University of Sunderland

Faculty of Business and Law

PGBM02

Managing Change & Leading People

"CRITICALLY ANALYSE THE EXTENT TO WHICH LEADERSHIP STYLE INFLUENCES EMPLOYEE COMMITMENT & ENGAGEMENT"

(Word count 3052 / Word limit 3000) 10%

Adnan ul Haque.

(2014)

Leaders in simple words can be defined as, individuals that have ability to influence and guide others as well demonstrate the culture as they are tone setters. Batista-Taran, Shuck, Gutierrez, & Baralt (2009) in their research conference regarding 'the role of leadership in employee engagement' stressed on the notion of globalisation as, the changes in the approach of the organisations and managements has altered to the great extent due to the era of globalisation. Furthermore, Batista-Taran et al., (2009), explained that "employees are considered more than just a part of unit working as a machine only for the maximization of the production, as now the concept has emerged that employees are valuable assets for the success and survival of the business and are as significant as other tangible and intangible assets" (p. 15). A skilled person is productive asset for the team that contributes towards the organisational success. Heger (2007) strongly emphasis on the significance of the employees that nowadays organisations are paying more attention to develop skills of employees. In the highly competitive environment, HR professionals are investing time and resources to retain and hire best brain for right tasks as talent management and succession planning facilitates organisations to have strategic and competitive advantage. To accomplish organisational goals, firms need to maintain the best brain, therefore the role of leader enhances as leadership play essential role in the employees commitment and engagement (Wu et al, 2006). According to Harter, Schmidt, & Hayes (2002) "engagement is involvement of an individual to work with self eagerness and content" (p. 269). Kahn (1990) suggests that engagement is closely associated with the emotional and cognitive behavior, that drives strong feeling in employees to contribute productively towards organisational success. On the other hand employee commitment is "binding of an individual with the organisation due to psychological state" (Allen & Myer, 1990). Therefore, leader's attributes and styles has immense significance in to engage employees in their jobs by increasing their level of commitment towards the organisation (Vance, 2006).

According to Northouse (2004), the process where common goals and objectives are being achieved by the collective team working as a one unit under one inspiring individual is regarded as leadership. This means that when followers are encourage to achieve the organisational outcomes in effective way by sharing the same vision with the top management is result of effective leadership. "It is leader who motivates employees and bring the changes that are essential for the survival and progress of the organisation" (Batista-Taran et al., 2009, p. 17). According to Bass (1985), leader's appreciation is essential for to strengthen the bond with its workforce as the styles of leadership provide energy to employees to attain the set objectives.
Increase Employee Engagement
Build Employemployer relationship

Enhance Employee Commitment

Skills

Skill Development

Knowledge

Recognition

Expertise

Appreciation

Experience

Concept adapted on the explanation of Vance (2010) 'Employee Engagement & Commitment'. Organisations as well individuals view the concept of leadership in depth and on wide spectrum. According to Bethel (1990) employees are being influenced and affected by the leadership as it has strong influencing ability. Moreover, Bohn and Grafton (2002) elaborate the concept of leadership as it enhances the employee's self confidence and forms a vision, by means of communication and coordination.

"The two main types of leadership is transactional and transformational leadership" (Burn 1978; and Bass 1997). Burns (1978) explains transactional leaders are those who uses reward and punishment approach to make followers accomplish assigned tasks. Moreover, Bass (1985), explains transactional leaders have three distinguish attributes, such as (a) contingent reward, (b) laissez-faire, and (c) management by exception. Contingent rewards is basically leader's common practice of rewarding the employees for their efforts and attempts. Rewards are granted when leader believe subordinates have clearly made a solid commitment towards work by making hard attempt. In case leader feel conversely about the commitment and engagement of subordinates, then there is no reward given to employees. A traditional and conservative methodology of checking and monitoring the performances of the subordinates by the leaders to ensure that the set standards are being met by the workforce (Bass, 1998). Moreover, due to defensive management approach leaders reduces the probability of employee's engagement going outside the parameter.

TRANSACTIONAL LEADERSHIP Contingent Reward Expected Outcome Management by Exception Performance Beyond Expectations

Adapted from Burns (2008), "Leadership", P. 186 Northouse (2004) suggests, point where problem arises and leader alone involve to resolve it is "laissez-faire" feature. Under this style of leadership, Judge and Bono (2000), "leader thoroughly defines the expected criterion and design rewards for employees who demonstrate engagement and commitment towards achieving the organisational goals" (p. 755). However, Batista-Taran et al., (2009) argue that

under this type of leadership style, the job satisfaction is less likely to improve for the members of team. Since the above discussion explains that transactional leadership style is based on "reward-and-punishment" approach therefore, there are likely chances that employees engagement and commitment will enhance. La Fosse is an excellent example of employee engagement and motivation increased through effective leader. The leader's role is a demonstration of the company's values, leading by example. There are monetary rewards for the

employees like bonus for high performances but the main notion behind these rewards are to take good care of workforce. For all the positive efforts demonstrated by the employees towards clients are being rewarded with beach holidays. Employees are not motivated just to achieve set financial targets but trained to improve their learning capabilities.

Leadership

Management

Technical
Concept adapted from Head (2010), 'An Extraordinary Success Story'. La Fosse primarily focus on three distinct dimensions that are, (I) ambition, (II) value, and (III) achievement (Head, 2010). Employees are engaged in meetings to feel a part of the organisation and take work as a career, not just as a job. One of

the reason for its progress and growth is fair treatment to entire workforce. According to Head (2010), employees are trained to take bold initiatives and work in force-free manner. The statistics show that there is only 12% staff turnover which itself states that employees have strong organisational commitment (Head, 2010). Another important leadership style is explained in the LMX- Leader-Member Exchange theory that focus on the 'quality relationship' between leaders and subordinates (Center for Leader Development, 2006). Due to the high quality correlation and coordination between followers and leaders, employees demonstrate high level of commitment and engagement towards team work. On the other hand, employees having low commitment and engagement is due to less support from the leaders. As a result of this decisions are less influential, employees are less responsible as there is less interaction between followers and leaders.

One of the biggest factors for the success of Pets at home is the employee engagement. The company's culture is strong as it is evident that it stands in fair dealing, leadership, and well being on second number respectively (Goldfingle, 2012). The reason behind this fact is that employees are more involved in job, there is a team work that enable the employees to work in more collaboration and high mutual coordination is a result of peers working in friendly environment (Best Companies Guide, 2013). The atmosphere of the company is that every individual fell pride in his or her own assigned tasks and are more willing to help and support other colleagues. Employees are more involve in job and are being taken care by the company through leadership and fair dealing (Goldfingle, 2012). The learning curve at the organisation is high as there are more opportunities for the employees to engage themselves in working and learning (DIY WEEK, 2012). The full support of leaders encourage and motivate them to participate more and as a result of this, there is 83% of workforce that consider that they are part of the organisation and has a significant role to offer in the success of the organisation

(Best Companies Guide, 2013). In other words, proper leadership and guidance has increased employees organisational commitment. 86% of the workforce agree that their manager openly talks to them, guide them, and work with them to improve their learning capabilities and working efficiency. The organisational goals and interest are the first priority of the workforce (Best Companies Guide, 2013). The 91% of the employees agree that there are high chances of personal growth and development at Pets at home. The organisation share the success with its workforce (Best Companies Guide, 2013).

Burns (1978) explains transformational leadership as a procedure that takes place when leaders and subordinates work in close coordination with each other by motivating and inspiring by engaging in work deeply and demonstrating high level of commitment. Moreover, four basic aspects of transformational leadership are: (I) idealized influence (II) Individual consideration, (III) Inspirational Motivation, and (IV) intellectual stimulation. The main focus is involving the employees so that they are more committed towards assigned tasks during transformation. Hay (1995) strongly argue that these dour distinct dimensions facilitate the leaders in becoming iconic symbols and role models encouraging employees to have high commitment and engagement to contribute towards the organisational goals and success.

Idealized influence

Individual consideration
Performance Beyond Expectations
Inspirational Motivation

Intellectual stimulation

Concept Adapted from Northouse (2001), "Leadership" Transformational leaders are have high focus on people as they motivate their workforce to accomplish the organisational goals. Sam Walton, Wal-Mart's founder wrote in his book "rules for success" that he visited frequently to Wal-Mart stores to meet his employees and motivate them by encouraging and appreciating them (Walton et al., 1996). This is a classical example of a transformational leader to motivate employees and encourage them to be more engaged in their respective tasks. Transformational leaders encourage employee participation, therefore empower employees so that short term objectives are accomplished by the workforce. In doing so, leaders mainly focus on the intrinsic needs of the employees (Meyer & Allen, 1997).

Another example of employee engagement and impact of transformational leadership style is evident at "Cloudreach" which is ranked number one in the small companies list of United Kingdom (The Sunday Times, 2013). It is a company where employees work with positive energy and are more enthusiastic about their work patterns. Taking in consideration the statement of Harter et al., (2002) regarding employee engagement that "involvement of employees having enthusiasm for work as well satisfaction" (P. 269). Therefore, it can be said that employee engagement is clearly present due to the transformational leadership. All employees are given equal chances and the salaries are set according to the business value. The young blood is important source for the success of organisation as it takes fresh blood (Donelly, 2012). The employee turnover ratio is 0% which indicate that people love working for Cloudreach. The culture of the organisation promotes team work and encourage employees to participate actively in the team work. The leaders are guide, they do not follow traditional autocratic approach (The Sunday Times, 2013). Leaders are friendly and the working environment is open and one that works with continuous support of the leaders. The leaders encourage employee participation in the decision making and problem solving (The Sunday Times, 2013). The leader has a breakfast with the employee which is an absolute example of team work, sharing vision and values, and moving in a same direction. The mutual trust and bond between employees and leader is strong which increase the level of confidence of employee, resulting into more motivation and effective working demonstrated at cloudreach (The Sunday Times, 2013). The opportunities for the personal growth is high which also motivates employees to work more enthusiastically at Cloudreach. Employees are properly trained and developed for their respective roles (Donelly, 2012). This means that employees have high organisational commitment. In other words, affective, normative, and continuance commitment is high in employees as a result of the leadership style. The previous empirical research of McGregor (1960) has shown that two types of employees in the organisation are X-type and Y-type. According to Robinson

(2010) those leaders who are consider and undertake theory Y, are democratic leaders with ability to motivate workforce to perform better by involving them in tasks. The result of this leads to improve organisational commitment as employees are more willing to take initiatives and participate in the work willingly and energetically. The level of trust between the employees and management improve due to this type of leadership style.

Theory X

Theory Y

Concept Adapted from McGregor (1960), "Human side of enterprise" For instance, WL Gore and associates, encourages theory Y, as the leader acts as a sponsor who works as a coach to ensure that employees personal goals are aligned with the organisational goals. Festejo (2012) emphasize that employees engagement is more visible as they are encourage to work in creative and free manner. WL Gore has minimal hierarchy, ensuring that employee are empowered to increase their affective, normative, and continuance commitment. Employees are motivated by investing trust in them to do tasks without keeping strict control or watching them over shoulder. Employees are self-motivated and manages things by their own without losing the organisational goals (Smith, 2010). It is a place where employees manage themselves by their own. More than a manager, sponsors are leaders who works to develop and increase organisational commitment in workforce (Shipper, 2007). At WL Gore & Associate, Leaders encourages employees to actively participate in the decision making process, which is another example of leaders subscription to theory Y. At time employees are stopped from the ongoing projects but it does not

reduce employee's commitment and engagement as leader ensures that employees understand that this is done in the best interest of the organisation. To ensure employees are creative, they are encouraged to be free thinkers to bring innovation without taking stress. The employees work in collaboration and their efforts are appreciated by the management (Smith, 2010). This is the reason of low staff turnover because workers enjoy working with AL Gore. In other words, employees have high engagement and commitment due to the leadership style presently operating at the company. According to Highsmith (2011) "Adaptive leadership style is a style based on the rapidly changing environment as to address the changing demands and responding to them in innovative and in situational manner" (p. 06). Such leader has a quality of recognizing the need and adjusting according to it. Moreover, "this type of leader has a potential to design decisions in a rational manner yet progressive one to use a flexible approach in the constantly changing business dynamics" (Highsmith, 2011, P. 08). However, Randall and Coakley, (2006) strongly argue that, "adaptive leader is more like a process than an individual with personal attributes and skills" (P. 03). Despite the counter argument, it is viewed as one of the finest leadership style that resolves major organisational problems. For instance, Collin Marshall of British Airways in 1980s is example of adaptive leader who understood the need for changing the operating patterns and systems and enable his team to work as the situation demanded. "This resolved the crises for the organisation as it emerged as one of the favorite airline from the most dissatisfying one" (Haifetz and Laurie, 1997, 07) . "Under adaptive leadership style, employee's level of commitment tends to improve as employees engage and enjoy their workplace responsibilities when leader share the vision, and demonstrate and communicate the need for change in right pattern" (Harrington, 2010). Team leadership style is effective one to increase employee commitment by engaging them as well ensuring that the tasks are accomplished by a total teamwork. Herzberg's Two factor theory is an example of how workforce is

motivated to increase the level of their commitment by providing the hygiene factors so that employees do not have dissatisfaction. Furthermore, motivational factors like recognition and responsibilities are used by the leaders to increase employee engagement.

Employees dissatisfied and unmotivated

H Y G I E N E

Employees not dissatisfied but unmotivated

M O I V A T I O N

Employees satisfied and motivated

Concept Adapted from Herzberg's Two factor theory (1966), "Work and the Nature of Man" According to Tuttle (2003), The leaders at Siemens use employee empowerment as a motivator to enhance employee engagement at workplace. Motivators are factors which as Siemens encourages employees to work in the best possible way they can perform. Moreover, Tuttle (2003) narrates that, team leaders encourages employees to work as one unit by personally involving in the task, rather than just giving plain directions. This type of empowerment increases employee commitment and motivates to work in collaboration. Moreover, in the changing environment it is not only about survival but also about thriving that compels the leaders or managers to adapt changes. Only well committed and engaged employees will bring desired results.

To put it in a nutshell, organisations focus on the role of leaders to retain and attract the best brain (talent) inside the organisation and keep the momentum of success in long term in the highly competitive and dynamic environment as various types of challenges are generated that have serious impact on the growth and progress of the organisation. Now, leader's role is not just simply to motivate the employees by giving monetary rewards. There is immense competition in the market to have the best talent and succession planning. These two core concepts serves theme for the leadership at the organisation. Through empowerment, employee's engagement is developed which enable the workforce to demonstrate high level of organisational commitment. Leaders are the tone setters and exhibit the culture of the organisation as well enable the employees to see the vision. Transformational leaders create the environment for the employees that encourages them to demonstrate their potential, abilities, and capabilities to accomplish organisational goals.

Transactional leaders usually believe in the reward and punishment system but transformational leader encourages employees to take initiative and perform better by fostering them and creating friendly environment. However, it is evident that transactional leaders do not always have positive relation with job satisfaction and commitment level of employees but transformational leader inspires employees to perform more effectively. On the other hand, the adaptive leaders have a huge impact on the employees engagement and level of commitment as according to situation uses techniques. Employees behavior and work related attitude is a result of the leadership styles as those employees perform better, who work in collaboration and coordination with the leaders. On the shoulders of leader lies the greatest responsibility of talent management and succession planning as they are role models for others to follow their footprints. In short, leadership is an 'X factor' as the employee engagement and commitment heavily rely on the style of leadership.

References: Allen, N. J. & Meyer, J. P (1997). Commitment in the workplace. 3rd ed. CA: Thousand Oaks Sage. 15-31. Bass, B. M. (1985). Leadership and performance beyond exceptions. New York: Free Press. Bass, M. B. & Avolio, B. J. (1997). Full range leadership development. Manual for the Multifactor Leadership Questionnaire. California: Mind Garden. Bass, M. B. & Steidlmeier, P. (1998). Ethics, character and authentic transformational leadership. Binghamton University, Binghamton, New York. Available: http://cls.binghamton.edu/BassSteid.html. Last accessed 25th Dec 2013. Batista-Taran, L. C., Shuck, M. B., Gutierrez, C. C., & Baralt, S. (2009). The role of leadership style in employee engagement. In M. S. Plakhotnik, S. M. Nielsen, & D. M. Pane (Eds.), Proceedings of the Eighth Annual College of Education & GSN Research Conference. Miami: Florida International University. p. 15-20. Best Companies Guide (2013), Profile: Pets at Home- Company Survey, available at:

http://bestcompaniesguide.co.uk/company_profile.aspx?CompanySurveyID =200387. Last accessed 25th Dec 2013. Bethel, S. M., (1990) Making a difference: 12 qualities that Make You A Leader. Bohn, J. G., & Grafton, D. (2002). The Relationship of Perceived Leadership Behaviors to Organizational Efficacy. of leadership &

Organizational Studies. 9 (2), 65-80. Burns, J. M. (1978). Leadership. New York: Harper & Row. Center for Leader Development. (2006), Leader-member exchange theory, Available at:

http://centreforleaderdevelopment.com/mediawiki/index.php?title=Leadermember_exchange_%28LMX%29_theory. Last accessed 25th Dec 2013. DIY WEEK, (2012), Pets at Home and home base named in top 20 employers, available at: http://www.diyweek.net/news/news.asp?id=15414. Last accessed 24th Dec 2013. Donelly, C., (2012), Google Apps reseller give channel to Cloudreach, available at: http://www.channelweb.co.uk/crn-uk/news/2153333/google-

apps-reseller-channel-cloudreach. Last accessed 23th Dec 2013. Festejo, L. (2012). How Organizational Culture Helps W.L. Gore & Associates Drive Innovation. Available:

https://www.greatplacetowork.com/publications-and-events/blogs-andnews/973. Last accessed 22nd Dec 2013. Goldfingle, G. (2012), Profile: Nick Wood, Pets at Home Chief Executive, available at: http://www.retail-week.com/people/profiles/profile-nick-woodpets-at-home-chief-executive/5034518.article. Last accessed 23th Dec 2013. Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction employee engagement, and business outcomes: A meta analysis. Journal of Applied Research. 87 (1), 268-279. Harrington, B., (2010), Fostering a Culture of Engagement, available at: http://adaptiveleadershipstrategies.com/wp-content/uploads/2011/11/08fostering-culture-engagement.pdf. Last accessed 23rd Dec 2013. Hay, I. (1995). Transformational leadership: Characteristics and criticisms. E-journal of Organizational Learning and Leadership . Available at: http://www.leadingtoday.org/weleadinlearning/. Last accessed 22nd Dec 2013. Head, D. (2010), An Extraordinary Success Story. Available at: http://www.lafosse.com/wpcontent/uploads/2010/09/4._An_extraordinary_S uccess_Story.pdf, Accessed: Last accessed 25th December 2013.

Heger, B. K. (2007). Linking the employee value proposition (evp) to employee engagement and business outcomes: Preliminary findings for a linkage research pilot study. Organizational Development Journal, 25, 121133.

Heifetz, R.A., & Laurie, D. L., (1997). The work of leadership, Harvard Business Review, available at: http://www.athenahealth.com/leadershipforum/_doc/The_Work_Of_Leadership.pdf. Last accessed 25th December 2013.

Herzberg, F. (1966). Work and the Nature of Man. Cleveland: World Publishing. Highsmith, J. (2011). Adaptive Leadership: Accelerating Enterprise Agility. Available on www.thoughtWorks.com. 2013. Last accessed 25th December

Kahn, W. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33(4), 692-724. Judge, T.A. & Bono, J.E. (2000). Five-factor model of personality and transformational leadership. Journal of Applied Psychology, 45 (5), 751765.

McGregor, D. (1960). The Human Side of Enterprise, New York, McGrawHill. Northouse, P. G. (2001). Leadership Theory and Practice, 2nd edition. Thousand Oaks, CA: Sage Publications, Inc. Northouse, P. G. (2004) Leadership theory and practice. 3rd ed.. Thousand Oaks, CA: Sage. Randall, L., Coakley, L. (2006). Applying Adaptive Leadership to Successful Change Initiatives in Academia. Emerald Insight. Robinson, M., (2010). Sports Club Management: Manager's leadership style influence by personality, activity. Available at:

http://www.humankinetics.com/excerpts/excerpts/managers-leadershipstyle-influenced-by-personality-activity. Last accessed 25th December 2013.

Shipper, F., (2007) Classic Case 6: AL Gore & Associates, Inc, Available at: http://www.academia.edu/964711/Classic_Case_6_WL_Gore_and_Associa tes_Inc. Last accessed 25th December 2013.

Smith, P. G., (2010), Fired up-Leading your organisation to achieve exceptional results. Georgia. USA. Page: 33-37 The Sunday Times, (2013), 25 Small best Companies to work forCloudreach rank 1. Available at:

http://features.thesundaytimes.co.uk/public/best100companies/live/templat e. Last accessed 21st December 2013. The Sunday Times - March Edition, (2013), Winds in their Sails. Available at: http://www.lafosse.com/wp-

content/uploads/2013/03/La_Fosse_PDF_EPS.pdf. Last accessed 20th December 2013. Tuttle, a. (2003). What Employees want. Industrial Distribution, 92 (5), p. 63-67 Vance, R. J., (2010), Employee Engagement and commitment: A guide to understanding, organisation. measuring, and increasing Available engagement in your at:

http://www.vancerenz.com/researchimplementation/uploads/1006Employee EngagementOnlineReport.pdf. Last accessed 25th December 2013. Walton, Sam and John Huey. (1996). Sam Walton: Made in America: My Story. Canada: Bantam Books. Wu, T. F., Tsai, M. H., Fey, Y., H., & Wu, R. T. Y., (2006). A Study of the Relationship between Managers Leadership Style and Organizational Commitment in Taiwans International Tourist Hotels. Asian Journal of Management and Humanity Sciences. 1(3): 434-452.