Transformational leadership in times of economic downfall Made by: Martyn Wielemaker Master: MSc in Human Resource Management Coach: Prof. Dr. Daan van Knippenberg - Department of Organisation and Personnel management Co-reader: Dr. Daan Stam – Department of Management of Technology and Innovation Date: August 23rd, 2012 0 TRANSFORMATIONAL LEADERSHIP IN RELATION TO JOB PERFORMANCE: HOW A SET OF SIX MODERATORS AFFECTS THIS RELATIONSHIP IN TIMES OF ECONOMIC DOWNFALL MARTYN WIELEMAKER RSM Erasmus University Rotterdam Presented in the partial fulfillment of the requirements for the Degree Master of Science in Business Administration, Human Resource Management at the Rotterdam School of Management, Erasmus University Key words: transformational leadership, job stress, job insecurity, organizational commitment, organizational identification, leader group prototypicality, openness to experience, job motivation, job performance Many leadership theories agree that a transformational leader is the key to increase the job performance of his followers. However, the purpose of this research is to investigate if this relationship is influenced by a set of moderators, job stress and job insecurity in particular during times of economic downfall. The four other moderators used in this study are leader group prototypicality, the personality dimension ‘openness to experience’ of followers, organizational commitment and organizational identification. Results among eight supervisors and seventy-three employees of eight Dutch companies showed an interaction effect of two of our moderators; job insecurity and organizational commitment. Organizational commitment and transformational leadership interacted in predicting job performance, such that transformational leadership was more strongly related to job performance for employees who experiencing less organizational commitment. Job insecurity and transformational leadership interacted in predicting job performance, such that transformational leadership was more strongly related to job performance for employees who experiencing greater job insecurity. 1 PREFACE The Master Thesis that is lying in front of you is the result of months of research into the topic transformational leadership. This report is the conclusion of my Master program Human Resource Management at the Rotterdam School of Management, Erasmus University Rotterdam. Hereby, I declare that the submitted work has been prepared independently and without the use of other than the specified sources. Rotterdam School of Management is only responsible for the educational coaching and beyond that cannot be held liable for the content of it. First of all, I would like to thank my coach Daan van Knippenberg and co-reader Daan Stam for their support during the writing of this thesis. Despite their busy schedule, they assisted and supported me in a pleasant way whenever I needed it. Secondly, I would like to thank the participating organizations and members of these organizations for their cooperation. Without them, I could not have collected my data for this research. Finally, I would like to thank my family and friends for the mental support when I needed it. I hope you enjoy reading this master thesis! 2 TABLE OF CONTENTS PREFACE .................................................................................................................................................. 2 CHAPTER ONE - INTRODUCTION ............................................................................................................. 5 CHAPTER TWO- THEORY ......................................................................................................................... 9 2.1 Job Performance ........................................................................................................................... 9 2.2 Transformational Leadership ...................................................................................................... 10 2.3 Job Performance, Transformational Leadership & Job Motivation ............................................ 12 2.4 Job Stress Level ........................................................................................................................... 13 2.5 Job Insecurity .............................................................................................................................. 14 2.6 Organizational Commitment....................................................................................................... 16 2.7 Organizational Identification ...................................................................................................... 17 2.8 Leader Group Prototypicality ...................................................................................................... 19 2.9 Openness to Experience ............................................................................................................. 21 2.10 Conceptual Framework ............................................................................................................. 22 CHAPTER THREE – METHODS................................................................................................................ 24 3.1 Introduction / Research Design .................................................................................................. 24 3.2 Sample & Data Collection ........................................................................................................... 24 3.3 Measurement of the independent variables .............................................................................. 26 3.3.1 Transformational Leadership Behavior of the Leader ......................................................... 26 3.3.2 Organizational Identification ............................................................................................... 26 3.3.3 Organizational Commitment................................................................................................ 27 3.3.4 Openness to Experience of followers .................................................................................. 27 3.3.5 Job Insecurity ....................................................................................................................... 27 3.3.6 Job Stress Level .................................................................................................................... 28 3.3.7 Leader Group Prototypicality ............................................................................................... 28 3.4 Measurement of the dependent variables ................................................................................. 28 3.4.1 Job Motivation ..................................................................................................................... 28 3.4.2 Job Performance .................................................................................................................. 29 CHAPTER 4 – RESULTS ........................................................................................................................... 30 4.1 Introduction ................................................................................................................................ 30 4.2 Descriptives ................................................................................................................................. 30 4.3 Hierarchical multiple regression analysis.................................................................................... 32 4.4 Mediation of job motivation ....................................................................................................... 38 4.4 Conclusion ................................................................................................................................... 39 3 CHAPTER 5 – GENERAL DISCUSSION ..................................................................................................... 40 5.1 Introduction ................................................................................................................................ 40 5.2 Overview ..................................................................................................................................... 40 5.3 Theoretical and practical implications ........................................................................................ 41 5.4 Limitations and future directions................................................................................................ 44 REFERENCES .......................................................................................................................................... 47 Appendices............................................................................................................................................ 54 Appendix 1 – Questionnaires ............................................................................................................ 54 A. Transformational Leadership Behavior of the Leader - Rafferty and Griffin (2004) ................ 54 B. Organizational Identification - Mael and Ashworth’s (1992) OI measure: ............................... 54 C. Organizational Commitment - Allen & Meyer (1990) ............................................................... 54 D. Job Motivation – (Motivation at Work Scale: Gagné et al. (2010)) .......................................... 55 E. Job Insecurity Scale – Ashford, Lee, & Bobko (1989) ................................................................ 56 F. Job Stress – Parker & DeCotiis (1983) ....................................................................................... 56 G. Leader Group Prototypicality – van Knippenberg (2011) ......................................................... 56 H. Openness to Experience – Costa & McCrae (1985) .................................................................. 57 I. Job Performance – Kearney & Gebert (2001) ............................................................................ 57 4 CHAPTER ONE - INTRODUCTION When the Chrysler Corporation was on the brink of bankruptcy at the end of the seventies, there was a man called Lee Iacocca, who is credited for saving the Chrysler Corporation. Mr. Iacocca took over Chrysler and he transformed the ideals and attitudes of his closest subordinates. As a result of his actions, the corporation’s culture began to reshape. This is what made Lee Iacocca a well-known successful transformational leader. A transformational leader gain follower trust by demonstrating faith in followers by empowering them, and through self-sacrificial behaviors (Conger & Kanungo, 1998; House & Shamir, 1993). A self-sacrificial behavior of Lee Iacocca is the fact that he decided to work for $ 1 a year, just like Apple’s Steve Jobs (Choi & Mai-Dalton, 1999). Mr. Iacocca managed to create an organization filled with effective leaders, and in today’s world, the most successful organization are those with transformational leaders throughout all levels of management (Joyce, 1999). There are many theories and notions about leadership in organizational and non-organizational settings. Since the publication of James MacGregor Burns’s seminal Leadership, a new type of leadership has rapidly become the approach of choice for much of the research and application of leadership theory; transformational leadership (Bass & Riggio, 2008). Since this research aims at the effects of transformational leadership during crisis, it is interesting to see what scholars have investigated about this connection. According to Bass (1985), a charismatic leader is seen as a savior, and a transformational leader is seen as most effective during crisis or distress situations. But the question is: “Is a transformational leader always the key solution in crisis or distress situations to increase job performance or are there other factors which influence this relationship?” This is what we are going to investigate by means of six components; organizational commitment, organizational identification, openness to experience, job motivation, leader group prototypicality, job stress and job insecurity. We will elaborate on these components later on. 5 Inspired by Burns, Bass and his colleagues developed the model of transformational leadership. Although, Burns introduced the term transformational leadership, Bass is called the driving force of transformational leadership theory after doing research and development for more than 20 years. This brings us to the main purpose of our research: “The effect of a set of moderators, job insecurity and job stress in particular, on the relationship between transformational leadership and job performance of followers through job motivation in times of economic downfall.” The first moderator we want to explain is organizational commitment. To date, it is more difficult for organizations to keep their employees within their organizations for a long time than it used to be. This means, organizations have to find a way to encourage, empower, motivate and develop employees in such a way that they are getting more committed to the organization for which they work. Previous research has shown that transformational leadership is known for its positive effect on followers’ attitudes and their commitment to the leader and organization (Bass & Riggio, 2008, Zohar, 2002, Brown & Moshavi, 2002, Rai & Sinha, 2000). Since lots of organizations live in uncertainty about the future nowadays, it is likely that employees within organizations are less committed to the organization for which they work, considering the degree of job stress and job insecurity in times of crisis. Therefore the importance of transformational leadership in relation to job performance of followers may decrease. If we look at the relationship between transformational leadership and job motivation, and leadership effectiveness, previous research mainly focused on the leader traits and behavior (Bass, 1990; Yukl, 1998) and not so much – rarely – on the psychological effects on followers (Hunt, 1999; Lord & Brown, 2004). Therefore, this research aims at organizational identification and its moderating effect on followers’ behavior. Social identification is an aspect of one’s identity under the ‘self-concept’ as espoused by different scholars (e.g. van Knippenberg & Hogg, 2003). The selfconception can be viewed as the knowledge a person has about him or herself. The self-concept consists of ‘self-construal’, self-efficacy, self-esteem, and self-consistency (van Knippenberg, et al. 6 2004). An important part of the self-construal is the collective self; the self is not only dependent on individual factors, but also on collective factors (Brewer & Gardner, 1996; Hogg & Williams, 2000). We can assume that followers are more motivated to work for an organization, if leaders can cultivate the collective self, so that the well-being of a company becomes a part of the collective self of followers (Van Knippenberg & Hogg, 2003). As we stated before, most research on the topic of leadership theory has focused almost exclusively on the impact of leader traits and behaviors on followers’ attitudes and behaviors (Howell & Shamir, 2005). This is a remarkable notion, because leadership is a social and interactive process between leaders and followers. Therefore, one of the gaps we tried to fill with this research is the moderating role of openness to experience of followers on the relationship between transformational leadership and job motivation and in the end, job performance. The following findings strengthen our proposition. “The follower remains an unexplored source of variance in understanding leadership processes” (Lord, Brown, and Freiberg (1999, p.167). “Bass (1985) and Conger and Kanungo (1998) have suggested that transformational leadership may be more effective for some followers than for others”. The fourth moderated used in this research is leader group prototypicality, defined as “how far a leader is perceived as embodying the group’s identity” (Giessner & van Knippenberg, 2008). Characteristics of the leader as a group member play a key role in leadership endorsement, because leadership processes are enacted in the context of shared group membership. Leaders, as group members, ask followers, as group members to exert themselves on behalf of the collective (Hogg, 2001; van Knippenberg & Hogg, 2003). According to Giessner & van Knippenberg (2008), a prototypical leader receives more follower endorsement and positive evaluations of leadership effectiveness than more non-prototypical leaders. In this research we wanted to examine in what way leader group prototypicality moderates the relationship between transformational leadership and job performance, considering the other moderators we used. 7 The last two moderators we used in this study are job stress – ‘the extent to which employees feel a tension or anxiety caused by their jobs’ (Dubinsky et al., 1995) - and job insecurity - ‘an overall concern about the continued existence of the job in the future’ (De Witte, 1999). Both constructs are of great importance in times of uncertainty. Many theories agreed that a transformational leader can reduce job stress of his followers (Bass, 1999; Dubinsky et al., 1995). To arouse and motivate his followers, a transformational leader can use his inspirational appeals. Charismatic and inspirational leadership has been shown to reduce feelings of burnout and symptoms of stress in professionals (Seltzer, Numerof, & Bass, 1989). In many studies, job insecurity is related to negative consequences for job attitudes, organizational attitudes, employee health, and work-related behavior (Sverke, Hellgren, and Näswall, 2002), but there is no clear picture regarding the consequences of job insecurity and individual studies found contradictory findings in relation to organizational outcomes. Therefore, we want to address job stress and job insecurity and examine the effect of these constructs on the relationship between transformational leadership and job performance, considering the other four moderators used in this study. 8 CHAPTER TWO- THEORY 2.1 Job Performance One of the main challenges for organizations is to optimize the job performance of their members. Therefore, it is important to understand the factors that influence this job performance. Job performance is quite an indefinite term in the literature. Despite the confusion about a clear definition, it is a critical aspect that relates to organizational outcomes and success. A simple definition of the concept is whether someone is performing well, or not. Other definitions also focused on behaviors that affect the goals of the organization and are under the control of an individual (Rotundo & Sackett, 2002). According to Campbell (1990), job performance is a behavior, done by an individual, this differentiates performance from outcomes. Job performance is stated as a key predictor for the organizational outcomes. Job performance is also a predictor for the success of the organization. It cannot be stated that job performance is the only reason of a certain outcome, there are much more influences which determines the outcome (Sackett et al, 1988; Campbell, 1990). There are different kinds of performances; the task performance which describes the performance about the expected and obligated behavior, the tasks is one kind of performance. Another kind of performance is the extra-role behavior; this is not about the obligated behavior but about the behavior outside the job requirements (Rotundo & Sackett, 2002). In this research we define job performance as ‘those actions and behaviors that are under the control of an individual and contribute to the goals of the organization’ (Rotundo & Sackett, 2002). One crucial aspect that influences the job performance is the type of leadership. This brings us to the main purpose of this research; to investigate the relationship between leadership and job performance, transformational leadership in particular. 9 2.2 Transformational Leadership The last decades, much research is done about the examination of the relationship between transformational leadership and performance outcomes (Bass, 1997; Judge & Piccolo, 2004; Lowe & Gardner, 2000; Sosik, 2006). But past research has focused exclusively on the impact of leader traits and behaviors on followers’ attitudes and behaviors (Howell & Shamir, 2005). This is a remarkable notion, because leadership is a social and interactive process between leaders and followers. Leadership is conceptualized by James MacGregor Burns (1978) as either transactional or transformational. Transactional leaders are those who lead through social exchange. Transformational leaders, on the other hand, are those who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leaders help followers grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organization (Burns, 1978). Bass (1985) mentioned that transformational leaders emphasize higher motive development, and arouse followers’ motivation and positive emotions by means of creating and representing an inspiring vision of the future (Bass, 1985). Transformational leadership is also called “charismatic”, “visionary”, or “inspirational” leadership (Shamir et al., 1993), but this terms include not all the aspects of transformational leadership, those are just parts of it. Leadership was seen primarily as an exchange relationship (e.g. Homans, 1950), but in 1980, Levinson suggested that if you limit leadership of a follower to rewards for good performance and punishments for bad performance, the follower will feel like a jackass. This is not the case with transformational leadership; “this type of leadership addresses the follower’s sense of self-worth to engage the follower in true commitment and involvement in the effort at hand.” Transformational leadership is not only effective in one specific setting, it can be an important type of leadership to inspire and develop followers in every sector and in every setting (Avolio & 10 Yammarino, 2002). There are four components in which transformational leadership itself differ from other types of leadership, defined by Avolio, Bass, and Jung (1997). The four components are: Idealized Influence (II), Inspirational Motivation (IM), Intellectual Stimulation (IS), and Individualized Consideration (IC). Leaders with a great deal of idealized influence are consistent, willing to take risks and have high standards of ethical and moral conduct. By behaving this way, leaders are admired, respected, and trusted by their followers. The second dimension, Inspirational Motivation, is about motivating and inspiring followers by providing meaning and challenge to their followers’ work. The leader creates clearly communicated expectations and demonstrates commitment to the goals and shared vision of the leader. Stimulation of Innovation and creativity is the main purpose of Intellectual Stimulation. Leaders are questioning assumptions, reframing problems, and approaching old situations in new ways to stimulate their followers to encourage and achieve this creativity. (Bass & Riggio, 2008). The last dimension, Individualized Consideration, aims at the individual differences of followers. A leader’s behavior demonstrates acceptance of individual differences; personalized interactions, listens effectively and tasks are monitored to see if followers need additional direction or support. The transformational leader acts as a mentor or coach to achieve the highest potential from each individual (Bass & Riggio, 2008). Transformational leaders have much in common with charismatic leaders, although charismatic leaders do not necessarily have to be transformational; the basic difference between the two lies in the fact that transformational leaders strive to transform the organization’s culture in which they are part of, whilst charismatic leaders may not want to change anything. In the literature, this difference has not always been made explicit, especially since different authors define transformational and charismatic leadership in different, sometimes overlapping, ways (c.f. Rowold & Heinitz, 2007, 123, referring to Conger & Kanungo, 1987). From this point, we see transformational leadership as ‘the type of leadership that motivates employees through referring to the aspirations of the entire group’, along the lines of the definition given by Bass (1990, 21). This brings us to the mediating variable of our research; namely ‘job motivation’. 11 2.3 Job Performance, Transformational Leadership & Job Motivation Motivation at work is a very important part of the leader-followership process. The selfdetermination theory (SDT) distinguishes two types of motivation; intrinsic and extrinsic motivation. The intrinsic motivation has something to do with work activity that a person has to do. This form of motivation comes from the person him/herself. This motivation is driven by the interest in the task or job and comes not from external pressure. The extrinsic motivation (contingent rewards) comes not from the individual but from external incentives like money or coercion. The employee is told what to do, and gets a reward in return. The instrumental reasons for extrinsic motivation depends on how internalized the motivation is. External regulation – “doing an activity in order to obtain rewards and avoid punishments” - lies at the low end and goes from introjected regulation – “regulation of behavior through self-worth contingencies like ego-involvement and guilt” - to identified regulation – “doing an activity because one identifies with its value or meaning, and accepts it as one’s own, which means that it is autonomously regulated” - and finally integrated regulation – “identifying with the value of an activity to the point that it becomes part of a person’s habitual functioning and part of the person’s sense of self” (Koestner & Losier, 2002). Extrinsic motivation can sometimes conflict with intrinsic motivation (Bénabou & Tirole, 2003; Centers & Bugental, 1966). The purpose of both types of motivation is to complete tasks in the best way possible, which leads to optimal job performance in the end. H1a: “Higher job motivation leads to higher job performance of followers”. H1b: “High job motivation positively mediates the relationship between transformational leadership and job performance of followers”. Since this study examines the relationship between transformational leadership and job performance through job motivation, an interesting finding of Shamir, House and Arthur (1993) is a valuable complement for this research. They found that transformational leaders motivate their followers “through implication the self-concept of followers”. Transformational leaders increase the intrinsic value of efforts and goals by linking them to valued aspects of the follower’s self-concept, 12 thus harnessing the motivational forces of self-expression, self-consistency, self-esteem and selfworth” (Shamir et al., 1993; 583). In addition, transformational leaders increase both self-efficacy and collective efficacy by “showing confidence in followers’ ability to meet such expectation, and emphasizing the individual’s ties to the collective” (Shamir et al., 1993; 583). To conclude, transformational leaders increase job motivation of their followers by influencing the ‘self’ of their followers, in order to enhance their collective behaviors. H1c: “A high degree of transformational leadership behavior positively affects the job performance of followers.” 2.4 Job Stress Level To date, we live in uncertainty with respect to the economic crisis worldwide. Therefore, we would like to investigate some of the influences of the economic crisis on the relationship between transformational leadership and job motivation and in the end, job performance. This research treats two constructs with respect to ‘crisis’; job stress and job insecurity. In addition, we treat three constructs regarding ‘group’: organizational identification, organizational commitment and leader group prototypicality. First of all, we define and elaborate on job stress. Dubinsky et al. (1995) defined job stress as the extent to which employees feel a tension or anxiety caused by their jobs. Several job stressors are friction with bosses, subordinates, colleague, and role conflict or ambiguity, and job insecurity (Cartwright and Cooper, 1997). Job stress of employees can cause organizational problems such as employee dissatisfaction, alienation, low productivity, absenteeism, and turnover (Beehr & Newman, 1978; Schuler, 1980). Despite lots of research, organizational psychologists have not agreed on the meaning and process of job stress in work organizations. In our research we define job stress as ‘A particular individual’s awareness or feeling of personal dysfunction as a result of perceived conditions or happenings in the work setting’ (Parker & DeCotiis, 1983). 13 Our research will investigate the moderating role of job stress of followers on the relationship between transformational leadership and job performance through job motivation. The transformational leadership theories focus on the effect which leaders can have on their followers’ motivation, commitment, deployment, satisfaction, and job performance. A transformational leader will reduce the stress levels of followers more than a transactional leader (Bass, 1999; Dubinsky et al., 1995). To arouse and motivate his followers, a transformational leader can use his inspirational appeals. Charismatic and inspirational leadership has been shown to reduce feelings of burnout and symptoms of stress in professionals (Seltzer, Numerof, & Bass, 1989). Transformational leaders can use idealized influence to portray a leader who is not panicking. A leader who is concerned but calm, who is decisive but not impulsive, and who is clearly in charge can inspire the confidence and trust of followers (Bass & Riggio, 2008). To conclude, if job stress of an employee is high, in general one will perform less than without the perceived job stress, because one is less motivated than before and as we mentioned before, job motivation leads to better performance. When a leader acts transformational by using his inspirational appeals like pep talks and motivational speeches to build organizational morale, he is able to reduce or eliminate job stress in individuals which may lead to increased motivation and in the end, better job performance. This brings us to our following hypothesis. H2: “High job stress of followers will be positively moderate the relationship between transformational leadership behavior of the leader and followers’ job performance. 2.5 Job Insecurity The second ‘crisis variable’ that will be defined is job insecurity. In this study, job insecurity is defined as ‘an overall concern about the continued existence of the job in the future (Van Vuuren, 1990). Van Vuuren (1990) stated that job insecurity has three components; 1) a subjective experience or perception, 2) uncertainty about the future, and 3) doubts concerning the continuation of the job as such. The first component involves that an employee might perceive the 14 same situation differently than a colleague. For example, an employee will feel secure when his job is in jeopardy, while another employee may feel insecure when there is no reason to, because his job is safe. The second component implies uncertainty about the future; the situation where a person who does not know whether he/she will be able to continue to work or whether he/she will be made redundant differs from the situation where a person is being made redundant. In the latter case, one can prepare him/herself for redundancy and future employment, because the future is clear. Especially in times of economic downfall, job insecurity is a well-known, interesting topic. In connection with the rapidly changing environment, job insecurity has received growing recognition over the past two decades. Organizations are faced with lots of competition and to survive, there is a need to make their operations more effective with fewer resources. The unpredictable economic situation has resulted in downsizing, mergers, acquisitions, and other types of structural change. All these changes have led to increased feelings of insecurity among the workers, not only feelings regarding their jobs but also about the future in general (Borg & Elizur, 1992; Davy, Kinicki, & Scheck, 1997). For the individual, perceptions of job insecurity may have harmful effects on employee well-being and job satisfaction. From the organization’s point of view, job insecurity may have deleterious consequences for employees’ attitudes toward the organization, willingness to remain with the organization, and performance. Job insecurity can be seen as a stressor in employee situations, stress reactions are consequences of the stressor for the psychological well-being, and coping behavior refers to the way a person deals with stress (De Witte, 1999). Hartley et al. (1991) even went so far as to suggest that “job insecurity can be one of the more important stressors in employment situations” (p. 44). Since job insecurity reduces the well-being of an individual in both the long and short term and is consistently associated with decreased job satisfaction, declines in commitment, less confidence in the organization and a rise in intentions to quit, one can assume 15 that the job performance of the individual suffers from all these consequences of job insecurity. (Ashford, Lee, & Bobko, 1989). In addition, if one has the feeling that his job is in jeopardy, in general one is less committed to the organization, and one can assume that this person is less interested in the transformational leadership behaviors of his supervisor, like the collective goals of the organization and the emphasis on long term achievements. This may led to a decreased job performance because the employee has less motivation to perform his job tasks. Therefore, a high degree of job insecurity will limit the influence of a transformational leader on the specific individual. This leads us to the following hypotheses: H3: “High job insecurity will negatively moderate the relationship between transformational leadership behavior of the leader and followers’ job performance.” 2.6 Organizational Commitment Now, we would like to define and elaborate the first construct of ‘group’; organizational commitment. Commitment is defined by Mowday, Porter, and Steers (1982) in three components: identification with the values and goals of the organization, willingness to exert effort on behalf of the organization, and commitment to stay in the organization. Bass (1998) and Yukl (2002) defined organizational commitment as ‘loyalty and attachment to the organization’. In a charitable organization, commitment of volunteers can be sustained for example by the positive feelings of helping others. Hence, our topic is leadership within organizations, and also leadership is a key factor that helps build commitment of followers to an organization (Bass & Riggio, 2008, Mowday, Porter, & Steers, 1982). Especially, leadership that is inspirational, stimulating, and considerate of followers’ needs. These aspects of leadership are the core of transformational leadership, thus of course interesting for our research. 16 Leaders can play a very important role in affecting organizational members’ levels of commitment by fostering followers’ commitment to the team, to the leader, and to the organization. Followers’ attitudes and their commitments to the leader and organization are one of the strongest effects of transformational leadership (Bass & Riggio, 2008). Transformational leaders influence both followers’ identification with and commitment to the leader and also positively influence followers’ social identification with the group or organization (Kark and Shamir, 2002; Kark, Shamir & Chen, 2003). Commitment itself has many facets, a number of scholars have suggested that commitment to the organization takes different forms (Bass & Riggio, 2008). Allen and Meyer (1990) made a distinction between affective commitment (employee’s emotional attachment to the organization), continuance commitment (deals with anticipated cost of leaving the organization), and normative commitment (employee’s sense of obligation to stay). Transformational leadership helps to build strong follower commitment, especially affective commitment. Employees who experience a high degree of job insecurity may be less committed to the organization and the leader. Thereby, one who has nu assurance about his job, he or she identify less with the organization and is less interested in the collective goals and interests of the organization. Since one core characteristic of transformational leadership is ‘to motivate and empowering followers through referring to the aspirations and goals of the entire group’, it is assumable that the positive influence of transformational leadership on job motivation and in the end, job performance is lower when followers identify less with the leader and the organization (Shamir et al., 1993). H4: “High organizational commitment positively moderates the relationship between transformational leadership and job performance.” 2.7 Organizational Identification Social identification with the organization is the second ‘group-variable’ in our research. Social 17 identification is an aspect of one’s identity under the ‘self-concept’ as espoused by different scholars (e.g. van Knippenberg & Hogg, 2003). The self-conception can be viewed as the knowledge a person has about him or herself. The self-concept consists of ‘self-construal’, self-efficacy, self-esteem, and self-consistency (van Knippenberg et al., 2004). An important part of the self-construal is the collective self; the self is not only dependent on individual factors, but also on collective factors (Brewer & Gardner, 1996; Hogg & Williams, 2000). Organizational identification is the degree to which a member defines him- or herself by the same attributes that he or she believes define the organization. We can assume that followers are more motivated to work for an organization, if leaders can cultivate the collective self, so that the well-being of a company becomes a part of the collective self of followers (Van Knippenberg & Hogg, 2003). Another part of the self-concept is one’s self-efficacy. Perceived self-efficacy is defined as ‘people’s beliefs about their capabilities to produce designated levels of performance that exercise influence over events that affect their lives’ (Bandura, 1994). Waldman & Spangler (1989) stated that transformational leadership can increase one’s self-efficacy. By helping their followers with individual problems and challenges, and showing confidence to them, leaders are able to raise the self-efficacy of followers (Bandura, 1977; Gist, 1987). The identification with the organization has been found to impact several variables in an organizational setting, such as operational reliability (Weick & Roberts, 1993), competitive behavior towards 'outside' groups, more organizational citizenship behavior and better individual association to the organization (Dutton, Dukerich & Harquail, 1994), or organizational performance in general (Beer, Spector, Lawrence & Quinn Mills, 1984; Gustafson & Reger, 1995). These effects (partly) come about through heightened motivation to perform better. Individuals who identify themselves with a group, base their self-concept and self-esteem on their belongings to the group. Group successes and failures are experienced as personal successes and failures (Mael & Ashforth, 1992). 18 Shamir, House & Arthur (1993) argued that transformational leadership has a positive influence on job motivation through the use of followers’ identity by the transformational leader. The more followers identify with the organization (include the organization in their self-concept), the more leverage leaders have to influence followers’ behavior. Also, the more followers identify with an organization, the more they are motivated to work for that organization (Giessner et al., 2010). When employees identify themselves with the organization for which they work, they appreciate transformational leadership more and the aspects of it, like personal care, vision, and charisma. So, we assume that social identification will positively moderate the relationship between transformational leadership and job performance through job motivation. H5: “High social identification with the organization positively moderates the relationship between transformational leadership and followers’ job performance.” 2.8 Leader Group Prototypicality Group prototypicality refers to the extent to which the leader is seen to embody the group identity – the group prototype (i.e., group prototypes are fuzzy sets of characteristics that in a given context define the group in comparison to relevant other groups. The group prototype describes and prescribes group membership appropriate attributes in a specific context (Giessner, 2009). Leader group prototypicality is a cognitive structure, which reflects the essential characteristics of a group. Leaders are perceived more effective and receive stronger leadership endorsement when they are perceived to be more group prototypical (Giessner, van Knippenberg, & Sleebos, 2009). Leader group prototypicality derives its effectiveness from the perception that group prototypical leaders can be trusted to pursue the group’s best interest (Giessner & van Knippenberg, 2008; van Knippenberg & Hogg, 2003, van Knippenberg & van Knippenberg, 2005a). To explain why some leaders are more effective than others, leadership researchers studied leader traits, behavioral style, and situational contingencies to find an explanation. In general, transformational and charismatic leadership result in heightened performance, because of the increased sense of collective identity 19 and common mission, greater levels of commitment and motivation, and the willingness to make personal sacrifices (Bass & Avolio, 1993; Lowe, Kroeck & Sivasubramaniam, 1996; Shamir et al., 1993). The social identity approach is an approach to understand the influence of shared group membership on perceptions, evaluations, and behavior. Individuals perceive the social world in terms of social categories. Hence, group membership can shape people’s cognitions, feelings, and behavior (Giessner, van Knippenberg, & Sleebos, 2009). To perceive higher motivation and better performance, leaders should be as prototypical to the group as possible, because individuals that are more representative of the group are more influential and attractive (Hogg, 1992; van Knippenberg, Lossie, & Wilke, 1994). Due to the fact that group prototypical leaders are effective whether they engage in group-oriented behavior or not, followers have more trust in the leader’s motivation to pursue the group’s best interest and this increases the openness to the leader’s influence (Giessner & van Knippenberg, 2008, van Knippenberg & Hogg, 2003). In addition, employees who identify more with their supervisor are in general more willing to sacrifice own goals in the interest of the collective goals that their supervisor pursue. Therefore, leader group prototypicality and leader group-oriented behavior interact to affect leadership effectiveness (van Knippenberg, 2011). As a result, transformational leaders who are more effective because of their perceived group prototypicality are able to positively affect the job motivation and job performance of their followers. Another theory about leader-member exchange shows that employees who perceive their leader as more group prototypical are more committed to the organization, which leads to employees who are more motivated and as a result of that, shows an increase in job performance (Sluss & Ashforth’s, 2007). H6: “High leader group prototypicality positively moderates the relationship between transformational leadership behavior of the leader and followers’ job performance.” 20 2.9 Openness to Experience To date, the linkage between transformational leadership and positive psychology, positive organizational behavior, and positive scholarship is missing (Seligman & Csikszentmihalyi, 2000; Seligman, et al., 2005; Luthans, 2002; Cameron, et al., 2003). Additional research is needed to examine the links between transformational leadership and follower characteristics and its effect on the follower attitudes and job performance (Zhu et al., 2009). Moreover, the focus, like much of leadership research, is on the transformational leader – the leader-centric perspective. More attention needs to be given to the followers of transformational leadership and to the leaderfollower transformational relationship (Hollander, 1992; Vecchio, 1997). Researchers have investigated personality measures in relation to job performance. The overall conclusion from these studies is that the validity of personality as a predictor of job performance is quite low (e.g., Ghiselli, 1973; Guion & Gottier, 1965; Locke & Huh, 1962). Though, the research of Barrick & Mount suggests that the relation of personality measures (openness to experience and extraversion) to training proficiency, one of the performance criteria, is an important area for future research. Openness to experience is related to training proficiency, because it assesses personal characteristics such as curious, broadminded, cultured, and intelligent, which are associated with positive attitudes toward learning experiences (Barrick & Mount, 1991). When we look at the intentions of a transformational leadership style, a supervisor is trying to develop and deploy his employees as leaders themselves in the long run. He is trying to create an organization with people who are able to bring the organization to the next level. People, who are more open to new experiences and changes, would benefit more from a transformational leader and the effect of this type of leadership on the motivation and performance of employees will be greater than with people who are more conservative and who prefer status quo rather than change. H7: “High openness of experience positively moderates the relationship between transformational leadership and job performance.” 21 2.10 Conceptual Framework There are nine variables used in this research. The main relationship is the one between transformational leadership and job performance through job motivation. The main purpose of the research is to investigate if this relationship is affected by a set of moderators. There are three types of moderators; the first category is ‘group’ (organizational identification, organizational commitment and leader group prototypicality), the second category is ‘crisis’ (job stress level and job insecurity) and the last category is ‘individual’ (openness to experience of followers). Lots of scholars agree that transformational leadership has a positive influence on the motivation and performance of followers. This research investigates if this is also the case in specific circumstances, like high or low organizational commitment, high or low job stress and/or job insecurity, and so on. Figure 1 shows the conceptual model of this study. 22 Figure 1. Conceptual Model Transformational Leadership Organizational Commitment Job Stress Organizational Identification Job Insecurity Leader Group Prototypicality Openness to Experience Job Motivation Job Performance 23 CHAPTER THREE – METHODS 3.1 Introduction / Research Design This chapter will mention the research strategy, the sample and data collection, and the measurement of the control, independent, moderating, mediating and dependent variables. This study can be qualified as a descriptive quantitative research, because the aim of this research is to determine the relationship between a set of variables by measuring subjects once. The conceptual model we use consists of nine variables; one independent variable, six moderating variables, one mediating variable and one dependent variable. All of these variables can be measured by means of a questionnaire. For this research, there are two different types of questionnaires; one that has to be filled out by employees who are rated by a supervisor, and one that has to be filled out by the supervisors themselves. The control variables used in this study are gender and age of the respondents. Once the data was collected, we used statistical regression to analyze our data. The program we used for our analyses is SPSS 19.0 for Windows. Both supervisors and employees use five or seven point Likert scales to answer the questions in the questionnaires. The items in the questionnaires are identical and gathered from existing questionnaires used and created by researchers in scientific research. The questionnaire for the supervisor consisted of 4 questions regarding job performance of his/her employees. The questionnaire for the employees consisted of 82 questions regarding transformational leadership behavior of their supervisor, organizational identification, organizational commitment, leader group prototypicality, openness to experience, job insecurity, job stress and job motivation. 3.2 Sample & Data Collection First of all, I thought about companies which are relevant for this study. I concluded that there is no specific branch or company needed or ruled out for this kind of research. All I needed was a number of companies with employees and one or more supervisors who are willing to participate in our 24 research by means of filling out two questionnaires; one for the supervisors and one for the employees. Participants were eight supervisors and seventy-three employees of eight different companies who participated voluntarily in this study. The companies who participated in our study are active in the following branches; construction work, industry, catering, financial services, landscaping business, and government agencies. The age distribution of the respondents was as follow: 8.2% younger than 20 years, 57.5% between 20 and 40 years, 34.2% between 40 and 60 years, and none of the respondents were older than 60 years. 53.4% of the participants were male, and 46.6% of the participants were female. The above participants from the eight different companies are gathered through the following procedure. After I decided that every company could be interesting for this study, I started contacting several organizations I know from my social circle. First of all, I called the organizations to ask if they were interested in participating in this study. After a positive reaction, I dropped by to explain this research in further detail and elaborate on the participation procedure. I explained to the supervisor in question that I needed a supervisor who will rate the job performance of his followers. In turn, the followers who were rated had to fill out the questionnaire about the transformational leadership behavior of his/her supervisor. Besides, questions about job stress, job insecurity, social identification with and commitment to the organization, leader group prototypicality, and job motivation are discussed. Finally, gender and age were asked as control variables in this study. After the supervisor agreed with participation and the procedure was clear, I promised him to send him the links of the questionnaires by email, and in case he wanted to, I handed out the questionnaires in person to him and his employees. I made clear that I am always available and willing to answer questions regarding ambiguities in the questionnaires. 25 3.3 Measurement of the independent variables 3.3.1 Transformational Leadership Behavior of the Leader The most widely accepted instrument to measure transformational leadership behavior of the leader is the revised form of the MLQ (5X) (Bass & Avolio, 1997). Though, we decided to use a different scale for our research, given the fact that the questionnaire used in this study cannot be too timeconsuming. The MLQ (5X) consists of 20 standardized items to measure transformational leadership, 4 items assessing each of the five transformational leadership dimensions. The questionnaire used for this research is the one from Rafferty and Griffin (2004), they developed a questionnaire to assess five clusters of behaviors that transformational leaders often demonstrate. This scale comprises 15 items, primarily derived from House (1998) and Podsakoff, MacKenzie, Moorman, and Fetter (1990). The scale encompasses five facets that are associated with transformational leadership behavior – articulating a vision, inspirational communication, intellectual stimulation, supportive leadership, and personal recognition. Every items was measured on a five point Likertscale ranging from (1) strongly disagree to (5) strongly agree. Item three is reverse-scored: “Has no idea where the organization is going”. A sample item is: “Has challenged me to rethink some of my basic assumptions about my work.” A composite transformational leadership score was computed by averaging the responses to each item (α = 0.826). 3.3.2 Organizational Identification Organizational identification is defined as ‘a perceived oneness with an organization and the experience of an organization’s successes and failures as one’s own (Mael & Ashford, 1992). In this research, the identification of followers with the organization is measured using the questionnaire created by Mael & Ashforth (1992). This questionnaire examines the degree to which followers identify themselves with an organization of which they are part of. The questionnaire consists of six items on a five point Likert scale ranging from (1) strongly disagree to (5) strongly agree. A sample item is: “I am very interested in what others think about my organization.” A composite social identification with the organization score was computed by averaging the responses (α = 0.798). 26 3.3.3 Organizational Commitment To measure followers’ commitment to the organization we used the questionnaire from Allen & Meyer (1990). This questionnaire consists of 24 items ranging from (1) strongly disagree to (5) strongly agree. The 24 items are divided in three components of commitment; affective commitment (AC), continuance commitment (CC), and normative commitment (NC). For this research, we decided to use 18 items in total; six from every component of commitment. Items three, four, five, and thirteen are negatively phrased, so we reversed code these four items in our dataset. A sample item is: “I really feel as if this organization’s problems are my own.” A composite organizational commitment score was computed by averaging the responses (α = 0.786). 3.3.4 Openness to Experience of followers To measure openness to experience of followers the items of Caprara et al. (1993) are used. In this study we used 2 items to measure the openness of experience; 1 item to measure ‘openness to culture’ and 1 item to measure ‘openness to experience’. The items are measured on a 5 point Likert scale varying from (1) strongly disagree to (5) strongly agree. A sample item is: “I am always informed about what’s happening in the world.” A composite openness to experience score was computed by averaging the responses (α = 0.353). Based on the reliability analysis, we have to conclude that this variable is not reliable enough (α < 0.65) to use in our analysis. 3.3.5 Job Insecurity To measure job insecurity we used items from the questionnaire of Ashford, Lee & Bobko (1989). In this research we decided to use only the 10 items that measure the likelihood of possible changes in a total job. The 10 items that measure the importance of changes affecting a total to one personally are not used in this research, because these items are less important for this research. Besides, the questionnaire used in this research should not be time-consuming with respect to the respondents. The 10 items we used are measured on a five point Likert scale ranging from (1) very unimportant to (5) very important. A sample item is: “Lose your job and be moved to a lower level job within the 27 organization?” A composite job insecurity score was computed by averaging the responses to each item. We have chosen to delete the fourth item of our scale: “Be moved to a higher position within your current location” to increase the reliability of the scale and besides, the correlation with the other items was extremely low and negative (r = -0.110, α = 0.914). 3.3.6 Job Stress Level The moderating variable job stress level is measured by means of the perceived work stress questionnaire developed by Parker & DeCotiis (1983). The questionnaire consists of 13 items measured on a five point Likert scale ranging from (1) strongly disagree to (5) strongly agree. A sample item is: “Working here makes it hard to spend enough time with my family.” A composite job stress level score was computed by averaging the responses (α = 0.910). 3.3.7 Leader Group Prototypicality The definition of group prototypicality used in this study refers to the extent to which the leader is seen to embody the group identity – the group prototype (Giessner, 2009). Leader group prototypicality is a concept measured by means of a questionnaire conducted by van Knippenberg, consisted of 6 items on a scale ranging from (1) strongly disagree to (5) strongly agree. The respondents were asked to answer six statements about the leader of his/her team. A sample item is: “Our team leader has a lot in common with our team”. A composite leader group prototypicality score was computed by averaging the responses to each item (α = 0.722). 3.4 Measurement of the dependent variables 3.4.1 Job Motivation The questionnaire used to measure job motivation is the one developed by Gagné et al. (2010). They developed the Motivation at Work Scale (MAWS), which consists of four types of motivation; intrinsic motivation, identified regulation, introjected regulation and external regulation Each of these four components consists of 3 items. The items are measured on a 7 point Likert scale ranging 28 from (1) not at all to (7) exactly. A sample item is: “For the moments of pleasure that this job brings me.” We have chosen to delete the 11th and 12th item of the scale; “Because it allows me to make a lot of money” and “I do this job for the paycheck”, because the Cronbach’s alpha could be raised from 0.631 to 0.824. A composite job motivation score was computed by averaging the responses to each item (α = 0.824). 3.4.2 Job Performance One approach to the study of performance is to focus on what leaders themselves do. What behaviors do they engage in, and are these the “right” kinds of behaviors to effectively lead? Another way to conceptualize leader performance is to focus on the outcomes of the leader’s followers, group, team, unit, or organization. The latter is the method we used in this study. To measure the performance of employees, supervisors were asked to fill out a short questionnaire regarding four performance criteria; productivity, efficiency, quality of innovations, and the overall achievement of their followers. Each supervisor was asked to compare a few of his followers with each other. The items ranged from (1) far below average to (5) far above average. These items are obtained from Kearney & Gebert (2009). A sample item is: “How productive is the focal subordinate?” A composite job performance score was computed by averaging the responses to each item (α = 0.859). 29 CHAPTER 4 – RESULTS 4.1 Introduction This chapter describes the results of our research study. The results were analyzed on the individual level of analysis. First of all, I present a table with some standard descriptives, like the means, standard deviations, and the correlations of our independent and dependent variables. Secondly, a reliability and validity analysis are given, which includes the cronbach’s alpha and multicollinearity of the variables used in the conceptual model. Next, I will analyze the results by means of a hierarchical multiple regression analysis. This will result in an acceptation and/or rejection of our hypotheses. Finally, I provide a conclusion with the link to the next chapter; the discussion of our study. 4.2 Descriptives Descriptive statistics and correlations between all variables of our model are presented in Table 1. The descriptive statistics in our study consist of the mean, standard deviations, inter-correlation coefficients and the reliability coefficients (Cronbach’s alpha) of our variables. The rule of thumb for the reliability coefficient is that the Cronbach’s alpha has to be at least 0.70, so I had to delete the openness to experience variable, because the coefficient was 0.35. In most of the cases, one can delete one or more items to raise the reliability coefficient, but in this case, the scale consists of only two items, so unfortunately the variable ‘openness to experience’ is no longer of relevance in this study. All other reliability coefficients in this study are higher than 0.70. When comparing the means of our variables, one can see that the mediating variable job motivation has the highest mean (M = 4.38) and the two constructs with respect to crisis the lowest; job stress (M = 2.12) and job insecurity (M=2.15). The majority of the respondents does not experience high job stress and do not have the feeling that their job is in jeopardy. The latter is somewhat unexpected in view of the current economic downturn in the Netherlands. When comparing the other moderators of this study, one can conclude that respondents score slightly above average on how committed they are to the organization (M=3.25), how strong they identify themselves with the 30 organization (M=3.34) and how they see their supervisor as a person who embody the group identity (M=3.61).Respondents assessed their supervisor slightly above average on transformational leadership behavior (M= 3.50) and supervisors assessed their employees slightly above average on job performance (M= 3.61). Notice there is a weak positive correlation between transformational leadership and job performance. Unfortunately, this correlation is not significant (r=0.12, p=0.305>0.05). When one looks at the effect of the mediating variable job motivation on job performance, one can conclude that there is a strong significant correlation between these two (r=0.48, p=0.001<0.01). The higher one is motivated to do his tasks, the better one performs at his job. Note that the standard deviation of job motivation is the highest of all variables (SD=0.87), which suggests that among the respondents, there is a remarkable difference between the degree of job motivation. This study is controlled for age and gender, and after interpreting the results, one can conclude that they do not have any significant effect on the relationships between the variables in this study. Table 1. Descriptive statistics Variables M SD 1 2 3 4 1. Transformational leadership 3.50 0.43 (0.83) 2. Organizational commitment 3.25 0.39 0.36** (0.79) 3. Organizational identification 3.34 0.67 0.47** 0.30** (0.80) 4. Leader group prototypicality 3.61 0.51 0.10 -0.02 -0.22 (0.72) 5. Job stress 2.12 0.65 -0.07 0.25* 0.23 -0.40*** (0.91) 6. Job insecurity 2.15 0.80 -0.28* -0.33** -0.65*** 0.32** -0.25* (0.91) 7. Job motivation 4.38 0.87 0.07 0.10 0.55*** -0.05 0.23 -0.67*** (0.82) 8. Job performance 3.61 0.74 0.12 0.09 0.31** 0.03 -0.04 -0.36** 0.48*** (0.86) 9. Age - - -0.09 0.08 0.02 -0.13 0.19 -0.06 0.01 -0.00 - 10. Gender - - -0.12 -0.18 -0.02 0.02 -0.15 0.18 0.10 -0.02 0.10 Notes. Cronbach’s alpha in parentheses. n = 73. *P<0.05; **p<0.01, ***p<0.001 31 5 6 7 8 9 10 - 4.3 Hierarchical multiple regression analysis The most interesting part of this study is to test the interaction effects in our model by means of hierarchical multiple regression analysis. The conceptual model consists of six moderators of which five will be used in further analyses. Earlier in this research, I concluded that the openness to experience scale is deleted for further analyses, because the scale failed the reliability test. Since age is not correlated at all and far from significance, this control variable does not seem to matter for this study, and therefore, in view of the power of our regression model, I decided to run model 2 and 3 without age as a control variable. At first, gender does not seem to matter as a control variable either. However, in model 3 gender causes an interesting interaction effect concerning transformational leadership and job insecurity. For this reason, I decided to include gender in all of the three regression models. To run appropriate hierarchical multiple regression analyses and test interaction effects, the independent variables and moderating variables of this study are centered. I followed the approach of Aiken & West (1991) in this matter. First, I created the centered independent variable by subtracting the mean score of transformational leadership of the individual respondent’s average score. Now the new variable has a mean of zero with the exact same standard deviation as the original variable. I followed the same procedure with the five moderators used this study. After the variables are centered and corrected for multicollinearity, I used the new centered variables to create the product terms following the product variable approach suggested by Baron & Kenny (1996). Since the control variables in this study - gender and age - are measured on an ordinal/nominal level, dummy variables were created instead of being centered. Finally, I ran the multiple regression analyses with the new variables to show if there are any interaction effects observable. 32 To summarize, model 1 consists of gender and age, the control variables of this study. In model 2, age is omitted and the independent variable and the set of moderators are added. Model 3 includes gender, the independent variable, moderating variables and the product terms to test for interaction effects. By far, the main focus of this study is model 3, to show if there are any significant interaction effects that affect the relationship between transformational leadership and job performance. However, significant relationships in Model 1 and 2 are worth to notice as well. 33 Tabel 2. Job performance as a function of transformational leadership and the set of moderators: summary of moderated multiple regression analyses Model, Step, and Predictor Variables Model 1 Β Model 2 t Constant 3.62 8.86*** Age -0.00 -0.01 Gender -0.03 -0.15 Β 3.60 Model 3 t 31.04*** Β t 3.73 28,71*** 0.02 0.14 -0.09 -0.73 Transformational leadership -0.07 -0.52 -0.16 -1.13 Organizational commitment -0.02 -0.15 0.16 1.06 Organizational identification 0.18 1.09 0.19 1.11 Leader group prototypicality 0.15 1.14 0.30 1.93* Job stress -0.11 -0.83 -0.17 -1.20 Job insecurity -0.35 -2.19** -0.30 -1.68* Organizational commitment * TL -0.36 -2.14** Organizational identification * TL 0.34 1.30 Leader group prototypicality * TL -0.03 -0.18 Job stress * TL -0.07 0.46 Job insecurity * TL 0.43 1.78* Note: ΔR² in model 1 = -0.03, for model 2, ΔR² equals 0.10, in model 3, ΔR² equals 0.17 *p<0.10; **p<0.05; ***p<0.01 34 As can be seen in Table 2, analysis yield a significant relationship between job insecurity and job performance (β = -0.31, p < 0.10). This result suggests that respondents perform less when their jobs are in jeopardy. Another significant relationship can be found between leader group prototypicality and job performance (β = 0.30, p= 0.06<0.10). This suggests that respondents perform better when they see their leader as a person who embodies the group identity. Of greatest interest is the finding that the hypothesized two-way interaction between transformational leadership and organizational commitment is significant and therefore predicts variance in job performance (β = 0.36, p= 0.04<0.05). Though, the finding is not in line with our fourth hypothesis. We predicted that high follower’s commitment to the organization has a positive effect on the relationship between transformational leadership and job performance, but the results show us that the opposite is true. This two-way interaction effect claims that the relationship between transformational leadership and job performance is stronger with lower organizational commitment. We will elaborate on this unexpected finding in our general discussion. The other significant finding of this multiple regression analysis that predicts variance in job performance is the two-way interaction between transformational leadership and job insecurity (β = 0.44, p = 0.08<0.10). This interaction shows that the relationship between transformational leadership and job performance is positively moderated through job insecurity. The relationship is stronger with higher job insecurity. Again, this result is in contrary to our hypothesis. The third hypothesis predicts a negative moderating effect of job insecurity on the relationship between transformational leadership and job performance. Possible explanations will be discussed in the general discussion. The other interaction effects in table 2 are not significant. The nature of these interactions can be further explored with simple slope analyses. I used procedures by Aiken and West (1991). Figure 2 shows the simple slopes plotted for the interaction effect of organizational commitment on the relationship between transformational leadership and job performance. The figure is obtained from Jeremy Dawson. 35 Figure 2. Job performance as a function of transformational leadership and organizational commitment 5 Job performance 4,5 4 3,5 Low Organizational commitment High Organizational commitment 3 2,5 2 1,5 1 Low Transformational leadership High Transformational leadership When one looks at figure 3 for interpreting the interaction effect, one can conclude that high organizational commitment negatively moderates the relationship between transformational leadership and job performance. This is not in line with our fourth hypothesis which claims that high follower’s commitment positively moderates the relationship between transformational leadership and job performance. When employees are less committed to their organization in combination with high transformational leadership, they perform better compared to employees who are more committed to their organization in combination with high transformational leadership. On the other hand, when the follower’s commitment is high in combination with low transformational leadership, the performance of employees is high, and with low commitment in combination with low transformational leadership, the performance is low. This analysis revealed that organizational commitment negatively moderates the relationship between transformational leadership and job performance; lower performance by employees who are more committed to their organization in combination with high transformational leadership. Possible explanations for this unexpected finding can be found in the general discussion of our results. 36 Figure 3 shows a simple slope for the interaction effect of job insecurity and transformational leadership. Figure 3. Job performance as a function of transformational leadership and job insecurity 5 Job performance 4,5 4 3,5 Low Job insecurity 3 2,5 High Job insecurity 2 1,5 1 Low Transformational leadership High Transformational leadership Note that employees perform better when they experience high job insecurity in combination with high transformational leadership compared to when employees experience low job insecurity in combination with high transformational leadership. On the other hand, when job insecurity is high in combination with low transformational leadership, employees perform less, compared to when employees experience low job insecurity in combination with low transformational leadership. This analysis revealed that job insecurity positively moderates the relationship between transformational leadership and job performance; higher job performance by employees who experience relatively high job insecurity in combination with transformational leadership. 37 4.4 Mediation of job motivation To examine whether job motivation mediates the interaction effect of transformational leadership and job performance, I followed four steps in establishing mediation discussed by Baron & Kenny (1986) and Judd and Kenny (1981). Step 1 is to demonstrate if the initial variable is correlated with the outcome. I used job performance as the criterion variable and transformational leadership as a predictor in a regression equation. Unfortunately, the relation was positive, but not significant (β= 0.12, p=0.31>0.10). In step 2, I needed to show if transformational leadership is correlated with the mediator, job motivation in our case. I used job motivation as the criterion variable and transformational leadership as a predictor in a regression equation. Unfortunately, the relation was positive, but not significant (β= 0.13, p=0.58>0.10). In step 3, one has to show that the mediator affects the outcome. I used job performance as the criterion variable and transformational leadership and job motivation as the predictors in a regression equation. The results show us that job motivation is significant and strong correlated with job performance (β = 0.41, p = 0.00<0.01). Since the relationship between transformational leadership and job motivation is not significant at all, one can conclude that job motivation leads to higher performance controlled for the effect of the relation between transformational leadership and job motivation. However, after the four steps we just followed, one can conclude that step 1 and 2 are not met, which lead us to the conclusion that there is no mediation effect of job motivation on the relationship between transformational leadership and job performance. To conclude, these findings do not provide support for hypothesis 1B; the prediction that higher job motivation positively mediates the relationship between transformational leadership and job performance. 38 4.4 Conclusion Hypotheses Rejection/Acceptation H1a: “Higher job motivation leads to higher job performance of followers”. Employees who are more motivated perform significantly higher than their colleagues who are less motivated. I accept this hypothesis. H1b: “High job motivation positively mediates the relationship between transformational leadership and job performance of followers There were no significant relationships found between transformational leadership and job motivation and between transformational leadership and job performance. I cannot accept this hypothesis. H1c: “A high degree of transformational leadership behavior positively affects the job performance of followers.” There was a weak negative correlation found between transformational leadership and job performance, but the finding was not significant. I cannot accept this hypothesis. H2: “High job stress of followers will be positively moderate the relationship between transformational leadership behavior of the leader and followers’ job performance through job motivation”. The interaction effect of job stress and transformational leadership does not significantly predicts variance in job performance. I cannot accept this hypothesis H3: “High job insecurity will negatively moderate the relationship between transformational leadership behavior of the leader and followers’ job performance through job motivation.” The interaction effect of job insecurity and transformational leadership significantly predicts variance in job performance. However, high job insecurity positively predicts variance in job performance. I cannot accept this hypothesis. H4: High followers’ commitment to the organization positively moderates the relationship between transformational leadership and job performance through job motivation“. The interaction effect of organizational commitment and transformational leadership significantly predicts variance in job performance. However, high organizational commitment negatively predicts variance in job performance. I cannot accept this hypothesis. H5: “High social identification with the organization positively moderates the relationship between transformational leadership and followers’ job performance through job motivation.” The interaction effect of organizational identification and transformational leadership does not significantly predicts variance in job performance. I cannot accept this hypothesis H6: “High leader group prototypicality positively moderates the relationship between transformational leadership behavior of the leader and followers’ job performance through job motivation.” The interaction effect of leader group prototypicality and transformational leadership does not significantly predicts variance in job performance. I cannot accept this hypothesis H7: “High openness of experience positively moderates the relationship between transformational leadership and job performance through job motivation.” The scale I used to measure this construct failed the reliability analysis, because of the low Cronbach’s alpha. I cannot accept this hypothesis. 39 CHAPTER 5 – GENERAL DISCUSSION 5.1 Introduction This research was set up to investigate the influence of a set of moderators on the relationship between transformational leadership and job performance. The moderators used in this study were: “organizational commitment”, “organizational identification”, “leader group prototypicality”, “job stress”, “job insecurity”, and “openness to experience”. Especially, job stress and job insecurity were chosen because of the current worldwide economic downfall and the different opinions in existing theories about the relationship between job insecurity and job performance. Nine hypotheses were tested by means of hierarchical multiple regression analyses. The results of these analyses will be further discussed in this chapter. Theoretical and practical implications of the findings will be discussed. Limitations and potential areas for future research will be provided at the end of the discussion. 5.2 Overview Our findings suggest that both job insecurity and organizational commitment have an effect on the relationship between transformational leadership and job performance. The results show that high job insecurity positively moderates the relationship between transformational leadership and job performance and high organizational commitment negatively moderates the relationship between transformational leadership and job performance. In addition, low job insecurity negatively moderates the relationship between transformational leadership and job performance and low organizational commitment positively moderates the relationship between transformational leadership and job performance. Both results are unexpected and not in line with the existing theory and literature. Organizational identification, job stress, and leader group prototypicality do not have an interaction effect on the relationship between transformational leadership and job performance. But worth to mention is the independent effect of leader group prototypicality on job performance. Higher leader group prototypicality leads to higher job performance. This is not a relationship that we explicitly hypothesized, but the finding is nevertheless a contribution to existing research regards 40 group prototypicality and leadership effectiveness that found a positive relationship between these two constructs (van Knippenberg & van Knippenberg, 2005, Hogg et al., 1998). Another finding is the negative independent effect of job insecurity on job performance. This is remarkable, because the interaction effect of job insecurity that we found showed a positive effect on the relationship between transformational leadership and job performance. As such, without taking into account the type of leadership, employees who perceive high job insecurity perform worse compared to their colleagues who perceive less job insecurity. In addition, with a transformational leader, employees who perceive high job insecurity perform better than without such a type of leader. This finding is a contribution to several studies conducted by many researchers regarding this topic (de Witte, 1999; Abramis, 1994; Mooney, 1984). These studies found a negative effect of job insecurity on job satisfaction and organizational outcomes, like job performance. This study shows no significant relationship between transformational leadership and job motivation which is remarkable and is probably the result of sampling bias and/or the amount of participants. On the other hand, the most obvious hypothesis in this study is statistically confirmed, namely the positive effect of job motivation on the job performance of followers. 5.3 Theoretical and practical implications Beforehand, we expected a negative influence of high job insecurity on the relationship between transformational leadership and job performance. As Hartley et al. (1991) suggest: “job insecurity can be one of the more important stressors in employment situations” (p. 44). And stress on its turn can cause organizational problems in means of low productivity, absenteeism, and dissatisfaction; three important things that in most of the times results in lower job performance. Since one of the key elements of a transformational leader is to empower their followers and change their attitudes to increase their long term performance and in turn, reshape the organizational culture, a decline in job performance can exist because employees perceive higher job insecurity in periods of change (Ackerman, 1982). 41 Based on these theories we hypothesized a negative influence of high job insecurity on the relationship between transformational leadership and the performance of one’s job. Since the results showed the opposite of this assertion, we need to find an explanation for our unexpected findings. Existing theories were investigated in order to explain the results from this study, so that new theory can be formulated. A high degree of job insecurity in combination with transformational leadership may lead to higher job performance, because employees want to work harder to convince their supervisor that they are important for the organization and to show commitment to their organization and their leader. Brockner (1988) suggested kind of the same assumption based on his laboratory study. As we mentioned earlier in this study, transformational leadership has five components; Idealized Influence (II), Inspirational Motivation (IM), Intellectual Stimulation (IS), and Individualized Consideration (IC). Especially the third one – Intellectual Stimulation – can explain the better job performance of an individual. Supervisors stimulate their followers to encourage and achieve creativity to approach old situations in new ways. Therefore, followers are more likely to be willing and able to come up with possible solutions for the current distress situation to reduce the perceived job insecurity. The other way around, the situation that low job insecurity in combination with transformational leadership leads to lower job performance is also an interesting finding of this study. This finding can be explained by the fact that employees who are not afraid of losing their job, are less willing and less motivated to further develop themselves and sacrifice their individual goals in the interest of the organization in comparison to employees who experience high job insecurity and want to fight for their organization to keep their jobs. A transformational leader who stimulates and encourages his employees to become a more capable employee and perhaps a good leader in the future, without rewarding each individual for every small achievement it accomplishes is probably not the most suited type of leader in this situation. 42 The other significant result we found is the one regarding organizational commitment. Scholars have provided evidence of a positive correlation between organizational commitment and job performance (e.g., Meyer, Paunonen, Gellatly, Goffin, & Jackson, 1989). Based on existing theories we hypothesized a positive influence of organizational commitment on the relationship between transformational leadership and job performance. The more one is committed to the organization, the more he or she shows self-sacrificing behaviors in the interest of the collective goals of the organization. Transformational leadership helps to build strong follower commitment, especially affective commitment – an employee’s emotional attachment to the organization (Allen and Meyer, 1990). However, this study shows the opposite. High organizational commitment in combination with high transformational leadership leads to lower job performance. As such, low organizational commitment in combination with high transformational leadership leads to higher job performance. We can think of several explanations for these unexpected findings. Employees who are extremely committed to the organization for which they work have the feeling that they need to satisfy every customer in every little detail to ensure that customers remain loyal to their organization and this at the expense of the productivity and efficiency of their daily tasks. Since productivity and efficiency were part of the four item scale supervisors used to rate the job performance of their followers, this can be an explanation for this finding. This is not necessarily bad for the company, because in the long run the customers remain with the company, which leads to an increased turnover. Another explanation could be the fact that participants score relatively high on continuance commitment and relatively low on normative and affective commitment. Scholars have found negative correlations between continuance commitment and supervisor ratings of overall performance (Konovsky & Cropanzano, 1991; Meyer, Paunonen, Gellatly, Goffin, & Jackson, 1989). The finding that low organizational commitment in combination with high transformational leadership leads to higher job performance is another finding which is not in line with existing literature. Based on existing theories, almost all scholars agree that low organizational commitment has been associated with low levels of morale (DeCotiis & Summers, 1987), lower satisfaction, 43 motivation and compliance (Schappe, 1998). All these aspects can lead to lower job performance. In our case, employees who see their supervisor as a transformational leader and are less committed to the organization perform even better than their colleagues who see their supervisor as a transformational leader and are more committed to the organization. An explanation could be the fact that employees are strongly committed to their supervisor, but not so committed to the organization. This way, employees want to work harder for their supervisor because of his idealized, inspirational, individualized, and intellectual leadership style. Another explanation can be drawn from the idea that the job performance measure is more focused on the short-term performance of employees, and employees who are less committed to the organization will perform better on the short term compared to employees who show a great deal of organizational commitment. Secondly, employees who are less committed to the organization and who do not care a lot about their organization may be more likely to take risks instead of choosing the easy way, and taking risks can result in better performance on the short term. For this reasons, these employees may perform better than their counterparts. A practical implication for HR managers following the findings of this study is that employees do not always perform better when they show organizational commitment or perceive low job insecurity. It is important that one always takes into account the leadership style that someone demonstrates before you place someone in a specific situation. This study showed that it is not guaranteed that a transformational leader increases job performance of his followers; it depends a lot on follower’s behaviors towards his supervisor and his organization. And after observing the behaviors and thoughts of followers it is vital to choose the right type of leadership, which may not always be the transformational one. 5.4 Limitations and future directions There is no study without its limitations. One of the greatest limitations of this research is the fact that all data is derived through cross-sectional research. The choice for cross-sectional research comes from the fact that there was a relatively small amount of time to conduct the research. Data 44 is obtained at one point in time and this can cause bias. For example, it is conceivable that participants perceived higher job insecurity and/or job stress a few months ago given the fact that the economic downfall is lasting for a couple of years. However, through reorganization or layoffs the perceived stress and job insecurity may be decreased. Another limitation of this study is the relatively small sample size. The sample size is big enough to conduct this research, but future research should provide confirmation or rejection for our hypotheses using a larger sample size to make the results of this study more reliable. Especially, the importance of follower’s attitudes and behaviors should be examined in future research (Zhu et al., 2009). In this study, we tried to provide some support in this manner, but unfortunately this construct failed the reliability analysis. A more appropriate scale is needed to investigate this area of research. The third limitation of the present study is the manner how job performance is measured. The measure itself is not wrong, but for this research on transformational leadership, it may focus a bit too much on the short-term performance of employees. Besides, next to supervisory ratings, future research should also focus on statistical data regards job performance to strengthen this scale. The final limitation of our study relates to the selection of the several organizations used for this research. We have chosen to make no distinction between non-profit and profit organizations, and only used small and medium-sized enterprises companies. However, this could have led to selectionbias. Employees working for financial services companies will probably experience more job insecurity than a nurse who is working for a hospital where the demand for personnel is huge. Despite some limitations of our study, this study also has some strengths. A strength of this research is that the relationship between the data comes from multiple sources, namely supervisors and followers. Followers filled out a questionnaire about their supervisor’s transformational leadership behavior and the supervisor on his turn rated his followers on their job performance. As a result, the relationship between variables does not suffer from common-rater bias. 45 In conclusion Nowadays, employees are not as loyal as they used to be to their organization. This, and the fact that employees have tacit knowledge about the company that is difficult to transfer to another person makes it increasingly important for companies to treat their employees in such a way that they remain with the company, Transformational leadership is a type of leadership that has the power to achieve this. When employees are being motivated, encouraged, inspired and stimulated by their supervisor to develop themselves to a person and employee who add value to his work, and the company, and in the end, to his personal life, they will be more committed to the organization. As a result, employees are more likely to remain with the company than without these aspects. 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Has a clear sense of where he/she wants our unit to be in 5 years 3. Has no idea where the organization is going (R)a Inspirational communication 1. Says things that make employees proud to be a part of this organization 2. Says positive things about the work unit 3. Encourages people to see changing environments as situations full of opportunities Intellectual stimulation 1. Challenges me to think about old problems in new ways 2. Has ideas that have forced me to rethink some things that I have never questioned before 3. Has challenged me to rethink some of my basic assumptions about my work Supportive leadership 1. Considers my personal feelings before acting 2. Behaves in a manner which is thoughtful of my personal needs 3. Sees that the interests of employees are given due consideration Personal recognition 1. Commends me when I do a better than average job 2. Acknowledges improvement in my quality of work 3. Personally compliments me when I do outstanding work a (R) indicates that the item was reverse-scored. B. Organizational Identification - Mael and Ashworth’s (1992) OI measure: Answer on a 5 point Likert scale (completely disagree - completely agree). 1. 2. 3. 4. 5. 6. When someone praises my organization, it feels like a personal compliment. When someone criticizes my organization, it feels like a personal insult. I am very interested in what others think about my organization. When I talk about my organization, I usually say “we” rather than “they”. My organization’s successes are my successes. If a story in the media criticized my organization, I would feel embarrassed. C. Organizational Commitment - Allen & Meyer (1990) Answer on a 5 point Likert scale (completely disagree - completely agree). Affective Commitment (AC); Continuance Commitment (CC); Normative Commitment (NC) AC1. I would be very happy to spend the rest of my career with this organization. AC2. I really feel as if this organization’s problems are my own. AC3. I do not feel a strong sense of belonging to my organization (R) 54 AC4. I do not feel emotionally attached to this organization. (R). AC5. I do not feel like part of the family at my organization. (R). AC6. This organization has a great deal of personal meaning for me. CC1. Right now, staying with my organization is a matter of necessity as much as desire. CC2. It would be very hard for me to leave my organization right now, even if I wanted to. CC3. Too much of my life would be disrupted if I decided to leave my organization now. CC4. I feel that I have too few options to consider leaving this organization. CC5. If I had not already put so much of myself into this organization, I might consider working elsewhere. CC6. One of the few negative consequences of leaving this organization would be the scarcity of available alternatives. NC1. I do not feel any obligation to remain with my current employer. (R). NC2. Even if it were to my advantage, I do not feel it would be right to leave my organization now. NC3. I would feel guilty if I left this organization now. NC4. This organization deserves my loyalty. NC5. I would not leave my organization right now because I have a sense of obligation to the people in it. NC6. I owe a great deal to my organization. D. Job Motivation – (Motivation at Work Scale: Gagné et al. (2010)) Note: The stem is “Using the scale below, please indicate for each of the following statements to what degree they presently correspond to one of the reasons for which you are doing this specific job” and is accompanied by the scale 1= not at all; 2= very little; 3 = a little; 4 = moderately; 5 = strongly; 6= very strongly; 7= exactly. Intrinsic motivation (intrins); Identification (ident); introjection (intro); external regulation (ext) Intrins1 Because I enjoy this work very much Intrins2 Because I have fun doing my job Intrins3 For the moments of pleasure that this job brings me Ident1 I chose this job because it allows me to reach my life goals Ident2 Because this job fulfills my career plans Ident3 Because this job fits my personal values Intro1 Because I have to be the best in my job, I have to be a “winner” Intro2 Because my work is my life and I don’t want to fail Intro3 Because my reputation depends on it Ext1 Because this job affords me a certain standard of living Ext2 Because it allows me to make a lot of money Ext3 I do this job for the paycheck 55 E. Job Insecurity Scale – Ashford, Lee, & Bobko (1989) To capture the perceived threat to a total job, we asked "Again, thinking about the future, how likely is it that each of these events might actually occur to you in your current job?" (very unlikely, 1; unlikely, 2; neither likely nor unlikely, 3; likely, 4; very likely, 5). 1. Lose your job and be moved to a lower level job within the organization? 2. Lose your job and be moved to another job at the same level within the organization? 3. Find that the number of hours the company can offer you to work may fluctuate from day to day? 4. Be moved to a higher position within your current location? 5. Be moved to a higher position in another geographic location? 6. Lose your job and be laid off for a short while? 7. Lose your job and be laid off permanently? 8. Find your department or division’s future uncertain? 9. Lose your job by being fired? 10. Lose your job by being pressured to accept early retirement? F. Job Stress – Parker & DeCotiis (1983) Please rank the following statements (1=strongly disagree, 5=strongly agree) 1. I have felt fidgety or nervous as a result of my job. 2. Working here makes it hard to spend enough time with my family. 3. My job gets to me more than it should. 4. I spend so much time at work; I can't see the wood for the trees. 5. There are lots of times when my job drives me right up the wall. 6. Working here leaves little time for other activities. 7. Sometimes when I think about my job I get a tight feeling in my chest. 8. I frequently get the feeling I am married to the company. 9. I have too much work and too little time to do it in. 10. I feel guilty when I take time off from job. 11. I sometimes dread the telephone ringing at home because the call might be job-related. 12. I feel like I never have a day off. 13. Too many people at my level in the company get burned out by job demands. G. Leader Group Prototypicality – van Knippenberg (2011) Answer on a 5 point Likert scale (completely disagree - completely agree). 1. Our team leader is a good example of the kind of people who are part of our team. 2. Our team leader has a lot in common with our team. 3. Our team leader has a lot of same features as our team members. 4. Our team leader is much like the members of our team. 5. Our team leader represents what is distinctive about our team. 6. Our team leader embodies who we are as a team. 56 H. Openness to Experience – Costa & McCrae (1985) Answer on a 5 point Likert scale (completely disagree - completely agree). Openness to culture: 1. I’m always informed about what’s happening in the world Openness to experience: 1. I’m fascinated by novelties I. Job Performance – Kearney & Gebert (2001) Follower performance (answer from (1) far below average to (5) far above average). 1. How efficient is the focal subordinate? 2. How productive is the focal subordinate? 3. How high is the quality of innovations the focal subordinate comes up with during work? 4. What is the overall achievement of the focal subordinate? 57