QTMS FINAL REPORT

THE IMPACT OF TRANSFORMATIONAL LEADERSHIP ON

EMPLOYEE MOTIVATION

SUBMITTED BY: SAFIULLAH, RUBAB HABIB AND RAMSHA ASGHAR

SUBMITTED TO: SIR ARSALAN HASHMI

Contents

Abstract:......................................................................................................................................................................4
Chapter One....................................................................................................................................................................5
1.1 Background:..................................................................................................................................................5
1.2 Introduction:..................................................................................................................................................6
1.3 Problem Statement:.......................................................................................................................................7
1.4 Research Questions:..............................................................................................................................................8
1.4 Research Objectives:.....................................................................................................................................8
1.5 Organization of the Study:............................................................................................................................8
Chapter Two................................................................................................................................................................9
LITERATURE REVIEW...........................................................................................................................................9
Introduction:................................................................................................................................................................9
2.1 Employee Motivation:.........................................................................................................................................10
2.2 Theories on Motivation:......................................................................................................................................11
2.2.1 Maslow Hierarchy of Human Need Theory:....................................................................................................11
2.2.2 Theory X and Y:..............................................................................................................................................11
2.2.3 Two Factor Theory:.........................................................................................................................................12
2.2.4 Expectancy Theory:.........................................................................................................................................12
2.2.5 Leadership:.......................................................................................................................................................12
2.3 Leadership Theories:...........................................................................................................................................13
2.3.1 Trait Theory:....................................................................................................................................................13
2.3.2 Behavioral Theory:..........................................................................................................................................13
2.3.3 Contingency and Participative Theory:............................................................................................................13
2.3.4 Situational Theory:...........................................................................................................................................13
2.4 Transactional and Transformational Leadership Theory:...................................................................................13
2.5 Leadership Styles:...............................................................................................................................................14
2.5.1 Autocratic Leadership:.....................................................................................................................................14
2.5.2 Bureaucratic Leadership:.................................................................................................................................14
2.5.3 Democratic Leadership:...................................................................................................................................14
2.5.4 Charismatic Leadership:..................................................................................................................................14
2.5.5 Laissez- faire Leadership:................................................................................................................................14
2.5.6 Task oriented leadership:.................................................................................................................................15
2.5.7 People Oriented Leadership:............................................................................................................................15
2.6 Transformational Leadership:.............................................................................................................................15
2.7 Relationship between Transformational Leadership and Employee Motivation:...............................................17
 2.8 Idealize Influence:...............................................................................................................................................17
2.9 Relationship between Idealize Influence and Employee Motivation..................................................................17
2.10 Inspirational Motivation....................................................................................................................................18
2.11 Relationship between Inspirational leadership and Employee Motivation.......................................................18
2.12 Intellectual Stimulation.....................................................................................................................................18
2.13 Relationship between Intellectual Stimulation and Employee Motivation.......................................................19
2.14 Individual Consideration...................................................................................................................................19
2.15 Relationship between Individual Consideration and Employee Motivation.....................................................20
2.16 Summary...........................................................................................................................................................20
Chapter three.............................................................................................................................................................20
Introduction:..............................................................................................................................................................20
3.1 Conceptual Framework:......................................................................................................................................20
Figure 3.1..............................................................................................................................................................21
3.2 Research Design:.................................................................................................................................................21
3.3 Research Philosophy...........................................................................................................................................22
3.4 Research Approach:............................................................................................................................................22
3.5 Research Purpose:...............................................................................................................................................22
3.6 Research Strategy:...............................................................................................................................................22
3.7 Data Collection Method:.....................................................................................................................................23
3.8 Research Population:...........................................................................................................................................23
3.9 Sampling Technique:..........................................................................................................................................23
3.10 Sample Size:......................................................................................................................................................23
3.11............................................................................................................................................................................24
Table: 3.1..............................................................................................................................................................24
Transformational Leadership Survey for the Validation & Development of Employees.............................................24
Employee Work Motivation and Performance. (Bachelor’s Thesis)............................................................................25
3.12 Validity & Reliability of Instrument:................................................................................................................25
3.12.1 Validity:.........................................................................................................................................................25
3.12.2 Reliability:......................................................................................................................................................25
3.12.3 Regression......................................................................................................................................................25
Chapter four..............................................................................................................................................................26
Results.......................................................................................................................................................................26
4.1 Descriptive Statistics...........................................................................................................................................26
4.2 Correlation Analysis...............................................................................................................................................27
4.3 Reliability Analysis.............................................................................................................................................28
4.4 Regression Analysis............................................................................................................................................28
4.5 Annova Table......................................................................................................................................................29
4.5.1 Interpretation R2...............................................................................................................................................30
4.6 Normality Test:...................................................................................................................................................30
4.7 Heteroscedasticity Test.......................................................................................................................................31
4.7.1 Multicollinearity Test.......................................................................................................................................32
Chapter Five..............................................................................................................................................................32
Discussion and conclusion:.......................................................................................................................................32
5.1 Introduction:................................................................................................................................................32
5.2 Discussion of Findings........................................................................................................................................32
5.3 Results of Hypothesis:........................................................................................................................................33
5.3.1 Idealize Influence Testing:...............................................................................................................................33
5.3.2 Inspirational motivation Testing:.....................................................................................................................34
5.3.3 Individual Consideration Testing:....................................................................................................................34
5.3.4 Intellectual stimulation Testing:.......................................................................................................................34
5.4 Limitations of This Study:..................................................................................................................................35
5.5 Suggestion for Future Studies:............................................................................................................................35
5.6 Conclusion..........................................................................................................................................................35
Recommendation:.....................................................................................................................................................36
References.................................................................................................................................................................36
Questionnaire............................................................................................................................................................39
Abstract:
In order to retain intellectual capital in organizations employee motivation is one of the key
elements. Leader’s works for the development and motivation of employees. Leaders are the
need of every organization to motivate the employees, to encourage them and to work for
innovation and creativity. These are the factors that identify the need of transformational
leadership in every organization. The purpose of this study is to find the impact of
transformational leadership on employee motivation in Habib Bank Limited we collect the data
through self-administrated questionnaire by using likert scale. Total population of this study is
21000 therefore sample size is 375 calculated by the formula. Questionnaire were distributed to
different banks as this research follows survey research strategy. To analyze the required data
Stata version 13.1 is used. To check the impact of independent variable on dependent variable
regression analysis were done. Through the regression analysis it is prove that transformational
leadership have positive and significant impact on employee motivation in private commercial
banks of Pakistan. In the end we conclude that employee motivation is the key element. To keep
employees motivated and to increase the proficiency effective team performance is essential

Key words: Transformational leadership, Motivation, Intellectual stimulation, HBL.

 Chapter One

Chapter Two

2.5 Leadership Styles:

2.5.1 Autocratic Leadership:

This style of leadership is used for less skilled peoples. What followers have to do is define by
leaders. In this style leaders have control and power on their followers. This style is the most
extreme form of leadership.

2.5.2 Bureaucratic Leadership:

According to this style leaders are more concern about following rules and regulations. They
look after either follower are following the rules or not. They also follow rules and regulations
by themselves. Leaders who work best in risky environment are called bureaucratic leadership.

2.5.3 Democratic Leadership:

In this style leaders are one who take advice from every team member related to situation or
related to issue which they are facing in the organization and then reach to final decision. In this
style communication and interpersonal skills develop into employees. It also enhance job
satisfaction.

2.5.4 Charismatic Leadership:

This style of leadership is about motivating followers and to help them. They make their
followers self-motivated towards work. They create enthusiasm in every follower. They don't
focus on deeds. This is the main drawback of this leadership style. Leaders who give much
motivation to their workers are considered to be charismatic leader.

2.5.5 Laissez- faire Leadership:

Strong communication is necessary between followers and leader in this style of leadership.
Experienced workers are required in this type. Leaders direct their team members to work on
their own. Leaders provide freedom to their team members.

2.5.6 Task oriented leadership:

These are leaders are one who are more concerned about their work. They are more task oriented.
Their main focus is to complete their task. They create activity plans and check their workers
whether they are moving in a direction, whether they are working properly or not. Leaders who
are focused more on deadlines of their work are known to be task oriented leaders. They set time
related system to show absence of trust in group. They may be fix the timing of in and out, lunch
timing also.

2.5.7 People Oriented Leadership:

People oriented leadership is opposite of task oriented leadership. Positive work relationship
between leaders and follower is mainly emphasize in this style. This style mainly focused on
team building. This style provide individual attention and support to their workers. Leaders help
them to meet the needs of individual.

2.6 Transformational Leadership:

Transformational leadership is a dual process in which workers agree with their leaders. This
dual process is between the workers and leaders. This is also one of the leadership style which is
participative leadership style [CITATION Anj01 \l 1033 ]. This type of leaders try to make their
worker more energetic, attentive and ask them to think out of the box. Leaders guide their
workers to perform their task proficiently for accomplishing the set goals. They also understand
that why task and their outcome is important [ CITATION Gin14 \l 1033 ].
In this style an individual will follow a person who will inspire them [ CITATION Naw14 \l 1033 ]. In
this leader excitedly set goals which are more challenging[ CITATION Anj01 \l 1033 ]. .

Transformational leaders have ability to help others something which is out of their personal
responsibility. Their achievement is depend on their motivating and visionary
behavior[ CITATION SBi15 \l 1033 ]. They perform practices which create change in working
environment. In the dimension of organization they have wide scope of advantages [ CITATION
NKo16 \l 1033 ].
(Burns 1978) was the first person who introduce the concept of transformational leadership. He
emphasize that leaders are one who change their working environment by putting their efforts
and change thinking of their workers. They are the one who set goals and vision by creating a
personal interest in connection with organizational objective and goals [ CITATION Edw16 \l 1033 ].
The most important basic element of every group is the participative and interactive link between
the team members. This kind of interactions help workers to communicate easily. This
communication between workers includes discussion of new plans, about goals and objectives,
role and responsibilities and rise vision.

Comparison will be done between transactional and transformational leadership. There are few
dimensions of transactional leadership describe by bass (1990). First dimension describes that
transactional leadership is about recognition on achievement, unexpected reward and rewarding
good performance. Second dimension is about management in which rules and regulations must
be set by leaders in order to take coercive actions against those who are unable to complete their
task. Active and passive management is focused in transactional leadership because leaders are
expected to intervene when set goals are not achieved by workers.

[ CITATION JMB87 \l 1033 ] The impact of transformational leadership on the organization can be
evaluate by comparing it with transactional leadership. In return to their work, Followers are
more concerned about their rewards, benefits and securities that's why generally Maslow’s need
theory is used by transactional leaders. Maslow theory is also used by transformational leaders
but they utilize self-realization.

Bass explained in 1985 that there are some objectives which can be sued by transactional leaders
to achieve set goals and those objectives are exception, expectation and contingent reward.
Unexpected reward defines that when follower get reward or punish by leader on completion of
task. He define active and passive management by exception and expectations. Leaders who
correct their followers and punish them on their mistakes are known to be active management by
exception. Leaders who wait for the wrong behavior of workers are known to be passive
management by expectation. In transactional leadership follower use chain of command and they
do their work according to the instruction of their leaders.
Some characteristics of charismatic leadership has also found in transformational leadership
because charismatic leaders not only convince their followers but also give them charismatic and
courage. Transformational leaders help and motivate their followers to interact with their leaders
in order to achieve set goals. They encourage followers to solve their problem by focusing on
them with wider and new point of view [ CITATION JBa14 \l 1033 ].

There are four main dimensions of transformational leadership style that include
 Idealize influence
  Inspirational motivation,
 Intellectual stimulation
 Individual consideration

To make them realize that organization set goals are more important than personal goal and to
change the behavior of employees, mentioned above all factors are important.

2.7 Relationship between Transformational Leadership and Employee Motivation:

Many different studies of leadership shows positive relationship between transformational

leadership and employee satisfaction and with many other dependent variables. This theory by
bass 1995 is very important in context of leadership style [ CITATION Sel15 \l 1033 ]. To improve
the abilities of workers and make them motivated transformational approach plays and important
role.

[ CITATION Ora16 \l 1033 ]with the help of transformational leadership, organizations are able to
create peaceful environment in which workers are encouraged and energized to work.
[ CITATION Naw14 \l 1033 ] further he more elaborate this idea that workers could perform
efficiently when they are performing in the motivated environment. This will also enhance the
productivity and performance of the organization.
H1: transformational leadership has positive relationship with employee motivation.

2.8 Idealize Influence:

In this proportion leaders are role model. Their qualities give chance to act like their leaders
because their leaders provide them free environment in which they provide faith mission vision
and motivate them to achieve set goals through objectives [ CITATION Anj01 \l 1033 ]. In this
proportion leaders want that their worker complete their task on time according to provided
guidelines by leaders. They want that their worker give them respect[ CITATION Gae16 \l 1033 ]. If
leaders will lose confidence ultimately they will be not able to motivate their workers and
redirect the organization. If you are able to make worker prepare to idealize you, then you can
lead only[ CITATION XZh16 \l 1033 ].

Effective leader must make their personality in a way so that follower inspired with them. Leader
must be role model for their workers. When sub ordinates try to follow their workers, try to Copy
their leaders. This enhance the confidence and self-esteem of leaders. This is how leaders can be
successful. Method which leaders are following with vision and values can be observed to
identify the effect of idealize influence on leaders[ CITATION JMB87 \l 1033 ].
2.9 Relationship between Idealize Influence and Employee Motivation

Idealize influence is one of the independent variable of this study. It has positive relationship
with transformational leadership. Idealize influence is a concept is which workers are able to
trust their leaders and motivate through them. When they trust them they easily follow the
guidelines without any problems which are provided by their leaders[ CITATION Gae16 \l 1033 ].
Idealize influence is also concerned with employee motivation, job satisfaction, organizational
commitment and employee engagement.

H2: idealize influence has positive relationship with employee motivation

2.10 Inspirational Motivation

inspirational leaders are those who have ability to encourage and inspire
[ CITATION JBa14 \l 1033 ]
their workers to achieve set goals in a very simple and proper manner with the mutual
understanding of what is bad and what is good for the environment.

Leaders accept the challenges and play and important role to inspire their worker through their
actions and deeds. To achieve organizational goals in efficient, manner. Leaders help their
worker to make them understand that what challenges will they going to face and what are the
future endeavor and goals. Leader make workers committed to their work [ CITATION SBi15 \l
1033 ].
Leaders who have passions, confidence commitment of their goals are known to be
transformational leadership. They have ability to inspire and encourage their worker according to
suitable behavior

2.11 Relationship between Inspirational leadership and Employee Motivation

Inspirational leadership is also one of the independent variable of this study[ CITATION Gae16 \l
1033 ] Further stated that set goals and objectives must achieved simultaneously, through
outcomes and interactions with employees and organization. Variables including inspirational
motivation, idealize influence is not studied widely in the concept of transformational leadership[
CITATION MAB11 \l 1033 ]. In working environment employee satisfaction and employee trust has
observed in the role of inspirational leadership

H3: inspirational leadership has positive relationship with employee motivation.

2.12 Intellectual Stimulation

The most important role which is play in organization by transformational leaders is the
transformational process.

He is responsible to carry out the responsibilities and task for follower. For example he know
how to encourage the workers to be innovative, imaginative. He is the one who have enough
knowledge to re-evaluate the assumption which has assumed [ CITATION JMB87 \l 1033 ].They
encourage their workers to come up with new ideas so that they can tackle their problems in an
efficient manner.
[ CITATION Anj01 \l 1033 ] the most essential and difficult act in transformational leadership is
questioning one’s own way. To accomplish the task requirement, comparison is important from
old ways which was carried out for years and through intellect find a new way.

2.13 Relationship between Intellectual Stimulation and Employee Motivation

This is another important independent variable of transformational leadership. This variable is

very important for evaluation to this study. To identify the problems and their solutions an
evaluation of this variable explained that follower get intellectual stimulation by providing
empowerment through communication in a proper way [ CITATION MAB11 \l 1033 ].
Intellectual stimulation can result in growth of employees and commitment of employees
towards working environment. This is suggested by (Bass (1995). in this manner worker are able
to accomplish set goals on the basis of struggle and continuous hard work [ CITATION MAB10 \l
1033 ]
H4: Intellectual stimulation has positive relationship with employee motivation.

2.14 Individual Consideration

Individual consideration required two way communication. Every person have different human
needs and desires. Some people want cash some prefer cash some want excitement. Some want
time and balance life. Its leader responsibility to observe the need and desire of their workers.
The best leader is the one who fulfil the need of their workers in the right way on right time
because he have that opportunity [ CITATION SBi15 \l 1033 ]

Leaders have opportunity to provide flexible environment to fulfil the need of their workers in
working environment. This should be fulfill according to their act. So that they can give more
times to their abilities and work in different situations. Most important factors are mentioned
below for transformational leadership.

 Team orientation.
 Creativity.
 Responsibility
 Teaching
 Recognition.

2.15 Relationship between Individual Consideration and Employee Motivation

Individual consideration is also one of the important and last independent variable. The concept
of individual consideration defines encouragement and abilities which can be provide by leaders
to their workers. They cherish individual support. [ CITATION JMB87 \l 1033 ] the concept of
individual consideration has positive impact on job and employee satisfaction. This satisfaction
count in terms of link between workers and leaders in working environment. This enhance the
motivation of employees as well as leaders also.
H5: Individual consideration has positive relationship with motivation of employees.

2.16 Summary

This chapter include all the important and essentials from researches by different authors. They
have studied the impact on transformational leadership on employee motivation through both
dependent and independent variable. This study explained that these variables help followers to
motivate towards works. Make them understand that organizational set goals are more important
than personal goals. Employees are more motivated with transformational leadership rather than
transactional leadership because transformational leaders transform the behavior of employee.

Chapter three
Introduction:

The methodology was discussed in this chapter. In this chapter the conceptual frame work
is explained in detail which starts from the philosophy, the research design, research
approach and strategy is used to conduct the research, the sampling techniques, the methods
and the population of this research is explained.

3.1 Conceptual Framework:

The conceptual frame work of this research is developed on the basis of precious studies
and findings and studies of other researcher’s articles. However, the main aim and
objective of this research is to find out the impact of transformational leadership on the
motivation of employee. According to [ CITATION ERi09 \l 1033 ] Transformational leadership
plays an vital role to enhance employee motivation towards their job. Transformational
leaders can boost the employee’s performance and create good organizational culture.
[ CITATION Ben10 \l 1033 ].
The components of transformational leadership such as: Inspirational motivation, Idealize
influence, intellectual stimulation and Individual Consideration, act as the independent
variables and dependent variable is Employee motivation for this study.
Figure 3.1

Transformational
Leadership

Idealize influence

Inspirational
motivation Employee
Motivation

Intellectual
stimulation

Individual
consideration

3.2 Research Design:

Research design is all about how we could get the answers of the research questions that are
used in this paper. In other words it set the parameters and framework for study or research
[ CITATION Sau15 \l 1033 ] .The philosophy of this research is positivism. For this study
survey research design is adopted. As this study adopted deductive approach therefore
survey strategy is used. According to [ CITATION Sau15 \l 1033 ] the survey research design
describe the specific characteristics of a large population group through questionnaire.
Moreover, this study follows descriptive research for estimating the population parameters.
In order to find out the impact of one variable on other particular analysis is used which is
regression analysis which shows the correlation between the variables. For that purpose data
is collected from both secondary and primary sources in which questionnaire and primary
data source and annual financial statements of state bank will be used to get the number of
employees from website. The total population of this study 21000 which is the total
employees that are currently working in Habib Bank Limited and the sample size for this
study is 375.

3.3 Research Philosophy:

Research philosophy is consider the most important part of research methodology because it
explains how the data was collected, examined and used. [ CITATION Sau15 \l 1033 ] Define
four types of research philosophy which include Positivism, Realism, inter pertivism and
Pragmatism, As positivism approach is used in this research because this approach is based
on results which came from hypothesis development and data collected.

3.4 Research Approach:

The two types of approaches are inductive and deductive [ CITATION Sau15 \l 1033 ] Explain
two different approaches for conducting a research that is deductive approach in which
researcher test the existing theory and inductive approach in which researcher build a theory
Deductive approach is used for this research because this study test the existence theory of
Bass that transformational leadership impact employee motivation.

3.5 Research Purpose:

The main purpose of this research is to find out the relation between the variables i.e.
transformational leadership and employee motivation.
3.6 Research Strategy:

Research strategy provides the direction to your study and allow you to conduct research
systematically.
“Survey research strategy” is suitable for this research as this research follows the deductive
approach According to [ CITATION Sau15 \l 1033 ]survey is the best strategy and it is suitable
for deductive approach studies. By this strategy it would be easier to get data, and
administered better with the help of questionnaire and for large group of populations.

3.7 Data Collection Method:

According to [ CITATION Sau15 \l 1033 ] there are different types of methods for collecting the
data for research and it is totally depend upon the type and nature of the research these
methods are interviews, survey questionnaires, self-administration surveys etc.
Questionnaire is used for the main data collection method instrument for this study. This
method is mostly used for the collection of primary quantitative data. According to
[ CITATION Sau15 \l 1033 ] this method having the potential in reaching out to a large number
of respondents in a very short period of time.”

3.8 Research Population:

According to [ CITATION Sau15 \l 1033 ] any group of peoples and objects having the
common characteristic is known as population. The target population of this research is the
employees of HBL Pakistan.

3.9 Sampling Technique:

According to [ CITATION Irv16 \l 1033 ] sample is defined as the sub-group that is taken from
the targeted population. Sub-group should have relevant characteristic and selected
carefully because sub-group represent the whole population. Sampling is a process or
technique through which you select a sub-group from the entire population.
[ CITATION Sau15 \l 1033 ] Explain two different type of sampling technique in which one is
non-probability sampling technique other is probability sampling technique. Sampling
technique was further divided by Many researchers which includes: snowball, convenience,
random purposive, and mix method. So for the achievement of this research objective “non
-probability convenience sampling method is used to obtain data from the sub-group.
Because it is an easy method to select the representative [ CITATION Sau15 \l 1033 ].

3.10 Sample Size:

For researchers it is always been important concern to define appropriate sample size for
their study. If sample size is not proper than it would affect the accuracy of the result. Many
researches have been done in order to identify the appropriate sample size for conducting
research studies. The population of this study is 375.

3.11 Research Instrument:

Self-administered questionnaire has been used for collecting the data from sub-group of
population. As Questionnaire is divided into two main sections in which first part and
section of the questionnaire is based on demographics while other section cover questions
according to the variables that are used for this study.”
Initial part of the of questionnaire covers questions regarding transformational leadership
that is independent variable; Part two cover questions concerning Employee motivation
which is dependent variable Questionnaire is based on Likert scale that contain five items as
follows:
1. Strongly disagree.
2. Disagree.
3. Neutral.
4. Agree.
5. Strongly Agree.

Open ended questions are made because in this questionnaire answers of the respondent
does not influence by the researchers Questionnaire items has been taken from the sources
mentioned below:

Table: 3.1
Variables Study Name Authors Year
Transformational Effect Of transformational Leadership on Hasan Karaca 2011
leadership Employee Performance

Inspirational Transformational Leadership Survey for the Edwards R. Jenifer, 2010

motivation, Validation & Development of Employees Broom M, Patrick
Intellectual &Kirk Flynn
stimulation,
Idealize influence
Individual
consideration
Employee Employee Work Motivation and Performance. Akah William 2010
Motivation (Bachelor’s Thesis)

3.12 Validity & Reliability of Instrument:

3.12.1 Validity:

[ CITATION Sau15 \l 1033 ] “Validity refers to the correctness, accuracy and importance of the
implications which is based on the results of the research paper, for validity of the instrument
construct, content, and face validity are explained most of the researchers for instrument validity.
High validity of the instrument shows the higher accuracy of the research similarly, Low validity
of an instrument shows lower accuracy of research.
There are several methods which are used to check the validity of an instrument such as
Bartlett’s test and KMO test. This test says that when the value of KMO is greater than 0.6 it is
acceptable. Which shows that the questionnaire of the items is accurate.

3.12.2 Reliability:
Reliability is consider the instruments ability to check accuracy and consistent representation of
results. “According to [ CITATION Gla \l 1033 ] Reliability is concerned with stability and
consistency and dependability of a test. To check the reliability of instrument test re-test
technique was used. There are different methods to check out the reliability of an instrument but
Cronbach’s Alpha is most commonly used method to check the reliability of an instrument.
However, there is a rule of thumb for checking out the consistency of instrument by this method
i.e. if the value is if < 5: Unacceptable, >5: Poor, >6: Questionable, >7 Acceptable, >8: Good,
and >9: Excellent”

3.12.3 Regression:

In this study Regression model is used to examine strong influence and effect of variables on
each other. There are various type of regression such as multiple regression and linear regression
that are used according to the complexity of data. Multi linear regression is used in this research
formula is mentioned below:
Y= b0 + b1X1 + b2X2 + b3X3 + b4X4 + b5X5
In order to describe the relationship between one or more variables regression create an equation
which states statistically.

Chapter four
Results
4.1 Descriptive Statistics
Descriptive statistics was conduct in order to check the probability distribution of data results are
shown in the below table:

Variable Obs Mean Std. Dev. Skewness Kurtoses

idealizein~e 383 2.669452 .8839947 0.75 3.00

intellectu~n 383 2.607311 .9421757 0.59 3.36
inspiratio~n 383 2.516971 .8823453 1.02 3.76
individual~n 383 2.21201 .8710359 0.85 4.25
employeemo~n 383 2.676613 .9598847 0.71 2.82

Here the inspirational motivation has the highest value of skewness (Sk=1.02) with (Mean=2.5
and Sd=0.88) and intellectual stimulation has the lowest value of skewness (Sk=0.59) with
(Mean=2.60 and Sd=0.94), similarly individual consideration has the highest value of kurtoses
(Kt=4.25) with (Mean=2.2 and Sd=0.87) and employee motivation shows the lowest value of
kurtoses (Kt=2.82) with (Mean=2.6 and Sd=0.87)

In the above table all the value of skewness and kurtoses are not in between the -3.5 to 3.5 which
shows that the data is not normally distributed.

4.2 Correlation Analysis

Correlation analysis shows the strength between two variables the value of variables should be in
between (0to1) either negative or positive the positive value shows that there is positive relation
between the variables similarly the negative value shows that there is negative relation between
the variables in the below table all the values are in positive which means that there is a positive
relationship between the variables.
 idealizein~e 1.0000
intellectu~n 0.4644 1.0000
inspiratio~n 0.3856 0.6179 1.0000
individual~n 0.3573 0.5206 0.4233 1.0000
employeemo~n 0.4236 0.4375 0.3665 0.4615 1.0000

4.3 Reliability Analysis

Reliability analysis was conduct to check the reliability of data Cronbach’s Alpha is considered
the most common method in order to check the reliability and there is a simple rule of that
method which says “if the value of alpha is > 0.9: excellent, if the value of alpha is > 0.8: good,
if the value of alpha is > 0.7:acceptable, if the value of alpha Is > 0.6: questionable, if the value
of alpha is > 0.5: questionable, if the value of alpha is < 0.5: unacceptable.

Here the value of cronbach’s alpha is 0.8009 which indicates good reliability of construct / items.
Results are shown in the below table:”

Cronbach's Alpha Average inter item covariance: N of Items

0.8009 0.3680 5

4.4 Regression Analysis

Regression analysis was conduct to check and understand whether independent variables are
related to dependent variable or not the results are shown in the below table:

Employee motivation Coefficient Std. Err. T P>t [95% Conf. Interval]

Individual consideration .301666 .0561532 5.37 0.000 .1912543 .4120777

Inspirational motivation .080143 .0600966 1.33 0.183 -.0380226 .1983085

Intellectual stimulation .1445744 .0612402 2.36 0.019 .0241603 .2649885

Idealize influence .2514016 .0532656 4.72 0.000 .1466675 .3561356

_cons .7595527 .156435 4.86 0.000 .4519609 1.067144

Here, all the co-efficient are statically significant at 5% level of significance because there P
value is less than 0.05 except inspirational motivation because its P value is 0.183>0.05.

4.5 Annova Table

The Annova table is used to calculate the F statistic which determines whether the overall model
is significant or not. If F-statistic is significant than the overall model is also significant. A
significant model means that the independent variables has a relationship with dependent
variable, similarly if F-statistic is insignificant than the overall model is also insignificant.

Here the overall model is significant at 5% level of significance because its Prob>F value is less
than 0.05 which means that there is a relationship between independent variables (Idealize
influence, intellectual stimulation, inspirational motivation) and dependent variable (Employee
motivation).

Results are shown in the below table:

 Source SS df MS Number of obs = 383
F( 4, 378) = 43.15
Model 110.340623 4 27.5851557 Prob > F = 0.0000
Residual 241.62602 378 .639222276 R-squared = 0.3135
Adj R-squared = 0.3062
Total 351.966643 382 .921378647 Root MSE = .79951

4.5.1 Interpretation R2

The R2 is used to determine whether the overall model has a good fit or not, here the R 2 vale is
0.3135 which suggest that 31.35% variation of the dependent variable (employee motivation) is
explained by the model independent variables (Idealize influence, intellectual stimulation,
inspirational motivation) the R2 value is reasonably low which means that the model has not a
good fit.

4.6 Normality Test:

.8

In order to check data is normally distributed or not skewness and kurtosis test was conducted
and according to the results: data is not normally distributed because its p value is less than 0.05.
.6

Skewness/Kurtosis tests for Normality

joint
Density

Variable Obs Pr(Skewness) Pr(Kurtosis) adj chi2(2) Prob>chi2

.4

e 383 0.0000 0.0016 27.68 0.0000

.2
0

-2 -1 0 1 2 3
Residuals
4.7 Heteroscedasticity Test

Heteroscedasticity is the violation of regression model assumptions when Heteroscedasticity is

present in the model the standard errors are in valid. And then we use corrective measures such
as taking log of the variable or conducting robust test the results are shown in the below table.

Chi2 (1) = 1.1

Prob > Chi (2) = 0.2916

4.7.1 Multicollinearity Test

Variable VIF 1/VIF

intellectu~n 1.99 0.502634

inspiratio~n 1.68 0.595129
individual~n 1.43 0.699468
idealizein~e 1.32 0.754736

Mean VIF 1.61

Chapter Five

Discussion and conclusion:

5.1 Introduction:

Reference to the previous chapters this section describe the results and analysis that have been
done in order to test the hypothesis and achieve the objective of this study. Results of this study
are correlated with realistic existing literature. We draw conclusion that is related to the
objectives and research questions and recommendation will draw accordingly.

5.2 Discussion of Findings:

This study has aim to explore the association among both independent and dependent variable
i.e. transformational leadership components “idealize influence, inspirational motivation,
intellectual stimulation and individual consideration" on Employee motivation in Pakistan
banking sector (HBL). We develop four hypothesis in order to check this research. In past there
were a lot of studies conducted on job satisfaction, organizational commitment but this research
having different variables that is employee motivation with the impact of transformational
leadership.
In order to get results we collect data from HBL bank. This study make contribution and deliver
statistical confirmation to the context of transformational leadership impact on employee
motivation. Both male and female of HBL were the respondent and all respondents were
educated and having banking experience. Questionnaire method is used to collect data from the
sample population. We check the validity and reliability of questionnaire by using statistical
analysis. All test have been done by using Stata version 13.1
Since it is shown in the previous chapter that positive relationship exist between variables, it is
stated that transformational leadership significantly influence motivation of employees which
improve the performance, effectiveness, morale of employees and make them more productive

5.3 Results of Hypothesis:

The hypothesis of this study remain consistent through which we answered the research
questions.
Furthermore this research aim to identify the extent to which leader impact subordinate
performance by continuously motivate them. Based on the results and analysis it is revealed that
transformational leadership significantly influence employee motivation and it is also determined
that employee motivation is an essential element for success of the organization and it can be
better accomplished through transformational leadership.

5.3.1 Idealize Influence Testing:

First hypothesis that is “idealize influence positively impact the employee motivation” is
accepted and research question R1 “does idealize influence positively impact employee
motivation?” has also been answered that is yes it positively impact. Positive relationship
between both variables shows that employee identify their leader as an ideal person or role
model and subordinate imitate their leaders and feel a logic and purpose in accomplishing task
[ CITATION SBi15 \l 1033 ].

5.3.2 Inspirational motivation Testing:

The second hypothesis that is “Inspirational motivation positively impact employee motivation”
is also accepted and research question R2 “does inspirational motivation positively impact
employee motivation” also answered that is yes it does positive impact. That positive influence
revealed that if leader assign challenging work through clearly define the objectives and goals of
organization it will surely enhance the opinion of employees for their leaders and increase
effectiveness. According [ CITATION JMB87 \l 1033 ] if we motivate employees and inspire them it
will effect positively and develop passion among them about their future and bring sense of
confidence in achieving organizational task.

5.3.3 Individual Consideration Testing:

Third hypothesis of this research is “individual consideration positively impact employee

motivation” is accepted and R3 research question “does individual consideration positively
impact employee motivation?” yes it positively impact. Leaders serve as coaches and mentor and
work for the development of their followers. They also understand different wishes of followers
therefore they treat each individual accordingly [ CITATION Jur15 \l 1033 ] transformational leaders
are team oriented that is why their main aim is to predict and understand the wishes of their
followers.

5.3.4 Intellectual stimulation Testing:

Last hypothesis of this research is “intellectual stimulation positively impact employee

motivation” has also been accepted and research question R4 “does intellectual stimulation
positively impact employee motivation?” already answered that is yes it does. This positive
impact shows that if leaders in banking sector allow their followers to generate new ideas it will
enhance the team effectiveness and increase level of motivation [ CITATION JBa14 \l 1033 ]
However descriptive statistics of this study reveals that mean value of all the variables is 3 or
greater than 3 which clearly explain that employees want to complete their work according to
their own style and wish and hence therefore are motivated through transformational leaders who
teach them, allow them to develop new ideas and support as a role model. Hence all the
dimensions of transformational leaders bring the greater employee motivation in HBL bank
Motivation is the technique which make employees more proficient and productive. Therefore
employee motivation is the best aspect of transformational leaders.

5.4 Limitations of This Study:

According to[ CITATION Gae16 \l 1033 ] every study have some limitations because no study is
complete and final. This study is for Karachi because of distance limits this study having low
size of sample. However transformational leadership alone will not motivate employees there
could be some other variables that impact the employee motivation.
However this study focused on one aspect of motivation that is transformational leadership and
its components we did not include in this research scope. As this study collect data from
secondary source some researcher said that secondary data collection use questionnaire, because
questionnaire for previous research was same therefore it is impossible to add some other
variables. Reference to this aspect there could be some problem in the data.

5.5 Suggestion for Future Studies:

This study focus on the aspect of transformational leadership and its components but it does not
include outcomes of leadership. Further research should be done in order to identify
transformational leadership outcomes. This study only focus on the HBL bank bank is not
included therefore further study should be done in order to explore the impact of
transformational leadership on both public sector in order to explore the impact of
transformational leadership on employee performance, motivation etc. on different areas.
5.6 Conclusion

As this study focus on employee motivation and identify transformational leadership impact on
motivation of employees. Results shows for effective team performance it is necessary to
continuously motivate your employees because for team is the source of organization
competitive advantage and they are committed to work for the betterment of the organization.
Job satisfaction and many other variables are important but employee motivation is the key to
success for any organization. For every organization it is necessary to keep their employees and
team motivated because corporate success is depend on them. It is concluded that the most
important variable for employee motivation is transformational leadership. However it is also
identified that motivation is a technique to enhance workers proficiency. In the last it is
acknowledged that in order to motivate their workers organizations can develop some policies
that will enhance employee morale and motivation level

Recommendation:

Since this research focus on transformational leadership in order to motivate employees thus
increase productivity of them so we add some recommendation in this regard which are
mentioned below:
 As this leadership style is very effective for employee motivation and enhance
performance therefore it could be taught at all managerial level to enhance performance
and motivational level.
 Research should be done in order to identify the application of those aspects which
significantly contribute transformational leadership and enhance motivational level of
employees.
  Organizations should organize different leadership training programs for understanding
different leadership competencies and new skills that will make organization workers
more productive and motivated.
 To develop cohesiveness between managers and employees team work should be
enhanced.
 Different training programs should be organized for career growth of employees, and
measures for reward and punishment should be fair at all level.

References

Ahmed, I. N. H, M. Iqbal, N.(2010). Effects of Motivational Factors on Employees Job

Satisfaction a Case Study of University of the Punjab, Pakistan. International Journal of
Business and Management, 5(3), 70-80.

Armstrong, M. (2006). Performance management: Key strategies and practical guidelines.

Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social
psychological research: Conceptual, strategic, and statistical considerations. Journal of
personality and social psychology,51(6), 1173.

Barlett, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Organizational research: Determining
appropriate sample size in survey research.Information technology, learning, and performance
journal, 19(1), 43.

Blume, B. D., Baldwin, T. T., & Rubin, R. S. (2009). Reactions to different types of forced
distribution performance evaluation systems. Journal of Business and Psychology, 24(1), 77-91

Bowra, Z. A., & Nasir, A. (2014). Impact of fairness of performance appraisal on motivation and
job satisfaction in banking sector of Pakistan. Journal of Basic and Applied Scientific
Research, 4(2), 16-20..

Darehzareshki, M. (2013). Effects of performnace aprisal quality on job satisfaction in

multinational companies in Malaysia. International Journal of Enterprise computing and
business Syestem , 2 (1).
 Dessler, G. (2004). A framework for human resource management. Pearson Education.

Dulebohn, J., & Martocchio, J. J. (1998). Employees' perceptions of the distributive justice of
pay raise decisions: A policy capturing approach. Journal of Business and Psychology, 13(1),
41-64.

Piggot-Irvine, E. (2003). Key features of appraisal effectiveness. International journal of

educational management, 17(4), 170-178.

Field, A. (2009). Discovering statistics using SPSS. Sage publications.

Farrar, D. E., & Glauber, R. R. (1967). Multicolliniarity in regression analysis: the problem
revisited. The Review of Economic and Statistics, 92-107.

Gliem, R. R., & Gliem, J. A. (2003). Calculating, interpreting, and reporting Cronbach’s alpha
reliability coefficient for Likert-type scales. Midwest Research-to-Practice Conference in Adult,
Continuing, and Community Education.

Huselid, M. A. (1995). The impact of human resource management practices on turnover,

productivity, and corporate financial performance. Academy of management journal, 38(3),
635672.
Iqbal, N., Ahmad, N., Haider, Z., & Batool, Y. (2013). Impact of performance appraisal on
employee's performance involvingthe Moderating Role of Motivation. Arabian Journal of
Business and Management Review (Oman Chapter), 3(1), 37.

Jabeen, M. (2011). Impact of performance appraisal on employees motivation. European

Journal of Business and Management, 3(4), 197-204.

Jehanzeb, K., Rasheed, M. F., & Rasheed, A. (2012). Impact of rewards and motivation on job
satisfaction in banking sector of Saudi Arabia. International Journal of Business and Social
Science, 3(21).

Kampokotter, P. (2014). Performance appraisal and job satisfaction. SOEP papers on

multidiscipliniary panel data research. , 1-27.

Karimi, R., Malik, M. I., & Hussain, S. (2011). Examining the relationship of performance
appraisal system and employee satisfaction. International Journal of Business and Social
Science, 2(22).

Kavanagh, P., Benson, J., & Brown, M. (2007). Understanding performance appraisal
fairness. Asia Pacific Journal of Human Resources, 45(2), 132-150.

Khan, A. Performance appraisal relation with productivity and job satisfaction. Journal of
Managerial Science , 1 (2), 99-114.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research
activities. Educational and psychological measurement,607-610 .

Questionnaire

Scale: 1 being strongly agree and 5 being strongly disagree

.
Statements Strongly Disagre Uncertai Agre Stron
Disagree e n e gly
Agre
e
Transformational Leadership:
1 Instill pride in me for being 1 2 3 4 5
associated with him/her.
2 Talk optimistically about the future. 1 2 3 4 5

3 Provides me assistance in exchange 1 2 3 4 5

for my efforts.
4 Keep track of all mistakes. 1 2 3 4 5
5 Avoid getting involved when 1 2 3 4 5
important issue arise.
Idealize Influence:
6 Leader express value shared by 1 2 3 4 5
program staff members.
7 Encourage staff behaviors consistent 1 2 3 4 5
with the value shared by all member.
8 Leader show self-confidence. 1 2 3 4 5
9 Is someone that staff member are 1 2 3 4 5
proud to be associated with.
10 Seek organization interest over 1 2 3 4 5
personal interest.
Intellectual stimulation:
11 Attempt to improve the program by 1 2 3 4 5
taking new approach to business.
12 Positively acknowledge creative 1 2 3 4 5
solution to problem
13 Encourage ideas other than own. 1 2 3 4 5

14 Encourage staff to try new ways to 1 2 3 4 5

accomplish their work.
15 Suggest new ways of setting task to 1 2 3 4 5
accomplish.
Inspirational motivation:
16 Promote team work in reaching 1 2 3 4 5
program goals.
17 Display enthusiasm about pursuing 1 2 3 4 5
goals.
18 Clearly define the steps need to reach 1 2 3 4 5
program goals.
19 Set attainable objective for reaching 1 2 3 4 5
program goals.
20 Make staff aware of the needs for 1 2 3 4 5
change in the program.
Individual consideration:
21 Recognize individual staff member 1 2 3 4 5
needs and desire.
22 Coaches staff member on the 1 2 3 4 5
individual basis.
23 Assist individual staff member in 1 2 3 4 5
developing their strength.
24 Take into account individual abilities 1 2 3 4 5
when reaching staff member.
25 Offer individual learning opportunity. 1 2 3 4 5
Employee Motivation: 1 2 3 4 5
26 My job is beneficial to my career. 1 2 3 4 5
27 It’s enjoyable to go to work. 1 2 3 4 5
28 I like more challenging task at work. 1 2 3 4 5

29 I am well aware of the company’s 1 2 3 4 5

comprehensive goals
30 My boss is good in communicating 1 2 3 4 5
information.
31 My company values my services. 1 2 3 4 5

32 I am satisfied with the working 1 2 3 4 5

condition.