Transformational Leadership and Employee Motivation
Transformational leadership has been associated with positive organizational outcomes on different levels. In the employee context, for example, research evidence has on numerous occasions shown a strong positive link between this leadership style and employee motivation. While many other factors come into play in the performance of an organization, the leadership style also plays a significant role. In determining the exact impact of this leadership approach to the performance of organizations, it is important to analyse different research studies paying attention to the specific outcomes achieved on the organizational level. In that regard, this paper presents an analysis of researches and studies on the subject of transformational leadership in the context of the three broad topics of employee motivation, organizational performance, and organizational effectiveness.
Transformational Leadership
Transformational leadership is a leadership style in which the leader focuses on inspiring his or her followers to achieve set objectives (Rawat, 2015). This leadership style has four dimensions which are inspirational motivation (IM), intellectual stimulation (IS), individual consideration (IC), and idealized influence (II) (Ahmad et al., 2014; Shelley et al, 2011). Aunjum et al. (2017) present a qualitative research study in which they collect data in the context of the four dimensions presented above in the Pakistan banking sector.
Impact of Transformational Leadership on Employee Motivation
Idealized Influence
The analysis of the results in the Idealized Influence (II) dimension shows that 45% of the improvement in employee motivation in the sector resulted from idealized influence. From table 1 below, it is seen that the beta (β) value for transformational leadership is 0.746. This implies that a unit change in idealized influence would result in a positive 0.83 unit change in employee motivation (Aunjum et al., 2017).
Table 1: Impact of idealized influence on employee motivation (Aunjum et al., 2017)
Inspirational Motivation
In the Inspirational Motivation dimension, table 2 below presents a beta (β) value of 0.619. This implies that a 1 unit incremental change in IM would result in almost 62% positive change in employee motivation (Aunjum et al., 2017).
Table 2: Impact of inspirational motivation on employee motivation (Aunjum et al., 2017)
Intellectual Stimulation
The results in this dimension as per the table below presented by Aunjum et al. (2017) reveal that a unit positive change in intellectual stimulation dimension would result in a 69% appreciation in the level of motivation in employees.
Table 3: Impact of intellectual stimulation on employee motivation (Aunjum et al., 2017)
Individualized Consideration
The overall employee motivation in the IC context appreciates by 83% in response to a unit positive change in transformational leadership within the studied organizations.
Table 4: Impact of individualized consideration on employee motivation (Aunjum et al., 2017)
The study shows that there is a strong correlation between the four dimensions of transformational leadership and employee motivation. However, the study focuses on one sector. This implies that for these results to achieve a high level of confidence, a comparison of different sectors must be presented. In that regard, Lizette et al. (2016) present a qualitative study in which respondents for the questionnaire are drawn from the EMEA sales unit in the Volvo group. The study leads to an observation that transformational leadership has an overall positive impact on employees' motivation. In addition, the above findings are corroborated by findings presented by Ahmad et al. (2014) in the telecommunication sector context where they find over 50% positive change in a unit change in all of the four dimensions of transformational leadership. Finally, in a research study evaluating how employees perceive different leadership styles, Alghazo and Al-Anazi find that 73.33% of employees hold the opinion that transformational leadership would motivate them more than other forms of leadership. The agreement between data from the different studies thus shows that transformational leadership has a strong positive correlation with employee motivation.
Impact of Transformational Leadership on Employees and Organizational Performance
Orabi (2016) presents a survey in which the aim is to establish the relationship between transformational leadership and organizational performance. Transformational leadership is linked to performance in terms of its four dimensions, thus resulting in four dimension-specific hypotheses and one general hypothesis. The survey involved 213 respondents from three banks. The table below shows the results obtained after testing the hypotheses using a multiple regression analysis:
Table 5: Regression results (Orabi, 2016)
The values p=0.00 indicate that the variable is statistically significant. From the table above, it is thus evident that there is a statistically significant and positive correlation between organizational performance and inspirational motivation (IM), intellectual stimulation (IS), and individual consideration (IC). This implies that a positive change in these three factors leads to a positive change in organizational performance. Since the p-value for idealized influence is greater than 0.05, idealized influence does not have any significant implication on organizational performance. The table below thus shows the actual relationship between the different elements of transformational leadership and organizational performance.
Table 6: Conclusions from the regression analysis (Orabi, 2016)
The general result of this study is supported by findings presented by Strukan et al. (2017) and Garcia-Morales et al. (2008). Strukan et al. (2017) divide organizational performance variables into financial performance and new product development. And the findings show a strong positive correlation between the application of transformational leadership and specific outcomes such as profitability and the expansion of market shares through newly developed products. However, organizational performance is dependent on employees and it is thus important to analyse the impact of transformational leadership on the performance of individual employees. In that regard, research results presented by Mbithi et al. (2016) in the context of employees in a higher learning institution setting show a positive correlation between transformational leadership and the level of commitment, job satisfaction, and organizational citizenship behaviour. Presenting the analysis in terms of employees' performance is important to the organizational performance results presented by Orabi (2016) since it provides a direct explanation of why the positive correlation between transformational leadership and organizational performance is observed (Iscan et al., 2014).
Impact of Transformational Leadership on Organizational Effectiveness
In establishing the relationship between transformational leadership and organizational effectiveness, Tahsildari et al. (2014) present a comprehensive survey of literature on the subject. The literature presented categorizes approaches for determining the effectiveness of organizations into three groups: goal approach, systems approach, and process approach. In the context of the goal approach, the effectiveness of an organization is determined by the extent to which it meets its objectives. The systems approach, on the other hand, is concerned with the ability of an organization to access resources that are not in abundant supply. Finally, the process approach is concerned with how the organization functions and includes factors such as employee satisfaction and work environment. In the survey, a wide range of research studies shows a strong connection between transformational leadership and the level of innovativeness in employees. This innovativeness is then shown to have a positive impact on the attainment of goals, the effectiveness of organizational systems, and the efficiency in internal processes.
Cavazotte et al. (2013), on the other hand, present an empirical study in which indicators of organizational effectiveness such as self-efficacy, follower identification with leader, and task performance are considered. The relationship between all these factors was statistically significant (p<0.001). In addition, positive beta (β) values were obtained, showing that the effectiveness indicators were positively correlated with transformational leadership. The figure below shows the model used in the analysis and how each factor is associated with transformational leadership in the context of the four variables which are vision, idealism, inspirational motivation, and intellectual stimulation. The fact that most of the path coefficients are above 0.3, except that between altruism and transformational leadership, is an indication that the model adequately predicts the organizational effectiveness achieved through the application of transformational leadership (Cavazotte et al., 2013).
Figure 1: An analytical model linking transformational leadership factors to organizational effectiveness measures (Cavazotte et al., 2013)
Summary of the Findings
The analysis of the researches and surveys covering the impact of transformational leadership on employee motivation, organizational performance, and organizational effectiveness reveals that the leadership style is positively correlated with all three organizational factors. Successful organizations perform well in employee motivation, organizational performance, and organizational effectiveness. The positive correlation between these factors and transformational leadership would thus imply that less successful organizations apply transformational leadership to a lesser extent than their more successful counterparts. The table below, presented in a research study by Jandaghi et al. (2009), shows that less successful companies have lower mean scores in all four dimensions of transformational leadership. The findings support the findings of the results of the analysis presented herein, which conclude that there is a positive impact of transformational leadership in all the presented organizational factors.
Table 7: The mean scores of successful and unsuccessful companies in terms of the dimensions of transformational leadership (Jandaghi et al., 2009)
References
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