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Master Thesis
Does Leader Inclusiveness influence Employee Well -being if it is
moderated by Authentic Leadership and Employee Engagement?
Author: Dana Mälzer Student Number: 10989951
Supervisor: Renske van Geffen, MSc 2nd Supervisor: Hannah Berkers, MSc Date of submission: 20.June.2017 Word count: 11,559
Executive Programme of Management Studies – Leadership and Management Track Amsterdam Business School (ABS), University of Amsterdam (UvA)
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STATEMENT OF ORIGINALITY
This document is written by student Dana Mälzer who declares to take full responsibility for the content 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 creating it.
The Faculty of Economics and Business is responsible solely for the supervision of the completion of the work, not for the contents.
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Abstract
Team members are constantly challenged to stand out in their working environment. This is particularly true when it comes to the level of inclusion in their working field and in decision related instances. This study looked at the relationship between leader inclusiveness and its influence on employee well-being when being moderated by authentic leadership and employee engagement. The conceptual model measured employee well-being as three components namely stress, leader-member exchange (LMX) and happiness. There has been very little research on inclusive leadership in the past and thus this paper seeks to contribute to the current research gap in academic literature looking at inclusion and its effect on employee well-being.
The hypotheses of this paper were tested with a sample of 274 participants working in international organizations in the Netherlands. The results of the statistical analysis displayed both positive and negative results when testing the conceptual model indicated that leader inclusiveness was positively related to LMX and happiness but not for stress. The same results occurred for the direct relationship between employee engagement on the dimensions of employee well-being. Additionally, authentic leadership showed a positive moderating effect in employee well-being as LMX. However the study did not find a significant moderation effect for both, authentic leadership and employee engagement, when testing the entire conceptual model. There was also no significant moderation effect when employee engagement was used to test the effect of leader inclusiveness and employee well-being.
Although some hypotheses had no significant outcome they display a vital contribution toward inclusive leadership and how these constructs should be elaborated further in future research.
Key words: leader inclusiveness, employee well-being, authentic leadership, employee engagement, happiness, Leader-Member Exchange, health
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Table of Contents
STATEMENT OF ORIGINALITY ...2 Abstract ...3 1.0 Introduction ...6 2.0 Theoretical Background ...8 2.1 Employee Well-being ... 8 2.2 Leader Inclusiveness ... 11 2.3 Employee Engagement ... 15 2.4 Authentic Leadership ... 18 2.5 Conceptual Model ... 20 3.0 Methodology ... 22 3.1 Research Design ... 223.2 Procedure and Sample ... 23
3.3 Measurement of constructs ... 24 3.3.1 Employee Well-being ... 25 3.3.2 Leader Inclusiveness ... 25 3.3.3 Employee Engagement ... 26 3.3.4 Authentic Leadership ... 26 3.4 Control Variable ... 26 3.5 Data Analysis ... 27 3.6 Reliability test... 27
5 3.7 Outliers ... 28 3.8 Predictions ... 28 4.0 Results ... 30 4.1 Descriptive Statistics ... 30 4.2 Hypotheses Testing ... 31
4.2.1 Hypothesis 1 (a), (b) and (c) ... 31
4.2.2 Hypothesis 2 (a), (b) and (c) ... 32
4.2.3 Hypothesis 3 (a), (b) and (c) ... 33
4.2.4 Hypothesis 4 (a), (b) and (c) ... 34
4.3 Moderation Effect on Conceptual Model ... 36
5.0 Discussion ... 38
5.1 Research findings and theoretical implications ... 38
5.1.1 Hypotheses 1 a, b, c ... 38
5.1.2 Hypotheses 2 a, b, c ... 38
5.1.3 Hypotheses 3 a, b, c ... 39
5.1.4 Hypotheses 4 a, b, c ... 39
5.2 Limitations of current study and implications for future research ... 40
6.0 Conclusion ... 41
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1.0 Introduction
Year by year organizations aim to attract, retain and grow their human capital pool. Many organizations are expecting, due to digitization, that employees are now more difficult to attain than ever as they have higher expectations regarding their power of decision making (Lammers et al., 2012). This change in decision making enables employees to become invaluable human capital that has more empowerment and therefore increases intrinsic motivation toward the organization (Bakker et al., 2012). Ultimately, organizations are able to improve their organizational performance through this according to Zhang (2010).
There is a variety of components that can influence performance. In the past, researchers have identified key mechanisms that influence performance and also employee well-being (see Schaufeli et al., 2006); Shimazu & Schaufeli, 2009). If employees do feel that they are not included, or their input for their work is not taken seriously, they are more likely to feel discouraged toward the organization and could potentially lead to groupthink, which occurs when the harmony of a group can override the decision making process (Bourke & Dillon, 2016). It is therefore of vital importance to ensure that the organizational values and mission are portrayed through the direct manager/leader as this can enhance the employees’ feeling toward the organization. This already instigates that the level of well-being is important as this dissertation aims to portray. Particularly, if the relationship between the leader and the follower is already strong, the level of engagement as well as the level of authentic leadership, can enhance this relationship even more if it is used with an intermediary relationship such as a moderator (see Seco & Lopes, 2013; Nadim & Khan, 2013). Authenticity, according to Vlachoutsicos (2012), indicates one’s ability to shape and continually evolve a message about one’s true self which could shape the behavior and attitude of employees and followers. It therefore suggests potential toward the future of managing diverse teams and its aim to avoid exclusion at any cost.
7 The literature has confirmed the significance of authentic leadership and how this trait can play an important role when looking at different levels of employee well-being (see Avolio & Gardner, 2005). The same can be said toward the effect of employee engagement and how it can, depending on organizational circumstances, increase or decrease the level of employee well-being (see Van de Voorde et al., 2012). In order to address potential implications of employee well-being an extended view of leadership should be acknowledged to enrich the employee’s level of inclusiveness.
This thesis aims to discover how effective the bond of the two moderators can result into an effective linkage between supervisor and subordinate relations via (a) the influence authentic leadership and (b) employee engagement and whether or not one plays a more important role than the other. The central research question thereby is: can inclusive leadership positively influence employee well-being when it is moderated by authentic leadership/employee engagement? So far, the moderators of this paper have never been used to test this relationship before which indicates that their individual effectiveness is still to be verified. An empirical relationship is yet to be distinguished which this thesis aims to establish.
The thesis is structured in the following way: firstly, the literature review will focus on previous and existing literature in which the independent/dependent variables as well as the moderators are explained in more theoretical depth through which hypotheses are constructed which map the conceptual model. Second, the research design is drawn and the established hypotheses tested through a methodological approach. Next, the results of the methodology chapter are discussed via a statistical analysis. The paper then continues with a discussion of the findings, limitations of the current study and guidelines for future research. The dissertation finishes with a short conclusion and summary of the overall paper.
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2.0 Theoretical Background
This section will describe each component carefully and elaborate on current literature that focuses on employee well-being, leader inclusiveness, employee engagement, and authentic leadership. By doing so, the current gaps are identified and the research topic is defined more specifically. The section closes with a short conclusion of the variables and the main research question is defined.
2.1
Employee Well-being
When looking at academic literature up to date, the importance of how leaders’ actions and values transfer to employees can either make or break a team. A way to preserve employees is to ensure that they feel fulfilled within their role and environment. This points toward a critical view of the organizational role executing the utilitarian theory, which Buckley et al. (2001) describes as “a duty to calculate how much happiness various courses of action will generate, and to choose the course of action that generates the most happiness,” (p.13). If employees do not feel valued, or have low levels of well-being, are inclined to contribute less and make careless decisions (see Danna & Griffin, 1999) whereas valued followers aim to achieve higher productivity which improves the overall happiness and wellbeing (see Wright et al., 2002). The statements confirm that one way to ensure that employees are happy within their working space is to focus on their well-being.
Employee Well-being has different interpretations based on previous literature. According to Grant et al. (2007), when considering organizational contexts, managers look at well-being in a “narrow fashion”, confining themselves to look at one dimension only such as performance or job satisfaction, whereas the authors define it as “the overall quality of an employee’s experience and functioning at work,” (p.52). Martens (2016) however, defines employee well-being as “the psychological, psychosomatic, and social well-being of employees,” (p.5). Ultimately, its definition can depend highly upon the organizational construction and the type of employment and the extent to which HRM is involved (see Peccei, 2004; Van
9 de Voorde et al., 2012). In the past, academics have used employee well-being to identify the distinctiveness of burnout and workaholism (see Burke & Matthiesen, 2004) but in this particular paper, well-being is interpreted as Van de Voorde et al.’s (2012) dimensions that were established via a quantitative review. As employee well-being is a strong component of intrinsic motivation, the dimensions by Van de Voorde et al. (2012) have not been used in the specific context of measuring inclusion. The following paragraphs elaborate on Van de Voorde et al.’s (2012) adapted dimensions by Grant et al. (2007) in which well-being is split up to identify the different relationships:
Happiness-related: The happiness factor plays a big role on how employees feel about their
organization. This in turn can drive commitment and loyalty. Van de Voorde et al. (2012) used satisfaction (in the job that the employee does) and commitment (from an organizational perspective of how the employee contributes) as their primary focus in this dimension as previous studies have used these variables in the past (see Appelbaum et al. 2000). In a study by Baptiste (2008), the author also compared the happiness related factor to the extent to which it affects work-life balance satisfaction and used it as an indicator toward well-being. Grant et al. (2007) considered this dimension to focus primarily on the employees’ own subjective experience and their feeling of fulfillment.
Health-related: This type focuses on the health of the employee and how their work can have an effect
on stress levels, burnout prospects through work intensification and workload. In a research conducted by Hafner et al. (2015), the authors aimed to identify “the relationship between health and wellbeing of staff productivity,” (p.2) in which they focused on Non-job, Lifestyle, Mental health factors and many more that could potentially influence the overall health of an individual. Grant et al. (2007) see this dimension as components for physical well-being and bodily health which can play a crucial role when it comes to absenteeism and exhaustion. Research conducted by Orlitzky & Frenkel (2005) indicated that work intensification is highly and strongly related to job strain. The authors confirm that this result can be interpreted in such a way “that stressful work leads to lower productivity because health and safety
10 deteriorates, which in turn contributes to errors, accidents, lower quality of work, and possible also higher absenteeism and turnover,” (p.1342).
Relationship-related: The relationship type measures the rapport between team members and their
supervisor or organization. It shows the extent to which your co-workers get support from you as a team member and vice versa. Van de Voorde et al. (2012) recognize that this relationship has been incorporated in theoretical frameworks in past literature (see Truss, 2001; Bartel, 2004). This particular type also portrays whether you enjoy the type of work you do or not. Grant et al. (2007) state that this type is closely related to social well-being which, according to Keyes (1998), refers to the value of relationships between an individual and other people. In previous research, to test the quality of relationship between the leader and follower was the leader-member exchange (LMX) theory. This model is often associated with high leader effectiveness and performance ratings (see Deluga & Perry, 1991).
If we consider the aforementioned relationship factors to well-being a clear distinction of each can be identified. The dimensions ultimately link back to the degree to which the employee feels toward their work and how each can be effected by their manager. This is important to consider in organizational contexts as it will aid to maintaining human capital. The dimensions are can be distinguished accordingly: Happiness-related factors are determined by the way employees feel fulfilled toward the organization (Grant et al., 2007). Leaders can be able to influence this relationship by empowering employees to make their own decisions toward general job satisfaction and having a healthy level of happiness and well-being (Diener, 2000). This in turn will decrease potential stress levels and workload as the leader is involving the followers toward organizational objectives which can minimize health-related factors. And finally, through the use of inclusive leadership behaviors, the relationship related dimension will be stronger as subordinates are able to establish closer and more satisfying affiliations which can be explained via the LMX theory (Marsiglia, 2005). This indicates that, by introducing leader inclusiveness toward these dimensions of employee well-being, that an interesting positive relationship can be predicted.
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2.2
Leader Inclusiveness
Inclusive leadership, or leader inclusiveness, has been defined by a few academics and its characterization has one commonality namely that contribution of all members is encouraged by the way the leader prompts employees for their input (Mitchell et al., 2015; Nembhard & Edmondson, 2006). According to Shore et al. (2011) leader inclusiveness is a vital component at work that fulfills the needs of individuals’ level of belongingness and uniqueness. It stands for the behaviors that a leader displays to encourage inclusion in the work place. This means that the metric of exclusion cannot happen in this type of leadership behavior. According to the Korn Ferry Institute (2017), a consultancy council dedicated to research and recruitment toward talent management and leadership behavior, by taking inclusion into account for the leaders development and organizational structure, “organizations can capture a competitive advantage from changing demographics across the workplace […] if diversity is “the mix,” then inclusion is making the mix work by leveraging the wealth of knowledge, insights, and perspectives in an open, trusting, and diverse workplace,” (p.1). At this point it is important to mention that the Korn Ferry Institute is not considered a scientific resource however it has aided as an authority focusing on research based on leadership and talent which is important to consider toward improving organizational contexts. There is not an exact agreement on how to measure leader inclusiveness but the main commonality in previous research by Randel et al. (2016) has proven that they “attempt to include others in decisions in which their voices might otherwise be absent,” (p. 217) which is what this thesis concurs to.
As in any leadership style, to the good there is the bad. Unfortunately inclusive leadership is not a skill that can be established automatically and can bring up potential consequences. Recent research by the Korn Ferry Institute (2016) suggests that todays’ leaders must be able to exceed in four areas of behaviors at the same time. Figure 1 below displays these behaviors in more detail:
12 Figure 1. Korn Ferry research: 21st century leaders needed today. Source: (Korn Ferry Institute)
The aforementioned metric show which behaviors a leader must have in order to be part of a specific “leading” category. Research by Tomlison (2005) states that “emphasis on the multiplicity of differences necessarily involves some process of identifying the relevant dimensions or categories by which individuals may be differentiated,” (p.2) which also indicates that each square above can drive potential consequences as individuals tend to be diverse and cannot be placed under one specific margin. Instead, organizations should aim to have a balanced fit of leadership behaviors and develop them towards inclusion. This in turn will influence how the employee feels at the workplace.
As this thesis aims to identify the direct effect leader inclusiveness has on employee well-being ,and their according dimensions developed by Van de Voorde et al. (2012) such as health related, relationship related and happiness related, it needs to be considered that, by offering more inclusion in a specific workplace, can potentially also lead to higher stress levels. This is particularly the case, when the workplace is within the health care sector. In these type of environments employees are aware that
13 human life can be at stake when a mistake is made and thus can constrain willingness to participate in uncertainty of new processes (Nembhard & Edmondson, 2006). Constitutions in such a setting also lead to workaholism and insufficient sleep (Kubota et al., 2010). Shimazu & Schaufeli (2010) have also confirmed that workaholism has a larger impact on health and can also influence job performance which can lead to higher stress levels. If we reconsider the health dimension of Van de Voorde et al. (2012) and leader inclusiveness is introduced in a structured manner it can positively influence job performance and health related factors. Hirak et al. (2012) suggested that when employees are encouraged to learn from their mistakes, it can positively influence unit performance. The same can be said for leaders that aim to accommodate psychological safety in the workplace. Results proven by Hirak et al. (2012) have also confirmed that “by inviting and appreciating others' contributions, leaders give members a sense that their work is important and their ideas for improving are appreciated,” (p.113) resulting in lower stress levels.
The relationship related dimension of Van de Voorde et al. (2012) and leader inclusiveness can also distinguish whether or not the employee feels valued by their supervisor or organization. This particular dimension can largely benefit from leader inclusiveness as it shows “behaviors that invite and acknowledge others’ views,” (Nembhard & Edmondson, 2006; p.947). Nishii & Mayer (2009) have also debated that inclusive leaders also have a higher quality LMX toward their employees which can result in lower turnover. Sherony & Green (2002) also confirmed similar results of LMX when the relationship of a manager toward their subordinate was strong. These findings implicate support for creating an approachable and welcoming environment in which the subordinates feel a higher sense of belonging. Leader inclusiveness can assist in this protocol toward improving LMX.
Looking at the happiness related dimension of Van de Voorde et al. (2012) leader inclusiveness can also show the importance of how a positive and diverse workplace can influence employees’ perceptions and overall happiness. Randel et al. (2016) state that “inclusive leadership in the context of a positive
14 psychological diversity climate is associated with enhanced leader-directed and work group-directed helping behavior,” (p.227). This type of behavior displayed by leaders can not only inspire employees to increase their intrinsic motivation but to develop their own potential to contribute toward the decision making process. Cadmus (2012) even states that diversity in teams and organizational culture are probably amongst the most important factors toward happiness. These elements can also play an important role in the way how leaders use patterns of inclusion within their units. Cadmus (2012) explains that an autonomous work environment results in employees’ perception of the organization endorsing an open climate in which informed and educated decisions are made. This in turn results in happy employees.
Taking these perspectives of leader inclusiveness toward the dimensions of employee well-being into
account the following hypotheses are to be tested:
H1 a: Leader inclusiveness of managers is positively related to the level of employee well-being (Health perspective).
H1 b: Leader inclusiveness of managers is positively related to the level of employee well-being (LMX perspective).
H1 c: Leader inclusiveness of managers is positively related to the level of employee well-being (Happiness perspective).
Nishii & Mayer (2009) “research in the role of leaders in diverse groups remains largely unexplored […] and has consistently supported a negative relationship between turnover and bottom line,” (p.1412). The aforementioned hypotheses however are predicting a positive relation toward the dependent variable. Considering how the core definition of leadership inclusiveness is still bound to be set, previous literature has shown the positive nature of including your followers in the decision making process (see Mitchell et al., 2015). Therefore it is predicted that this particular leadership behavior is positively related to the level of employee well-being and should sustain, if not exceed it.
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2.3
Employee Engagement
Recent literature has investigated the importance of employee engagement within an organization. Shalley et al. (2004) for example focused on the role of leadership and how their managerial support can motivate employees’ engagement toward their tasks by being open to experiences. Furthermore, leadership can be accessed by everyone in the organization, and should not be limited to a few individuals, and should come with the potential to develop employees in a constructive manner (Shuck & Herd, 2012). In the past, engagement has also been seen as a contributor toward team effort (Nembhard & Edmondson, 2006). Ariani (2013) on the other hand describes employee engagement more as “a positive attitude held by the employee towards the organization and its value,” (p.46) and as “one of the indicators of an employee’s willingness to expend discretionary effort to help the employer,” (p.51). Downey et al. (2014) have considered engagement to be “a vital ingredient in overall workplace well-being,” (p. 1) which presumes a positive influence toward the dependent variable of this study.
Although employee engagement is such a vital construct of an organization, there are only a few conceptual models and frameworks that have been created for exploration. Recent examples include the multidimensional approach by Saks (2006) or the intersected framework of engagement by Rich et al. (2010) and Kahn (1990). Rich et al. (2010) adopted Kahn’s (1990) model and suggest that engagement is part of an individual’s full performance potential when their cognitive, emotional, and physical energies are active. Depending on how strongly these energies are active can result in the individual’s level of engagement and organizational citizenship behavior (OCB), (see Ariani, 2013; Bhatnagar & Biswas, 2010). The three aforementioned energies will be discussed in more detail below.
Cognitive Engagement: This level of engagement, according to Shusha (2013), focuses on the
“employees’ beliefs about the organization, its leaders and working conditions,” (p.23). This component can play an important role in annual appraisals as, if the employee feels that their work or being is not
16 appreciated/given potential to grow, they may be inclined to lack performance on their work roles (Kahn, 1990).
Emotional Engagement: The emotional engagement corresponds to all three energies and how
emotionally involved the employee is toward their work and organization. The more engagement the employee has, the more positive the relationship to his organization can be.
Physical Engagement: Shusha (2013) claims that this level of engagement focuses on “the energies
exerted to accomplish their roles,” (p.23). If employees feel that their engagement matters to managers and other team members they may be more inclined to do better than the most effective way possible and focus on their physical effort to exert their work.
The types of engagement by Rich et al. (2010) can also be compared to Van de Voorde et al.’s (2012) dimensions of well-being. The cognitive engagement includes components in which employees feel fulfillment toward their role and organization which is very much related to the happiness related dimension of well-being by Van de Voorde et al. (2012). Emotional engagement corresponds to how sensitively involved the employee is toward the organization which can also be highly associated to the relationship related dimension of well-being in which the LMX theory can be enhanced. Finally, the physical engagement can result in a positive work environment and increase feelings toward jobs and organizations as previous research has confirmed (see Rothbart, 2001; Lockwood, 2007).
Another important aspect to consider is the fact that engagement can be recognized as a circumstantial variable meaning that its level can highly depend on how the employee feels at a given time. Kahn (1990) explains that employees who feel they are not challenged in their role and are highly disconnected from their tasks, tend to keep their cognitive, physical and emotional energies, to themselves. This can therefore influence the relationship between leader inclusiveness and the level of engagement depending on different employees at a particular time. When an organization provides the
17 opportunity to learn and expand the horizon of their employees via internal resources, the employees will respond by being fully engaged in their role (Downey et al., 2014). This shows the link that when looking at the dimensions of engagement, leader inclusiveness (and the extent to which leaders involve employees in a decision making process) can aid followers’ motivation if they are more involved in fine-tuning current issues and processes. Employee well-being can therefore be influenced directly by a variety of factors which ultimately should respond to the level of engagement and autonomy followers have. The same can be said of employee well-being; in a research conducted by Schaufeli et al. (2008) the authors identified engagement to be considered as a positive component of burnout and influenced commitment. The dimensions above will assist in identifying the direct effect of engagement to explore to what extent employees feel connected to their work and organization as well as which level of engagement has a higher indication of motivation. A way how this issue can be addressed would be via the corresponding variables that this research further aims to explain. The following hypotheses are formulated to test this relationship:
H2 a: Employee Engagement has a positive effect on Employee Well-being (Health perspective). H2 b: Employee Engagement has a positive effect on Employee Well-being (LMX perspective). H2 c: Employee Engagement has a positive effect on Employee Well-being (Happiness perspective).
If all of the aforementioned mechanisms are considered, engagement is predicted to be a moderator due to clearness of mutual objectives. In a previous study conducted by Shuck & Rejo Jr (2014) the authors have identified that engagement aids toward the moderation of psychological climate and emotional exhaustion in such a way that it can positively influence culture, climate, and performance management. Seeing how the dependent variable is focused toward the well-being of employees, and can also influence the culture, climate and performance (see Danna & Griffen, 1999; Wright et al., 2002; Orlitzky & Frenkel, 2005) engagement is used as a moderator to test this relationship. Thus, based on the above-mentioned
18 hypotheses, a moderation model is to be tested where the levels of engagement by Kahn (1990) are considered a predictor for the direct relationship between inclusive leadership and the dimensions of employee well-being by Van de Voorde et al. (2012). The following hypotheses are to be tested:
H3 a: Employee Engagement has a positive moderating effect on the relationship between Leader Inclusiveness and Employee Well-being (Health perspective).
H3 b: Employee Engagement has a positive moderating effect on the relationship between Leader Inclusiveness and Employee Well-being (LMX perspective).
H3 c: Employee Engagement has a positive moderating effect on the relationship between Leader Inclusiveness and Employee Well-being (Happiness perspective).
The effect of this relationship is predicted to be positive as previous literature has confirmed that the aforesaid moderator can play a role on different energies of engagement (see Ariani, 2013; Kahn, 1990; Rich et al., 2010). Also, engagement can be seen as a positive attribute for employees’ (individual and team) contribution toward their organization when inclusive leadership is used as an independent variable.
2.4
Authentic Leadership
Authentic leadership has increasingly become an important asset when it comes to fostering the development of faithfulness in followers. In a meta-analytic study conducted by Avolio & Gardner (2005), they state that authentic leaders and their followers can feel disposed to look at the same task or issue from multiple perspectives by doing so in a balanced routine. When authenticity first arrived to leadership literature around the 1990s, it emphasized primarily “the way in which that true self is enacted which is critical to followers’ experience,” (Ladkin & Taylor, 2010, p.2) and looked primarily on sociology (focusing on the aspect of intrinsic motivation) and education (in regard to authentic learning) (Chan et al., 2005). The characteristics of authentic leadership grew of the self-determination theory (SDT) which suggests
19 that “its arena is the investigation of people’s inherent growth tendencies and innate psychological needs that are the basis for their self-motivation and personality integration […] for the conditions that foster those positive processes,” (Chan et al., 2005; p.68). If leaders aim to show themselves as their ‘true’ self, and are relatively aware of doing so, employees are more likely to relate to them as being authentic. Literature by Fields (2007) however argues, that authentic leadership of the leaders’ ‘true’ self does not distinguish their authenticity nor their integrity in their employees’ eyes.
Previous literature suggests, that authentic leadership can have a positive effect on employee well-being when leaders are composed in an intrinsic level as opposed to standard behaviors. According to Cassar & Buttigieg (2013), authentic leadership in relation to employee well-being has been examined by several authors in which ‘health’ plays a vital component (see Quick et al., 2010). In a research conducted by Macik-Frey et al. (2009), they discovered that through the understanding of the employees’ (positive) health patterns, authentic leadership effectiveness can be controlled and understood. This shows the link between authentic leadership and a form of employee well-being. Gardner et al. (2005), on the other hand would argue that authentic leadership has to do with self-awareness and regulation processes to encourage follower development rather than health.
Bourke (2016) specifies that “there is little research on the specific qualities of leadership which make a difference to employees’ feelings of inclusion,” (p.1). Although there is not a lot of literature regarding the relation of authentic leadership and leader inclusion, some research has focused on authenticity having a direct effect toward the feelings of employees (see Kernis, 2003; Gardner et al. 2005). Other research conducted by Cottrill et al. (2014), confirmed a powerful connection of authentic leadership and the employees’ own feelings of inclusion. This shows the potential to bring forward valuable information to expand on this area of focus.
20 Ultimately, there is no right or wrong way how an authentic leader should behave, nor is there a unified definition that has been used among authentic leadership. As long as leaders remain true to their own moral values and ethics, they will be able to translate these to action that will benefit their following base accordingly (Novicevic et al., 2006). Research by Penger & Černe, 2014 has provided empirical evidence that authentic leadership, when used as an intermediary, can result in positive results from the employees’ perspective. Due to the aforementioned literary background we assume that; when authentic leadership is high the (already) positive relationship between leader inclusiveness and employee well-being is stronger than when the moderating effect is low. The following hypotheses have thus been formulated:
H4 a: Authentic leadership positively moderates the relationship between Leader Inclusiveness and Employee Well-being (Health perspective).
H4 b: Authentic leadership positively moderates the relationship between Leader Inclusiveness and Employee Well-being (LMX perspective).
H4 c: Authentic leadership positively moderates the relationship between Leader Inclusiveness and Employee Well-being (Happiness perspective).
The hypotheses above claim that followers will be more likely to make appealingly assessments regarding their own perception of their leader when authentic leadership is used as a moderator.
2.5
Conceptual Model
As previous research has shown, there is redundancy when it comes to examining leader inclusiveness and its effect on employee well-being. This thesis aims to identify and elaborate on the different affects and tests it via the following central question:
21 Does Leader Inclusiveness influence Employee Well-being if it is moderated by Authentic Leadership and Employee Engagement?
To visualize the components that are to be tested, the following conceptual model has been established and is portrayed below (Figure 2):
In the past, scholars have argued that, in order to become more harmonious toward the agile behavior of teams, leaders constantly need to establish new ways to accommodate their needs to enhance quality of decision making (see Markey, 2006). One way to attend to teams prerequisites is to ensure that there are inclusion opportunities in various team tasks such as the decision making process, training opportunities and actively being involved in tasks that improve firm performance (see Prisca, 2011; Kuye & Sulaimon, 2011). This shows potential toward the independent and dependent variables of this research and how the direct relationship of leader inclusiveness and employee well-being can be influenced. Leader Inclusiveness Authentic Leadership Employee Engagement Employee Well-being (Health, LMX, Happiness) H1 (a), (b), (c) H4 (a), (b), (c) H3 (a), (b), (c) H2 H2 (a), (b), (c) H2 Figure 2. Conceptual Model
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3.0 Methodology
In order to test the relationship between leader inclusiveness and employee well-being, through the use of authentic leadership and employee engagement as moderators, research in a quantitative manner was conducted. This chapter indicates the methodology used to explore and signify the relationship as well as which sample and procedures were used to attain the necessary data. Here, the measurements of the variables are described in detail, the primary control variable is described, data analysis along with preliminary steps are listed to prepare the data and lastly, the prediction of the study is elaborated upon.
3.1
Research Design
This was a quantitative study that investigated the relationship between inclusive leadership and employee well-being. This design choice has its advantages and disadvantages according to Yauch & Steudel (2003). The authors indicate that an advantage of quantitative research is that surveys can be overseen and evaluated rapidly due to digitization. Another advantage is that “numerical data obtained through this approach facilitates comparisons between organizations or groups […] allowing determination of the extent of agreement or disagreement,” (Yauch & Steudel, 2003; p.473). The number of respondents can therefore specify if there is any (strong or weak) correlation toward the research components. Choy (2014) indicates that in order for quantitative research to be effective, it usually involves a big sample size which makes it hard to validate if the number of respondents is shortcoming. Of course, there are also weaknesses of quantitative design, according to Yauch and Steudel (2003). Potential incapacities of understanding the meaning of survey questions can influence the intended observations of the survey. The same can be said for respondents who may not speak the language of the survey fluently.
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3.2
Procedure and Sample
Data collection was conducted by seven Master students of the University of Amsterdam. The quantitative framework enabled the Master students to collect a sample of 71 different teams that derived from international organizations around Amsterdam, the Netherlands. In this dissertation a Team represented a working group of at least 3 individuals who share the same leader (supervisor-employee dyads) and are currently employed in an international organization and working environment. By focusing on this particular sample the data ensured correlation of perception and instances of inclusion. The teams were approached by convenience, due to available resources to directly to gain volunteers and retrieve email addresses. Whilst explaining what the goal of the research was, the researchers kept the identifying variables of the study confidential as this could have created a form of prior bias and potential influence on error. The participants were ensured that any information will not be able to get traced back to them, or their team, directly to avoid potential consequences.
The questionnaire was created in Dutch and English to make the measures more comprehensive. Two separate surveys were created to gather cross-sectional information; one for employees, also known as subordinates, (members of a team) and another for their corresponding managers (who is responsible for their direct supervision). The participants consisted of employees and managers which were surveyed and distributed by an online questionnaire tool via the Qualtrics Software System. To ensure that all participants understood the topic of the dissertation, a short introductory text was created to thank the participants for their time and the duration of the questionnaire. Questionnaires that were filled out by the parties involved were completed anonymously.
The final sample consisted of 71 teams (team members of at least 3 individuals) and 77 leaders (direct supervisor of the team). A total of 426 emails were distributed to subordinates and 318 were completed. For the leaders, 84 emails were sent and a total of 77 completed surveys were collected which ultimately
24 yields a response rate of 75% for subordinates and 92% for leaders. The final count of completed questionnaires ultimately resulted in 63 teams due to uncompleted questionnaires between the subordinates and leaders. Some teams had to be removed as only 1 or 2 team members filled out the questionnaire resulting in in a total of 280 respondents. In some cases, IBM’s Statistical Package for Social Sciences (SPSS) indicated some missing values of 6 respondents which ultimately makes the data reflect on 274 respondents. The demographic variables of concluded that, based on 274 participants, 33% were female (89 participants), 67% male (185 participants). Education levels indicated that 2% went to primary or high school, 16% attended vocational education/trade school, 36% attended University of Professional Education and 46% attained a university degree. The age categories of the respondents ranged between 20-30years (18%), 31-40 years (33%), 41-50 years (19%), 51-60 years (25%) and over 60 years (5%). The tenure of employees ranged between 6 months and 38 years. The respondents had also indicated that 72% (197 respondents) have a senior team member that takes on the leader role when their leader is unavailable whereas 28% (77 respondents) indicated they did not or were unsure of what was meant by this (MEAN value = 1.28; Standard Deviation: .450).
3.3
Measurement of constructs
In order to test the hypotheses for this dissertation the following sections describe the measures and scales that were used to identify the significance of the perspective of either the employee or the leader. The independent variable (Inclusive Leadership) was used to measure the perspective of both, leader and employee. The dependent variable (Employee Well-being) and the moderating variable (Employee Engagement) were focusing on the employee’s perspective and another moderator (Authentic Leadership) was used to get insights of the leader. The measures and scales are described in more detail below.
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3.3.1 Employee Well-being
The aforementioned dimensions of well-being established by Van De Voorde et al. (2012); happiness related, health related, and relationship related are measured as indicators of employee well-being.
Happiness Related: Three items were used to measure happiness related factors of employee well-being. These included Job Satisfaction, Employee Commitment and Work-Life Balance Satisfaction from the original 16 item scale developed by Baptiste (2008) with a Cronbach’s alpha (α) of 0.90. An example statement is, “I am satisfied with the sense of achievement I get from my job”, “I feel loyalty towards the organization”, and “My job requires that I work hard”.
Health Related: To measure stress related measures, Cohen’s (1983) Perceived Stress Scale (PSS) was used to distinguish the impact that stressful events may have and how this can influence ones perception of stress. The scale consists of 10 items and the Cronbach’s alpha (α) was initially 0.63, however after recoding three questions (specifically Question 5, 7 and 8), the Cronbach’s alpha (α) improved to 0.79. The scale asks the respondent to indicate their feelings and thoughts during the last month. An example is “In the last month, how often have you been upset because of something that happened unexpectedly?”
Relationship Related: To identify the significance of co-worker and supervisor relations it is measured through the level of Leader-member exchange. A scale adapted from Graen & Uhl-Bien (1995) was used and consists of 7 items with a Cronbach’s alpha (α) of 0.84. The questions of the scale are directed toward the employee. An example is” How well does your leader understand your job problems and needs?”
3.3.2 Leader Inclusiveness
A 12 item inclusive leadership scale developed by Carmeli, Reiter-Palmom and Ziv (2010) was used to measure the significance of the leadership behavior. The scale was adapted by Hirak et al. (2012) and
26 contains the leader’s openness to new ideas, accessibility, and availability to members. An example contains: “the manager is open to hearing new ideas”. The scale has a Cronbach’s alpha (α) of 0.93.
3.3.3 Employee Engagement
To measure employee engagement, the variable was broken down into the three main components namely; Cognitive, emotional, and physical engagement. Each consisted of 2 items to measure these constructs by using the Engagement Scale by May et al. (2004). A sample item is, “Performing my job is so absorbing that I forget about everything else”. The scale hash a Cronbach’s alpha (α) of 0.52. Question 4 of the scale had to be recoded as the initial reliability test indicated a negative value. After this was done, the new Cronbach’s alpha (α) was 0.69.
3.3.4 Authentic Leadership
In order to measure the level of authentic leadership of the manager, the Authentic Leadership Questionnaire (ALQ) was presented with 16 items and has a Cronbach’s alpha (α) of 0.79. This scale has recently been authenticated by Walumba et al. (2008) in which the following substantive factors were considered to measure the authentic leadership construct: balanced processing, internalized moral perspective, relational transparency, and self-awareness. Some examples include; “I see feedback as a way of understanding who I really am as a person” (self-awareness), “My actions reflect my core values” (internalized moral perspective), “I listen closely to the ideas of those who disagree with me” (balanced processing), and “I openly share my feelings with others” (relational transparency). The total would make up the level of authentic leadership of the manager.
3.4
Control Variable
In several teams that were collected for the study it was indicated verbally, that there is a role in which an employee in a team is considered more “senior” due to their level of experience or seniority in the company. In one particular international organization these roles work very closely with the manager and
27 could therefore influence results if the senior role also partakes in managerial or people related tasks that could influence the employees’ perception. These similar positions may distort the results of the survey particularly if the manager is gone for paternity leave or longer periods of time whilst at work. This could therefore influence the followers’ perception if they are more in touch with the “senior” than with their actual manager. Therefore, controlling for potential “under positions” could possibly have an impact on the results.
3.5
Data Analysis
IBM’s Statistical Package for Social Sciences (version 24) was used to analyze the data. Before the analysis, some steps had to be undertaken to ensure the best preparation of the data. As the survey entailed scales and measures from all 7 Master students, some are not taken into account nor are they part of this specific dissertation. This research primarily looks at Inclusive Leadership, Employee Well-being, Leader-Member-Exchange, Happiness, Perceived Stress and Employee Engagement. The according responses from the other variables were removed from the data set, which resulted in N = 230. Out of these respondents, 6 individuals did not finalize the survey or left the responses blank and are considered as missing values.
3.6
Reliability test
A reliability test was performed to ensure internal consistency of the scales. For this research a Cronbach’s alpha of 0.70 was used as a rule of thumb (see Field, 2013; Pallant, 2010). Each variable was checked for potential recoding for counter-indicative items. In this dissertation, 2 variables had to be recoded namely the Health indicator of the Perceived Stress Scale by Cohen’s (1983) (question 5,7 and 8) and the Engagement Scale by May et al. (2004) (question 4). Through the recoding, the Cronbach’s alpha also improved drastically for the Perceived Stress Scale (increase of .16 leading to α = .79) and the Engagement Scale (increase of .17 leading to α = .69) and was therefore suitable for assessing the data.
28 Otherwise no further improvements could be made to Cronbach’s α by deleting an item on the scale set. Therefore the scale reliabilities were retained accordingly.
3.7
Outliers
There were several outliers detected in five out of the six scales namely Inclusive Leadership, Authentic Leadership, Leader-Member-Exchange, Happiness, and Employee Engagement. The outliers indicated both high and low scores which resulted in a normality test having to be undertaken. In order to test the impact of these outliers the distribution was tested on the normality by performing a Kolmogorov-Smirnov and Shapiro-Wilk test. The tests were performed with and without the outliers to identify whether or not the given variable is statistically significantly different. When the outliers were included in the data set, the Kolmogorov-Smirnov test displayed that only 1 variable is normally distributed and the rest were not as mentioned before. When the outliers were removed from the data set, the variables Employee Engagement (p = .06) and Health (Perceived Stress Scale) (p = .20) are not significant and normally distributed according to the Kolmogorov-Smirnov test. Interestingly, the Shapiro-Wilk test showed that for the Health variable (Perceived Stress Scale) the p = .04 which indicates that the scale is not normally distributed and statistically significant. According to the q-q plots of each variable is close to, or touching, the diagonal line which lead to the conclusion to preserve the outliers for the sake of retaining a large data set. As each variable was measured on a 5 or 7 point Likert scale and on behavioral perceptions and traits, it is doubtful whether or not data may have been misinterpreted by the respondent or inaccurately entered. As the data was carefully examined before and after the tests were conducted, no peculiar numbers or values were identified.
3.8
Predictions
The hypotheses that are to be tested each expect a positive relationship for the independent and dependent variable (Leader Inclusiveness and Employee Well-being). This research anticipates that
29 support will be found for the moderating effect of Authentic Leadership on the direct relationship and will positively enhance Employee Well-being. The same is predicted for the moderating effect of Employee Engagement and will significantly increase Employee Well-being when it is used in the direct relationship between Leader Inclusiveness and Employee Well-being. It is also assumed, that the direct relationship of Employee Engagement and Employee Well-being will be positively related.
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4.0 Results
This section describes the results of the statistical analysis. It begins with a descriptive statistics table in which the means, standard deviations, Cronbach’s alphas and correlation coefficients are depicted. Next, the hypotheses of the dissertation are tested using the PROCESS macro by Andrew Hayes (2012) for SPSS. Ultimately, this section elaborates on the direct relationship of the dependent and independent variables and examines the moderating role of authentic leadership and employee engagement.
4.1
Descriptive Statistics
Table 1 displays the means, standard deviations, Cronbach’s alphas and correlation coefficients of the variables within this study. Although a correlation may indicate a certain in/significance, it does not portray the general direction of the association. When looking at the independent variable Leader Inclusiveness, a positive correlation to Employee Engagement (r = .22, p = <0.01, SD = 0.88), Leader-Member-Exchange (r = .70, p = <0.01, SD = 0.62), Happiness (r = .52, p = <0.01, SD = 0.79) and Authentic Leadership (r = .20, p = <0.01, SD = 0.46) can be identified. As expected; the more leaders include subordinates in decision making processes drives engagement, LMX and overall happiness. As previous literature suggests, Authentic Leadership drives the development of subordinates and therefore a correlation with the independent variable was predicted. Leader Inclusiveness also displayed a significant negative correlation with the Health Variable (r = -.17, p = <0.05, SD = 0.56). The reason for this could be because the health perspective is measured as a stress indicator which could indicate that the less employees are included in decision-related aspects it can result in a negative effect on the subordinates’ level of stress.
31 Table 1. Means, Standard Deviations, Cronbach’s alphas and Correlations
Variable M SD 1 2 3 4 5 6
1. Authentic Leadership 5.6 0.46 (.80)
2. Happiness 5.3 0.79 .26** (.89)
3. Leader-Member-Exchange 3.7 0.62 .26** .65** (.84)
4. Health (Perceived Stress) 2.5 0.56 -.07 .16* -.31** (.79)
5. Employee Engagement 4.8 0.88 .17* .61** .34** -.10 (.69)
6. Leader Inclusiveness 5.6 0.92 .20** .52** .70** -.17* .22** (.93) N = 230. ** p < 0.01. * p < 0.05
4.2
Hypotheses Testing
In order to test the direct relationships of the conceptual model, Leader Inclusiveness to Employee Well-being and Employee Engagement to Employee Well-being, regression analyses were used to examine whether a positive affect can be established. The analyses were performed using the Process macro (Hayes, 2012) for SPSS to detect interactions and results. More specifically, Hypothesis 1-4 were all tested using Model 2 in Process. This specific model tested a moderation model where leader inclusiveness is our independent variable (X), employee well-being (in the dimensions of health, LMX and happiness) the dependent variable (Y) and authentic leadership (W) and employee engagement our moderators (M).
4.2.1 Hypothesis 1 (a), (b) and (c)
The first set of hypotheses examine whether or not leader inclusiveness of managers is positively related to the level of employee well-being in the health perspective (a), LMX perspective (b), and happiness perspective (c). The results are shown in more detail below in Table 2.
32 Hypothesis 1 (a) suggested that leader inclusiveness is positively related to the level of stress the employee perceives in their daily work. The effects of leader inclusiveness on health are B = -.09, p = .11, R² = .07 which shows that inclusive leadership does not have a direct effect on the health dimension of employee well-being. Therefore Hypothesis 1 was rejected. Hypothesis 1 (b) examined whether or not leader inclusiveness is positively related to the level of employee well-being in the relationship-related dimension using the LMX model. The results are as follows: B = .40, p = .00, R² = .56 which confirms Hypothesis 1 (b) as it indicates that leader inclusiveness is significantly related to LMX. Lastly, Hypothesis 1 (c) tested whether leader inclusiveness is positively related to the level of employee well-being from a happiness perspective. The analysis resulted in the following: B = .31, p = .00, R² = .55 which signifies that leader inclusiveness has a positive effect on the happiness related dimension. Hypothesis 1 (c) was therefore also confirmed.
4.2.2 Hypothesis 2 (a), (b) and (c)
The second set of hypotheses examined whether or not employee engagement has a positive direct effect on employee well-being as stress (a), LMX (b), and happiness perspective (c). The results are shown in more detail below in Table 2.
Hypothesis 2 (a) looked to what extent employee engagement has a positive direct relationship on employee well-being in the health perspective. The effects of employee engagement on stress are B = -.05, p = .34, R² = .07 which indicates that there is no significance between these two variables. Therefore Hypothesis 2 (a) was rejected. Hypothesis 2 (b) measured the effect of employee engagement on the LMX perspective of employee well-being. The results are: B = .12, p = .00, R² = .56. The results confirm that employee engagement has a positive effect on the LMX dimension which focuses on the type of relationship the manager has with their subordinate. Hypothesis 2 (b) was therefore confirmed and significantly supported. Hypothesis 2 (c) evaluated the final dimension of employee well-being which is
33 the happiness perspective and whether or not employee engagement has a positive direct effect. The results showed B = .45, p = .00, R² = .55 which indicates that there is a significant positive effect in the relationship therefore the level of engagement can positively influence the happiness perspective of employees. Hypothesis 2 (c) was thereby also supported.
4.2.3 Hypothesis 3 (a), (b) and (c)
The third set of hypotheses investigated whether or not employee engagement has a positive moderating effect on the relationship between leader inclusiveness and employee well-being as a (a) stress indicator, (b) LMX perspective, and (c) happiness perspective. Here, the interactions of Leader Inclusiveness (X) and Employee Engagement (M) were tested.
Hypothesis 3(a) proposed a positive moderation effect of employee engagement on stress. The interaction term caused a 22% change in the variance (ΔR2= .022) in stress which was not significant. The results indicated that B = -.07, p = .23, R² = .07 meaning that when employee engagement is used as a moderator toward perceived stress, there is no significant effect and therefore Hypothesis 3(a) cannot be supported. Hypothesis 3(b) examined the moderation effect and its influence on the LMX dimension of employee well-being. The interaction term caused a 51.9% change in the total variance (ΔR2= .519). As shown in Table 2, the interaction stated that B = -.00, p = .94, R² = .56 which was non-significant. This suggests that when leader inclusiveness is already high the level of stress of the employee will not be influenced whether or not employee engagement is moderating the relationship. We therefore reject Hypothesis 3(b). Finally, Hypothesis 3(c) suggested a positive moderation effect of engagement between leader inclusiveness and the happiness related dimension of employee well-being. The interaction results were B = -.02, p = .74, R² = .55 which caused 52.3% change in the variance (ΔR2= .523) which suggests that employee engagement does not significantly moderate the relationship between inclusive leadership and happiness of the employee. Hypothesis 3(c) was also rejected.
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4.2.4 Hypothesis 4 (a), (b) and (c)
The fourth set of hypotheses looked closely at the moderation effect of authentic leadership. Specifically whether or not this has a positive moderating effect on the direct relationship of leader inclusiveness and employee well-being. As in the previous hypotheses the variable of employee well-being is investigated as (a) stress, (b) LMX perspective and (c) happiness perspective. Specifically, this moderation model tested the following interaction: leader inclusiveness as the independent variable (X), health, LMX, happiness related dimensions of well-being as the dependent variable (Y), and authentic leadership as the moderator (W).
Hypothesis 4(a) predicted that authentic leadership positively moderates the relationship between leader inclusiveness and stress. The analysis resulted to B = .13, p = .27, R² = .07 meaning that there is no significant moderation occurring with authentic leadership and that the level of experience of a leader does not have an influence on the stress level of employees. The interaction term accounted for 17% change in variance (ΔR2 = .017) in perceived stress which was insignificant. Therefore there was no support in Hypothesis 4(a). The second part of Hypothesis 4 examined the interaction of authentic leadership toward the LMX perspective. According to the results B = -.22, p = .03, R² = .56. Here the interaction term caused a 49.6% change in variance (ΔR2 = .496) in LMX which was significant and therefore indicated that authentic leadership significantly moderates the relationship between leader inclusiveness and LMX, which supported Hypothesis 4(b). This is interesting however as the interaction model indicates that when authentic leadership is high it there is a diminishing effect in LMX the higher the level of inclusion gets. When there is low authentic leadership however the level of LMX is higher initially but yet slowly decreases based on higher levels of leader inclusiveness. Please refer to Figure 3 for a visual representation of this effect. Lastly, Hypothesis 4(c) did not support the predicted interaction, between leader inclusiveness and happiness in relation to authentic leadership. The interaction resulted in B = -.19, p = .12, R² = .55 of which 29.2% (ΔR2= .292) of the change in variance was explained which
35 implies Hypothesis 4(c) was also rejected due to its insignificant results. In sum, there was no significant moderation effect from the authenticity of the manager on stress and happiness related well-being.
Table 2. Main effects of the relations of Leader Inclusiveness, Authentic Leadership, Employee Engagement
on Health, LMX and Happiness
Y (Health) Y (LMX) Y (Happiness)
Antecedent Coeff. SE p Coeff. SE P Coeff. SE p
X (Leader Inclusiveness) -.09 .06 .11 .40 .08 .00 .31 .07 .00
W (Authentic Leadership) -.07 .08 .93 .12 .07 .11 .18 .08 .04
M (Employee Engagement) -.05 .05 .34 .12 .04 .00 .45 .05 .00
XM (Leader Inclusiveness x Employee Engagement)
-.07 .06 .23 -.00 .56 .94 -.02 .06 .74
XW (Leader Inclusiveness x Authentic Leadership)
.13 .12 .27 -.22 .10 .03 -.19 .12 .12
Control (Senior Leader) .14 .08 .08 -.07 .06 .24 .15 .08 .06
Constant 2.29 .11 .00 3.81 .08 .00 5.11 .11 .00
R² = .07 | F = 1.63 R² = .56 | F = 31.19 R² = .55 | F = 28.50
p = .00 p = .14 p = .00
36 Figure 3. Significant interaction on the moderating effect of Authentic Leadership on Leader Inclusiveness
and LMX
4.3 Moderation Effect on Conceptual Model
In order to test the effect the moderators of this study have on the entire conceptual model, the Process macro (Hayes, 2012) of SPSS indicated the following findings in Table 3. The results indicate that when employee engagement is used as a moderator on the conceptual model, there is no significance in the results on stress (p = .23), LMX (p = .94) nor happiness (p = .74). When using authentic leadership as a moderator in the direct relationship however, there seems to be a significant effect on LMX (p = .03). The data did not report a significance on stress (p = .27) or happiness (p = .12). When looking at both interactions of the moderators on the conceptual model simultaneously however, the data almost showed a significance on LMX (p = .05) but not on stress (p = .37) or happiness (p = .29).
37 Table 3. Moderation effect on entire conceptual model
Y (Health) Y (LMX) Y (Happiness)
Moderator Model using M and W R2-chng F p R2-chng F P R2-chng F p
XM (Leader Inclusiveness x Employee Engagement)
.02 1.43 .23 .00 .01 .94 .00 .11 .74
XW (Leader Inclusiveness x Authentic Leadership)
.01 1.24 .27 .02 4.98 .03 .01 2.37 .12
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5.0 Discussion
This section of the thesis explains the main findings of the hypotheses and examines the significant relationships of the conceptual model. It not only inspects the research findings but also mentions the theoretical implications of the research. Next, limitations of the study and implications for further research are discussed.
5.1
Research findings and theoretical implications
This research aimed to examine the relationships between leader inclusiveness and employee well-being (as stress, LMX and happiness). The research also targeted to explain the moderating effect of authentic leadership and employee engagement on the stress, LMX and happiness relationships. The findings of the statistical analysis are discussed in more detail below.
5.1.1 Hypotheses 1 a, b, c
The first set of hypotheses predicted that leader inclusiveness of managers is positively related to the level of employee well-being (stress, LMX and happiness perspective). The findings of the statistical analysis portray that having a high level of leader inclusiveness can positively influence LMX and happiness related dimensions of well-being but not stress related factors. These can be interpreted as follows: when leader inclusiveness is high the level of inclusiveness is positively related to the employee’s happiness and feeling of fulfillment. Also, when leader inclusiveness is high the level of inclusiveness is positively related to the LMX model which can also be related to high leader effectiveness and performance ratings (Deluga & Perry, 1991). This indicates that the more inclusive a leader is toward their subordinate can negatively affect the employee’s well-being when measured as stress. In previous research of Foesenek (2013) the author suggested that when leaders are aware of how to manage their resources efficiently, by introducing some higher responsibilities to their day to day tasks, can result in higher feelings of energy and happiness. The research partially confirms the aforementioned theory as, according to the results of
39 the study, some members of organizations can actually feel more stressed when there is a higher level of inclusion.
5.1.2 Hypotheses 2 a, b, c
The second set of hypotheses looked at the direct effect employee engagement (cognitive, emotional and physical) has on employee well-being (on a stress, LMX and happiness perspective). The hypotheses predicted that each type of employee engagement would have a positive relation toward employee well-being. The findings indicate that employees who feel a high level of engagement are more likely to have a high LMX as well as higher levels of happiness. This shows that when the level of cognitive, emotional and physical engagement is high employees are more likely to feel happy toward their work and their organization (Ariani, 2013). As mentioned before, if employees perceive that their engagement matters to their direct managers they are likely to increase their own motivation to exert their work. For hypothesis 2 (a) toward stress however there was no significant effect toward the level of cognitive, emotional and physical engagement of employees and could not be accepted. Previous research by Schaufeli et al. (2008) had confirmed, engagement has a positive relation to burnout and can therefore influence commitment. This could explain why hypothesis 2 (a) was not supported as being more engaged could result toward higher stress levels as it could be interpreted as additional work.
5.1.3 Hypotheses 3 a, b, c
The third set of hypotheses in this study looked at the moderating effect of employee engagement on the relationship between leader inclusiveness and employee well-being (in the stress, LMX and happiness perspective). The set of hypotheses predicted that employee engagement would have a positive moderating effect on the relationship of the independent and dependent variable. However, the results showed that using employee engagement as a moderator showed no significance toward the dependent variable. This may have to do with the fact that inclusive leadership is already focused on
