University of Sunderland

Faculty of Business and Law

PGBM02

Managing Change & Leading People

"CRITICALLY ANALYSE THE EXTENT TO WHICH

LEADERSHIP STYLE INFLUENCES EMPLOYEE

COMMITMENT & ENGAGEMENT"

(Word count 3052 / Word limit 3000) 10%±

Adnan ul Haque.

(2014)

Leaders in simple words can be defined as, individuals that have ability to

influence and guide others as well demonstrate the culture as they are tone

setters. Batista-Taran, Shuck, Gutierrez, & Baralt (2009) in their research

conference regarding 'the role of leadership in employee engagement' stressed on

the notion of globalisation as, the changes in the approach of the organisations

and managements has altered to the great extent due to the era of globalisation.

Furthermore, Batista-Taran et al., (2009), explained that "employees are

considered more than just a part of unit working as a machine only for the

maximization of the production, as now the concept has emerged that employees

are valuable assets for the success and survival of the business and are as

significant as other tangible and intangible assets" (p. 15). A skilled person is

productive asset for the team that contributes towards the organisational success.

Heger (2007) strongly emphasis on the significance of the employees that

nowadays organisations are paying more attention to develop skills of employees.

In the highly competitive environment, HR professionals are investing time and

resources to retain and hire best brain for right tasks as talent management and

succession planning facilitates organisations to have strategic and competitive

advantage. To accomplish organisational goals, firms need to maintain the best

brain, therefore the role of leader enhances as leadership play essential role in the

employees commitment and engagement (Wu et al, 2006).

According to Harter, Schmidt, & Hayes (2002) "engagement is involvement of an

individual to work with self eagerness and content" (p. 269). Kahn (1990) suggests

that engagement is closely associated with the emotional and cognitive behavior,

that drives strong feeling in employees to contribute productively towards

organisational success. On the other hand employee commitment is "binding of an

individual with the organisation due to psychological state" (Allen & Myer, 1990).

Therefore, leader's attributes and styles has immense significance in to engage

employees in their jobs by increasing their level of commitment towards the

organisation (Vance, 2006).

According to Northouse (2004), the process where common goals and objectives

are being achieved by the collective team working as a one unit under one

inspiring individual is regarded as leadership. This means that when followers are

encourage to achieve the organisational outcomes in effective way by sharing the

same vision with the top management is result of effective leadership. "It is leader

who motivates employees and bring the changes that are essential for the survival

and progress of the organisation" (Batista-Taran et al., 2009, p. 17). According to

Bass (1985), leader's appreciation is essential for to strengthen the bond with its

workforce as the styles of leadership provide energy to employees to attain the set

objectives.

Concept adapted on the explanation of Vance (2010) 'Employee Engagement

& Commitment'.

Organisations as well individuals view the concept of leadership in depth and on

wide spectrum. According to Bethel (1990) employees are being influenced and

affected by the leadership as it has strong influencing ability. Moreover, Bohn and

Grafton (2002) elaborate the concept of leadership as it enhances the employee's

self confidence and forms a vision, by means of communication and coordination.

Increase Employee

Engagement

Build Employ-employer

relationship

Skill Development

Recognition

Appreciation

Enhance Employee

Commitment

Skills

Knowledge

Expertise

Experience

"The two main types of leadership is transactional and transformational

leadership" (Burn 1978; and Bass 1997).

Burns (1978) explains transactional leaders are those who uses reward and

punishment approach to make followers accomplish assigned tasks. Moreover,

Bass (1985), explains transactional leaders have three distinguish attributes, such

as (a) contingent reward, (b) laissez-faire, and (c) management by exception.

Contingent rewards is basically leader's common practice of rewarding the

employees for their efforts and attempts. Rewards are granted when leader

believe subordinates have clearly made a solid commitment towards work by

making hard attempt. In case leader feel conversely about the commitment and

engagement of subordinates, then there is no reward given to employees. A

traditional and conservative methodology of checking and monitoring the

performances of the subordinates by the leaders to ensure that the set standards

are being met by the workforce (Bass, 1998). Moreover, due to defensive

management approach leaders reduces the probability of employee's engagement

going outside the parameter.

Adapted from Burns (2008), "Leadership", P. 186

Northouse (2004) suggests, point where problem arises and leader alone involve

to resolve it is "laissez-faire" feature. Under this style of leadership, Judge and

Bono (2000), "leader thoroughly defines the expected criterion and design rewards

for employees who demonstrate engagement and commitment towards achieving

the organisational goals" (p. 755). However, Batista-Taran et al., (2009) argue that

TRANSACTIONAL LEADERSHIP

Contingent Reward

Management by Exception

Expected Outcome

Performance

Beyond Expectations

under this type of leadership style, the job satisfaction is less likely to improve for

the members of team. Since the above discussion explains that transactional

leadership style is based on "reward-and-punishment" approach therefore, there

are likely chances that employees engagement and commitment will enhance.

La Fosse is an excellent example of employee engagement and motivation

increased through effective leader. The leader's role is a demonstration of the

company's values, leading by example. There are monetary rewards for the

employees like bonus for high performances but the main notion behind these

rewards are to take good care of workforce. For all the positive efforts

demonstrated by the employees towards clients are being rewarded with beach

holidays. Employees are not motivated just to achieve set financial targets but

trained to improve their learning capabilities.

Concept adapted from Head (2010), 'An Extraordinary Success Story'.

La Fosse primarily focus on three distinct dimensions that are, (I) ambition, (II)

value, and (III) achievement (Head, 2010). Employees are engaged in meetings to

feel a part of the organisation and take work as a career, not just as a job. One of

Leadership

Management

Technical

the reason for its progress and growth is fair treatment to entire workforce.

According to Head (2010), employees are trained to take bold initiatives and work

in force-free manner. The statistics show that there is only 12% staff turnover

which itself states that employees have strong organisational commitment (Head,

2010).

Another important leadership style is explained in the LMX- Leader-Member

Exchange theory that focus on the 'quality relationship' between leaders and

subordinates (Center for Leader Development, 2006). Due to the high quality

correlation and coordination between followers and leaders, employees

demonstrate high level of commitment and engagement towards team work. On

the other hand, employees having low commitment and engagement is due to less

support from the leaders. As a result of this decisions are less influential,

employees are less responsible as there is less interaction between followers and

leaders.

One of the biggest factors for the success of Pets at home is the employee

engagement. The company's culture is strong as it is evident that it stands in fair

dealing, leadership, and well being on second number respectively (Goldfingle,

2012). The reason behind this fact is that employees are more involved in job,

there is a team work that enable the employees to work in more collaboration and

high mutual coordination is a result of peers working in friendly environment (Best

Companies Guide, 2013). The atmosphere of the company is that every individual

fell pride in his or her own assigned tasks and are more willing to help and support

other colleagues. Employees are more involve in job and are being taken care by

the company through leadership and fair dealing (Goldfingle, 2012). The learning

curve at the organisation is high as there are more opportunities for the

employees to engage themselves in working and learning (DIY WEEK, 2012).

The full support of leaders encourage and motivate them to participate more and

as a result of this, there is 83% of workforce that consider that they are part of the

organisation and has a significant role to offer in the success of the organisation

(Best Companies Guide, 2013). In other words, proper leadership and guidance

has increased employees organisational commitment. 86% of the workforce agree

that their manager openly talks to them, guide them, and work with them to

improve their learning capabilities and working efficiency. The organisational goals

and interest are the first priority of the workforce (Best Companies Guide, 2013).

The 91% of the employees agree that there are high chances of personal growth

and development at Pets at home. The organisation share the success with its

workforce (Best Companies Guide, 2013).

Burns (1978) explains transformational leadership as a procedure that takes place

when leaders and subordinates work in close coordination with each other by

motivating and inspiring by engaging in work deeply and demonstrating high level

of commitment. Moreover, four basic aspects of transformational leadership are:

(I) idealized influence (II) Individual consideration, (III) Inspirational Motivation, and

(IV) intellectual stimulation. The main focus is involving the employees so that they

are more committed towards assigned tasks during transformation. Hay (1995)

strongly argue that these dour distinct dimensions facilitate the leaders in

becoming iconic symbols and role models encouraging employees to have high

commitment and engagement to contribute towards the organisational goals and

success.

Concept Adapted from Northouse (2001), "Leadership"

Transformational leaders are have high focus on people as they motivate their

workforce to accomplish the organisational goals. Sam Walton, Wal-Mart's

founder wrote in his book "rules for success" that he visited frequently to Wal-Mart

stores to meet his employees and motivate them by encouraging and appreciating

them (Walton et al., 1996). This is a classical example of a transformational leader

to motivate employees and encourage them to be more engaged in their

respective tasks. Transformational leaders encourage employee participation,

therefore empower employees so that short term objectives are accomplished by

the workforce. In doing so, leaders mainly focus on the intrinsic needs of the

employees (Meyer & Allen, 1997).

Idealized influence

Individual consideration

Inspirational Motivation

Intellectual stimulation

Performance Beyond

Expectations

Another example of employee engagement and impact of transformational

leadership style is evident at "Cloudreach" which is ranked number one in the

small companies list of United Kingdom (The Sunday Times, 2013). It is a

company where employees work with positive energy and are more enthusiastic

about their work patterns. Taking in consideration the statement of Harter et al.,

(2002) regarding employee engagement that "involvement of employees having

enthusiasm for work as well satisfaction" (P. 269). Therefore, it can be said that

employee engagement is clearly present due to the transformational leadership.

All employees are given equal chances and the salaries are set according to the

business value. The young blood is important source for the success of

organisation as it takes fresh blood (Donelly, 2012). The employee turnover ratio

is 0% which indicate that people love working for Cloudreach. The culture of the

organisation promotes team work and encourage employees to participate actively

in the team work. The leaders are guide, they do not follow traditional autocratic

approach (The Sunday Times, 2013).

Leaders are friendly and the working environment is open and one that works with

continuous support of the leaders. The leaders encourage employee participation

in the decision making and problem solving (The Sunday Times, 2013). The

leader has a breakfast with the employee which is an absolute example of team

work, sharing vision and values, and moving in a same direction. The mutual trust

and bond between employees and leader is strong which increase the level of

confidence of employee, resulting into more motivation and effective working

demonstrated at cloudreach (The Sunday Times, 2013).

The opportunities for the personal growth is high which also motivates employees

to work more enthusiastically at Cloudreach. Employees are properly trained and

developed for their respective roles (Donelly, 2012). This means that employees

have high organisational commitment. In other words, affective, normative, and

continuance commitment is high in employees as a result of the leadership style.

The previous empirical research of McGregor (1960) has shown that two types of

employees in the organisation are X-type and Y-type. According to Robinson

(2010) those leaders who are consider and undertake theory Y, are democratic

leaders with ability to motivate workforce to perform better by involving them in

tasks. The result of this leads to improve organisational commitment as

employees are more willing to take initiatives and participate in the work willingly

and energetically. The level of trust between the employees and management

improve due to this type of leadership style.

Concept Adapted from McGregor (1960), "Human side of enterprise"

For instance, WL Gore and associates, encourages theory Y, as the leader acts

as a sponsor who works as a coach to ensure that employees personal goals are

aligned with the organisational goals. Festejo (2012) emphasize that employees

engagement is more visible as they are encourage to work in creative and free

manner. WL Gore has minimal hierarchy, ensuring that employee are empowered

to increase their affective, normative, and continuance commitment. Employees

are motivated by investing trust in them to do tasks without keeping strict control

or watching them over shoulder. Employees are self-motivated and manages

things by their own without losing the organisational goals (Smith, 2010). It is a

place where employees manage themselves by their own. More than a manager,

sponsors are leaders who works to develop and increase organisational

commitment in workforce (Shipper, 2007).

At WL Gore & Associate, Leaders encourages employees to actively participate in

the decision making process, which is another example of leaders subscription to

theory Y. At time employees are stopped from the ongoing projects but it does not

Theory X

Theory Y

reduce employee's commitment and engagement as leader ensures that

employees understand that this is done in the best interest of the organisation. To

ensure employees are creative, they are encouraged to be free thinkers to bring

innovation without taking stress. The employees work in collaboration and their

efforts are appreciated by the management (Smith, 2010). This is the reason of

low staff turnover because workers enjoy working with AL Gore. In other words,

employees have high engagement and commitment due to the leadership style

presently operating at the company.

According to Highsmith (2011) "Adaptive leadership style is a style based on the

rapidly changing environment as to address the changing demands and

responding to them in innovative and in situational manner" (p. 06). Such leader

has a quality of recognizing the need and adjusting according to it. Moreover,

"this type of leader has a potential to design decisions in a rational manner yet

progressive one to use a flexible approach in the constantly changing business

dynamics" (Highsmith, 2011, P. 08). However, Randall and Coakley, (2006)

strongly argue that, "adaptive leader is more like a process than an individual with

personal attributes and skills" (P. 03). Despite the counter argument, it is viewed

as one of the finest leadership style that resolves major organisational problems.

For instance, Collin Marshall of British Airways in 1980s is example of adaptive

leader who understood the need for changing the operating patterns and systems

and enable his team to work as the situation demanded. "This resolved the crises

for the organisation as it emerged as one of the favorite airline from the most

dissatisfying one" (Haifetz and Laurie, 1997, 07) .

"Under adaptive leadership style, employee's level of commitment tends to

improve as employees engage and enjoy their workplace responsibilities when

leader share the vision, and demonstrate and communicate the need for change

in right pattern" (Harrington, 2010).

Team leadership style is effective one to increase employee commitment by

engaging them as well ensuring that the tasks are accomplished by a total

teamwork. Herzberg's Two factor theory is an example of how workforce is

motivated to increase the level of their commitment by providing the hygiene

factors so that employees do not have dissatisfaction. Furthermore, motivational

factors like recognition and responsibilities are used by the leaders to increase

employee engagement.

Concept Adapted from Herzberg's Two factor theory (1966), "Work and the

Nature of Man"

According to Tuttle (2003), The leaders at Siemens use employee empowerment

as a motivator to enhance employee engagement at workplace. Motivators are

factors which as Siemens encourages employees to work in the best possible way

they can perform. Moreover, Tuttle (2003) narrates that, team leaders encourages

employees to work as one unit by personally involving in the task, rather than just

giving plain directions. This type of empowerment increases employee

commitment and motivates to work in collaboration. Moreover, in the changing

environment it is not only about survival but also about thriving that compels the

leaders or managers to adapt changes. Only well committed and engaged

employees will bring desired results.

Employees dissatisfied

and unmotivated

Employees satisfied

and motivated

Employees not dissatisfied but

unmotivated

HYGI

ENE

MOIVA

T

ION

To put it in a nutshell, organisations focus on the role of leaders to retain and

attract the best brain (talent) inside the organisation and keep the momentum of

success in long term in the highly competitive and dynamic environment as

various types of challenges are generated that have serious impact on the growth

and progress of the organisation. Now, leader's role is not just simply to motivate

the employees by giving monetary rewards. There is immense competition in the

market to have the best talent and succession planning. These two core concepts

serves theme for the leadership at the organisation. Through empowerment,

employee's engagement is developed which enable the workforce to demonstrate

high level of organisational commitment.

Leaders are the tone setters and exhibit the culture of the organisation as well

enable the employees to see the vision. Transformational leaders create the

environment for the employees that encourages them to demonstrate their

potential, abilities, and capabilities to accomplish organisational goals.

Transactional leaders usually believe in the reward and punishment system but

transformational leader encourages employees to take initiative and perform

better by fostering them and creating friendly environment. However, it is evident

that transactional leaders do not always have positive relation with job satisfaction

and commitment level of employees but transformational leader inspires

employees to perform more effectively. On the other hand, the adaptive leaders

have a huge impact on the employees engagement and level of commitment as

according to situation uses techniques.

Employees behavior and work related attitude is a result of the leadership styles

as those employees perform better, who work in collaboration and coordination

with the leaders. On the shoulders of leader lies the greatest responsibility of

talent management and succession planning as they are role models for others to

follow their footprints. In short, leadership is an 'X factor' as the employee

engagement and commitment heavily rely on the style of leadership.

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