The Role of Transformational Leadership on

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And one of the contemporary leadership theories is transformational leadership. ... transformational leadership and its impact on employees' intention to quit in ...
PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

The Role of Transformational Leadership on Employees’ Intention to Quit Marites M. Eduardo (Corresponding author) Graduate School (Student) Our Lady of Fatima University – Pampanga, Campus, Philippines [email protected] Jean Paolo G. Lacap City College of Angeles, Angeles City, Philippines [email protected] Abstract The study assesses how transformational leadership impacts employees’ intention to quit. It specifically examines the significant differences in transformational leadership when respondents are grouped according to demographic factors, significant differences in intention to quit of the employees when grouped based on demographic factors, and the significant relationship of transformational leadership and intention to quit. A purposive sampling technique was used in identifying the respondents and a descriptive research design was employed in the study. Using t-test, ANOVA, and Pearson correlation, the findings revealed that significant difference exists in the assessment of transformational leadership when respondents are grouped according to educational attainment. On the other hand, no significant difference was found in the intention to quit construct when participants are grouped based on age, sex, educational attainment, employment status, and years of service. A significant negative correlation was found on the relationship between transformational leadership and intention to quit. Keywords: leadership, transformational leadership, intention to quit 1. Introduction Leadership and management are two (2) basic concepts in business that are being used interchangeably in most cases. According to Kotter (2008), management is all about how to cope with complexity while leadership is about coping with change. From this standpoint, good managers provide order and consistency in the organization through formal plans, organizational structure design, and monitoring and control whereas leaders create direction for the organization through vision and align people by communicating the identified vision and inspire them to overcome challenges. Thus, in order to achieve organizational effectiveness, strong leadership and management are needed (Robbins & Judge, 2013). There are various definitions of what leadership is. Robbins and Judge (2013) defined it as the capacity to influence a group to realize the vision or organizational goals. It is also the process in which one influences others and facilitates people in collective efforts in accomplishing organizational goals (Yukl, 2006). And one of the contemporary leadership theories is transformational leadership. The central theme of transformational leadership is on inspiring followers through actions, words, ideas, and behavior (Robbins & Judge, 2013). It happens when leaders uplift the interests of their followers and stir them to look beyond their own interests for the good of others. It has four (4) dimensions namely: charisma, inspiration, intellectual stimulation, and individualized consideration. Charisma is 39

PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

the process of instilling pride, respect, and trust among followers and establishing vision and a sense of mission. Inspiration on one hand refers to how leaders communicate elevated expectations, utilize symbols to focus efforts, and show vital purposes in a much simpler way. Intellectual stimulation is about promoting intelligence, rationality, and careful problem solving. And individualized consideration means treating people individually, mentoring them, and giving them personal attention (Schermerhorn et al, 2012). Employee turnover or intention to quit, on the other hand, is another concept that is widely researched. This refers to the percentage of employees who leave the firm and are replaced by new ones (Mayhew, 2017). According to Ryan (2016), employee turnover is a problem of leadership in the organization. There are several reasons why employees leave the organization. Some of the reasons include: employees feel they are overworked, team members are treated differently, salary offered by other companies is much larger, toxic company culture, employees hate their bosses, no career development in the company, and they are not recognized by the company, among others (Reynolds, 2017). Several studies have identified that transformational leadership reduces employees’ intention to quit (Dimaculangan & Aguiling, 2012; Thirulogasundaram & Kumar, 2012; Herman, Huang, & Lam, 2013; Amankwaa & Anku-Tsede, 2015; Gyensare et al, 2016; Sow, Ntamon, & Osuaho, 2016; Caillier, 2016; Sun & Wang, 2017, Amayappan, 2017). Thus, it is important to explore the concepts of transformational leadership and its impact on employees’ intention to quit in order to fully understand how leadership in the organization can affect employees’ behavior. 2. Research Framework and Hypotheses The present study aims to investigate how identified demographic variables influence transformational leadership and employees’ intention to quit. Moreover, it explores the correlation between transformational leadership and intention to quit.

2.1. Transformational Leadership

Kouzes and Posner (2006) model of transformational leadership identified five (5) leadership behavior which are: • Model the way. This involves earning respect by leading people through direct individual involvement and action. This leadership behavior includes articulation of one’s values and beliefs as leaders. Aligning the leaders’ actions with shared values and becoming a good example is part of this behavior. By this, leaders can promote commitment, enthusiasm, and creativity. • Inspire a shared vision. This means that leaders must inspire commitment from others by establishing a clear vision and by articulating to the follower the meaning of the vision. The vision should be grounded from the values, and aspirations of the organization and of the leaders. • Challenge the process. This reflects risk taking behavior. Leaders must also be agents of change. They need to adapt to changes in the environment and be proactive than reactive. Leaders must be progressive in thinking, taking things one at a time, achieving progress in incremental manner. Achieving small successes can create something thing for the future of the organization. Mental toughness and resiliency are primary attitudes that must be present to challenge the status quo.

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PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

• Enable others to act. Empowering others is the key into any organizational success and it is one important behavior a leader must possess. Leaders must encourage team work and instill cooperation among people. Building trust and strengthening others for them to become leaders too are also vital. • Encourage the heart. This involves encouraging other to keep on moving forward. Leaders must learn to celebrate success by recognizing the efforts of their people and acknowledging their contributions in the organization. Several studies identified significant differences in the assessment of transformational leadership of leaders when grouped based on demographic characteristics. For instance, Mohammed, Othman, and Silva (2012) examined the significant difference between demographic variables and transformational leadership styles in Malaysia. Using t-test and ANOVA, the findings showed no significant differences between gender, race, marital status and educational level and transformational leadership. This means that transformational leadership does not depend on demographic variables. Moreover, Jonesa, Khaled, and Bekhet (2015) explored the relationship of leadership styles - transformational and transactional leaderships – and demographics of leaders in Egypt. The results showed that transformational leadership style was more adopted than transactional leadership. Moreover, the demographic factors – type of business, position, age, sex, length of service, and educational attainment – have no impact on leadership styles. This indicates that the leaders’ demographics are not significant factors in determining leadership styles.

2.2. Intention to Quit

There are several studies that explored the construct intention to quit. For example, Hayes (2015) examined the relationship between age, education, gender, income, length of tenure, and employee turnover intention among full time employees in Texas. The results showed that significant relationships exist between age, income, and turnover intention whereas the relationship between education, gender, and length of tenure was found to be not statistically significant. Akova, Cetin, and Cifci (2015) explored the relationship of the employees who were recruited by opening hotel businesses and their turnover intentions. The results revealed that turnover intentions of the workers in opening hotel businesses are low. It also indicated that there is significant difference on turnover intentions and sex. Furthermore, Chowdhury (2015) investigated how demographic factors influence employee turnover in the banking sector in Bangladesh. The findings showed that age, educational attainment, and tenure influences turnover intentions. Ramatu Abdulkareem, Ajay, and Kabiru Maitama (2014) examined the impact of demographic variables in predicting turnover intention in Nigeria. The results indicated that males are more likely to leave the organization than female in the nursing industry (sex). Younger respondents are likely to leave the organization compared to the older ones (age). On the other hand, Ajayi and Olatunji (2017) scrutinized how demographic factors impact turnover intentions among Nigerian teachers. The results revealed that intention to quit is correlated with age, qualification, work status, and experience. Emiroğlu, Akova, and Tanrıverdi (2015) examined the relationship of turnover intention and demographic variables on five-star hotels in Istanbul. The findings revealed that age, gender, marital status, education, as well as the factors such as tenure, wage, position, working department are determinants for turnover intentions. Agyeman and Ponniah (2014) investigated the effects of 41

PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

demographic factors on turnover intentions. The findings showed that turnover intentions negatively affect organizational including decrease in productivity and profitability.

2.3. Relationship of Transformational Leadership and Intention to Quit

Several researchers also delved on the role of transformational leadership to employees’ intention to quit. For instance, Gyensare et al (2016) examined the mediating effect of affective commitment on the transformational leadership and employee turnover intention relationship. The findings revealed that affective commitment fully mediates the relationship of transformational leadership and employee turnover intention. This suggests that affective commitment would decrease intention to quit among employees and it increases the degree of trust and willingness to follow leaders’ vision, philosophy, and ideology of the organization. Herman, Huang, and Lam (2013) investigated transformational leadership and employee turnover. Using structural equation modelling, the findings showed that affective commitment mediates the relationship of transformational leadership and turnover intention. Moreover, employee turnover intention mediated the link between affective commitment and turnover behavior. Sun and Wang (2017) examined transformational leadership, employee turnover intention, and actual voluntary turnover in public organizations. The results revealed that transformational leadership prevents employees from forming intentions to leave the organization and at the same time indirectly cultivates a culture of collaboration. Furthermore, increase in turnover intentions leads to increase in actual turnover rate. Amayappan (2017) investigated the relationship between transformational leadership styles and employee turnover intention in Malaysia. The results indicated that transformational leadership styles have negative and significant relationship with employee turnover intention. This suggests that the more the leaders practice transformational leadership styles, the less employee turnover intention takes place in the organization. Amankwaa and Anku-Tsede (2015) explored the mediating effect of alternative job opportunity on the relationship of transformational leadership and employee turnover. The findings showed that transformational leadership is negatively related to employees’ turnover intention. Moreover, availability of alternative job opportunities did not mediate the transformational leadership and turnover intention relationships. Sow, Ntamon, and Osuoha (2016) investigated the transformational leadership and employee turnover intentions of health care professionals in the United States. The findings revealed that turnover intention is significant and negatively related to transformational leadership. Caillier (2016) investigated how transformational leadership and mission valence impact turnover intentions and extra-role behaviors. The findings revealed that transformational leadership is directly, negatively associated with turnover intentions. Moreover, mission valence partially mediates relationship of transformational leadership and turnover intentions and it fully mediates the link between transformational leadership and extra-role behaviors. Dimaculangan and Aguiling (2012) explored the impacts of transformational leadership on salespersons’ turnover intentions through ethical climate, person-organization fit, and organizational commitment. The findings showed that transformational leadership is negatively 42

PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

related to turnover intention and it indirectly decreases turnover intention through perceived ethical climate, person-organization fit, and organizational commitment. Thirulogasundaram and Kumar (2012) investigated the correlation between leadership approach and employee turnover intentions in India. The findings indicated that leadership approach has negative influence to turnover intention. From the related studies identified, the goal of the present study was to contribute to the body of knowledge on transformational leadership and intention to quit. Since majority of studies related to these two (2) management concepts explore interrelationships of other constructs in organizational behavior, the current undertaking identified the significant differences in the respondents’ demographic profiles and their assessment on transformational leadership and intention to quit. Moreover, the correlation of the two (2) constructs –transformational leadership and intention to quit - was also performed. Based on the extensive literature review and research objectives, the hypotheses of the study are as follows: H1: There is no significant difference in the assessment of transformational leadership when grouped based on respondents’ age. H2: There is no significant difference in the assessment of transformational leadership when grouped based on respondents’ sex. H3: There is no significant difference in the assessment of transformational leadership when grouped based on respondents’ educational attainment. H4: There is no significant difference in the assessment of transformational leadership when grouped based on respondents’ employment status. H5: There is no significant difference in the assessment of transformational leadership when grouped based on respondents’ years of service. H6: There is no significant difference in the respondents’ intention to quit when grouped based on age. H7: There is no significant difference in the respondents’ intention to quit when grouped based on sex. H8: There is no significant difference in the respondents’ intention to quit when grouped based on educational attainment. H9: There is no significant difference in the respondents’ intention to quit when grouped based on employment status. H10: There is no significant difference in the respondents’ intention to quit when grouped based on years of service. H11: There is no significant negative relationship between transformational leadership and intention to quit.

Figure 1. Research Framework From the research objectives and hypotheses formulated, Figure 1 shows how the identified variables were gauged. The study aims to examine if the demographic factors –age, sex, educational attainment, employment status, years of service - influence respondents’ assessment of transformational leadership and intention to quit. Furthermore, it investigates the correlation of transformational leadership and intention to quit. 43

PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

3. Methods

3.1. Research Design

A descriptive research design was employed in the study in order to measure the significant difference in the respondents’ assessment on transformational leadership and intention to quit of the respondents when grouped according to age, sex, educational attainment, employment status, and years of service. A descriptive research design is used to provide explanation on current issues or problems by means of data collection in order to describe the occurrence completely (Fox & Bayat, 2008). A causal research design was also employed to identify the relationships of the respondents’ assessment on transformational leadership and intention to quit. A causal research also called explanatory research, is utilized to show cause-and-effect relationships of the variables under study (Zikmund et al, 2013).

3.2. Participants of the Study

A purposive sampling was employed in the study. A purposive sampling technique, also called judgment sampling, is used when the researcher relies on his or her own judgment in identifying the member of the population to participate in the undertaking (Collis & Hussey, 2013). The participants were employees of a government agency. A total of 201 respondents voluntary signified to participate in the study. Table 1. Demographic Characteristics of the Respondents Age Groups 21-30 31-40 41-50 51-above Sex Male Female Educational Attainment College Graduate College Undergraduate Master's Graduate Master's Undergraduate Doctorate Degree Graduate Doctorate Degree Undergraduate Others Employment Status Temporary Permanent/Plantilla Years of Service Less than 5 6-10 11-15 16-20 21-25 26-30 31-35 36-above

Frequency

Percentage

59 36 33 73

29.4 17.9 16.4 36.3

55 146

27.4 72.6

108 1 52 27 6 5 2

53.7 .5 25.9 13.4 3.0 2.5 1.0

17 184

8.5 91.5

69 18 7 26 13 5 36 27

34.3 9.0 3.5 12.9 6.5 2.5 17.9 13.4

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PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

Table 1 reflects the participants’ demographic characteristics. It can be gleaned that majority of the respondents were in the age groups of 51-above and 21-30 years old. Most of the participants were female and attained Bachelor’s degree (college graduate). Almost all were permanent (employees with plantilla) and 34.3% had less than 5 years of service in the organization.

3.3. Research Instrument

A survey questionnaire was used in the study. It was composed of two (2) parts – demographic profile and transformational leadership and intention to quit constructs. The demographic factors include age, sex, educational attainment, employment status, and years of service. With regard to assessment of transformational leadership, the Multifactor Leadership Questionnaire – Form 5X (MLQ-5X) by Avolio and Bass (1995) was utilized. On the other hand, to measure the level of intention to quit, the Turnover Intention Scale (TIS) by Dhladhla (2011) was adopted. Table 2 presents the results of the reliability test for the two (2) constructs – transformational leadership and intention to quit. The Cronbach’s alpha of 0.963 and 0.835 signify that the items used in the questionnaire were highly reliable. The value of Cronbach’s alpha (CA) must be equal to or greater than 0.7 to reflect good reliability (Fornell & Larcker, 1981; Nunnally, 1987; Nunnally & Bernstein, 1994). Table 2. Reliability of the Constructs Cronbach’s Alpha Transformational Leadership 0.963 Intention to Quit 0.835

Number of Items 25 4

3.4. Statistical Treatment

In order to measure the significant difference between the demographic factors and the respondents’ assessment on transformational leadership and intention to quit, t-tests and analysis of variance (ANOVA) were used. Moreover, a correlation test was also utilized to measure the significant relationship between transformational leadership and intention to quit. 4. Results

4.1. Respondents’ Assessment on Transformational Leadership and Intention to Quit

Table 3 reflects the respondents’ assessment on transformational leadership. A total weighted mean of 4.18 indicates that employees of the organization experience transformational leadership among their supervisors or bosses.

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PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

Table 3. Respondents’ Assessment on Transformational Leadership Transformational Leadership TL1 TL2 TL3 TL4 TL5 TL6 TL7 TL8 TL9 TL10 TL11 TL12 TL13 TL14 TL15 TL16 TL17 TL18 TL19 TL20 TL21 TL22 TL23 TL24 TL25 Total Weighted Mean

Weighted Mean 4.48 4.29 4.04 4.12 4.06 3.81 4.26 4.18 4.11 4.21 4.19 4.31 4.26 4.14 4.04 4.16 4.25 4.18 4.15 4.26 4.06 4.20 4.33 4.22 4.24 4.18

Interpretation Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often Often

Legend: 1.00-1.49: Never; 1.50-2.49: Rarely; 2.50-3.49: sometimes; 3.50-4.49: often; 4.50-5.00: always

Table 4 shows the respondents’ intention to quit. A total weighted mean of 1.82 signifies that employees rarely have the intention to leave their current position and look for other opportunities outside the organization. Table 4. Respondents’ Intention to Quit Intention to Quit IQ1 IQ2 IQ3 IQ4 Total Weighted Mean

Weighted Mean 1.98 1.99 1.83 1.46 1.82

Interpretation Rarely Rarely Rarely Never Rarely

Legend: 1.00-1.49: Never; 1.50-2.49: Rarely; 2.50-3.49: sometimes; 3.50-4.49: often; 4.50-5.00: always

4.2. Results of the Independents Sample T-test, ANOVA, and Pearson Correlation

Table 5 manifests the significant difference in the assessment on transformational leadership of the respondents when grouped according to age group. With the F-value of 2.561 and p-value of >.05, the results revealed that that there is no significant difference in the assessment on transformational leadership of the respondents when grouped according to age. Thus, H 1 is not rejected.

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PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

Table 5. Significant Difference in Transformational Leadership when Grouped into Age Groups

TL

Age Group 21-30 31-40 41-50 51-above

N 59 36 33 73

Mean 4.25 4.16 4.19 3.98

F computed

P-value

Decision

Remark

2.561

.056

Fail to reject H1

Not Significant

Table 6 manifests the significant difference in the assessment on transformational leadership of the respondents when grouped according to sex. With the t-value of -.247 and p-value of >.05, the results revealed that that there is no significant difference in the assessment on transformational leadership of the respondents when grouped according to sex. Thus, H2 is not rejected. Table 6. Significant Difference in Transformational Leadership when Grouped Based on Respondents’ Sex TL

Sex Male Female

N 55 146

Mean 4.11 4.13

t-computed

P-value

Decision

Remark

-.247

.805

Fail to reject H2

Not Significant

Table 7 manifests the significant difference in the assessment on transformational leadership of the respondents when grouped according to educational attainment. With the F-value of 2.549 and pvalue of .05, the results revealed that that there is no significant difference in the assessment on transformational leadership of the respondents when grouped according to employment. Thus, H 4 is not rejected. 47

PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

Table 8. Significant Difference in Transformational Leadership when Grouped Based on Respondents’ Employment Status TL

Employment Status Plantilla Temporary

N

Mean

t-computed

P-value

Decision

Remark

17 184

4.31 4.11

1.331

.290

Fail to reject H4

Not Significant

Table 9 manifests the significant difference in the assessment on transformational leadership of the respondents when grouped according to years of service. With the F-value of 1.737 and p-value of >.05, the results revealed that that there is no significant difference in the assessment on transformational leadership of the respondents when grouped according to years of service. Thus, H 5 is not rejected.

Transformational Leadership

Table 9. Significant Difference in Transformational Leadership when Grouped Based on Respondents’ Years of Service Years of Service Less than 5 6-10 11-15 16-20 21-25 26-30 31-35 36-above

N 69 18 7 26 13 5 36 27

Mean 4.27 4.01 4.29 4.17 4.05 3.82 3.90 4.16

F computed

P-value

Decision

Remark

1.737

.102

Fail to reject H5

Not Significant

Table 10 manifests the significant difference in the intention to quit of the respondents when grouped according to age group. With the F-value of .945 and p-value of >.05, the results revealed that that there is no significant difference in intention to quit of the respondents when grouped according to age group. Thus, H6 is not rejected.

Intention to Quit

Table 10. Significant Difference in Intention to Quit when Grouped Based on Respondents’ Age Groups Age Group

N

Mean

F computed

P-value

Decision

Remark

21-30 31-40 41-50 51-above

59 36 33 73

1.79 1.94 1.89 1.71

.945

.420

Fail to reject H6

Not Significant

Table 11 manifests the significant difference in the intention to quit of the respondents when grouped according to sex. With the t-value of .458 and p-value of >.05, the results revealed that that there is no significant difference in the intention to quit of the respondents when grouped according to sex. Thus, H7 is not rejected.

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PREO Journal of Business and Management Vol. 1, Issue 1, February 2018

ISSN: 2619-6824

Table 11. Significant Difference in Intention to Quit when Grouped Based on Respondents’ Sex IQ

Sex Male Female

N 55 146

Mean 1.85 1.79

t-computed

P-value

Decision

Remark

.458

.231

Fail to reject H7

Not Significant

Table 12 manifests the significant difference in the intention to quit of the respondents when grouped according to educational attainment. With the F-value of .473 and p-value of >.05, the results revealed that there is no significant difference in the intention to quit of the respondents when grouped according to educational attainment. Thus, H8 is not rejected.

Intention to Quit

Table 12. Significant Difference in Intention to Quit when Grouped Based on Respondents’ Educational Attainment Educ. Attainment

N

Mean

College Grad

108

1.84

College Undergrad

1

2.50

Master’s Grad

52

1.72

27

1.83

6

1.58

5

1.80

2

2.25

Master’s Undergrad Doctorate Grad Doctorate Undergrad Others

F computed

P-value

Decision

Remark

.473

.828

Fail to reject H8

Not Significant

Table 13 manifests the significant difference in the intention to quit of the respondents when grouped according to employment status. With the t-value of -2.044 and p-value of >.05, the results revealed that there is no significant difference in the intention to quit of the respondents when grouped according to employment status. Thus, H9 is not rejected. Table 13. Significant Difference in Intention to Quit when Grouped Based on Respondents’ Employment Status IQ

Employment Status Plantilla Temporary

N

Mean

t-computed

P-value

Decision

Remark

17 184

1.44 1.83

-2.044

.170

Fail to reject H9

Not Significant

Table 14 manifests the significant difference in the intention to quit of the respondents when grouped according to years of service. With the F-value of 1.639 and p-value of >.05, the results revealed that that there is no significant difference in the intention to quit of the respondents when grouped according to years of service. Thus, H10 is not rejected.

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ISSN: 2619-6824

Intention to Quit

Table 14. Significant Difference in Intention to Quit when Grouped Based on Respondents’ Years of Service Years of Service Less than 5 6-10 11-15 16-20 21-25 26-30 31-35 36-above

N 69 18 7 26 13 5 36 27

Mean 1.78 1.97 2.36 2.01 1.42 1.80 1.64 1.83

F computed

P-value

Decision

Remark

1.639

.127

Fail to reject H10

Not Significant

Table 15 presents the correlation data between the respondents’ assessment on transformational leadership and intention to quit. Analysis of the data revealed that transformational leadership is significantly correlated with intention to quit (r=-.491, p