible influences of leaders or supervisors. Therefore, the aim of this study is to answer the following question:
Do transformational leadership and person-supervisor fit enhance the relationship between employee wellbeing and the employee’s individual performance?
Theoretical Framework
According to Wright and Cropanzano (2000) there is a need for more research on psychological wellbeing in an organizational setting. Moreover, the relation between employee wellbeing and their performance can use some general clarification. In this section the expected relationship between employee-rated wellbeing and manager-rated task
performance of the employee is further illustrated. Followed by the hypotheses for the moderating effects of transformational leadership and PS fit.
Employee wellbeing and individual performance
Employee wellbeing is mostly defined as the overall quality of the experience and functioning of an employee (Danna & Griffin, 1999; Warr, 1987) and for a long time operationalized as a balance between negative and positive affect (Bradburn, 1969). In other words, being psychologically well means being simultaneously high on positive emotions and low on negative ones. Wellbeing can also be defined by two different components, namely subjective and objective wellbeing. Subjective wellbeing is the evaluation of people’s own beliefs and feelings about their own happiness (Diener, 2000), whereas objective wellbeing is not self-evaluated, but rated by the supervisor. In this study employee wellbeing is self-evaluated by the employee, thus subjective. Subjective wellbeing advances achievements in working environments (Oishi, 2012), but more importantly leads to productivity (Diener, 2012).
Several measures of performance were investigated in combination with wellbeing over the last twenty years, for example individual performance and overall firm performance (Wright, 2010). However, there seems to be a trade-off between wellbeing and organizational performance. Thus, there is evidence for positive effects of wellbeing on individual performance, however only a few studies speculated about the effects on organizational performance (Van De Voorde et al., 2012). Moreover, Taris and Schaufeli (2015) state that it is more useful to investigate the relationship between wellbeing and individual performance. Therefore, this study focuses on individual performance measures.
Staw and colleagues (1993) ensured that there is sufficient reason to suspect that wellbeing predicts several indicators of performance, like individual managerial ratings and employee turnover. Some more recent studies (Cropanzano & Wright, 2001; Wright & Bonnet, 2007; Wright, 2010) concluded that in an organizational setting there even is a possible causal relationship between the two. Additionally, previous studies about wellbeing state that it can have an influence on productivity. Namely, the happy productive worker thesis implies that a happy worker should automatically be a productive worker (Wright & Cropanzano, 2000). The reasoning behind this theory stems from that a happy employee is a psychologically well employee and therefore tends to be more outgoing and extrovert, which can result in more positive cooperation at work (Cropanzano & Wright, 2001; Wright, 2010; Zelenski et al., 2008). This more positive cooperation can be linked to the overall productivity of the employee, because smooth cooperation with colleagues and managers is likely to increase the overall efficiency of how a job is operationalized (Taris & Schaufeli, 2015). In sum, a happy worker is indeed a more productive one. Thus, a happy employee is a productive employee and should therefore perform better than an unhappy one (Wright & Cropanzano, 2000).
Psychologically well people generate more positive emotions that can help develop new skills and enhance creativity (Fredrickson, 2001; Zelenski et al., 2008). Yet, another reason why wellbeing should increase performance, because creativity and new skills may improve the innovativeness and efficiency of the employee. Furthermore, Wright and Cropanzano (2004) concluded that psychological wellbeing predicts performance in terms of managerial ratings and actual pay. This is in line with other results of the various studies about wellbeing in relation to performance.
Another explanation for the link between employee wellbeing and the individual performance of the employee could be social exchange theory. This theory is based on the assumption that when people feel happy and appreciated in their organization, they tend to
give back (Gould-Williams & Davies, 2005). It seems logical that in the case of psychologically well employees or happy workers, the feeling of reciprocation towards the organization is stronger. This also indicates that employees who feel better will be more productive and therefore perform better collectively and individually. These arguments lead to the first hypothesis:
Hypothesis 1: Employee wellbeing is positively related to the individual performance of the employee.
Transformational leadership
A transformational leader can be defined as a charismatic leader that intellectually stimulates and inspires followers to become more aware, while simultaneously enhancing their self-esteem and collective feelings (Bass, 1985). More specifically, there are four different dimensions in transformational leadership (Bass, 1985; Burns, 1978). The first dimension is
idealized influence or charisma, which entails that a leader influences followers by increasing
emotions and creating loyalty. The aim of the leader is to communicate their own idealized vision and make sure followers can identify themselves with it. The second dimension is referred to as inspirational motivation, whereby the leader expresses the future collective goals in an optimistic way and communicates a vision that is motivational and inspiring. They do so by setting high standards for goal accomplishments and often use symbols and imagery to clarify their vision for the future. As a third dimension, intellectual stimulation can be identified. This dimension describes how the leader stimulates followers to be aware of their capabilities to solve problems. Moreover, the leader aims to encourage followers to approach problematic situations differently. The fourth and final dimension of transformational leadership is individualized consideration. Here, the leader intends to
provide support and understanding for individual followers by giving them personal attention.
The moderating effect of transformational leadership
Quick and Quick’s (2004) suggestion for future research contains a combination of the happy productive worker theory and positive authentic or charismatic leaders. Also, according to Ilies and colleagues (2005), it is specifically interesting to study the effects of different types of leadership like transformational leadership. Bass (1991) concluded that employees with a transformational leader generally are more satisfied with their leader. This satisfaction with the leader may also result in a stronger relationship between the wellbeing of the employee and their performance. Moreover, according to Bono and Ilies (2006) charismatic leaders can be linked to the positive emotions and affect of employees towards the organization and their leaders. Transformational leaders create a positive supportive work environment, which can increase an employee’s motivation and positive affect towards the leader. The previously mentioned social exchange theory (Gould-Williams & Davies, 2005) can explain why this relation might exist. Namely, the transformational leader gives the employee a positive feeling, which can lead to the employee reciprocating those positive emotions towards their leader.
As mentioned before, transformational leaders aim to increase esteem and self-awareness of the employee, but more importantly tend to enhance a collective feeling by means of a clear joint goal or vision (Bass, 1985; Burns, 1978). This more relevant sense of direction towards an organizational goal can increase the effect of an employee’s wellbeing on their performance. It seems logical that an employee that is psychologically well and has a transformational leader knows where to direct his or her energy to and thus has a more positive influence of their wellbeing on their performance. In other words, transformational
leaders make employees more aware of collective goals in a positive way, so that employees want to reciprocate and put their working activities in the right direction towards those collective goals. This all leads to an enhanced effect of employee wellbeing on individual employee performance. In sum, the presence of a transformational leader can increase the effect of employee wellbeing on their individual performance. Thus, the second hypothesis is as follows:
Hypothesis 2: Transformational leadership positively moderates the relationship between employee wellbeing and the individual task performance of the employee, such that when transformational leadership is high the effect of employee wellbeing on the individual task performance of the employee is stronger.
Person-supervisor fit
The term person-supervisor (PS) fit stems from theory about person-environment (PE) fit, which addresses the positive outcomes that can result from value and goal congruency of the individual with the environment they work in (Muchinsky & Monahan, 1987). According to Muchinsky and Monahan (1987), PE fit is about the match between an employee and their work environment as a whole and can be split up in two different types. The distinction is between supplementary fit and complementary fit, where supplementary is about the congruence of individual characteristics with those of others in the same work environment. The complementary part of PE fit is focused on to what extent the characteristics of the individual complement those of the environment they work in. PS fit can be defined as the match or congruence between the values and characteristics of an employee with those of their manager or supervisor (Kristof-Brown et al., 2005). Thus, PS fit is considered a supplementary fit.
PS fit was included in only a few studies, mostly related to job satisfaction and overall firm performance. For example, according to a study by Meglino and colleagues (1989), there is an evident relationship between PS fit and job satisfaction and commitment. They concluded that this was only the case when supervisors themselves rated the PS fit with their employee and not for employee-rated PS-fit. To see if this is also the case in this study, PS fit will be measured from an employee perspective as well as from a managerial perspective. PS fit is proposed as the match between an employee’s values, goals and personality with those of their supervisor, or in this case manager (Kristof-Brown et al., 2005). When individuals have matching values, they tend to act in a more positive way towards others in the organization (Meglino et al., 1989). This indicates that employees who have similar values and goals as their manager feel better in their work environment.
The moderating effect of person-supervisor fit
The previously mentioned similarity-attraction model (Byrne, 1971) is based on the assumption that individuals prefer to interact with people that they perceive to be similar to them. In this case, employees are inclined to work together with managers that share the same values and the other way around. This better PS fit can lead to better cooperation and therefore more productivity and higher performance. Moreover, when an employee’s values are similar to those of other people, this will result in positive affect towards the organization and other people working there (Meglino et al., 1989). This positive affect towards the manager and the organization can again enhance the employee’s productivity, because this can lead to employees aiming their efforts to the relevant organizational goals in a more effective way. Moreover, a better value congruence between an employee and his or her supervisor can result in a more positive interpersonal relationship (Edwards & Cable, 2009). This more positive interpersonal relationship can result in more positive feelings from the
employee and can be projected onto the manager and the overall organization. This can stimulate the employee to work towards the relevant collective goals of the organization, which again increases the effect of their wellbeing on their performance. Thus, it is expected that employees with a good fit with their supervisor or manager have a stronger effect of their wellbeing on their performance. This leads to the final hypotheses:
Hypothesis 3a: Person-supervisor fit from an employee’s perspective positively moderates the relationship between employee wellbeing and the individual performance of the employee, such that when person-supervisor fit is high the effect of employee wellbeing on the individual task performance of the employee is stronger.
Hypothesis 3b: Person-supervisor fit from a manager’s perspective positively moderates the relationship between employee wellbeing and the individual performance of the employee, such that when person-supervisor fit is high the effect of employee wellbeing on the individual task performance of the employee is stronger.
It is expected that a high PS fit from a manager’s perspective will have a stronger effect on the relationship between employee wellbeing and performance than a high PS fit from an employee’s perspective. The reasoning behind this is that the manager rates the individual performance of the employee and this might influence the perceived PS fit with that same employee. For example, if a manager rates an employee as not performing well, this might be due to the fact that the values and goals of both parties just don’t match.
Figure 1. Conceptual Model of Wellbeing (WB), individual performance (IP),
Transformational leadership (TL) and PS fit. ER=Employee-Rated, MR=Manager-Rated.
Method
Design and sample
Data were collected through personal contacts of several students from the University of Amsterdam, by means of online surveys. Two different datasets were collected, namely one with Dutch-speaking residents from the Netherlands and another with German-speaking residents from Germany. Several Bachelor and Master students of the University of Amsterdam collected the Dutch data set during a period of 1 year starting March 2014. The German data set was collected in March 2015 by three Master students under the supervision of dr. Corine Boon.
The data from both countries was merged into one dataset, because the smaller German set would be insufficient for independent analyses. For this reason, a dummy variable was added to indicate the country, where 0 stands for the Netherlands and 1 for Germany. This variable can be used as a control variable.
All surveys were sent by email in triad form to one manager and two employees in each triad. The final sample size for both countries together was 403 participants, 278 Dutch and 125 German. Only fully completed surveys were included in the final sample and the data were adjusted for extreme and impossible values. The final sample of the Dutch and German samples together consisted of 134 managers and 269 employees. Of the managers, 62.7% was male and 37.3% was female. The average age was 43 years (SD = 11.6) and the average tenure was 12.0 years (SD = 12.2). Of the employees, 39.5% was male and 60.5% was female, with an average age of 36 years (SD = 12.6) and an average tenure of 8.8 years
(SD = 9.0). More than 75% of the managers and more than 65% of the employees succeeded
in higher (vocational) education.
Procedure
The Dutch surveys were created by the thesis supervisor and contained a broad range of validated scales. There were two surveys, one survey for the manager or supervisor and one for the two employees. The existing Dutch survey was professionally translated into a German version with identical questions and sequence. A native German student and a German HRM assistant professor of the University of Amsterdam did parallel translations, which were compared afterwards. The German survey was not pilot-tested, but checked for inconsistencies by the three master students.
All communications were through email with all participants, where the first email was purely informational and contained the request for cooperation. Each participant was informed about their anonymity in the data collection process and was aware of the purpose of the surveys. All voluntarily participating managers and employees were sent a second email with a link to the survey with a personal code. This personal code was used to link data from the manager to the two individual employees. A week after the second email a reminder was sent to those who did not yet fill in the questionnaire. After data collection, all answers from the managers were matched with those of their employees and the codes were removed to insure the anonymity of all participants.
Measurements of the different variables
Dependent variable individual performance of the employee was measured on a 4-item scale
where (1) means totally disagree with this statement and (7) means totally agree with this statement. A high score on this scale means that the manager or supervisor rated the individual task performance of the employees as high. In order to get managers to compare employee A and employee B in the survey, the statements were presented for both employees simultaneously. An example from this scale is: “Employee A/B: Delivers good work”. No items were counterbalanced for this variable and the value of Cronbach’s alpha was (0.874).
Independent variable wellbeing was measured on an 11-item scale rated by the
employees and was designed by Warr (1990). Wellbeing can be divided in four different domains, namely enthusiasm, anxiety, depression and competence. Depression and anxiety were counterbalanced because of the negative nature of the questions. A 7-point Likert scale was used to indicate whether respondents felt like one of the options (1) never or (7) always. An example from this scale is: “How many times in the past weeks at work did you feel:
concerned”. A score of (7) in this case would mean that the respondent felt concern al the
time and therefore wellbeing was low. For this variable the Cronbach’s alpha was (0.889).
Moderating variable transformational leadership was measured on an 11-item scale
developed by De Hoogh, Den Hartog and Koopman (2004). An example from the employee survey is: “My manager stimulates employees to think in novel ways about problems”. The employees answered on a 7-point Likert scale, ranging from (1) totally disagree to (7) totally agree with this statement. Scoring a (7) on this scale means that the manager is more transformational in the employee’s opinion than when scoring a (1). No items where counterbalanced and Cronbach’s alpha was found at (0.959).
Moderating variable person-supervisor fit was measured on a 3-item scale developed
by Cable and DeRue (2002). Since this moderator is defined in this study as the fit between an employee and their supervisor, the scale was both rated by employees and managers. Again a 7-point Likert scale was used to determine the fit from an employee’s perspective.
An example from these scales is: “My norms and values fit well to the norms and values of
my supervisor”. In this case a score of (1) means that there is absolutely no fit and (7) that
there is a perfect fit. Again no items were counterbalanced. Cronbach’s alpha for P-S fit from an employee’s perspective was (0.936) and from a manager’s perspective (0.902).
Analyses and Predictions
Before starting the analyses, the collected data set was structured and checked for inconsistencies. All variables were tested for reliability. Only when they are reliable enough, the items of the scales can be combined into the different variables. The next step was to check for correlations between variables, in order to establish a degree of linear dependence between them. Before the multiple regression analyses, the independent and moderating variables were mean-centered. After mean-centering the variables, three interaction variables were created of wellbeing multiplied with each of the moderators. Thereafter, there were three different regression analyses, one for every moderator; transformational leadership, PS fit employee-rated and PS fit manager-rated. Each regression analysis consisted of two different steps, where the first was investigating the main independent effects of the independent variable wellbeing and each of the moderating variables on dependent variable individual performance (model 1). Then, the second step in the analyses was testing the interaction effect of the independent variable wellbeing, combined with each of the moderating variables, on the dependent variable individual performance (Model 2). The analyses and predictions addressing these three models are as follows:
Analysis 1: the independent main influence of the independent variable wellbeing on
Prediction 1: the main effect to be predicted in dis regression model is a positive
effect of the independent variable wellbeing on the dependent variable individual
performance.
Analysis 2: the second analysis is an interaction test of both the independent variable wellbeing and the moderating variable transformational leadership on the dependent variable individual performance.
Prediction 2: the prediction of the second analysis is that there is a positive interaction
effect of both the independent variable wellbeing and the moderating variable
transformational leadership on the dependent variable individual performance.
Analysis 3a: this analysis is an interaction test of both the independent variable wellbeing and the moderating employee-rated variable person-supervisor fit on the dependent
variable individual performance.
Prediction 3a: the prediction is that there is a positive interaction effect of the
independent variable wellbeing and the moderating employee-rated variable
person-supervisor fit on the dependent variable individual performance.
Analysis 3b: this last analysis is an interaction test of both the independent variable wellbeing and moderating manager-rated variable person-supervisor fit on dependent variable individual performance.
Prediction 3b: the last prediction is that there is a positive interaction effect of the
independent variable wellbeing and the moderating manager-rated variable person-supervisor
Results
Reliabilities and correlations
A reliability analysis was used to determine whether the to be tested scales could be used for a regression analysis. The results from this analysis were positive for all variables. Where transformational leadership has the highest reliability, with a Cronbach’s alpha of (.96). The Cronbach’s alpha for dependent variable wellbeing was found at (.89) and the reliability value for independent variable individual performance at (.88). The two different measures of PS fit, namely from an employee’s perspective and a manager’s perspective, were respectively (.94) and (.90). Because all Cronbach’s alphas are considered high, all variables were computed without deleting any existing items.
Table 1 shows the means, standard deviations and correlations between the variables.
The abovementioned Cronbach’s alphas can be found between brackets on the diagonal. As expected individual performance is positively correlated to wellbeing (r (269) = .194 p<.01), transformational leadership (r (269) = .223 p<.01), and PS fit from an employee’s perspective (r (269) = .256 p<.01) as well as a manager’s perspective (r (269) = .369 p<.01). In other words, individual performance is related to either one of the variables. An example of such a correlation is when transformational leadership changes with the value of (1), individual performance increases with the value of (.223). As predicted, wellbeing is also positively correlated with transformational leadership (r (269) = .388 p<.01), PS fit from an employee’s perspective (r (269) = .293 p<.01), and PS fit from a manager’s perspective (r
(269) = .181 p<.01). Thus the weakest correlation is found between wellbeing and PS fit
from a manager’s perspective. Furthermore, transformational leadership positively correlates with PS fit from an employee’s perspective (r (269) = .644 p<.01) as well as from a manager’s perspective (r (269) = .217 p<.01). Thus, the strongest correlation that can be
perspective. Moreover, PS fit from both perspectives are also correlated, namely (r (269) = .242 p<.01). In sum, all the investigated variables are significantly correlated with each other.
Table 1. Means, standard deviations and correlations (Cronbach’s alpha on diagonal) of
dependent variable individual performance (IP), independent variable wellbeing (WB), moderating variable transformational leadership (TL), moderating variable person-supervisor fit (PS fit) and control variable country.
M SD 1 2 3 4 5 1 IP MR 5.96 .81 (.88) 2 WB ER 5.28 .85 .194** (.89) 3 TL ER 5.18 1.13 .223** .388** (.96) 4 PS fit ER 5.18 1.18 .256** .293** .644** (.94) 5 PS fit MR 5.10 1.06 .369** .181** .217** .242** (.90) 6 Country .29 .46 .188** -.262** -.032 .003 -.040
Note. N=269. *p<.05. **p<.01. MR = Manager-Rated, ER = Employee-Rated.
Results from regression analyses
Table 2 shows the results of the linear regression analysis of wellbeing and individual performance. With an explained variance of 10.1 percent, the results indicate that wellbeing has the expected positive effect on individual performance (β = .271, p < .001, R2 = .101). This means that employees that are psychologically well have a better individual performance than employees that reported not to be psychologically well. In other words, employee wellbeing is definitely positively related to the individual performance of the employee. Therefore, the first hypothesis of this study is accepted.
Table 2. Main effects of independent variable wellbeing (WB) (and control variable country)
on dependent variable individual performance (IP)
Individual performance MR Model 1
Coeffient SE Beta
Constant 4.025*** .42
Wellbeing ER .257*** .11 .271
Control variable country .436*** .07 .263
R² .101
Note. N=269. *p<.05, **p<.01, ***p<.001. MR = Manager-rated, ER = Employee-rated. Transformational leadership
The main effect of transformational leadership on individual performance (see table 3, model 1), with an explained variance of 12.3 percent, was found at β = .160, p < .05, R2 = .123. This indicates that there is a positive effect of transformational leadership on individual performance. In other words, a transformational leader improves performance on an individual level.
After the main effects analysis, the interaction variable of wellbeing and transformational leadership was used to run another regression analysis (see table 3, model 2). The model explains a variance of 13.6 percent but unfortunately only a marginally significant result was found (β = .123, p < .10, R2 = .136). Unexpectedly, this means that it cannot be concluded that transformational leadership is moderating the relationship between wellbeing and individual performance. However, the marginally significant result in figure 2 seems to indicate that there is a stronger relationship between wellbeing and performance for high transformational leadership than for low transformational leadership. In other words, the
performance more than a leader that is low on transformational leadership. Moreover, the figure shows that individual performance is higher at all times combined with high transformational leadership than with low transformational leadership. However, because of the non-significant result the conclusion is that the second hypothesis is not completely accepted.
Table 3. The main (model 1) and interaction effects (model 2) of independent variable
wellbeing (WB) and moderating variable transformational leadership (TL) on dependent variable individual performance (IP)
IP MR
Model
1
Model
2
Coeffient SE Beta Coeffient SE Beta
Constant 3.783*** .43 3.624*** .43 WB ER .193** .07 .203 .195** .07 .206 TL ER .114* .05 .160 .142** .05 .200 WB x TL .108 .06 .123 Country .424*** .11 .256 .393*** .11 .238 R² .123 .136 Note. N=269. *p<.05, **p<.01, ***p<.001. MR = Manager-rated, ER = Employee-rated.
Figure 2. Plot of marginally significant effect of moderating variable transformational
leadership (TL) and independent variable wellbeing on dependent variable individual performance.
Employee-rated person-supervisor fit
The regression analysis of the main effect of PS fit from an employee’s perspective (see table
4a, model 1), resulted in an explained variance of 13.9 percent, with a β of .204 and a p<.01.
This indicates that PS fit rated by the employee indeed relates to that employee’s individual performance, which means that an employee that perceives a good fit with his or her manager performs better than an employee that does not perceive a good fit with their manager.
In the interaction analysis of wellbeing and PS fit from the employee’s perspective (see table 4a, model 2), there was no significant effect present. With an explained variance of 13.9 percent, the results were β = .015, ns, R2 = .139. Unfortunately, this non-significant effect means the relationship is not as expected. The proposed moderating effect of PS fit is not proven, which means that a good congruence between an employee’s values and his or her supervisor’s values is not enhancing the effect of employee wellbeing on his or her
Low Wellbeing High Wellbeing
Indi v idua l P er fo rm a nc e Low TL High TL
performance. The third hypothesis (3a) stated that this effect was expected to be present, thus this hypothesis is rejected.
Table 4a. The main (model 1) and interaction effects (model 2) of independent variable
wellbeing (WB) and moderating variable person-supervisor fit (PS fit) ER on dependent variable individual performance (IP)
IP MR
Model
1
Model
2
Coeffient SE Beta Coeffient SE Beta
Constant 3.663*** .42 3.644*** .43 WB ER .195** .07 .205 .197** .07 .208 PS fit ER .140** .05 .204 .142** .05 .206 WB x PS fit .013 .06 .015 Country .409*** .11 .247 .405*** .11 .245 R² .139 .139 Note. N=269. *p<.05, **p<.01, ***p<.001. MR = Manager-rated, ER = Employee-rated. Manager-rated person-supervisor fit
As expected, the regression analysis of the main effect of manager-rated PS fit (see table 4b, model 1), with an explained variance of 21.7 percent, shows that PS fit from a manager’s perspective has a positive effect on individual performance (β = .346, p < .001, R2 = .217). This means that an employee performs better individually under the supervision of a manager that perceives to have the same goals and values.
Unexpectedly, no significant result was found for the regression analysis of the interaction effect of manager-rated PS fit and wellbeing on individual performance (β =
-employee does not moderate the relationship between wellbeing and individual performance. This means that despite the supposedly congruent goals and values, the employee does not have an increased effect of his or her wellbeing on their performance. This means the final hypothesis (3b) is also rejected.
Table 4b. The main (model 1) and interaction effects (model 2) of independent variable
wellbeing (WB) and moderating variable person-supervisor fit (PS fit) MR on dependent variable individual performance (IP).
IP MR
Model
1
Model
2
Coeffient SE Beta Coeffient SE Beta
Constant 3.018*** .43 3.111*** .44 WB ER .198** .06 .207 .188** .06 .197 PS fit MR .26*** .05 .346 .255*** .05 .340 WB x PS fit -.052 .05 -.064 Country .431*** .11 .260 .423*** .11 .256 R² .217 .221 Note. N=269. *p<.05, **p<.01, ***p<.001. MR = Manager-Rated, ER = Employee-Rated.
Unfortunately, because there was no significant effect found of either one of the measures of PS fit (manager- or employee-rated), nothing can be said about the difference between the two moderators. However, as shown in the results, manager-rated PS fit has a more significant and stronger main effect on individual performance.
Summary
The main goal of this study was to investigate the relationship between employee wellbeing and the individual performance of those employees. As mentioned in the introduction, there are many existing studies about the effects of wellbeing on performance in many forms. According to Taris and Schaufeli (2015), these many forms of wellbeing and performance caused for the mixed results in this field. However, several studies concluded that there is definitely a relationship, in some cases even a causal one, between wellbeing and different measures of performance (Cropanzano & Wright, 2001; Wright & Staw, 1999; Wright & Bonnet, 1997).
In order to further explore the relationship between wellbeing and individual performance, Taris and Schaufeli (2015) stated that different context might play a role here. Therefore, two moderators were proposed to influence the relationship, namely transformational leadership, person-supervisor (PS) fit from an employee’s perspective and from a manager’s perspective. The research question from the introduction was as follows:
Do transformational leadership and person-supervisor fit enhance the relationship between employee wellbeing and the employee’s individual performance?
The first conclusion that can be drawn from the results is that there is indeed an existing relationship between how an employee feels in the organization and his or her individual performance. Namely, the results showed that wellbeing is positively related to individual performance. In other words, when an employee feels good and is psychologically well in the organizational environment, he or she performs better, as opposed to a not psychologically well employee. This result is in line with the results of previous research on this subject.
Another important outcome of this study was the positive direct effect of transformational leadership and PS fit, from both perspectives, on individual performance.
The results showed that the presence of a transformational leader is positively related to the performance of the employee. This indicates that a transformational leader stimulates employees to perform better individually. Also, there was a positive effect of high PS fit on employee performance. In other words, when a supervisor and an employee match on the level of goals and values, the employee performs better.
Furthermore, a marginally significant result was found of the proposed moderation of transformational leadership on the relationship between wellbeing and performance. The results showed that for high transformational leadership there is a stronger effect on the relationship than for low transformational leadership. Moreover, individual performance was higher at all times in the presence of a highly transformational leader than in the presence of a leader that was low on transformational leadership. Overall it seems highly likely that a transformational leader increases the effect of how an employee feels on how that employee performs. However, further research is needed to establish the relationship more accurately.
Unfortunately, no support was found for the proposed moderating effects of either one of the PS fit variables. Thus, the proposed effect of PS fit, from both perspectives, was not proven. This indicates that a good fit between the supervisor and the employee does not positively influence the relationship between employee wellbeing and employee performance. In other words, in spite of the high value-congruence between the manager and the employee, the employee does not have an increased effect of being well on his or her performance.
Another prediction that was made in the beginning of this study, is that the effect of PS fit from a manager’s perspective would be stronger than the effect of PS fit from an employee’s perspective. As mentioned before, no interaction effect was found for either one of the moderating variables, thus no conclusion can be drawn on this prediction. However, as
stronger than the direct effect of employee-rated PS fit. This could indicate that when a manager perceives a good fit, the employee is also perceived as a high performer. Also, it could mean that when a manager perceives an employee as performing well, this automatically results in a higher-perceived congruence between the two.
Unpredicted results
As mentioned in the previous section, the proposed moderating effects were only partially present in this study. However, an unexpected result that can be discussed is the direct relationship of either one of the moderating variables in associated with individual performance. As previously mentioned, transformational leadership does have a direct positive effect on an employee’s individual performance. This means that the presence of a leader that is transformational results in a better performance of the employees. Furthermore, the direct relationship between PS fit, from both manager and employee perspective, and performance was also positive. This indicates that the better the fit between the manager or supervisor and the employee, the higher the performance. It can be concluded that the leader’s behavior and the congruence between leader and follower should be considered when investigating individual performance.
Another unexpected outcome is the low correlation between manager-rated PS fit and employee-rated PS fit. It was expected that these would correlate the most of all variables, as they are the same variables, only different perspectives. However, it seems that managers and employees do not perceive their relationship in the same way. Thus, for future reference it would be wise to always consider that there definitely is a difference of perceptions in this field of study.
This study was conducted with the intention to prove and clarify the relationship between wellbeing and individual performance with two different moderators. Several authors called for more research from different perspectives and combined with different context factors that affect this relationship, such as different types of leaders (Taris & Schaufeli, 2015; Ilies et al., 2005; Quick & Quick, 2004). Unfortunately, the attempt to prove that PS fit affects this relationship positively did not succeed. However, the results for transformational leadership indicated that it is highly likely that the effect of wellbeing on performance is stronger for high transformational leadership than for low transformational leadership. This contributes to the existing literature, because earlier suggestions by Quick and Quick (2004) about external influences of charismatic leaders can be confirmed.
This study also contributed to theory in this field by again proving that the relationship between wellbeing and performance does indeed exist and that it is positive. This is totally in line with results from previous studies about this relationship (Cropanzano & Wright, 2001; Wright & Staw, 1999; Wright & Bonnet, 1997). Also, because of the unexpected direct effects of transformational leadership and PS fit on employee performance, there is even more conformation on the question if contexts play a role. Not all findings indicate moderation, but are definitely in line with the existing literature about different contexts with regard to the wellbeing-performance relationship. Also, this study contributes to the literature about PS fit, because no known research combined the effects of PS fit on wellbeing and performance. Moreover, Kristof-Brown and colleagues (2005) asked for more clarification on the topic PS fit combined with any other variable.
Future research
correlations between all the measured variables, it seems interesting to further investigate the nature of these relationships. Unfortunately, there were only partially moderating effects found on the relationship. However, the direct effects of transformational leadership and PS fit on performance indicate that there is an interesting connection between them. It could be interesting to operationalize transformational leadership or PS fit as independent variables, to see how they influence wellbeing and eventually performance. Namely, a transformational leader tends to stimulate self-awareness and self-esteem, which can result in a happier employee, but also a more productive one (Quick & Quick, 2004; Herrbach & Mignonac, 2004; Rego & Cunha, 2008). Moreover, employees that have a transformational leader are generally more satisfied with their leader, which improves their emotional state and increases positive affect towards the leader and the organization (Bass, 1991). Furthermore, according to social exchange theory an employee tends to give back when they feel appreciated and happy in an organization (Gould-Williams & Davies, 2005). In other words, a transformational leader can make employees feel happier, which in their turn reciprocate towards the organization in the form of productivity and therefore perform better. This indicates a more direct relationship from transformational leadership to performance, which could be mediated by wellbeing.
Although PS fit was measured from both an employee’s perspective and a manager’s perspective, the results did not show a moderating effect on the relationship between wellbeing and performance. This might be because the supposedly influencing ‘context-factors’ are not the match with the supervisor per se, but more likely the fit of the employee with their job or organization as a whole. Therefore, for future research a suggestion is made to investigate multiple types of fit to indicate whether there is an effect of any of these other context factors on the existing relationship between wellbeing and performance.
Furthermore, for future research on this topic other measures of wellbeing and/or performance might be useful. As stated in the literature, different aspects of wellbeing can be investigated as well (Taris & Schaufeli, 2015), such as depression, organizational commitment or physical health. When looking for example at depression, it could be argued that the presence of a transformational leader has a positive effect on the employee, and thus a less negative effect of depression on performance. Moreover, not only transformational leaders are likely to affect the relationship, thus future research should also focus on other leader behaviors such as authentic leadership and even the separate aspects of transformational leadership, as charisma could have a stronger effect than for example intellectual stimulation.
In the process of investigating the proposed relationship between wellbeing and performance, many roads also led to motivation. Motivation is a concept that is closely related to wellbeing and might explain the nature of the relationship between wellbeing and individual performance. It would be interesting to investigate further on this topic and maybe even include leader behaviors as motivators for increased performance.
As a final suggestion for future research, the effects of wellbeing on performance should be clarified even more. The previous mixed results on the nature of the relationship indicate that there is a need for clarification on causal relationships, such that we can indeed assume that wellbeing causes better performance, individually and even collectively. This might be achievable using a much bigger sample in a longitudinal study design, as opposed to the cross-sectional nature of this study. It is often suggested that causes precede their effects in time, thus different measures in time will be necessary.
Data was collected by means of online surveys, which were collected by several students from the University of Amsterdam. The online nature of the surveys can result in unfinished questions because of lack of control over participants. However, this bias was eliminated by only including those surveys that were completely finished. Both the Dutch and German respondents were personal contacts of students of the University. This can indicate bias, because personal contacts are eager to fill in a survey as a friend and therefore might not be aware of participating in a scientific study. However, this limitation was probably partially ruled out by clearly stating through every communication that several students, instead of just the one student they know personally, collected the data. Moreover, there could be a peoples-bias, because each person has a different interpretation of what the question is about. The perception of the different questions in the survey might have an influence on the answers that were given by each participant. As a final limitation, due to the cross-sectional nature of this study, no causal relationships could be tested.
One of the strengths of this study is that the final sample was relatively large and was conducted in two different countries across a range of different industries, which makes it a representative sample for generalizations of the outcome. Moreover, all data was collected in triad or dyad form, which made it possible to measure with two different perspectives. These perspectives, from both the manager and the employee, formed a better overview of the different situations in the organization.
Conclusion
In sum, this study was dedicated to investigating if and how wellbeing is related to performance, combining this relationship with two potential influencing concepts. The relationship between wellbeing and individual performance was proven to be present, however, the proposed moderating variable person-supervisor (PS) fit only showed a direct
effect on performance. Transformational leadership showed a marginally significant effect, that indicated that high transformational leadership had a stronger effect on the relationship between wellbeing and performance than low transformational leadership. Thus, the research question from the introduction is partially answered by the results of this study. Namely, wellbeing does indeed relate positively to performance, but is not enhanced by PS fit and only partially by transformational leadership. From the results of this study can be concluded that, employees that consider themselves psychologically well, perform better than those who do not consider themselves psychologically well. Moreover, unexpectedly the presence of a transformational leader, as well as high PS fit, positively affects the performance of the employee. Unfortunately, no enhancing effect of PS fit was found on the relationship between wellbeing and performance. However, the moderating effect of transformational leadership seems to be that high transformational leadership has more effect on the relationship between wellbeing and performance than low transformational leadership. As mentioned before, it is still necessary to investigate different contexts of and perspectives on wellbeing and performance, such as different leader behaviors, in future research. Especially different aspects of wellbeing can be useful in predicting several performance indicators, or maybe even with transformational leadership and PS fit as independent variables.
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Appendix A: Dutch manager survey Geachte leidinggevende,
Welkom en hartelijk dank voor uw deelname aan dit onderzoek. Dit onderzoek wordt uitgevoerd door studenten in samenwerking met dr. Corine Boon van de Amsterdam Business School. Dit project beoogt ons meer inzicht te geven in de invloed die personeelsmanagement, uw baan en uw directe werkomgeving hebben op medewerkers. Wij stellen u vragen over uzelf, en over 2 van uw medewerkers.
Uw hulp en bereidheid om de vragen te beantwoorden wordt ontzettend gewaardeerd. U heeft een code ontvangen en wij vragen u vriendelijk om deze in te vullen op de volgende pagina. Deze code gebruiken wij om vragenlijsten aan elkaar te verbinden. Na het koppelen verwijderen we de code en zullen uw antwoorden volledig anoniem zijn. Wij zijn alleen geïnteresseerd in gemiddelden en niet in specifieke antwoorden. Uw antwoorden worden vertrouwelijk behandeld.
Alvast hartelijk bedankt voor uw deelname! Het onderzoeksteam: Suze Korse Josephine Selchow Joyce Derksen Corine Boon
Amsterdam Business School
Voor vragen kunt u contact opnemen met Corine Boon (c.t.boon@uva.nl)
1. Geef aan wat uw geslacht is. 2. Wat is uw leeftijd in jaren?
3. Wat is uw hoogst behaalde opleiding? • Middelbare school • MBO • HBO • Universiteit (bachelor) • Universiteit (master) • PhD • Anders
4. Hoe lang werkt u voor deze organisatie?
5. Task performance (Van Dyne & LePine, 1998) 4 items. Deze medewerker (werknemer A/werknemer B):
Scale: helemaal mee oneens, mee oneens, enigszins mee oneens, neutraal, enigszins mee eens, mee eens, helemaal mee eens.
1. Maakt de verantwoordelijkheden waar die in zijn/haar taakomschrijving staan 2. Voert de taken uit die bij zijn/haar baan horen
3. Voldoet aan de prestatienormen 4. Levert prima werk af
6. Person-supervisor fit (Cable & DeRue, 2002) 3 items.
Scale: helemaal mee oneens, mee oneens, enigszins mee oneens, neutraal, enigszins mee eens, mee eens, helemaal mee eens.
1. Wat ik belangrijk vind in het leven is vergelijkbaar met wat deze medewerker belangrijk vindt
2. Mijn waarden en normen passen bij de waarden en normen van deze medewerker 3. De waarden van deze medewerker sluiten goed aan bij de dingen die ik belangrijk
Appendix B: Dutch employee survey Geachte deelnemer,
Welkom en hartelijk dank voor uw deelname aan dit onderzoek. Dit onderzoek wordt uitgevoerd door studenten in samenwerking met dr. Corine Boon van de Amsterdam Business School. Dit project beoogt ons meer inzicht te geven in de invloed die personeelsmanagement, uw baan en uw directe werkomgeving hebben op u.
Uw hulp en bereidheid om de vragen te beantwoorden wordt ontzettend gewaardeerd. U heeft een code ontvangen en wij vragen u vriendelijk om deze in te vullen op de volgende pagina. Deze code gebruiken wij om vragenlijsten aan elkaar te verbinden. Na het koppelen verwijderen we de code en zullen uw antwoorden volledig anoniem zijn. Wij zijn alleen geïnteresseerd in gemiddelden en niet in specifieke antwoorden. Uw antwoorden worden vertrouwelijk behandeld.
Alvast hartelijk bedankt voor uw deelname! Het onderzoeksteam: Suze Korse Josephine Selchow Joyce Derksen Corine Boon
Amsterdam Business School
Voor vragen kunt u contact opnemen met Corine Boon (c.t.boon@uva.nl)
3. Wat is uw hoogst behaalde opleiding? • Middelbare school • MBO • HBO • Universiteit (bachelor) • Universiteit (master) • PhD • Anders
4. Hoe lang werkt u voor deze organisatie?
5. Hoe lang werkt u met uw huidige leidinggevende samen? 6. Hoeveel uur werkt u gemiddeld per week?
7. Person-supervisor fit (Cable & DeRue, 2002) 3 items.
Scale: helemaal mee oneens, mee oneens, enigszins mee oneens, neutraal, enigszins mee eens, mee eens, helemaal mee eens.
1. Wat ik belangrijk vind in het leven is vergelijkbaar met wat mijn leidinggevende belangrijk vindt
2. Mijn waarden en normen passen bij de waarden en normen van mijn leidinggevende 3. De waarden van mijn leidinggevende sluiten goed aan bij de dingen die ik belangrijk
vind in het leven
8. Transformational leadership (De Hoogh, Den Hartog & Koopman, 2004) 11 items.
De volgende stellingen gaan over uw leidinggevende. Geef a.u.b. aan in hoeverre u het eens bent met de volgende stellingen:
Scale: helemaal mee oneens, mee oneens, enigszins mee oneens, neutraal, enigszins mee eens, mee eens, helemaal mee eens.
