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African Journal of Business Management Vol. 5(17), pp. 7391-7403, 4 September, 2011 Available Online At Http://Www.Academicjournals.Org/Ajbm DOI: 10.5897/AJBM11.126 ISSN 1993-8233 ©2011 Academic Journals Full Length Research Paper Transformational leadership, employee engagement and performance: Mediating effect of psychological ownership Azka Ghafoor*, Tahir Masood Qureshi, M. Aslam Khan and Syed Tahir Hijazi University of Central Punjab, Lahore, Pakistan. Accepted 16 May, 2011 In this study, we examined the relationship between transformational leadership, employee engagement and employee performance. Furthermore the mediating effect of psychological ownership in the dimensions of self-efficacy, belongingness, self-identity and accountability are studied in the relationship of these variables with employee performance. The empirical findings of data, collected through questionnaires from sample of 270 employees and managers of telecom companies indicated significant relationship between transformational leadership, employee engagement practices and employee performance. Results also supported the mediation of psychological ownership in relationship of these variables. Managerial implications and future research directions are discussed. Key words: Transformational leadership, employee engagement, employee performance, psychological ownership. INTRODUCTION Employees’ involvement in the organization is considered a source of development and innovation. Management practices transformational leadership style. Transformational leadership theory explains that encouraging positive behavior or the leader enables followers to think bigger (Burns, 1978). Targeting follower’s interests and abilities, transformational leadership can enhance the follower’s commitment towards organization (Piccolo and Calqitt, 2006). Transformational Leadership style encourages the culture and human resource practices that motivate employees to participate in organizational development. These practices engage employees into their tasks and decision making process. Transformational leadership leads to empowerment of employees that improves employee’s engagement (Dvir et al., 2002). *Corresponding author. E-mail: azkamalikucp@gmail.com. Tel: +92-42-35880007 or +923314413872. Following this theory organization can encourage positive work attitude and increase the quality of work (Piccolo and Calqitt, 2006). Practicing transformational leadership style basically develops the feeling among employees that they mean a lot and their betterment is the purpose of the organization. This feeling improves their organizational attitude and ultimately the quality of work being performed. The concept of employee involvement refers to the employee interest into the tasks and jobs assigned to him. This way when an employee is involved in his tasks he feels psychological ownership of his job. Psychological ownership is the feeling of employee that they have responsibility to make decisions in the interest of the company. (Avey et al., 2009) Psychological ownership is referred to as psychological empowerment. It is the sense of employee that he can create, mold and take decisions and mange his work his way. Empowerment of an employee can base on self-esteem, locus of control and the information available to employee (Spreitzer,
7392 Afr. J. Bus. Manage 1995). Employees feel themselves that they can influence the organization by raising their voice; it is a job enrichment theory (Spreitzer, 1996). They feel themselves empowered to take decisions in executing tasks and feel themselves accountable for taking any risky steps associated with the tasks. When employees are secured to take any decision on their own responsibility with the support of the organization, the level of commitment in the organization will increase. Also employee is given opportunity to involve and he feels psychological ownership towards his actions and their consequences, employees develop the sense of belongingness. These feelings develop interest and responsibility in employees. This enables them to effectively perform their tasks. When employees is responsible towards his task he takes every decision with much attention and involvement this increases the chances of best outcomes. When employee is satisfied he develops the sense of security. Job satisfaction is defined as the state of mind that develops the feeling that employees all job related needs are being met (Evans, 2001). When employee performs all his tasks with responsibility and interest, he strives to go better and bring effective and efficient outcomes. Today’s working environment employees have to face certain situations. These situations are related to their work tasks and ask for quick responses. Employees do not effectively perform any challenging tasks given to them because of the lack of association with work. Employees are selected after much consideration. They are trained extensively to bring best practices in the organization. Top management lacks to develop the psychological well being of employees. Physical performance depends on the psychological state of employees. Employees having blurred identity in terms of work and weak sense of belongingness are not motivated to improve their work. The feeling of dissatisfaction holds them back from performing right. Current study draws the motives of (1) The relationship between transformational leadership and employee performance. (2) The relationship between employee engagement and employee performance. (3) The mediation of psychological ownership between transformational leadership and employee performance. (4) The mediation of psychological ownership in the relationship of employee engagement and employee performance. LITERATURE REVIEW Transformational leadership style Leadership is broadly discussed topic in literature. Its antecedents and consequences have greater impact on organizational outcomes and performance. Scholars, such as (Bass, 1988, 1990 ; Hartog et al., 1997) contributed in the literature of leadership and its prominent styles of transactional and transformational leadership style. Transactional leadership style is defined as the exchange of rewards and targets between employees and management (Howell and Avolio, 1993) leaders fulfill employee needs of rewards when targets are met (Bass, 1990; Howell and Avolio, 1993; Humphreys, 2002) it is defined as the transaction of needs fulfillment from both sides of the organization and employees (Pounder, 2002). Transformational leadership style focuses on the development of followers and their needs. Managers exercising transformational leadership style focus on the development of value system of employees, their motivational level and moralities with the development of their skills (Ismail et al., 2009) transformational leadership acts as a bridge between leaders and followers to develop clear understanding of follower’s interests, values and motivational level (Bass, 1994) it basically helps follower’s achieve their goals working in the organizational setting; it encourages follower’s to be expressive and adaptive to new and improved practices and changes in the environment. (Bycio et al., 1978) Burn’s (1978) transformational theory and Bass’s (1985) transformational leadership theory explained these characteristics of leadership style. Transformational theory proposed by Burns (1978) explains that transformational leadership style supports mutual understanding between employees and management while Burn’s (1985) theory explained that interaction between employees and management is managed in ways that ultimately leads employees beyond their self interest in support of organizational targets. Transformational leadership is discussed based on two important characteristics of individualized consideration and intellectual stimulation. As discussed by Bass and Avolio (1994) intellectual stimulation is the enhancement of the followers ability to think own his own related to his work tasks. Intellectual stimulation is defined as the ability of an individual to be logical, rational and able to intelligently adopt from certain situations (Dionne et al., 2003). Logical thinking and intelligent evaluation of environment helps employees create new ideas. Stimulating employee’s intellectuality encourages them to take risk in order to bring new practices and ideas that help improve performance (Yammarino and Dubinsky, 1994). Kahn (1992) discussed that organizational support to employee develops intellectual stimulation in employee to solve issues and difficulties. Organizational support and encouragement motivate employees to think about the improvement of their own abilities and organizational processes. Another characteristic of transformational leadership is individualized consideration. Literature defines individuallized consideration as the consideration of employee’s individuality. Transformational leaders link priorities of every follower’s with the development of the organization
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African Journal of Business Managem
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Editors Prof. Wilfred Isioma Ukpere
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Electronic submission of manuscript
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Fees and Charges: Authors are requi
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Table of Contents: Volume 5 Number
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7166 Afr. J. Bus. Manage. the high
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7168 Afr. J. Bus. Manage. Cargo mov
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7170 Afr. J. Bus. Manage. has produ
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7172 Afr. J. Bus. Manage. resources
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7174 Afr. J. Bus. Manage. celebrate
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7176 Afr. J. Bus. Manage. effective
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7178 Afr. J. Bus. Manage. interacti
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7180 Afr. J. Bus. Manage. firstly,
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7182 Afr. J. Bus. Manage. TQM pract
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7184 Afr. J. Bus. Manage. with lowe
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7186 Afr. J. Bus. Manage. in a diff
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7190 Afr. J. Bus. Manage. Decision
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7192 Afr. J. Bus. Manage. restructu
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7194 Afr. J. Bus. Manage. Performan
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7196 Afr. J. Bus. Manage. firm perf
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African Journal Of Business Managem
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7200 Afr. J. Bus. Manage. to establ
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7202 Afr. J. Bus. Manage. marketing
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7204 Afr. J. Bus. Manage. initial a
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7206 Afr. J. Bus. Manage. from the
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7208 Afr. J. Bus. Manage. Phillips
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7210 Afr. J. Bus. Manage. of the sa
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7212 Afr. J. Bus. Manage. ′ w k m
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7214 Afr. J. Bus. Manage. procedure
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7218 Afr. J. Bus. Manage. Figure 2.
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7220 Afr. J. Bus. Manage. stimulate
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7222 Afr. J. Bus. Manage. these com
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7228 Afr. J. Bus. Manage. Table 2.
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7234 Afr. J. Bus. Manage. CRM resea
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7238 Afr. J. Bus. Manage. The one a
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7242 Afr. J. Bus. Manage. and Norto
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7250 Afr. J. Bus. Manage. DEFINING
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7256 Afr. J. Bus. Manage. critical
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7260 Afr. J. Bus. Manage. external
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7262 Afr. J. Bus. Manage. represent
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7270 Afr. J. Bus. Manage. business
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7274 Afr. J. Bus. Manage. Satisfact
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7276 Afr. J. Bus. Manage. Score of
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7298 Afr. J. Bus. Manage. Procedure
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7324 Afr. J. Bus. Manage. Psychol.,
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7326 Afr. J. Bus. Manage. the resea
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7328 Afr. J. Bus. Manage. Z( T, whe
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7330 Afr. J. Bus. Manage. (10) and
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7332 Afr. J. Bus. Manage. during wh
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7334 Afr. J. Bus. Manage. optimal v
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7336 Afr. J. Bus. Manage. satisfact
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7340 Afr. J. Bus. Manage. female re
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Page 224 and 225: to CSR clearly and reliably. The st
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Page 230 and 231: A Liao 7379 Figure 1. Example of ev
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Page 236 and 237: REFERENCES Anderson JC, Narus JA (1
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Page 246 and 247: (Bass and Avolio, 1994). Leaders fo
Page 248 and 249: the employees. When employees are e
Page 250 and 251: Table 1. Means, standard deviation
Page 252 and 253: negativity in the organization. Tra
Page 254 and 255: of psychological ownership. Thus te
Page 256 and 257: Meyer JP, Becker TE, Vandenberghe C
Page 258 and 259: goods industry in the future. LITER
Page 260 and 261: F + 2 0. 110 * F + Table 3. Factor
Page 262 and 263: APPENDIX Data for evaluation on the
Page 264 and 265: anks. Camanho and Dyson (2005) enha
Page 266 and 267: Step A-4: Correlation analysis Star
Page 268 and 269: Table 1. Original raw data of input
Page 270 and 271: Table 5. Scenario table. Wang and W
Page 272 and 273: Delmas M, Toka Y (2005). Deregulati
Page 274 and 275: Technology managers need to attract
Page 276 and 277: λ is the parameter for risk aversi
Page 278 and 279: specified ranges of return, for eac
Page 280 and 281: Carlsson C, Fulle´r R, Majlender P
Page 282 and 283: Stock Exchange, (Rao, 2010) in Nati
Page 284 and 285: etween size and unsystematic risk i
Page 286 and 287: The research schema Figure 1 indica
Page 288 and 289: Table 3. Result of Freidman rank te
Page 290 and 291: Table 8. The result of Spearman cor
Page 292 and 293: significant differences between the
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leadership. The process of manageri
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indices of quality of life work. On
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Figure 2. The values of standardize
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Table 4. The values of coaching ind
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Table 1. Contrast between hedonic a
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in consumers’ shopping behavior.
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et al., 2006; Carpenter, 2008). For
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Table 2. contd Shopping satisfactio
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value in the construct of clothing
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independence, assertiveness, innova
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over those of competitors in order
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Table 2. Demographic profile and ce
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Table 4. Service satisfaction level
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There is a strong significant corre
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Dean AM (2004). Rethinking customer
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as a margin rate of 10% and rest to
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(7) Table 1. Descriptive statistics
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APPENDIX A Table 1. Failure rate te
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Table 1. Results of the multivarian
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Figure 3. Entrepreneurship as a fun
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Furkukawa K, Shafer WE, Lee GM (200
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happen to firms of any and all size
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participants attributed their failu
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Table 1. Descriptive statistics of
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Table 4 Contd. Inconsideration of l
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Table 5 Contd. Manufacturing 2.17 1
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The CLRP is an NP-hard problem, so
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No START Form a new cluster. Select
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Table 1. Computational results of G
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Table 1. Correlation of facets of C
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Figure 1. Theoretical approach adop
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quadrant (III), including product v
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consistently showed negative (posit
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signal. This hypothesis predicts a
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Variables are defined as in the ful
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Table 3. The results of model (2).
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around the world. Q. Rev. Econ. Fin
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tourism industry development. In th
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Table 2. Canonical correlation. 2 C
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Table 5. Bilateral analysis and ran
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strategies (Hart, 1995; Tello and Y
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Table 1. Reliability and construct
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Table 3. Latent variables test. She
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Haines R, Street M, Haines D (2008)
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owned insurance firm to enter the m
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affective commitment; organizationa
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Figure 1. Structural relationships
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Prior to analysis, variables were e
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Table 1. Effect decomposition for M
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Figure 5. Unstandardized estimates
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prospects. In other words, less wor
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goal of a SCM process is to create
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Sale Lean Supply Chain (LSC) Growth
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Upper Saddle River: Pearson Prentic
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the green awareness movement by ado
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usiness practices than smaller firm
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Table 3. Descriptive statistics and
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China. Green leadership could be em
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APPENDIX Appendix 1: Measures of ob
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Emotional intelligence Self monitor
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ship between a people’s perceived
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Table 1. Analysis of the reliabilit
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Table 4. Results from hypothesis te
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Ajzen I, Driver BL (1992). Applicat
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mono production economy, and rural
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Table 2. Pearson correlation betwee
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Table 1. Behavioral Phenomenon that
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Table 3. Test period data. Table 4.
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Prospect value Figure 3. Expected v
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Tversky A, Gilovich T (1989). The H
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Table 1. Components of a mentoring
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Table 3. Perceptions on the success
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Table 5. Characteristics of a mento
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terms of sustained development, are
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Table 7. Ideal characteristics of m
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qualitative analysis of fifteen hou
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section. In Section 3, we will disc
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Table 1. Participants’ demographi
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of Am. Acad. of Bus., Cambridge. 4(
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directors and propose the board ind
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composition is the outcome of a neg
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Table 1. Descriptive statistics. Ti
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Table 3. The determinants of board
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Booth JR, Cornett M, Tehranian H (2
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provides a wider response and swift
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Correlation “Customary Approach
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Table 2. Correlation matrix of EAC
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Table 9. Intra-EAC imports as share
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Martin JC (1999). The European Mone
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participate in the highest degree o
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innovation. A secondary innovation
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Figure 2. The switching ecology of
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Table 1. Revenue growth rate and CA
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variables (Beattie and Jones, 1999a
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Table 3. Explanations of dependent
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Courtis JK (1997). Corporate annual
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treated in the literature, its rela
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company. METHODOLOGY Table 1. Quest
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as an important factor in the manag
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satisfaction may also reduce the ov
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Table 1. Customer expectations on s
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Table 2. Contd. Machirori and Fatok
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and travelling may lead to satisfac
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and professionally developmental pr
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Table 1. Organizational elements mo
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Table 2. Studying the demographical
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education might involve plenty of c
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(Deng et al., 2010). To date, there
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Table 2. Results of hierarchical re
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WOM. The comparison can be seen in
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UPCOMING CONFERENCES International
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