Professional Documents
Culture Documents
International Journal of Manpower: Article Information
International Journal of Manpower: Article Information
International Journal of Manpower: Article Information
Access to this document was granted through an Emerald subscription provided by emerald-
srm:277069 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as
well as providing an extensive range of online products and additional customer resources and
services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.
IJM
37,8
Effects of transformational
leadership on turnover
intentions in IT SMEs
1322 Swati Mittal
Received 15 October 2014
Department of Management Studies, Indian Institute of Technology,
Revised 1 April 2015 Roorkee, India
3 June 2015
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
27 September 2015
Accepted 26 October 2015 Abstract
Purpose – The purpose of this paper is to examine the impact of transformational leadership (TL) on
building trust and hence, its influence on the commitment level of the employees to achieve the desired
work outcomes. It also examined whether transformational leaders were able to psychologically
empower employees so as to increase their commitment level and thus reduce the employee turnover
intentions (TIs) in the small- and medium-sized (SME) IT companies operating in Delhi NCR, India.
Design/methodology/approach – Data were collected from 420 employees (168 females and
252 males) of SME IT companies operational in Delhi NCR, India. They responded to questions about
their leader’s TL and their own psychological empowerment (PE), commitment and trust.
Findings – The findings of the study show that transformational leaders were able to create a higher
level of PE and trust amongst their employees. Further, it was also found that this led to an increase in
their commitment level and hence, a decrease in their TI. The findings of the study also suggest that
trust, commitment and PE act as mediators.
Research limitations/implications – Limited sample size is a possible limitation of the study.
One more limitation of the study is the data collection method, i.e. through survey. It was self-reported,
taking only the perspective of the employees; it may not be a completely accurate response.
Practical implications – With TL, leaders can psychologically empower followers to do things in a
better way and can develop trust in employees resulting in high commitment; highly committed
employees in turn reduce the TIs. If followers do not have faith in their own capability, it may not be
possible for them to complete their job effectively.
Originality/value – This study adds to the existing literature; it clarifies the process by which
transformational leaders enhance followers’ meaning in life through PE and develop trust resulting in
high commitment.
Keywords Employee behaviour, Human resource management, Organizational, Employees,
Small- to medium-sized enterprises, Leaders, Employee turnover
Paper type Research paper
Introduction
Employee turnover has been considered to be an area of concern and a matter of
research across the globe. Since employees are considered to be the most valuable asset
of IT companies, their high rate of turnover is considered to affect the performance of
the organisation significantly leading to a decrease in the service quality offered to
their customers (Kontoghiorghes and Frangou, 2009). Researchers like Griffeth et al.
(2000) in their study have reiterated this by highlighting that employees are a very
important asset for an organisation and when they leave, the organisation suffers loss
due to subsequent hiring of replacements, work units and organisational readjustment.
International Journal of Manpower Therefore, employee turnover intentions (TIs) is a threat for the organisation that not
Vol. 37 No. 8, 2016
pp. 1322-1346
only affects the productivity but also its profits (Park and Shaw, 2013; Tse et al., 2013).
© Emerald Group Publishing Limited The Indian IT industry is a key sector that has brought the whole economy into the
0143-7720
DOI 10.1108/IJM-10-2014-0202 limelight in front of the entire world by increasing the national GDP by about 9 per cent
annually (Mishra and Bhatnagar, 2010; Biswas, 2009). However, this industry has been Effects of TL
badly affected due to its high rate of employee TIs (Bhatnagar and Som, 2010). Though on TIs in IT
studies in the recent past have shown that the major cause of high rates of employee
TIs in this industry has been largely due to lack of commitment and job dissatisfaction
SMEs
(Firth et al., 2007), little significant work has been done that explains the underlying
process that leads to TIs.
According to some studies, it is believed that the transformational leadership (TL) 1323
style can play an influential role in increasing the commitment level of employees,
leading to a decrease in the turnover rate (Chi and Pan, 2012; Dimaculangan and
Aguiling, 2012), as they primarily believe in building trust amongst their employees
and also empower them psychologically (Avolio, 2003), so that the employees develop
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Effects of TL
TL and PE. “The concept of empowerment can be defined as a group of practices that
combine information sharing, delegation of authority and increased employee
autonomy” (Randolph, 2000). Spreitzer (1995) in his research concludes that
empowerment cannot be forced on employees but instead they must feel
“psychologically empowered”.
The concept of “empowerment”, which is viewed as a set of practices and
techniques, plays an essential role in TL (Arnold et al., 2000) and can be explained from
a psychological perspective. “Psychological empowerment has been defined as a
motivational construct which reflects the individual’s ability to take independent
initiatives and regulate the actions to perform the job well” (Spreitzer, 1995). PE refers
to a motivational state having four dimensions, which give a direction to individuals to
produce better work outcomes, and resulting in role-meaning, competence,
self-determination and impact (Spreitzer, 1995). Role-meaning characterises an
individual as energised with his work, role and values (Brief and Nord, 1990).
Competence focusses on the individuals’ confidence on their abilities and belief in their
own capability to perform their activities. Self-determination explains individuals’
autonomy and control over their job (Deci and Ryan, 1987) and also reflects the extent to
which an individual can influence organisational outcomes (Spreitzer, 1995). These four
dimensions define a complete and sufficient cognition to understand PE.
TL is an emerging concept of empowering individuals through optimum utilisation of
resources (Menon, 2001). Many researchers have highlighted the relationship between
TL and PE (Avolio, 2003). They have devised an argument that transformational leaders Effects of TL
empower followers through PE in four areas, i.e. competence, meaning, self-determination on TIs in IT
and impact. They have argued that leaders can identify followers’ identities, needs,
preferences and values, and have the potential to recognise the individual meaning and
SMEs
purpose of work (Lowe et al., 1996). TL focusses on providing individual attention to each
follower in order to develop and empower them (Antonakis and House, 2002), which
means there is a close relationship between TL and PE: 1325
H1. TL is positively associated with PE.
TL and trust. Trust is an individual level construct and a major component of human
social relationships. It is defined as an individual’s willingness to be exposed to the
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
issues such as conflicts and low profitability with mutual consent. Trust is believed to
develop commitment to continue a long-lasting relationship (Anderson and Weitz,
1992) and past studies have shown that a high level of trust improves the
commitment to a prearranged relation (Zhang et al., 2008). Hence, we can propose that
a greater level of trust is related to AOC:
H3. Trust is positively related with AOC.
PE and AOC. Empowerment and commitment are essential elements of the effective
functioning of modern organisations (Baek-Kyoo and Ji, 2010; Liu et al., 2006). Several
studies have found that AOC is an outcome of PE (Liden et al., 2000). A number of
researchers have found that psychologically empowered employees have a higher level
of commitment to their organisations (Zeffane et al., 2012). According to Kirkman et al.
(2004) and Spreitzer (1995), highly psychologically empowered employees perform their
job effectively and efficiently and show a high level of affective commitment to their
organisation. Research conducted by Vacharakiat (2008) on American and Filipino
nurses shows that there is an effective relationship between PE and AOC. With the help
of PE, employees become more responsible and perform challenging work effectively.
It increases their commitment to the organisation (Meyer and Allen, 1991). If a person
has more responsibility, he has more opportunity to give his opinions and hence feels
more psychologically empowered, results in increasing his commitment to the
organisation (Liu et al., 2007):
H4. PE is positively associated with AOC.
AOC and TIs. In the last two decades, TIs have gained significant attention of
organisational researchers. Mobley (1977) defined TIs as the intent to quit and depart
from the organisation. According to Mowday et al. (1982) the TI decision is influenced
by multiple factors including unavailability of growth opportunities within the current
organisation which leads to searching for new job alternatives (Mobley et al., 1978).
Several studies have shown the relationship between commitment and TI (Robinson
et al., 2012). Joiner et al. (2004) conducted a study proving that employees with high
levels of commitment possess low TI. Ahuja and Thatcher (2005) stated that working
continually in a remote location requires high commitment and absence of commitment
raises intent to quit the organisation. A high level of affective commitment reduces TI
and motivates the individual to remain in the organisation (Major et al., 2007).
Steers (1977) found that people who are not highly committed to the organisation are
likely to leave it. On basis of this, it can be concluded that commitment plays an
important role in TI and has a negative association with TI (Meyer et al., 2002). It also
states that AOC plays an important role in retaining employees in an organisation and Effects of TL
has a negative relation to the TI: on TIs in IT
H5. AOC is negatively related to TIs. SMEs
The mediating role of trust, PE and AOC. Trust is the most important factor in
influencing organisational success and failure. Further, it also depends on the integrity
of the trustee (Mayer et al., 1995). In TL, trust is the most important element of 1327
achieving higher levels of work, commitment and performance (Schaubroeck et al.,
2011). Some researchers have investigated the impact of TL on trust and PE
(Walumbwa and Hartnell, 2011) and found that higher levels of trust and PE between
the leader and the follower raise the follower’s efforts so as to complete the work
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
effectively. The present study proposed the mediating role of trust and PE between TL
and AOC. H1 proposed that TL has a significant and positive relationship with
PE and H4 proposed that PE has a significant positive relationship with AOC.
On the basis of these hypotheses we also test whether PE acts as a mediator between
TL and AOC and similarly on the basis of H2 and H3 we propose trust as a mediator
between TL and AOC. According to Allen and Meyer (1996), affectively committed
employees have recognition of, contribution to and emotional regard for the
organisation. And organisational commitment has been a powerful TI antecedent in
prior research.
On the basis of H3-H5 we can propose that AOC works as a mediator between trust
and TI. Some researchers have found that employees who are psychologically
empowered have high levels of affective commitment to their organisation and these
employees have low levels of TIs ( Joiner et al., 2004; Liden et al., 2000). On the basis of
this research we hypothesised that AOC works as a mediator between PE and TI:
H6a. Trust mediates the effect of TL on AOC.
H6b. PE mediates the effect of TL on AOC.
H6c. AOC mediates the effect of trust on TI.
H6d. AOC mediates the effect of PE on TI (Figure 1).
Research model
Since last decade, the Indian IT industry has been growing at a phenomenal rate with a
large number of global players entering into the Indian market. This study investigated
the relationship among TL, trust, PE, AOC and TIs. The respondents contacted for the
Transformational
leadership Trust
respond to the questionnaires with utmost sincerity. In the second step, the cover letter,
questionnaires and return envelopes were distributed to the respondents. All the
questionnaires were written in English. The informal relationship helped in expediting
the process of questionnaire collection. Survey tracking involved visits to the
companies at regular intervals. To maintain the confidentiality of the respondent,
completed questionnaires were collected in sealed envelopes by the researcher within a
period of two weeks. In all, 480 questionnaires were distributed within 15 IT SMEs;
a total of 420 IT employees completed and returned the questionnaires. The response
rate level was 87.5 per cent. There were 168 female (40 per cent) and 252 male
(60 per cent) respondents in the sample. Sample details are depicted in Table I.
Measures
In this study, we took established scales for all the constructs at individual level.
Five valid and reliable scales were used which have been tested and validated in
IT employees
Details Number Percentage
Gender
Female 168 40.00
Male 252 60.00
Age (years)
25-35 196 46.67
36-45 123 29.28
46-55 69 16.42
55 and above 32 7.61
Education
Graduate 313 74.52
Post-graduate 107 25.47
Work experience (years(s))
o1 37 8.80
1-5 114 27.14
6-10 120 28.57
11-15 77 18.33
Table I. 16-20 48 11.42
Sample 21 or above 24 5.71
characteristics Note: n ¼ 420
previous studies. All items were measured on a five-point scale (from 1 to 5, i.e. strongly Effects of TL
disagree to strongly agree). on TIs in IT
TL. TL was adopted from Zhen et al. (2012), with 15 items which were divided into
five dimensions: vision, inspirational communication, intellectual stimulation,
SMEs
supportive leadership, and personal recognition and each dimension reflects three
items. Previous studies also suggest this method for measuring TL; these five
dimensions are highly correlated with each other (Bass, 1995; Rafferty and Griffin, 1329
2004). This scale has been widely used to measure the individuals’ perception of
transformational leader behaviours (Zhen et al., 2012). The Cronbach’s α reliability of
this scale was 0.915. The sample item was as follows, “Leader has a clear
Understanding of where we are going”.
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
PE. The 12-item scale measuring PE was developed by Spreitzer (1995). This scale
has four dimensions: meaning, competence, self-determination and impact; each
dimension has four items to reflect PE. The Cronbach’s α reliability value of the scale
was 0.942. Previous studies established this measurement scale for PE and it shows
better discriminant validity. Its dimensions have a better predictor for measuring PE
results (Seibert et al., 2011). And the sample item was “I am self-assured about my
capabilities to perform my work activities”.
Trust. Trust was calculated using the six-item Likert scale developed and tested
by Podsakoff et al. (1990). A number of trust measuring scales exist but there is no
clear consent as to which one of these is best. In this study, trust was developed as
faith and loyalty to the leader and six items were used to measure these dimensions
(α ¼ 0.915). The sample scale was “I feel quite confident that my leader will always try
to treat me fairly”.
AOC. The most validated six-item scale measuring AOC was developed by Meyer
et al. (1993). Cronbach’s α reliability of this scale was 0.911. The sample scale item was
“I really feel a sense of ‘belonging’ to my organisation”.
TIs. TI was calculated using the two items developed by DeConinck and Stilwell
(2004) and the items were based on intention to quit the organisation. Cronbach’s α
reliability value of this scale was 0.909. It shows that the measurement scale items
reflect the overall concept of TIs. And the scale items were “Within the next six months,
I intend to search for another job”, “Within the next six months, I would rate the
likelihood of leaving my present job as high”.
Control variable
On the basis of the present literature review employee age, gender, education and work
experience were included as control variables. These variables needed control because
they have been shown to have significant influence on the outcome variables such as
TIs in previous research (Van Der Vegt et al., 2003). Hence the present study did not use
these variables in the final results and interpretation.
Analytic approach
The information was analysed at individual level by SPSS and AMOS 20th version.
Confirmatory factor analysis (CFA) was applied as the first step to assess the
proposed measurement model. CFA identified a relation between the observed
variables and their respective latent factors. A range of fit indices were used to
evaluate the fitness of the model – comparative fit index (CFI), normed fit index (NFI),
root mean square error of approximation (RMSEA), goodness-of-fit index and
IJM adjusted goodness-of-fit index (AGFI). An RMSEA value below 0.05 indicates a good
37,8 degree of fit. To test the hypothesised model a computational tool for path analysis
SPSS macro, i.e. PROCESS was used. This method is used to evaluate the indirect
effect of independent variable on dependent variable and integrates the stepwise
process of mediation by using the Sobel test and a bootstrap method. In the first step
of the analysis, the effect of the independent variable on the dependent variable is
1330 measured and the relationship strength of this effect is reduced once the mediator is
introduced in the model. The Sobel test helps in justifying that the reduction in the
strength of the relationship between independent variable and dependent variable is
significant when the mediator is introduced into the model (Sobel, 1982). It gives a
most likelihood assessment of the entire system in a proposed model, and facilitates
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
the assessment of variables with the data in the form of supporting the hypothesis,
which leads to the empirical findings.
Results
CFA
The correlation matrix, means and standard deviation are depicted in Table II. CFA of
the variables was performed initially to study the data. Holistically, after using the
modification indices the results of the CFA fit indices signified a good model fit
( χ2 ¼ 1.306, degrees of freedom ¼ 850, p ¼ 0.00, GFI ¼ 0.902, AGFI ¼ 0.901, NFI ¼ 0.91,
CFI ¼ 0.97, RMSEA ¼ 0.02, confidence interval (CI) ¼ [0.045-0.074]. When observed
variables of construct correlate with each other, as per theoretical foundation,
convergent validity is represented. High composite reliability and significant loadings
signify convergent validity (Cable and DeRue, 2002) as shown in Table III. The results
indicated that the model adaptability was satisfactory.
Descriptive analyses. Discriminant validity was also tested to determine the extent
that one construct was distinct from the others. Discriminant validity can be measured
with various techniques; however, the technique of Fornell and Larcker (1981) is
considered to be one of the most commonly used to measure it. Table II shows that the
estimated intercorrelations among all constructs were less than the square roots of the
AVE in each construct, and this provides preliminary support for discriminant validity.
Thus we found support for discriminant validity.
Discriminant validity can also be measured by comparing the values of average
shared variance (ASV) and maximum shared variance (MSV) with AVE values.
It exists when all MSV and ASV values are less than their respective AVE values
(Hair et al., 2010). With reference to Table III, it was seen that all relevant values fulfilled
this condition. Therefore, we are convinced that our model has discriminant validity.
Podsakoff et al. (2003) used the concept of Harman’s one-factor test to check the
possibility of common method bias. Common method bias is a common issue in
behavioural research as the same respondents evaluate the predictor as well as
criterion variables. To address this problem, Harman’s one-factor test and
common method variance were used. In Harman’s one factor test, every variable is
entered in principal component factor. The result of unrotated factor analysis
should be less than 50 per cent. In the present study, for all items for which the
data was collected from employees, i.e. TL, PE, AOC, trust and TI were included
in a principal component factor analysis. The results show five factors in the model
with the greatest covariance explained by one factor of 37.58 per cent, which is less
than 50 per cent. We also used the common latent factor in AMOS suggested by
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Correlation
Mean SD 1 2 3 4 5 6 7 8 9
and discriminant
1331
standard deviations
Correlations, means,
validity
SMEs
on TIs in IT
Table II.
Effects of TL
IJM Factor
37,8 Construct Indicators AVE α/CR MSV ASV loading t-value
Podsakoff et al. (2003). In this method all the items were allowed to load on their
theoretical constructs, as well as on a latent common method factor, this common
factor determines common variance among all the observed variables of the model.
The result shows that the common variance among all the variables was 0. This
analysis showed that there was no general factor, thus indicating that common
method variance is not a major problem in this study.
Hypothesis testing Effects of TL
The study applied SPSS macro, i.e. PROCESS (Hayes, 2013) between variables to on TIs in IT
verify the H1 to H6(a)-H6(d). And, we examined a simple mediation model for
H6(a)-H6(d). Collectively, H6(a)-H6(d) suggest an indirect effect model. This study
SMEs
followed the guidelines of Hayes (2013), who recommended that meditational analysis
be based on formal significance tests of the indirect effect of which the Sobel test is
the best known. This approach is more influential than the stepwise procedure of 1333
Baron and Kenny (1986), because it more directly addresses mediation analysis.
Through the application of bootstrapping CIs, it is possible to avoid power problems
introduced by asymmetric and other non-normal sampling distributions on an
indirect effect. The SPSS macro facilitates estimation of the indirect effect both with a
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
normal theory approach (i.e. the Sobel test) and with a bootstrap approach to obtain
CIs, and this approach also incorporates the stepwise procedure recommended by
Baron and Kenny (1986). The steps involved are regressing dependent variable on
independent variable, regressing the mediator(s) on independent variable, regressing
the dependent variable on the independent variable and mediator. And, if the
independent variable shows significance on the mediator, the mediator shows
significance on the dependent variable and the independent variable directly is not
significant on the dependent variable; there is a full mediation between the
independent variable and the dependent variable.
Table IV demonstrates the results for H2, H3 and H6(a). TL was positively related
to trust, as proposed in H2 ( β ¼ 0.152, t ¼ 7.330, p o 0.001). The relationship between
trust and AOC was found to be significantly positive ( β ¼ 0.659, t ¼ 18.563, p o 0.001).
This relationship controlled TL and satisfied H3. TL influenced AOC indirectly
through the effects of trust. This indirect effect was found to be positive (0.127), as
proposed in H6(a). The results of a two-tailed significance test (assuming a normal
distribution) illustrated a significant indirect effect (Sobel z ¼ 6.809, p o 0.001).
Bootstrap analysis established the Sobel test results (see Table IV), with 95 per cent CI
and did not include zero (0.066, 0.132). Further, the direct effect of TL on AOC, after
controlling for trust, was insignificant ( β ¼ 0.028, t ¼ 1.767, p W 0.05). Hence, trust fully
mediated the relationship of TL and AOC because it has satisfied all the steps of
mediation. Therefore, H2, H3, and H6(a) were fully supported.
Table V shows the results for H1, H4 and H6(b). TL was significantly positively
related to PE, as proposed in H1 ( β ¼ 0.379, t ¼ 10.962, p o 0.001). The relationship
between PE and AOC was found to be positively significant ( β ¼ 0.322, t ¼ 13.554,
p o 0.001). This relationship controlled TL and supported H4. TL influenced AOC
indirectly through the effect of PE. This indirect effect was found to be significant and
positive (0.127). The results of a two-tailed significance test (assuming a normal
distribution) illustrated a significant indirect effect (Sobel z ¼ 8.509, p o 0.001).
Bootstrap analysis confirmed the Sobel test results with 95 per cent CI and did not
contain zero (0.091, 0.160). Further, the direct effect of TL on AOC, after controlling for
PE, was insignificant ( β ¼ 0.028, t ¼ 1.767, p W 0.05). Hence, PE fully mediated the
relationship of TL and AOC because it has satisfied all the steps of mediation analysis.
Therefore, H2, H4 and H6(b) were fully supported.
Table VI shows the results for H5 and H6(c). The relationship between AOC
and TIs was found to be negatively significant ( β ¼ −0.121, t ¼ −3.214, p o 0.001).
This relationship controlled trust and supported H5. Trust influenced TIs indirectly
through the effects of AOC. This indirect effect was found to be significant and
negative (−0.150). The results of a two-tailed significance test (assuming a normal
IJM Variable β SE t p
37,8
Direct and total effects
Control variable
Gender 0.596 0.857 0.694 0.487
Age −0.422 0.701 −0.602 0.547
Education −0.449 1.029 −0.436 0.663
1334 Work experience 0.101 0.438 0.231 0.817
AOC on transformational leadership 0.127 0.02 6.333 0
Gender −1.521 0.882 −1.724 0.085
Age −0.42 0.721 −0.582 0.56
Education −0.335 1.058 −0.316 0.751
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Education 0.591
Work experience 0.379 0.365 1.038 0.299
AOC on PE 0.325 0.02 15.556 0
Gender −0.368 0.464 −0.792 0.428
Age 0.145 0.378 0.384 0.701
Education −0.82 0.554 −1.479 0.139
Work experience −0.22 0.236 −0.931 0.352
Turnover intentions regressed on AOC, controlling for PE −0.036 0.031 −1.133 0
Turnover intentions regressed on PE, controlling for AOC −0.131 0.013 −9.684 0.257
Value SE z p
Indirect effect and significance using normal distribution
Sobel −0.011 0.01 −1.128 0.002 Table VII.
M SE LL 95% LL 95% Regression results
CI CI for affective
organisational
Bootstrap results for indirect effect commitment
Effect −0.011 0.01 −1.104 −0.259 mediating between
Notes: n ¼ 420. Bootstrap sample size ¼ 1,000. AOC, affective organisational commitment; PE, psychological
psychological empowerment; LL, lower limit; UL, upper limit; CI, confidence interval. *p o0.05; empowerment and
**p o0.01; ***p o0.001 turnover intentions
communicate the organisation’s vision and convince employees to achieve what the
organisation desires. Some researchers have further stressed that in TL employees are
believed to trust their leader only to the extent to which they believe that their leader
treats them on equal grounds (Flaherty and Pappas, 2000). From the above findings, it
is suggested that leaders should spend sufficient time and effort enhancing their
leadership style which must be coupled with strengthening the relationship with
employees who will lay a strong foundation for developing a high level of trust between
the leader and the workers.
On testing the third hypothesis, it was found that trust had a positive relationship
with AOC. In service organisations such as IT where effective communication plays an
important role in understanding customer needs and requirements, this is possible only
in the presence of trust leading to AOC (Postmes et al., 2001). The present study also
supported that trust and commitment had a strong positive relationship. According to
researchers like Alder et al. (2006) as well as Simons and McLean (2000), when
employees receive fair treatment in the organisation, they tend to support
organisational objectives which leads to the development of a high trust level. If it is
practised regularly, it is expected that employees will be willing to put extra effort into
their work to develop a high level of commitment to the organisation.
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
IJM
37,8
1338
Figure 2.
Path result of
mediation model
(a) (b)
Psychological
Trust
empowerment
= 0.152, p < 0.001 = 0.659, p < 0.001 = 0.379, p < 0.001 = 0.322, p < 0.001
= 0.099, 95 % CI = 0.122, 95% CI
(0.066, 0.132) (0.091, 0.160)
Affective Affective
Transformational Transformational
organisational organisational
leadership = 0.127, p < 0.001 leadership
commitment = 0.127, p < 0.001 commitment
= 0.028, p = 0.07 = 0.028, p =0.077
(c) (d)
Affective Affective
organisational organisational
commitment commitment
= 0.677, p < 0.001 = –0.121, p < 0.01 = 0.325, p < 0.001 = –0.036, p < 0.001
= –0.081, 95% CI = –0.011, 95% CI
(–0.146, –0.022) ( –1.104, –0.259)
1339
= 0.322*** Education
= –0.036*** Turnover
Psychological Affective
empowerment commitment intentions
Experience
= –0.119***
Figure 3.
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Control variables
Path results of full
Notes: 2 =1.306;
df = 850; GFI = 0.902; AGFI = 0.901; NFI = 0.91; CFI = 0.97; research model
RMSEA = 0.02. ***p < 0.001
On testing the fourth hypothesis, it was found that PE has a positive relationship with
AOC. Liden et al. (2000) stated that PE is related to commitment and employees who are
more empowered would be highly committed to the organisation. Bogler and Somech
(2004) conducted a study along with the teachers and found that the understanding of
one’s own strength is positively associated to commitment; the findings of present study
also supported this statement. Hence, we can conclusively state that leaders should trust
their personnel, give them an opportunity to explore the new dimensions of their job and
produce innovative results. The leader should also encourage the employees to decide
how their job should be done so that the employees feel psychologically empowered and
accountable for their jobs. This may result in putting in extra effort to achieve their given
targets and hence, develop higher level of commitment.
On testing the fifth hypothesis, it was found that AOC had a negative and
significant relation with TI. Meyer et al. (2002) conducted a study and explained that
AOC plays a significant role in reducing employee TI. From this, it could be implied
that commitment reduces the employee’s intention to leave the organisation. To reduce
the TI, leaders must develop a personal rapport with the employees by being a part of
their followers’ appraisal and pay system, and of the promotion decision-making
process (Shanock and Eisenberger, 2006), etc. This might develop a high level of
commitment amongst the employees and is expected to manifest into a greater
intention to stay in the organisation.
The study also confirmed that PE, trust and AOC act as mediators in IT SMEs.
IT employees perceived that TL increases employee empowerment and highly
empowered employees develop their commitment to the organisation. In this process,
PE and AOC act as a complete mediator. The present study has proved that trust and
commitment also act as complete mediators. Trust and PE was found to be the most
important factor along with commitment of decreasing employees’ intention to leave
the organisation.
In all, the findings of the present study revealed that the TL approach is important
for analysing employee understanding and behaviour. By adopting the TL style,
leaders can empower their followers to do things in a better way and develop trust,
leading to the development of a higher level of commitment. Highly committed
employees in turn may reduce the TI that might have otherwise developed. Thus we
suggest that IT SMEs should make more effort to develop trust, commitment and PE
IJM by using an effective leadership style such as TL to reduce the attrition rate in the
37,8 organisation. This study can help new age entrepreneurs who are planning to devise
new IT business ventures in India utilising their ideas and enthusiasm. The study,
thus, can bring solutions to the issues raised by SMERA (SME Rating Agency of India
Ltd) relating to “Emerging IT SMEs of India” (Sampat, 2007) who revealed that Indian
SMEs face several challenges such as shortage of skilled employees.
1340
Theoretical implications
The findings of this study have some theoretical implications. First, even though some
work has been carried out to establish the relationship between TL and TI in the
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
organisational context (Tse et al., 2013; Hughes et al., 2010), little attention has been
given to the role that TL plays in influencing the turnover process. Through this study,
we have made an attempt to address this issue by exclusively focussing on the
employees’ behaviour which displays intentions to leave the organisation in our model.
The study also suggests that TL is effective in managing employee turnover, enabling
employees to internalise their organisation’s values and mission, and thus encouraging
them to be proud of being a part of their organisation. In spite of the fact that we did not
hypothesise the impact of TL on TI, the presented findings show a negative
relationship that exists between the two.
Second, this study provides some new insights into how TL can help to understand
the factors that influence the employees’ development of TI and then act on those
influencers so as to suppress the TI. The present findings suggest that although there
could be various influencers acting at the same time on the employees to develop
intentions to quit the job, the affection that the employees have for the organisation
ultimately influences the development of TI. Hence, it leads to the suggestion that the
TL needs to focus on carrying out activities within the organisation that ultimately can
positively influence the commitment level of the employees. This study focusses on the
rapidly growing IT industry, where employees get opportunities to switch between
companies frequently thus increasing the employee TIs. One potential contribution of
this study is to enhance the factors such as TL, PE, trust and commitment which are
involved in the process of reducing employee TIs.
increases behavioural dimensions such as trust, PE and AOC. This positive outcome
may lead to the development of a competitive advantage for IT SMEs in a global
economy and help them to compete with IT multinationals.
References
Ahuja, M. and Thatcher, J. (2005), “Moving beyond intentions and toward theory of trying:
linking the work environment and gender to post-adoption information technology use”,
MIS Quarterly, Vol. 29 No. 3, pp. 427-459.
Alder, S.G., Noel, T.W. and Ambrose, M.L. (2006), “Clarification the effects of internet monitoring
on job attitude: the mediating role of employee trust”, Information and Management,
Vol. 43 No. 7, pp. 894-903.
Allen, N.J. and Meyer, J.P. (1990), “The measurement and antecedents of affective, continuance
and normative commitment to the organisation”, Journal of Occupational Psychology,
Vol. 63 No. 1, pp. 1-18.
Allen, N.J. and Meyer, J.P. (1996), “Affective, continuance, and normative commitment to the
organisation: an examination of construct validity”, Journal of Vocational Behavior, Vol. 49
No. 3, pp. 252-276.
Anderson, E. and Weitz, B. (1992), “The use of pledges to build and sustain commitment in
distribution channels”, Journal of Marketing Research, Vol. 29 No. 1, pp. 18-34.
Antonakis, J. and House, R.J. (2002), “The full-range leadership theory: the way forward”,
in Avolio, B.J. and Yammarino, F.J. (Eds), Transformational and Charismatic Leadership:
The Road Ahead, Vol. 2, pp. 3-34.
Arnold, A.E., Maynard, Z., Gilbert, G.S., Coley, P.D. and Kursar, T.A. (2000), “Are tropical fungal
endophytes hiperdiverse?”, Ecology Letters, Vol. 3 No. 4, pp. 267-274.
Avolio, B.J. (2003), “Examining the full range model of leadership: looking back to transform
forward”, in Day, D. and Zaccarro, S. (Eds), Leadership Development for Transforming
Organisations: Grow Leaders for Tomorrow, Lawrence Erlbaum Associates, Mahwah, NJ,
pp. 71-98.
Avolio, B.J. and Bass, B.M. (1990), Basic Workshop in Full Range Leadership Development, Bass,
Avolio and Associates, Binghamton, NY.
Baek-Kyoo, J. and Ji, H.S. (2010), “Psychological empowerment and organisational commitment:
the moderating effect of organisational learning culture”, Human Resource Development
International, Vol. 13 No. 4, pp. 425-441.
Baron, R.M. and Kenny, D.A. (1986), “Moderator-mediator variables distinction in social
psychological research: conceptual, strategic, and statistical considerations”, Journal of
Personality and Social Psychology, Vol. 51 No. 6, pp. 1173-1182.
Bass, B.M. (1985), Leadership and Performance Beyond Expectations, Free Press, New York, NY.
IJM Bass, B.M. (1995), “Theory of transformational leadership redux”, Leadership Quarterly, Vol. 6
No. 4, pp. 463-478.
37,8
Bass, B.M. (1998), Transformational Leadership: Industry, Military, and Educational Impact,
Erlbaum, Mahwah, NJ.
Bennis, W. and Nanus, B. (1985), Leadership: The Strategies for Taking Charge, Harper & Row,
New York, NY.
1342 Bhatnagar, J. and Som, A. (2010), “Lessons from two Indian success stories”, in Budhwar, P. and
Varma, A. (Eds), Doing Business in India, Routledge, London, pp. 224-237.
Biswas, S. (2009), “Job satisfaction and job involvement as mediators of the relationship between
psychological climate and turnover intention”, South Asian Journal of Management, Vol. 16
No. 1, pp. 27-43.
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Boehke, K., Bontis, N., Distefano, J.J. and Distefano, A.C. (2003), “Transformational leadership:
an examination of cross-national differences and similarities”, Leadership and
Organisation Development Journal, Vol. 24 No. 1, pp. 5-15.
Bogler, R. and Somech, A. (2004), “Influence of teacher empowerment on teachers’ organisational
commitment, professional commitment and organizational citizenship behavior in
schools”, Journal of Teaching and Teacher Education, Vol. 20 No. 3, pp. 277-289.
Brief, A. and Nord, W. (1990), “Work and meaning: definitions and interpretations”, in Brief, A.
and Nord, W. (Eds), The Meaning of Occupational Work, Lexington, Lexington, MA,
pp. 1-20.
Burns, J.M. (1978), Leadership, Harper and Row, New York, NY.
Cable, D.M. and DeRue, D.S. (2002), “The convergent and discriminant validity of subjective fit
perceptions”, Journal of Applied Psychology, Vol. 87 No. 5, pp. 875-884.
Chi, N.W. and Pan, S.Y. (2012), “A multilevel investigation of missing links between transformational
leadership and task performance: the mediating roles of perceived person-job fit and person-
organisation fit”, Journal of Business and Psychology, Vol. 27 No. 1, pp. 43-56.
Crosby, L.A., Evans, K.A. and Cowles, D. (1990), “Relationship quality in services selling:
an interpersonal influence perspective”, Journal of Marketing, Vol. 54 No. 3, pp. 68-81.
Davis, J.H. and Mayer, R.C. (1995), “An integrative model of organisational trust”, Academy of
Manage Review, Vol. 20 No. 3, pp. 709-734.
Deci, E.L. and Ryan, R.M. (1987), “The support of autonomy and the control of behavior”, Journal
of Personality and Social Psychology, Vol. 53 No. 6, pp. 1024-1103.
DeConinck, J.B. and Stilwell, C.D. (2004), “Incorporating organisational justice, role states, pay
satisfaction and supervisor satisfaction in a model of turnover intentions”, Journal of
Business Research, Vol. 57 No. 3, pp. 225-231.
Dhar, R.L. (2012), “Employees’ perception of organisational support: a qualitative investigation in
the Indian IT industry”, WORK: A Journal of Prevention, Assessment, and Rehabilitation,
Vol. 23 No. 2, pp. 211-222.
Dimaculangan, E.D. Jr and Aguiling, H.M. (2012), “The effects of transformational leadership on
salesperson’s turnover intention”, International Journal of Business and Social Science,
Vol. 3 No. 19, pp. 197-210.
Dirks, K.T., Kim, P.H., Ferrin, D.L. and Cooper, C.D. (2011), “Understanding the effects of
substantive responses on trust following a transgression”, Organisational Behaviour and
Human Decision Processes, Vol. 114 No. 2, pp. 87-103.
Doh, J., Stumpf, S. and Tymon, W. (2011), “Responsible leadership helps retain talent in India”,
Journal of Business Ethics, Vol. 98 No. S1, pp. 85-100.
Firth, L., Mellor, D.J., Moore, K.A. and Loquet, C. (2007), “How can managers reduce employee
intention to quit?”, Journal of Management Psychology, Vol. 19 No. 2, pp. 170-187.
Flaherty, K.E. and Pappas, J.M. (2000), “The role of trust in salesperson- sales manager Effects of TL
relationships”, The Journal of Personal Selling and Sales Management, Vol. 20 No. 4,
pp. 271-278.
on TIs in IT
Fornell, C. and Larcker, D.F. (1981), “Evaluating structural equation models with unobservable
SMEs
variables and measurement error”, Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.
Gaan, N. (2011), “A revisit on impact of job attitudes on employee turnover: an empirical study in
Indian IT industry”, Vilakshan: The XIMB Journal of Management, Vol. 8 No. 2, pp. 33-42. 1343
Ganesan, S. (1994), “Determinants of long term orientation in buyer seller relationships”, Journal
of Marketing, Vol. 58 No. 2, pp. 1-19.
Garg, S. and Dhar, R.L. (2014), “Effects of stress, LMX and perceived organisational support on
service quality: mediating effects of organisational commitment”, Journal of Hospitality and
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Liden, R.C., Wayne, S.J. and Sparrowe, R.T. (2000), “An examination of the mediating role of
psychological empowerment on the relations between the job, interpersonal relationships,
and work outcomes”, Journal of Applied Psychology, Vol. 85 No. 5, pp. 407-416.
Liu, C.H., Chang, L.C., Li, I.C., Liao, J.Y. and Lin, C.I. (2006), “Organisational and psychological
empowerment on organisational commitment and job satisfaction among primary health
professionals”, Journal of Evidence-Based Nursing, Vol. 2 No. 1, pp. 5-13.
Liu, M.M.A., Chiu, W.M. and Fellows, R. (2007), “Enhancing commitment through work
empowerment”, Engineering, Construction and Architectural Management, Vol. 14 No. 6,
pp. 568-580.
Lowe, K.B., Kroeck, K.G. and Sivasubramaniam, N. (1996), “Effectiveness correlates of
transformational and transactional leadership: a meta-analytic review of the MLQ
literature”, Leadership Quarterly, Vol. 7 No. 3, pp. 385-425.
McAllister, D.J. (1995), “Affect- and cognition-based trust as foundations for interpersonal
cooperation in organisations”, Academy of Management Journal, Vol. 38 No. 1, pp. 24-59.
Major, D.A., Davis, D.D., Germano, L.M., Fletcher, T.D., Sanchez-Hucles, J. and Mann, J. (2007),
“Managing human resources in information technology: best practices of high performing
supervisors”, Human Resource Management, Vol. 46 No. 3, pp. 411-427.
Mayer, R.C., Davis, J.H. and Schoorman, F.D. (1995), “An integrative model of organisational
trust”, Academy of Management Review, Vol. 20 No. 3, pp. 709-734.
Menon, S.T. (2001), “Employee empowerment: an integrative psychological approach”, Applied
Psychology: An International Review, Vol. 50 No. 1, pp. 153-180.
Meyer, J.P. and Allen, N.J. (1991), “A three-component conceptualization of organisational
commitment”, Human Resource Management Review, Vol. 1 No. 1, pp. 61-89.
Meyer, J.P., Allen, N.J. and Smith, C. (1993), “Commitment to organisations and occupations:
extension and test of a three-component conceptualization”, Journal of Applied Psychology,
Vol. 78 No. 4, pp. 538-551.
Meyer, J.P., Stanley, D.J., Herscovitch, L. and Topolnytsky, L. (2002), “Affective, continuance and
normative commitment to the organisation: a meta-analysis of antecedents, correlates, and
consequences”, Journal of Vocational Behavior, Vol. 61 No. 1, pp. 20-52.
Mishra, S.K. and Bhatnagar, D. (2010), “Linking emotional dissonance and organisational
identification to turnover intention and emotional well-being: a study of medical
representatives in India”, Human Resource Management, Vol. 49 No. 3, pp. 401-419.
Mittal, S. and Dhar, R.L. (2015), “Transformational leadership and employee creativity: mediating
role of creative self-efficacy and moderating role of knowledge sharing”, Management
Decision, Vol. 53 No. 5, pp. 894-910.
Mobley, W.H. (1977), “Intermediate linkages in the relationship between job satisfaction and
employee turnover”, Journal of Applied Psychology, Vol. 62 No. 2, pp. 237-240.
Mobley, W.H., Horner, S.O. and Hollingsworth, A.T. (1978), “An evaluation of precursors of Effects of TL
hospital employee turnover”, Journal of Applied Psychology, Vol. 62 No. 3, pp. 237-240.
on TIs in IT
Moorman, C., Deshpandcoq, R. and Zaltman, G. (1993), “Factors affecting trust in market research SMEs
relationships”, The Journal of Marketing, Vol. 57 No. 1, pp. 81-101.
Morgan, R.M. and Hunt, S.D. (1994), “The commitment-trust theory of relationship marketing”,
The Journal of Marketing, Vol. 58 No. 3, pp. 20-38.
Mowday, R.T., Porter, L. and Steers, R. (1982), Employee-Organisation Linkages: The Psychology 1345
of Commitment, Absenteeism, and Turnover, Academic Press, New York, NY.
NASSCOM (2007), “Strategic review 2007”, National Association of Software and Service
Companies, New Delhi.
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
Park, T.-Y. and Shaw, J.D. (2013), “Turnover rates and organisational performance: a meta-analysis”,
Journal of Applied Psychology, Vol. 98 No. 2, pp. 268-309.
Piccolo, R.F. and Colquitt, J.A. (2006), “Transformational leadership and job behaviors: the
mediating role of job characteristics”, Academy of Management Journal, Vol. 49 No. 2,
pp. 327-340.
Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y. and Podsakoff, N.P. (2003), “Common method biases in
behavioural research: a critical review of the literature and recommended remedies”,
Journal of Applied Psychology, Vol. 88 No. 5, pp. 879-903.
Podsakoff, P.M., MacKenzie, S.B., Moorman, R.H. and Fetter, R. (1990), “Transformational leader
behaviors and their effects on followers’ trust in leader, satisfaction, and organisational
citizenship behavior”, The Leadership Quarterly, Vol. 1 No. 2, pp. 107-142.
Postmes, T., Tanis, M. and de Wit, B. (2001), “Communication and commitment in
organisations: a social identity approach”, Group Processes and Intergroup Relations,
Vol. 4 No. 3, pp. 227-246.
Rafferty, A.E. and Griffin, M.A. (2004), “Dimensions of transformational leadership: conceptual
and empirical extensions”, The Leadership Quarterly, Vol. 15 No. 3, pp. 329-354.
Raju, G.A. and Kurpad, M. (2013), “SME securitization: a new ray of hope for SMEs in India”, The
Journal of Structured Finance, Vol. 19 No. 2, pp. 89-119.
Randolph, W.A. (2000), “Re-thinking empowerment: why is it so hard to achieve?”, Organisational
Dynamics, Vol. 29 No. 2, pp. 94-107.
Robinson, S.D., Griffeth, R.W., Allen, D.G. and Lee, M.B. (2012), “Comparing operationalizations of
dual commitment and their relationships with turnover intentions”, International Journal of
Human Resource Management, Vol. 23 No. 7, pp. 1342-1359.
Sampat, K. (2007), “Emerging IT SMEs of India, CIOL”, available at: www.ciol.com/ (accessed 26
November 2013).
Schaubroeck, J., Lam, S.S.K. and Peng, A.C. (2011), “Cognition-based and affect-based trust as
mediators of leader behavior influences on team performance”, Journal of Applied
Psychology, Vol. 96 No. 4, pp. 863-871.
Seibert, S.E., Wang, G. and Courtright, S.H. (2011), “Antecedents and consequences of
psychological and team empowerment in organisations: a meta-analytic review”, Journal of
Applied Psychology, Vol. 96 No. 5, pp. 981-1003.
Shanock, S. and Eisenberger, R. (2006), “When Supervisors feel supported: relationships with
subordinates’ perceived supervisor support, perceived organisational support and
performance”, Journal of Applied Psychology, Vol. 91 No. 3, pp. 689-695.
Sharma, J. and Dhar, R.L. (in press), “Factors influencing job performance of nursing staff:
mediating role of affective commitment”, Personnel Review.
IJM Simons, T. and McLean, P.J. (2000), “The sequential impact of behavioral integrity on trust,
commitment, discretionary service behavior, customer satisfaction, and profitability”,
37,8 working paper series, Center for Hospitality Research, Ithaca, NY.
Sivasubramaniam, N. (1996), “Effectiveness correlates of transformational and transactional
leadership: a meta-analytic review of review of the MLQ literature”, The Leadership
Quarterly, Vol. 7 No. 3, pp. 385-415.
1346 Sobel, M.E. (1982), “Asymptotic intervals for indirect effects in structural equations models”,
in Leinhart, S. (Ed.), Sociological Methodology, Jossey-Bass, San Francisco, CA, pp. 290-312.
Spreitzer, G.M. (1995), “Psychological empowerment in the workplace: dimensions, measurement
and validation”, Academy of Management Journal, Vol. 38 No. 5, pp. 1442-1465.
Steers, R.M. (1977), “Antecedents and outcome of organisational commitment”, Administrative
Downloaded by UNIVERSITY OF TOLEDO LIBRARIES At 10:53 28 March 2018 (PT)
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com