The leadership approach in an
organisation has a significant influence on the level of employee satisfaction.
It shapes the organisational culture and has a major influence on how employees
relate to each other and to their superiors in the workplace (Greer and Carter
2013, p. 376). It can be described as the glue that potentially binds the
organisation and the employee together. More importantly, various studies have
established that most employees perceive their superiors as the embodiment of
the organisations (Selesho and Ntisa 2014, p. 212). This implies that the kind
of treatment received by their superiors is likely to have a significant impact
on their level of satisfaction, and therefore, intention to stay or leave the
organisation (Selesho and Ntisa 2014, p. 211). This essay draws from relevant
literature to demonstrate the extent to which leadership is likely to impact
employee turnover and turnover intentions.
Employee turnover is the rate at which
employees leave an organisation to retire or in search of other career
opportunities (Christian and Ellis 2014, 193). Employee turnover can be
discussed under two contexts: the actual turnover and turnover intentions with
the two being distinguishable by whether the employee has left or merely intends
to leave the organisation. The two should be distinguished in terms of factors
influencing them. For instance, actual turnover is dependent on the external
environment where employees are likely to leave an organisation after
identifying better opportunities within the market (Palanski and Avey 2014, p.
135). The turnover intention, on the other hand, is solely dependent on the
level of employee satisfaction as determined by factors such as level of
empowerment, performance and reward systems, nature of the working environment,
the leadership approach, and other human resource management policies (Ertürk
2014, 141).
Organisations strive to minimise
employee turnover due to the fact that it is costly in three ways: loss of
intelligence and knowledge held by the leaving employee; loss of morale by the
remaining employees; and the actual cost of replacing the departed employees
(Islam et al 2013, 323). While these costs are only realised after actual
turnover has occurred, there are further costs that are related to turnover
intentions. Christian and Ellis (2014, p. 193) established a positive
association between the level of turnover intentions and prevalence of deviant
behaviour in organisations. Deviant behaviour was in this case characterised by
lateness, vandalism, theft, and low productivity (Christian and Ellis 2014, p.
193). These come at a high cost to the organisation hence the need to for the
human resource managers to ensure that both the actual turnover and turnover
intention are low within the organisation.
The basic roles of any manager in the
organisation can be divided into two categories: management roles and
leadership roles (Randeree and Chaudhry 2012, p. 62). While management
primarily deals with planning, resource allocation, and control; leadership
concentrates on the inter-personal aspects of the organisation (Green, Miller
and Aarons 2013, 375). The main role of managers in leadership is to provide a
sense of direction and inspiration. Leadership is an important ingredient of
the organisational culture. It influences how employees interact with their
superiors and with each other. More significantly, leadership plays an
important role in building the level of trust and empathy within the
organisation. Leadership skills are therefore closely related to interpersonal
skills; hence the emphasis by most organisations to ensure that their managers
master the interpersonal skills they need to be effective as leaders
(Ertureten, Cemalcilar and Aycan 2013, 206). In general, leadership styles in
organisations are manifested through emphasis on decision making approach,
recognition, and reward aspects of the human resource management approach.
In reference to decision making
approach, leadership differs on the extent to which autonomy and inclusivity is
exhibited in decision making (Johnston and Spinks 2013, p. 21). The main leadership
approaches are democratic as opposed to authoritative leadership where the
former involves greater empowerment and consultation while the latter involves
the superiors making the decisions. The impact of such leadership approaches
depends on factors such as culture and employee expectations. Also used to
distinguish leadership approaches; is the orientation where the leaders can be
task-oriented or relationship-oriented (Davoudi and Fartash 2013, p. 89). In
task-oriented leadership, the managers focus on the tasks and goals with a
strong emphasis on performance. On the other hand, relationship-orientation
focuses on satisfaction and the general wellbeing of the employees. There’s
little evidence that a particular leadership approach would lead to low turnover
and turnover intentions with the underlying factor being whether or not the
employees are satisfied with the leadership styles implemented.
Leadership does not have a singular
impact on turnover rates and turnover intentions: it is often one of the
contributing factors alongside organisational commitment, social
identification, employee satisfaction, and the organisational culture among
other factors (Davoudi and Fartash, 97). Its influence on turnover intentions can
be indirect by virtue of having an impact on the level of organisational
commitment and organisational culture. Organisational commitment can be
described as the extent to which employees are determined and committed to
deliver on the organisational goals.
High levels of organisational commitment
lead to low turnover intentions as employees tend to be interested in staying
in the organisation and ensure that the long term goals are achieved. Employee
satisfaction also reduces turnover intentions. This was the finding of Randaree
and Chaudhry (2012, p. 61) where they established that 50% of employees in the
UAE affirmed that the approach to leadership by their immediate supervisors has
a strong influence on their job satisfaction levels. High levels of satisfaction
lead to high productivity and a sense of belonging within the organisation
(Randaree and Chaudhry 2012, p. 64). Also important is the influence of
leadership on the organisational culture. The organisational culture is
characterised by how employees relate to each other and to their work. It
dictates their communication approaches, operational approaches, and even
accountability approaches. The organisation is characterised by its
organisational culture hence it is an important determinant of how long an
employee would want to work with the organisation.
Leadership is strategic in an
organisational context in terms of its ability to inspire employees and
influence their attitude towards the organisation and their work (Liu et al
2013, p. 305). It therefore influences behaviour and attitudes. It is different
from management which emphasises on measuring performance based on the minimum
targets set out. Leadership inspires employees to achieve beyond the minimum
standards set by the organisation. It also influences how the employees
perceive themselves as well as the organisation. Its influence over
organisational performance and employee turnover intentions is therefore very
high.
Christian and Ellis (2014, p. 204)
described the leadership approach as being instrumental in encouraging
employees to voice their concerns; a step that would enable managers to
estimate turnover intentions and take pre-emptive measures to reduce them.
According to them, an appropriate leadership approach would establish high
levels of trust between the employees and their superiors. This trust
translates into open discussions which can facilitate a collaborative approach
in tackling the issues raised such as excessive workload and job stress. As
Christian and Ellis (2014, p. 204) put it, there tends to be a significant time
difference between the time employees decide to leave and the time they
actually leave the organisation. Effectively building trust through leadership
prowess helps in detecting such intentions and taking steps to limit the actual
turnover rates.
The importance of trust and open
communication is emphasised by Cao, Chen and Song (2013, p. 62) who point out
that work-life conflicts tend to raise employee turnover intentions. In most
cases, the nature of the conflicts is so personal that employees can only share
their concerns if they have a high level of trust in their superiors. This is
related to the quality of leader-subordinate relationships within the
organisation. Islam et al (2013, p. 323) creates a strong link between the
quality of leader-subordinates relationship and the organisational commitment
of the employees. He observes that it is when the relationship is healthy and
characterised by trust and empathy that the level of organisational commitment
increases. The level of organisational commitment, in turn, leads to lower
levels of turnover and turnover intentions among the employees. The level of
empathy that a leader has is also crucial to the level of organisational
commitment and turnover intentions. In general, leaders that are perceived to
be supportive and understanding tend to inspire higher levels of organisational
commitment; hence the negative impact on turnover intentions (Islam et al2013,
p. 327). The element of organisational commitment is therefore crucial in
determining the relationship between leadership and employee turnover
intentions.
In the model outlined below, leadership
can be said to be instrumental in promoting the learning culture within the
organisation. Where the learning culture is entrenched, the frequency and
quality of exchange improves hence leading to higher levels of organisational
commitment.
Source: Islam et al 2013, p. 324
In a strong organisational learning
culture, individual members are empowered to openly share their values and
visions (Islam et al 2013, p. 325). This free exchange helps in developing a
strong team spirit; often manifested in employees being proud of working within
the organisation. This is only facilitated through strong leadership where
emphasis is on encouraging employees to interact more frequently with their
superiors and gain the experience and knowledge needed to accomplish their
tasks.
The influence of leader-member exchange
on employee turnover and turnover intentions can also be discussed in the
context of the social identity of the employees. Liu et al (2013, p. 307)
creates a link between social identification and leadership as a way of
explaining how leadership impacts employee turnover. Social identification in
this context is described as the extent to which an employee can be said to
have redefined themselves to fit into the organisational identity (Liu et al
2013, p. 307). It entails the adoption of organisational goals and alignment of
personal goals to conform to them. Where there is a strong correlation between
self and organisational identity, employee turnover and turnover intentions are
known to be much lower than when the two identities are significantly
different. The role of leadership in enhancing social identification within the
organisation is to enable the creation of a sense of belonging and strong team
spirit; culminating into high level of understanding, trust, support,
interaction and formal/informal rewards (Liu et al 2013, p. 308). With a high
quality relationship between the leader and the subordinates, social
identification is high hence lower levels of turnover intentions.
The influence of leadership on employee
turnover and turnover intentions is closely related to the concept of positive
psychological contracts (Liu et al 2013, p. 308). In psychological contracts,
reciprocal obligations are created between the managers and the employees. This
means that where the leader exercises high levels of empathy and trust,
employees are prompted to reciprocate the relationship. The psychological
contract is actualised with team; leading to the creation of a highly cohesive
team where members are not only committed to realising collective goals but
also commit to stay on until the team goals are realised (Ahmed and Muchiri
2014, p. 151). The concept of positive psychological contract also explains the
influence of the leadership approach employed in influencing the organisational
culture. It explains why most organisations tend to adopt the behaviour and work
ethics of their top managers as the organisational culture. By extension, this
influence over the organisational culture influences turnover intentions with
employees who find the culture unacceptable exhibiting higher levels of
employee turnover intentions.
The impact of the psychological contract
was also demonstrated by Palanski, Avey and Jiraporn (2014, p. 134) who
established that abusive behaviour by managers almost always resulted in the
employees initiating the search for alternative jobs. In understanding the
impact of the leadership approach in this context, it is important to
appreciate that most employees view their immediate supervisors as the
representation of the organisation. This implies that few will initiate
disciplinary actions against their supervisors and will instead opt to look for
alternative sources of employment. The employees like to feel valued and
appreciated. At the very least, indifference can be accommodated; but abusive
behaviour would certainly raise turnover intentions and actual turnover
significantly (Palanski, Avey and Jiraporn 2014, p. 137). Ahmed and Muchiri
(2014, p. 149) defines abusive supervision as exposing subordinates to hostile
verbal and nonverbal behaviour. This definition excludes physical abuse, an act
that would constitute a legal offense.
In addition to the creation of a healthy
working culture, leadership approach has been proven to have a moderating
influence on the impact of de-motivators such as excess workload and stress
levels (Green, Miller and Aarons 2013, p. 373). This was a finding made on a
research study on 388 community mental health providers; hence the
recommendation that organisations can reduce employee turnover by ensuring that
managers and supervisors master transformational leadership skills. The impact
of transformational leadership on turnover intentions is as shown below:
Source: Green, Miller and Aarons 2013,
p. 377
The level of satisfaction with the
management and leadership approach in an organisation is dependent on the expectations
of the employees. In essence, implementing a leadership approach just because
it has been known to work perfectly in a different context may be
counter-productive. Jianfei et al (2014, p. 321) cites culture as one of the
drivers of expectation on leadership approaches. For instance, while it may be
common among Western employees to demand higher levels of autonomy in decision
making, research findings are that employees in high power distance cultures
like China tend to be uncomfortable with empowerment in decision making
(Jianfei et al 2014, p. 321). This line of thought was advanced by Cao, Chen
and Song (2013, p. 64) who described the Chinese culture as hierarchical and
mirroring the family structure where the more senior members of the family make
all the important decisions for implementation by the lower ranking family
members.
The implication of these assertions is
that the managers should strive to understand their employees’ expectations and
seek to either conform or manage the expectations. Once the employees are
satisfied with the leadership approach, the relationship between them and their
superiors is improved (Cao, Chen and Song 2013, p. 63). This facilitates open
communication with managers being able to determine the challenges that are
being faced by the employees and how such challenges can be overcome. This
creates the link between effective leadership and employee turnover rates.
Irrespective of the leadership approach
involved, employees are often on the lookout for certain management practices
such as procedural justice, accuracy in gauging performance, and fairness in
reward and promotion approaches. This means that managers should be keen on
streamlining HRM policies with an emphasis on enhancing the level of employee
satisfaction. Cao, Chen and Song (2013, p. 62) further cited factors that also
impact employee turnover as: salaries, material rewards, work-life balance, and
career development opportunities. As Cao, Chen and Song (2013, p. 62)
reiterate, having a good remuneration reduces the incentive for the employees
to go out in search of better opportunities. However, remuneration is cited
under the Herzberg’s two-factor theory of employee motivation as a hygiene
factor.
According to this theory, motivating
factors are either hygiene factors or satisfiers where the latter lead to
enhanced employee satisfaction whiles the former only have the impact of
reducing the level of dissatisfaction (Fabjan, Lovec and Civre 2013, p. 219).
In this context, adequacy of remuneration may limit turnover; but it is the
presence of satisfiers such as recognition that will positively influence the
intention of employees to stay in the organisation for long. The implication of
this is that even though being the highest paying organisation will ensure that
employees do not leave to go other organisations, the low turnover may not
necessarily be an indicator that the employees are happy. In the real sense,
turnover intentions tend to exist as the employees are on the lookout for what
they’d consider to be a better opportunity than the one they currently has
(Christian and Ellis 2014, p. 194). It is therefore possible to have high
turnover intentions with little turnover being actually realised. Organisations
in this context could incur losses in terms of reduced productivity and deviant
behaviour which is often related to high turnover intentions. Leadership can
play a role in reducing such losses by inspiring employees to embrace a higher
level of organisational commitment through creation of a healthy corporate
culture that conforms to employee expectations.
Leadership is an integral part of the
organisation and an important duty for the managers who must plan, control and
lead their subordinates (Jianfei et al 2014, p. 321). The leadership approaches
that are common in organisations touch on the decision making approaches,
communication approaches, and emphasis on how employees need to relate to each
other and to their jobs. These impacts of leadership impact employee turnover
intention by influencing the level of employee satisfaction, organisational
commitment, and social identification (Green, Miller and Aarons 2013, p. 373).
Employees who identify themselves with the organisation tend to be more loyal
hence are likely to opt to stay for long periods of time. The same can be said
of high levels of organisational commitment where employees are likely to
commit to stay on until the set organisational or team goals are accomplished.
The existence of psychological contracts between leaders and their subordinates
is at the heart of the influence of leadership approach on turnover intentions
(Ahmed and Muchiri 2014, p. 151). This means that leadership behaviour and
styles tend to attract a proportionate reaction from the employees hence
contributing to the level of organisational commitment, sense of belonging, and
level of satisfaction. Nevertheless, it is important to appreciate that
different leadership approaches are ideal in different contexts. This means
that effectiveness can only be achieved when managers are keen to understand
employee expectations and apply the most appropriate leadership styles
necessary to boost employee satisfaction, organisational commitment, and social
identification.
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