BUS605 Impact of Transformational Leadership on Employee Engagement and Performance Assessment 3 Answer

The engagement of the employees of an organization is related to the performance of the organization. The transformational leadership style helps in engaging the employees with their tasks. However, the job-driven assessment of employee engagement misses the intentional purpose of the style and instead focuses on the job level. The research aims at investigating this gap. The main aim of the research is to examine the relationship between employee engagement and organizational performance influenced by the transformational leadership 

The researcher collected primary data from a survey of more than 200 respondents working in the retail industry of Sydney and the collected data has been analysed through ANOVA and testing significance through Chi-Square tests. The secondary sources of data have also been collected from the annual reports, manuals and documents from each retail and manufacturing company and the collected data have been analysed through desk review method. 

From the findings in the research study, it is evident that employee engagement has improved due to the company's decision to incorporate transformational leadership style within their organisations. On the other hand, based on the findings of two leading manufacturing and retail companies, it is evident that the transformational leadership helps in improving the organisational performance upon driven by the productivity and performance of the employees in the organisations.

Introduction

According to Mone, London and Mone (2018), the engagement of the employees of an organization is directly linked with the performance of the organization. In addition to that, it was also found that the application of the transformational leadership style helped engage the employee to their tasks but the job-driven assessment of the employee engagement misses the intentional purpose of the style and instead focuses on the job level. This research gap has been investigated by this project to shed light on the impact of the transformational leader on the performance of the employee as well as their engagement with a task. This research gap has been chosen as this research would help to bridge the relationship between the leadership style and employee engagement by focusing on the particulars and methods of engagement.

The main objective of the research is to examine the relationship between employee engagement and organizational performance influenced by transformational leadership. It means that the project would discuss and explore the mediating role that is played by the engagement of the employees to affect the performance of the employees and the organization by transformational leaders.

The main research questions for this project are as follows:

1. What is the impact of transformational leadership on employee engagement and performance?
2. How do engaged employees impact by the leadership style?
3. What are the factors that interplay to produce the desired impacts of the leadership style on the employees?

Data Collection method

Paradis et al. (2016) stated that the choice of data collection methods helps to add relevant information and data to the research and enhance its applicability and credibility. Primary and secondary data are the two popular methods of data collection. This research collected primary data from a survey of more than 200 professionals of the retail industry of Sydney between the ages of 18 to 65 through random sampling technique. These participants of the industry reflected on the effect of the leadership style on their performance through the prepared questionnaire and record their responses. The secondary sources of data have also been collected through desk review to collect relevant data sources that are relevant to the study through the examinations of the annual reports, manuals and documents from each retail and manufacturing company. The researcher has used both the type of data collection methods to add duality in the research arguments. The primary data enriched the accuracy of the conclusions as well as include formative intentions of the sample pool so that numerical and quantitative analysis limited the proliferation of data in the required sample pool and scope of the research is also obtained easily. The secondary sources, on the other hand, helped in adding subjective views and opinions about the topic of the research from dependable sources. The two different types of data collection methods added dimensions to the research and developed the arguments of the research to be more complete in description and analysis. 

Data Analysis Methods

Chambers (2018) opined that the choice of the data analysis methods determines how the data that has been collected are translated into absorbable forms and conclusions derived from them. For this research, there are two types of data that were collected which are primary data collected through the survey instruments and secondary data from credible literary sources. The primary data has been analyzed with the help of ANOVA and testing significance through Chi-Square tests. For this, the responses of the sample pool have been recorded using a Likert scale to eliminate bias and preserve the integrity of the analysis. On the other hand, the secondary data that has been analyzed with the help of the desk review method. This enabled the researcher to conduct the scanning of the secondary sources of information for critical and important data that are relevant to the research topic. The graphical analysis using the Likert scale added numerical supremacy and accuracy to the research whereas the desk review added possible explanations and subjective knowledge about the topic that would enhance the overall acceptability of the research and its conclusions received after the analysis.

Findings and analysis

Primary Data analysis

The data analysis section is focused on presenting and analysing the findings which have been obtained through analysing the quantitative data. The current research work is focused on comparing the mean values of the population through ANOVA and testing significance through Chi-Square tests. Initially in this chapter descriptive statistics of the variables under consideration have been obtained in order to develop a better understanding of the dataset and then sequentially ANOVA tests and Chi-Square tests have been carried out of the variables.

Table 1: Descriptive Statistics

(Source: SPSS Output)

The descriptive statistics is a measure that represents and portrays the nature of the data in a clear and comprehensive manner. In order to project the current dataset in an effective way, the descriptive statistics have been used. This will help in understanding the stability and variability present within the data and whether carrying out further research with the data will be viable or not. In the context of the current research work, there are 27 variables which have been classified into three groups. The first group of variables fall under the category of Transformational Leadership Inventory, the next 4 variables are determining the engagement scale while the rest of the 10 are performance scale. As it has been observed in the context of the transformational leadership inventory variables, all are centrally aligned and lying loser to the central value. This means that the dataset is evenly distributed with the values lying closer to the mean. The standard deviation of the variables is also observed to be moderate and this signifies that the variables are not distant from the mean value.

One-Way ANOVA which is also known as the One-Factor Anova is a test that critically compares the mean value of two or more groups independently so as to determine whether there is any statistical evidence of an association between the population means.

Table 2: ANOVA

(Source: SPSS Output)

The Anova test in the context of the current research is to test whether transformational leadership has a positive impact on employee performance and engagement. In order to evaluate the same here, four key variables from the transformational leadership inventory have been selected and the relationship between each variable with the four engagement scale variables has been tested. The table above represents the interrelationship between the leader is considerate about the need of the employee and his or her engagement scale variables. As it can be observed that among the four variables the F value is below 5% for only one determinant, where the employee has said that he or she does not feel to be engaged while doing the packaging tasks. Therefore, it is quite evident from the studies of Ng (2017), that if the manager or leader is considerate about the needs of the employees, they will remain engaged. 

Table 3: ANOVA

(Source: SPSS Output)

The table above presents the results while the independent variable is considered to be a leader in the role model of the employee and the dependent variables are the engagement scale variables. The results depict that while the leader is the role model before the employees then the employees remain engaged in most of the cases. The value of the F statistics is higher for when the employees do not feel engaged while doing the packaging work.

Table 4: ANOVA

(Source: SPSS Output)

The table presented above traces out the relationship between when the leader challenges on best performance and the engagement scale variables. It has been observed that the significance level for all the engagement scale variables is higher and more than 5% at a 95% confidence interval. Therefore, it can be stated that this specific trait of the leader to challenge the employees on best performance is the most suitable method for engaging them. This finding can also be substantiated with the research work conducted by Aga, Noorderhaven and Vallejo (2016), where it has been observed that in the majority of the cases, rather than criticizing the performance of the employees, if they are challenged on best performance it would certainly compel them to perform well.

Table 5: ANOVA

The fourth Anova is the final test of the impact of transformational leadership over the engagement of the employees. This specific test has taken into account the leader asks questions that prompt the employee to think and its influence over the engagement of the employees. It can be observed from the table that under such a scenario the employees do not feel engaged while doing the packaging work. Else in terms of all the other engagement scale variables, those are insignificant at 5% confidence interval. This may be because of the fact that the employees while working under an interactive work environment, it is difficult for them to focus on a monotonous task. The task involving packaging may be monotonous for them.

Table 6: ANOVA

The table above is the Anova analysis for the performance scale variables wherein the leader has a vision for the future is the independent variable. It is a matter of fact that if the employees consider the leader as their role model, they will be more likely to follow their leader minutely. However, the results of the analysis signify that while the leader is the role model before the employees their performance scale variables are projecting significant results. Therefore, it can be stated that as per the analysis it can be stated that the employees will perform well when they consider their leader as their role model (Willis, Clarke and O'Connor, 2017).

Table 7: ANOVA

The table above represents the results of ANOVA analysis which is conducted as a leader is considerate about the needs of the employee as an independent variable and the performance scale variables as the dependent. Most interestingly, it has been observed that the employees are not willing to have their job to be challenging to perform. Therefore, it can be stated that the employees are not willing to move away from their comfortable position in the work culture and participate in something which is challenging for them to perform. As the leader, in this case, is considerate about the needs of the employees he or she will certainly allocate the roles and responsibilities as per the competencies of the employees.

Table 8: ANOVA

When the independent variable is considered to be the leader thinks about the problems in new ways and its impact over the performance scale variables, the result is astounding. In this case, all the performance scale variables are significant and it has been observed that "Thinking is not my idea of fun" is the only variable which is non-significant. This finding is also substantiated by the research work of Fischer (2016), which signifies that if the leader is inclined towards identifying new ideas and methods, the employees are more likely to accompany the leader in the process which as a whole improves their performance. 

Table 9: ANOVA

In the context of the table presented above the independent variable is the transformational leadership trait “influence the employees to rethink the way they would do a particular work” and its impact over the performance scale variables of the employees. The interesting finding which is observed in this case is that “learning new ways to think does not excite me” is the least significant. Hence it can clearly be stated that when the leader is influential enough to compel the followers to rethink ways through which their problems could be solved or approach towards a specific task can be changed, the employee performance is likely to improve. Hence, this transformational leadership trait also helps in improving employee performance. 

Table 10: Chi-Square Test

Chi-Square test is conducted in order to determine whether there is an association between two variables. The table above is the results of the chi-square test which have been conducted to determine the association between leader acts without considering the needs of the employees and the employees finding new ways more interesting. The results depict that the value of R-squared is quite low which signifies the model is not perfect and hence there may be no relationship between these two (Boamahet al., 2018). Although through the previous analysis it has been observed that the traits of transformational leadership, in turn, influence the employee performance. However, in this case, the leader's trait cannot be considered as a transformational one as the leader is acting without taking into consideration the needs of the employees.

Table 11: Chi-Square Test

The employees while working for the needs of the customers feel better motivated, while the leader is not taking into consideration the feeling of the employees. In such a case the results of the chi-square test are again not significant it can be stated that though there were other leadership traits for motivating the employees still as the leader in the current scenario is not taking into account the interest or feelings of the employees the result is insignificant. In accordance with the goodness of fit as well, the model is not perfect. Therefore, it is to be noted that in order to influence the followers with transformational leadership, the leader must take into account the feelings of the employees.

Table 12: Chi-Square Test

The results presented in the table above signify that the model is a better fit than the previous ones. The employees do not feel motivated while working with packaging task and the independent variable being the leader not taking into account the feelings of the employees. 

Secondary Data analysis

Unilever Australasia Ltd is a Sydney based multinational FMCG (Fast Moving Consumer Goods) manufacturing company which has a transformational leadership in their organisation. In a press release, Unilever Australasia has reported that the recent changes in the leadership of the organisation have focused on the continuation of transformational leadership within the organisation. The former CEO Clive Stiff was a transformative leader during his tenure in the company and the recent decision to appoint Nicole Sparshott demonstrates the company's focus towards the facilitation of transformative leadership within the organisation (Unilever, 2020a). This focus on the facilitation of transformational leadership has benefited the company and which can be seen within the growth of the company. Recently published annual reports show that during 2019 the company had gained 2.9% in sales growth (Unilever, 2020b). Moreover, this change in revenue is also visible in the historical revenue data of the company as the data suggests that since 2012 the company has seen rapid growth in their annual revenue. In 2012 former CEO of Unilever Australasia Ltd was appointed as the CEO and he was a transformational leader (Unilever, 2020a). Thus, this massive growth in annual revenue since 2012, as a result, suggests a relationship between the leadership changes within the company. Therefore, based on this growth factor of the company suggests increased engagement from the employees and performance as well as productivity growth of the employees of the company. This brief study of Unilever Australasia demonstrates that there is a relationship between transformational leadership and the performance growth of the organisation.

On the other hand, Woolworths is the leading retail store chain in Australia and has around 1,000 retail stores in Australia. Multiple retail stores are also present in Sydney, Australia as well. Based on reports in 2018 Woolworths group had initiated a leadership improvement training and coaching program. This leadership improvement program focused on the development of the company's leadership style from autocratic to transformational style (Counsel, 2019). This change in leadership style within the company, as a result, is visible in the growth of the company's finances as during 2019 the company had reported a net profit of AU$1.82 billion which is higher than the previous year's AU$1.68 million net profit (Hughes, 2020). Hence, this growth, as a result, demonstrates that the leadership program to drive transformational leadership among the leadership team of Woolworths has shown improvement in the organisational performance. Now, as organisational performance is dependent on the performance and productivity of the employees, it can be argued that Woolworth's embracing the transformational leadership style has improved the employee performance. Moreover, a discussion of the problem statement suggested that the enhanced employee engagement improves the productivity and performance of the employees, it can be stated that the employee engagement has improved due to the company's decision to incorporate transformational leadership style within their retail stores.

Hence, based on this brief discussion of two leading manufacturing and retail companies it can be seen that the transformational leadership has improved the organisational performance, which is driven by the productivity and performance of the employees.

Ethical implications

The ethical implications are a huge liability for the researchers of today especially in light of the recent trends and importance according to data. Bell, Bryman & Harley (2018) expressed that the ethical implications should be understood by the researcher for the protection of information as well as for adding credibility to the researcher and their work. For this research project, the ethical implications that have been considered are the protection of the personal information of the respondents as well as their responses. While no personal information about the interviewees has been collected to avoid any implications, the responses of the respondents have been stored in the laptop and the access to it has been limited to the researcher only for safety reasons. In addition to that, the secondary sources that have been used for the collection of the data from them for this project were acknowledged so that misrepresentations of the intended use of the information has been restricted. The ethical implications of liability and authenticity have also been imposed by offering letter from the Excelsia College stating the purpose and intended use of the information that is gathered for academic purposes only. 

Challenges

The most relevant challenge that was faced during the conduction of this research was in relations to the protection of the identity of the interview participants. The questionnaire also posed a challenge and difficult as it proved harder for the researcher to prepare them objectively as well as remove any bias from being introduced into the research. The researcher also found it difficult to sift through the plethora of information that is available and choose the accurate data that reflects on the topic or aids in the achievement of the objectives of this research. Limited time and financial resources were also allocated for the purpose of the conduction of the survey and the study which also restricted the applicative elaborateness of the research. It also limited the extrapolation of the conclusions from being applied in other areas.