The Effectiveness of Transformational Leadership - Research Paper Example

TRANSFORMATIONAL LEADERSHIP PROMOTES EMPLOYEE SATISFACTION AND EMPLOYEE RETENTION By Location Transformational leadership is one of the theories that have emerged in the 21st century as global leaders seek to become more people focused. In the previous centuries, many employees gave attention to the completion of tasks without ensuring that employees had the required motivation to handle the tasks. Some companies are still struggling with high employee turnover. Employees in such organizations lack motivation and satisfaction. Therefore, they are less likely to commit themselves to the organization on a long-term basis. Such organizations need to adopt new strategies for employee retention and motivation. Theorists have described transformational leadership as one of the most effective strategies for improving job satisfaction as well as promoting employee retention. This research will seek to highlight the statistical significance in the relationship between transformational leadership and employee retention and satisfaction. Many theorists have highlighted that transformational leadership promotes employee empowerment, increased motivation, as well as numerous growth opportunities. Therefore, leaders have been adopting transformational leadership in an effort to increase employee motivation and satisfaction. Satisfied employees are less likely to register a high turnover. The research will adopt a quantitative approach. Participants will be recruited from four different companies with ten employees selected randomly from each company. Ethical considerations in this research will focus on maintaining confidentiality and anonymity as well as obtaining informed consent from the participants. The SPSS software will be used in the data analysis. The researchers will predict that this study will reveal a statistically significant relationship between transformational leadership and employee satisfaction and retention. Contents Abstract 2 Introduction 4 Research Rationale 5 Objectives 5 Research Questions and Hypothesis 6 Literature Review 7 Theoretical Frameworks 9 Methodology 10 Discussion 10 Proposed Research Duration 11 Bibliography 12 Introduction Transformational leadership has gained popularity in the 21st century as one of the most effective leadership theories. The effectiveness of transformational leadership has been the focus of discussion by many researchers and scholars. There is an increasing level of academic literature on the effectiveness of transformational leadership. Many researchers opine that transformational leadership can register increased levels of employee motivation and job satisfaction. Employee retention is one of the main goals established by different organizations. With the fear of the unexpected employee turnover, many organizations have considered an employee retention as an organizational goal (Bateh & Heyliger 2014, p. 38). Employee retention enables an organization to maintain the skills and competencies of high performers within the organization. Organizations that do not focus on employee retention face the compulsion of incurring recruitment costs regularly. The recruitment and hiring process takes time and involves costs that can be avoided by employee retention. Transformational leadership is one of the theories that can promote employee retention. Since transformational leadership seeks to promote employee motivation, as well as self-actualization, employees are more likely to remain loyal to one organization. Evidently, research has highlighted that rarely do employee give up on organizations. Rather, they give up on ineffective leaders of such organizations (Brown 2014, p. 70). Therefore, adopting effective leadership can increase the employee retention. On the other hand, employee retention depends on the level of satisfaction experienced by the employees within the organization. Scholars have sought to identify whether the transformational leadership has a direct relationship with employee satisfaction. Since transformational leadership provides employees with a clear vision of the future, employees are more likely to register high levels of satisfaction (Dey 2009, p. 58). This research seeks to identify the existing relationship between transformational leadership, employee satisfaction, and employee retention. Research Rationale Since transformational leadership has received an increasing appraisal for its capacity to transform employees into motivated individuals who can register a remarkable performance, it is important to determine the statistical importance of this leadership theory to employee retention. Many leaders need to adopt leadership styles that have been proven to be highly effective in increasing both employee satisfaction and retention (Fernandez 2013, p. 75). Therefore, this research seeks to provide evidence to whether transformational leadership can alter an employee’s perception towards work, the levels of motivation, and satisfaction. Other researchers have ventured into this topic previously. However, none of them has considered the effect of transformational leadership on employee satisfaction and employee retention. Therefore, this research will fill the existing gap and determine the relationships between transformational leadership, employee satisfaction, and employee retention (Kim et al 2012, p. 669). Objectives The objectives of the study will be: a. To describe transformational leadership and its basic tenets b. To determine the factors, that contribute to employee retention c. To investigate the factors, that contribute to employee satisfaction d. To determine the existing relationship between transformational leadership and employee retention e. To determine the relationship between transformational leadership and employee satisfaction Research Questions and Hypothesis The main research question for this research will be: How does transformational leadership contribute to employee satisfaction and retention? The Hypothesis in this research will be: Transformational leadership promotes both employee satisfaction and employee retention. Literature Review Recent research has highlighted that the type of leaders an organization has determins whether there will be a high rate of employee turnover or employee retention. Leadership can increase employee motivation and loyalty to the organization. Leaders who do not give attention to people and their needs and only focus on tasks are likely to register high levels of employee turnover. Effective leaders give special attention to the needs of employees (Metwally, El-bishbishy, & Nawar 2014, p. 32). According to the transformational leadership theory, employees need to have a clear vision for the organization as well as high levels of motivation. A transformational leader can develop a realistic vision for an organization and share it with all the employees, as highlighted by Mujkić and his colleagues (2014). Transformational leadership considers the needs and aspirations of the employees when determining a vision for the organization. The inclusion of employees in the organization’s vision is a sure way to create an attachment between the employees and the organization. Such employees have every reason to follow a transformational leader. Therefore, they are more likely to remain loyal to the organization and register a high level of productivity. Transformational Leaders use charisma to communicate the shared vision as well as the organizational goals to the employees. In addition, transformational leadership provides employees with the opportunities for growth, such as training opportunities so that they can gain new skills (Longo & Mura 2011, p. 283). Transformational leaders seek to ensure that employees can achieve self-actualization. Self-actualization means that an employee can explore his or her full potential. Employees need empowerment and an appraisal from transformational leaders if they are to achieve self-actualization. Notably, self-actualization is a lifelong goal as supported by research by Fernandez (2013). Therefore, empowered employees will be more willing to grow with an organization over time, reducing the chances of turnover. Organizations that have adopted a transformational leadership have registered the highest level of employee retention in the recent past (Mills 2008, p. 3952). According to a study carried out by Fernandez (2013), it emerged that employee retention depends on how a company invests in human resource development. Organizations that offer training programs and allow employees to handle challenging tasks that come with rewarding packages are more likely to retain them. Employees who can express their creativity and autonomy within the workplace are likely to remain with the organisation for long. Therefore, employee retention requires the development of motivational strategies as well as reward and recognition schemes (Tillman 2013, p. 29). Employees who feel that their work is appreciated are likely to exhibit a higher level of commitment and loyalty to the organization. On the other hand, job satisfaction depends on how rewarding the job is. Although salary packages may prove to be rewarding to employees, a higher level of satisfaction of the employee comes from the growth opportunities they receive from the organization. Transformational leadership recognizes that leaders need to inspire and motivate employees so that they can register personal and professional growth (Tonvongval 2013, p. 37). According to Mills (2008), transformational leaders stimulate the intellectual capacity of employees and give all the employees individualized considerations. Transformational leaders seek to ensure that the employee recognize new realms of possibilities and that they can challenge individual assumptions. When this happens, an employee can register remarkable personal and professional growth. Such growth presents employees with a high level of satisfaction (Tse, Huang, & Lam 2013, p. 769). Many scholars have highlighted that transformational leadership has four basic tenets namely charismatic leadership, intellectual stimulation, individualized consideration, and inspirational leadership. These four tenets can affect both employee retention and satisfaction positively. Metwally, El-bishbishy, and Nawar (2014) asserts that leaders who rely on these tenets in their leadership styles have highlighted that their employees register high levels of job satisfaction. In addition, the employees are more willing to commit themselves to the organization on a long-term basis (Yamamoto 2011, p. 3564). Theoretical Frameworks The research will seek to test the existing theories that link transformational leadership with both employee satisfaction and retention. It is important to determine whether the relationship between transformational leadership and employee retention and satisfaction is of any statistical significance. Descriptive studies conducted in the past have highlighted that there is an evident correlation between transformational leadership tenets and employee retention. In addition, there is an existing relationship described between transformational leadership and employee satisfaction (Yi-Feng 2014, p. 749). Therefore, this research will test these theories. Methodology This research will adopt a quantitative approach. A quantitative approach is of critical importance in this study, as it will determine the statistical importance of different variables. The research will rely on questionnaires as the main data collection methodology. Questionnaires are highly reliable in quantitative researches. The study will recruit ten employees from four different companies. Purposive sampling will be used to identify the four companies while random sampling will be used in identifying the ten employees from each company. All the participants will sign a consent form during a session in which they will be familiarized with the study. Phone calls will be used to create the initial contact between the researchers and the participants. Confidentiality and anonymity will form the key ethical considerations of the study. After data collection, when all the participants have filled in their questionnaires, data analysis will follow. The SPSS software will be used to analyse data from the questionnaires. Discussion This research is likely to demonstrate the existing relationship between transformational leadership and employee retention. In addition, the research will reveal that transformational leadership contributes to employee satisfaction. The research findings will be of great significance because they will explain why more organization struggling with high levels of employee turnover should adopt the transformational leadership in an effort to promote employee retention. However, this research is likely to have certain limitations. The research will rely on a limited number of participants because of the limited resources and time. In addition, employee retention and satisfaction do not only result from transformational leadership (Hall 2010, p. 78). Therefore, this will be a limitation because it is impossible to control other factors that contribute to either retention or satisfaction. Proposed Research Duration Task Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Introduction Literature Review Methodology Analysis and Evaluation Conclusions and Recommendations Reference and Bibliography Correction and Submission Bibliography Bateh, J, & Heyliger, W 2014, Academic Administrator Leadership Styles and the Impact on Faculty Job Satisfaction, Journal of Leadership Education, 13, 3, pp. 34-49, Education Source, EBSCOhost, viewed 18 February 2015. Brown, OL 2014, Employee retention during a leadership change, Dissertation Abstracts International Section A, 75, 5-A (E), PsycINFO, EBSCOhost, viewed 18 February 2015. Dey, S 2009, Employee Retention -- A Key To Organizational Growth, Globsyn Management Journal, 3, 1, pp. 45-49, Business Source Complete, EBSCOhost, viewed 18 February 2015. Fernandez, D 2013, Employee retention and transformational leadership: A phenomenological study, Dissertation Abstracts International Section A, 74, 5-A(E), PsycINFO, EBSCOhost, viewed 18 February 2015. Hall, E 2010, ‘Relationship between emotional intelligence of managers and voluntary turnover intentions of employees/followers’, UMI, 3417610. Kim, S, Magnusen, M, Andrew, D, & Stoll, J 2012, Are Transformational Leaders a Double-Edged Sword? Impact of Transformational Leadership on Sport Employee Commitment and Job Satisfaction, International Journal of Sports Science & Coaching, 7, 4, pp. 661-676, SPORTDiscus with Full Text, EBSCOhost, viewed 18 February 2015. Longo, M, & Mura, M 2011, The effect of intellectual capital on employees’ satisfaction and retention, Information & Management, 48, pp. 278-287, ScienceDirect, EBSCOhost, viewed 18 February 2015. Metwally, A, El-bishbishy, N, & Nawar, Y 2014, The impact of transformational leadership style on employee satisfaction, Business & Management Review (Conference Proceedings), 5, 3, p. 32, Publisher Provided Full Text Searching File, EBSCOhost, viewed 18 February 2015. Mills, GE 2008, Transformational leadership and employee retention: An exploratory investigation of the four characteristics, Dissertation Abstracts International Section A, 68, 9-A, p. 3953, PsycINFO, EBSCOhost, viewed 18 February 2015. Mujkić, A, Šehić, D, Rahimić, Z, & Jusić, J 2014, Transformational leadership and employee satisfaction, Ekonomski Vjesnik, 27, 2, pp. 259-270, Central & Eastern European Academic Source, EBSCOhost, viewed 18 February 2015. Tillman, A 2013, Improving Worker Satisfaction Yields Improved Worker-Retention Rates, Employment Relations Today (Wiley), 39, 4, pp. 27-31, Business Source Complete, EBSCOhost, viewed 18 February 2015. Tonvongval, S 2013, Impact of transformational leadership development through organization development intervention on employee engagement and firm performance: a case study, Social Research Reports, 25, pp. 34-49, SocINDEX with Full Text, EBSCOhost, viewed 18 February 2015. Tse, H, Huang, X, & Lam, W 2013, Why does transformational leadership matter for employee turnover? A multi-foci social exchange perspective, The Leadership Quarterly, 24, pp. 763-776, ScienceDirect, EBSCOhost, viewed 18 February 2015. Yamamoto, H 2011, The relationship between employee benefit management and employee retention, International Journal of Human Resource Management, 22, 17, pp. 3550-3564, Business Source Complete, EBSCOhost, viewed 18 February 2015. Yi-Feng, Y 2014, Studies of transformational leadership: evaluating two alternative models of trust and satisfaction, Psychological Reports, 114, 3, pp. 740-757, Business Source Complete, EBSCOhost, viewed 18 February 2015. Read More