Career Development International

Career Development International Emerald Article: Linking LMX, innovative work behaviour and turnover intentions: The mediating role of work engagement Upasna A. Agarwal, Sumita Datta, Stacy Blake-Beard, Shivganesh Bhargava

Article information: To cite this document: Upasna A. Agarwal, Sumita Datta, Stacy Blake-Beard, Shivganesh Bhargava, (2012),"Linking LMX, innovative work behaviour and turnover intentions: The mediating role of work engagement", Career Development International, Vol. 17 Iss: 3 pp. 208 - 230 Permanent link to this document: http://dx.doi.org/10.1108/13620431211241063 Downloaded on: 18-06-2012 References: This document contains references to 107 other documents To copy this document: [email protected]

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Linking LMX, innovative work behaviour and turnover intentions The mediating role of work engagement

208 Received 16 July 2011 Revised 22 December 2011 17 February 2012 6 April 2012 Accepted 6 April 2012

Upasna A. Agarwal Department of People and Performance, S.P. Jain Institute of Management and Research, Mumbai, India

Sumita Datta Department of Family Managed Business, S.P. Jain Institute of Management and Research, Mumbai, India

Stacy Blake-Beard School of Management, Simmons College, Boston, Massachusetts, USA, and

Shivganesh Bhargava Department of Human Resources Management and Organization Behaviour, Indian Institute of Technology Bombay, Mumbai, India Abstract Purpose – This study aims to examine the relationships among leader-member exchange (LMX), innovative work behaviour (IWB), and intention to quit. The mediating role of work engagement is tested within the relationship of LMX, IWB, and intention to quit. Design/methodology/approach – Respondents to a survey were 979 Indian managerial employees working in six service sector organisations in India. Structural equation modelling was used to test hypothesised relationships. Findings – Results suggest quality of exchanges between employees and their immediate supervisors influences engagement. Work engagement correlates positively with innovative work behaviour and negatively with intention to quit. Work engagement mediates the relationship between LMX and innovative work behaviour, and partially mediates intention to quit. Research limitations/implications – A cross-sectional design and use of self-reported questionnaire data is a limitation of this study. Since the study focuses only on service-sector organisations, the results of this study should be interpreted with caution. Originality/value – This study makes important theoretical contributions in three ways. In the domain of work engagement, it addresses factors that influence employee engagement and its outcomes. It expands knowledge about organisational resources that foster work engagement. For LMX, this study complements existing research by investigating work engagement as an outcome. Identifying LMX and work engagement as antecedents of innovative work behaviour, it also extends research in that domain. An important contribution is positioning work engagement as a means through which job resources are linked to employee outcomes. The study is also a rare examination of the Indian context. Keywords Work engagement, Innovative work behaviour, LMX, Intention to quit, Employees, Managers, Workplace, Employees turnover, India Paper type Research paper Career Development International Vol. 17 No. 3, 2012 pp. 208-230 q Emerald Group Publishing Limited 1362-0436 DOI 10.1108/13620431211241063

Introduction Organisations increasingly realise that no company, small or large, achieves sustainable success without engaging employees who bring high energy and passion

to their work (Macey et al., 2009). Work engagement is cognitive-affective motivation at work, characterised by vigour, dedication, and absorption (Schaufeli and Bakker, 2004). Work engagement has far-reaching implications for quality of employees’ core work responsibilities, and supports extra-role performance (Leiter and Bakker, 2010). Since engaged employees are vital for survival, sustainability, and growth, organisational leaders increasingly cultivate this state among employees. Encouraging individuals to invest more psychic energy in work is the most powerful lever corporations possess to improve productivity (Erickson, 2005). Despite important consequences of work engagement, scholarly research on the construct is inadequate (Wefald and Downey, 2009a); little is known about factors that foster work engagement, and there is insufficient information about its outcomes (Karatepe and Olugbade, 2009). Increasing employee engagement is a challenging and complex undertaking; some researchers suggest that the relationship quality an employee shares with immediate supervisors, known as leader-member exchange (LMX), plays a pivotal role in fostering engagement (Macey and Schneider, 2008). The principle of LMX theory is that leaders develop different types of exchange relationships with direct reports, a phenomenon labelled LMX differentiation (Liden et al., 2006). The quality of these relationships influences important leader and member attitudes and behaviours (Bhal et al., 2009; Gerstner and Day, 1997; Sparrowe and Liden, 1997). This study examines the influences of LMX on work engagement. Organisational leaders recognise they must continuously innovate on products and internal processes (Dorenbosch et al., 2005). Given the importance of employee innovative work behaviours to organisational sustainability and effectiveness, greater efforts to uncover factors that encourage innovative work behaviours emerged in the literature (Yuan and Woodman, 2010). Employee attrition remains a critical issue for organisations and managers (Cascio, 2006). Retaining the best professional talent and controlling the costs associated with recruiting, selecting, and hiring new employees continue to be a challenge (Tymon et al., 2011). Given the significant impact of work engagement on employee attitudes and discretionary work behaviours (Bakker, 2011), studies are conducted to examine the relationship between work engagement and both turnover intentions (Halbesleben, 2010) and innovative work behaviour (Bakker et al., 2007; Bakker and Demerouti, 2007). This paper examines the influences of work engagement on both innovative work behaviour and intention to quit in an Indian context. Work engagement emerged recently as an important mediating variable (Rich et al., 2010), with Job-Demand Resource ( JD-R) theory (Bakker and Demerouti, 2007; Demerouti, Bakker, Nachreiner, and Schaufeli, 2001a) providing a basis for much of this work. According to JD-R theory, job resources such as organisational and supervisor support have motivational potential; their availability increases engagement of employees, which in turn fosters positive employee outcomes. This paper examines the role of engagement as a means through which the leader-subordinate relationship influences critical employee outcomes such as innovative work behaviour and intention to quit. This study makes a significant contribution by proposing and testing a research model of work engagement (Figure 1), examining its antecedent, outcomes and mediating effects. Examining the influence of supervisor-subordinate relationships on employee work engagement, this study addresses the growing need to explore the

LMX, IWB and turnover intentions 209

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210 Figure 1. Research model

impact of a broader range of predictors of work engagement to acquire deeper understanding of the construct (Chughtai and Buckley, 2011; Shuck and Wollard, 2009). Although work engagement is posited to play a mediating role, empirical studies examining engagement as a means through which organisations create competitive advantages are insufficient (Rich et al., 2010). This study proposes work engagement as a mechanism that links LMX and outcomes, namely innovative work behaviour and intention to quit. Work engagement as a concept Positive psychology emphasises leveraging human strengths, optimal functioning, and wellbeing, for business success and competitive advantage (Luthans, 2002). One positive organisational behaviour concept that emerged in the past decade is work engagement. Macey et al. (2009, p. 5) define engagement as a “psychic kick of immersion, striving, absorption, focus and involvement.” Engagement is discretionary effort, achieved through the behavioural investment of physical, cognitive, and emotional energy in work roles (Kahn, 1992). Engagement involves investing “hands, head, & heart” (Ashforth and Humphrey, 1995, p. 110) in active, full-work performance. The conceptual basis for work engagement was provided by Kahn’s (1990) ethnographic study of the members of an architecture firm. He defined engagement as “the harnessing of organisation members’ selves to their work role by which they employ and express themselves physically, cognitively and emotionally during work performances” (Kahn, 1990, p. 694). There are various attempts to expand engagement’s conceptualisation. The most accepted definition of work engagement is from Schaufeli et al. (2002, p. 465) as “a positive, fulfilling, work-related state of mind characterised by vigour, dedication, and absorption.” Vigour refers to high energy and mental resilience while working, a willingness to invest effort in one’s work, and persistence even in the face of difficulties. Dedication refers to a sense of significance, enthusiasm, inspiration, pride, and challenge. Absorption is characterised as being fully concentrated and deeply engrossed in one’s work, whereby time passes quickly and one has difficulty detaching from work. Empirical studies demonstrate evidence for a one-factor, parsimonious structure of work engagement (Wefald and Downey (2009b). In this study, absorption, vigour, and dedication dimensions of engagement are combined into an aggregate measure of engagement. Although the phrases employee engagement and work engagement are often used interchangeably, we prefer the latter because it is more specific. Work engagement

refers to the relationship of the employee with his or her work, whereas employee engagement may include a relationship with the organisation. Research suggests work engagement can be measured reliably (Schaufeli et al., 2006), and can be discriminated from related concepts such as job involvement and commitment (Hallberg and Schaufeli, 2006). Though related, engagement does not occupy the same conceptual space as organisation citizenship behaviour (OCB) (Macey and Schneider, 2008), job satisfaction, or workaholism (Schaufeli and Salanova, 2008). Work engagement is a desirable condition that has implications for employees experiencing it. At the individual level, engaged employees enjoy good health and positive work affect (Demerouti, Bakker, De Jonge et al., 2001b; Rothbard, 2001). Work engagement is relevant for organisations since it results in customer satisfaction (Harter et al., 2002; Salanova et al., 2005), individual work goals (productivity) (Schaufeli and Bakker, 2004), in-role and extra-role performance (Schaufeli et al., 2006), and financial returns (Xanthopoulou et al., 2007). Given the clear importance of work engagement, it is not surprising that there are increasing attempts to uncover conditions that foster employee engagement. Relationship between LMX and work engagement Several studies use overarching frameworks of the JD-R model to explain antecedents of work engagement. The basic premise of JDR theory (Demerouti, Bakker, De Jonge et al., 2001b; Demerouti, Bakker, Nachreiner, and Schaufeli, 2001a) is that working environment characteristics can be classified into two general categories: job demands and job resources. Job demands refer to physical, psychological, social, or organisational aspects of the job that require sustained physical and/or psychological (cognitive and emotional) effort, and are associated with physiological and/or psychological costs. Examples of job demands are high work pressure, role overload, emotional demands, and poor environmental conditions. High job demands are related positively to emotional exhaustion (Bakker et al., 2007). Job resources refer to those physical, psychological, social, or organisational aspects of a job that: . achieve work goals; . reduce job demands and associated physiological and psychological costs; and . stimulate personal growth and development. Job resources may be located at the organisational level (e.g. salary, career opportunities, job security), among interpersonal and social relations (e.g. supervisor and co-worker support, team climate), within the organisation of work (e.g. role clarity, participation in decision making), and at the task level (e.g. performance feedback, skill variety, task significance, task identity, autonomy). Various job resources examined as predictors in the literature include autonomy, feedback, skill utilisation, job control (Bakker and Geurts, 2004; Hakanen et al., 2006; Salanova et al., 2005; Schaufeli et al., 2009; Xanthopoulou et al., 2007), and co-worker and supervisory support (May et al., 2004; Saks, 2006). A subordinate’s immediate manager is a representative of the organisation, a purveyor of job resources that facilitate employees’ achievement of job demands. Organisational leaders create a context in which direct reports operate. Since immediate managers are agents of the organisation, their behaviours play critical roles in shaping employee attitudes and behaviours (Bhatnagar, 2007; Joo, 2010; Rousseau and Greller, 1994; Tymon et al., 2011; Whitener, 2001). Manager support exists when


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employees perceive their immediate manager as someone who leads by example, offers support needed to do a job well, is personally effective, and is good at developing people. The quality of relationships between supervisors and subordinates is often studied via LMX theory. These relationships are characterised as high quality, reflecting trust, respect, and loyalty, or low quality, reflecting mistrust, low respect, and a lack of loyalty (Morrow et al., 2005). Sparrowe and Liden (1997) found individuals in high-quality LMX relationships receive more of a leader’s time, more direction information, and more emotional support than those in low-quality relationships. Such subordinates have an advantage since their supervisors introduce them to key people in the social network, leading to additional information and political and social resources (Sparrowe and Liden, 1997). Subordinates with a strong, high-quality relationship with immediate managers experience psychological safety, the belief that the environment is safe to take interpersonal risks (Spreitzer et al., 2010). Psychological safety is important for fostering work engagement because it reduces the depletion of vigour, a core dimension of engagement. In high-quality exchange relationships, leaders mentor subordinates (Scandura and Schriesheim, 1994). Bhatnagar (2007) argues that mentors enhance employee engagement; leaders of high-quality exchange relationships represent resources that facilitate accomplishment of work goals, stimulate personal development, and increase work engagement among employees. Although the quality of exchange relationship between employees and supervisors is posited to be a critical job resource that influences employee engagement (Macey et al., 2009), this association is not often tested empirically. The positive relationship between LMX and work engagement can also be explained using the Social Exchange Theory (SET). SET suggests that obligations are generated through a series of interactions between parties (e.g. between a leader and subordinate) in a state of reciprocal interdependence (Gouldner, 1960). When an immediate supervisor provides opportunities for development, fair supervision, meaningful work, and autonomy, subordinates feel obliged to repay leaders with higher levels of organisational commitment, citizenship behaviours (Bhal, 2006), innovation (Basu and Green, 1997; Scott and Bruce, 1998), competency (Epitropaki and Martin, 2005; Lee, 2007), and trust (Bauer and Green, 1996). Another way for individuals to reciprocate is through engagement. Engagement is payback or reciprocation for what an employee receives. People reciprocate because they “fundamentally believe in reciprocation” (Macey et al., 2009, p. 15). Reciprocity between subordinate and immediate supervisor can be explained by psychological contract theory. The psychological contract encapsulates perceived promises employees believe are made to them in exchange for effort (e.g. skill, loyalty, discretionary work behaviour) (Rousseau, 2000). To the extent value propositions meet needs, employees perform at levels consistent with their interpretations of an implicit contract (Macey et al., 2009). When supervisors fulfil the psychological contracts of their employees by taking care of personal and professional needs and treating them with respect, that fulfilment creates a sense of obligation for the subordinates to reciprocate in equally positive ways. Employees feel obligated to reciprocate by approaching their work with greater vigour, dedication, and absorption (Saks, 2006). Drawing from a strong foundation of JD-R and SET, we posit: H1. LMX correlates positively with work engagement.

Work engagement, turnover intentions and innovative work behaviour Work engagement and turnover intentions A review of the literature suggests work engagement correlates negatively with turnover intention (Saks, 2006). Halbesleben’s (2010) recent meta-analysis demonstrates there was a strong negative relationship between work engagement and turnover intention with corrected population correlations ranging from 2 0.25 (vigour) to 20.45 (dedication). The negative relationship between work engagement and turnover intention is explained by SET (Robinsons and Morrison, 1995; Rousseau, 1995), suggesting that when one party provides something to another, the provider expects reciprocation. Organisations are the prime purveyors of job resources that facilitate employees achieving a fulfilling, positive work-related state of mind (work engagement). Procuring these benefits necessitates that individuals turn a portion of their energy, time, and effort over to employers. Based on this reasoning, continuing organisational membership is analogous with making an investment that increases employee perceived entitlement and decreases perceived debt (Cropanzano et al., 1997; Robinsons and Morrison, 1995). Replicating past literature, we posit: H2a. Work engagement correlates negatively with turnover intention. Work engagement and innovative work To cope with global competition and environmental uncertainty, organisations need employees who not only fulfil formal job requirements, but exceed standard work behaviours by engaging innovatively (Janssen, 2000). Innovative work behaviour is intentional creation, introduction, and application of new ideas within a work role, group, or organisation to benefit role performance, a group, or an organisation (West and Farr, 1989). The central role of innovation in long-term survival (Ancona and Caldwell, 1987) provokes continued interest among social scientists and practitioners. Studies into innovative behaviour are in early stages, and limited attention is given to antecedents. Of extant studies, leadership, individual problem-solving style, and work-group relations (Scott and Bruce, 1994); distributive and procedural fairness (Janssen, 2004); supervisor supportiveness ( Janssen, 2004); and self-leadership, income, and job tenure skills (Carmeli and Weisberg, 2006) are examined to determine if they have implications for innovativeness. However, limited efforts have been made to examine work engagement as an antecedent of innovativeness (Hakanen et al., 2008). Organisations often introduce innovations to provide benefits (West and Farr, 1989), but adopting innovations requires employees to invest substantial effort. Since innovative behaviours involve creation of something new, they require employees to concentrate and become absorbed in their work (absorption). Innovation is also change-oriented (Spreitzer, 1995; Woodman et al., 1993). Other employees in the work environment may resist changes because of the insecurities and uncertainties they bring (Argyris, 1960). Hence, innovative employees are often confronted by workers who want to prevent change. Convincing resistant workers of the benefits of innovations can be difficult and emotionally taxing. Innovation is a multistage process, including idea generation, idea promotion, and idea realisation; varying behaviours are necessary at each stage (Janssen, 2004). Therefore, it is paramount that employees possess the mental resilience to resist the temptation to distract from work (vigour). To make such cognitive and emotional investments persistently, individuals must


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perceive significance and pride in what they are doing, and regard the extra effort worthwhile. It is only when individuals have such likeability toward their jobs that they can concentrate fully on their work (dedication). Absorption (being fully concentrated and deeply engrossed in work), vigour (high levels of energy and mental resilience, and persistence even in the face of difficulties) and dedication (a sense of likeability, significance, and challenge in tasks) required to develop an innovative work approach are the core dimensions of work engagement. Work engagement, a persistent positive affective-cognitive state characterised by vigour, dedication, and absorption (Wefald and Downey, 2009b), contributes to the development of innovative work behaviour. Bakker et al. (2007) found positive correlations between innovativeness and the three dimensions of work engagement: (1) vigour; (2) dedication; and (3) absorption. Thus, we hypothesise: H2b. Work engagement correlates positively with innovative work behaviour. Mediating role of work engagement An important assumption of JD-R theory is that job resources link to organisational outcomes via engagement. The presence of adequate job resources (LMX, in this case) reduces job demands, fosters goal accomplishment, and stimulates positive affective reactions (Hobfoll, 2001), including work engagement. When employees find their work meaningful and interesting, they are enthusiastic to immerse themselves in their work, and persevere to complete even the most difficult assignment. Feeling good about work sparks a willingness to experiment, leading to the creation of new ideas and novel solutions (Fredrickson, 2001) such as innovative work behaviour. JD-R suggests employees experiencing likeability toward work are less likely to leave the organisation (turnover intention) (Saks, 2006). Studies demonstrate the robustness of the motivational process through the mediating role of work engagement in the relationship between job resources and organisational outcomes. In a study by Saks (2006), engagement mediated the relationships between antecedents ( job characteristics, perceived supervisory support, rewards and recognition, procedural justice and distributive justice) and organisational commitment, intention to quit, and organisational citizenship behaviour-individual, and partially mediated the relationship with other outcomes ( job satisfaction and organisational citizenship behaviour-organisation). Sonnentag’s (2003) study found that engagement mediates the effects of recovery on proactive behaviour, and Schaufeli and Bakker (2004) argue engagement mediates the relationship between job resources and turnover intentions. Richardsen et al. (2006) found that work engagement partially mediated the effects of individual characteristics, job demands, and job resources on organisational commitment and self-efficacy. Schaufeli and Salanova (2008) suggest work engagement mediates the relationship between job resources (variety, control and feedback) and proactive behaviour. Finally, Rich et al. (2010) discovered engagement mediates relationships between value congruence, perceived organisational support, core self-evaluations, task performance and organisational

citizenship behaviour. We expect that work engagement mediates the relationship between LMX and innovative work behaviour. Therefore: H3. Work engagement mediates the relationship between LMX and outcomes of innovative work behaviour and turnover intention. Sample and study procedure The sample for this study was drawn from organisations in the service sector in India. Various organisations located in and around Mumbai, the financial capital of India, were invited to participate. The services sector is important for many worldwide economies, particularly in India. According to the Services Sector-Union Budget and Economic Survey (2010-2011), the contribution of the services sector to the Indian economy is manifold: a 55.2 per cent share in gross domestic product (GDP), growing 10 per cent annually, contributing about a quarter of total employment, accounting for a high share in foreign direct investment (FDI) inflows, a third of total exports, and recording very fast (27.4 per cent) export growth through the first half of 2010. A few of the organisations requested that the researchers make a brief presentation about the objectives, scope, and implications of the study. A total of six private-service companies consented to participate. These companies were an investment bank, a business process outsourcing (BPO) firm, a knowledge process outsourcing (KPO) firm, an information technology (IT) company, a telecommunication company, and a retail company. Data were collected from managers. Managers are an important group to investigate because they play a key role by making important economic contributions to an organisations (Quick and Cooper, 2002). For the purposes of this study, managers with team responsibility (at least three subordinates) were selected. The human resources departments of the six organisations assisted the researchers identify prospective managers who fit this criterion. Stratified random sampling was used to select managers across ages, gender, tenures, education, hierarchical levels, and functions. A total of 1,500 managers were sent an invitation by the HR team of their respective organisations to volunteer for the study; 1,200 volunteered to participate. Groups were categorised according to convenience of the employees to optimise organisational time and facilitate data collection. A questionnaire was prepared in English since it is spoken and understood by the majority of people in Indian organisational contexts. A hardcopy version of the survey was administered to the employees directly by the researchers. Attached to each questionnaire was a cover letter explaining the objectives of the study and assuring respondents the study was voluntary and their responses would be confidential. Of 1,200 responses, 979 were usable for further analysis, a response rate of 81.6 per cent; 65 per cent of respondents were men and 35 per cent were women. Respondents had an average age of 30 years ðSD ¼ 7Þ and average tenure at their current jobs was four years ðSD ¼ 1:7Þ; 68.6 per cent were graduates (with a bachelors degree) and 31.4 per cent were post-graduates (with a Master’s degree). Respondents represented diverse functional backgrounds, including accounting/finance (7.6 per cent), engineering (16 per cent), sales/marketing (14.5 per cent), production/manufacturing (44.3 per cent), computer systems (2.3 per cent), human resources/administration (9.9 per cent), consumer services (2.3 per cent), and research and development (3.1 per cent). In terms management hierarchy, 45 per cent were lower-level managers, 44 per cent were middle-level managers, and 11 per cent were top-level managers.


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Measures Indicators were used to estimate each latent variable. Unless otherwise indicated, all measures used a response scale ranging from 1 (strongly disagree) to 7 (strongly agree). Work engagement was measured with the nine-item version of the Utrecht Work Engagement Scale (UWES) (Schaufeli et al., 2006). The UWES reflects three underlying dimensions, each measured with three items: (1) vigour (at my work, I feel bursting with energy); (2) dedication (my job inspires me); and (3) absorption (I get carried away when I am working). The three dimensions of engagement were aggregated to create an overall scale of work engagement. High scores on all three dimensions indicate high work engagement. The Cronbach’s alpha coefficient for the scale was 0.88. LMXwasassessedusingScanduraandGraen’s(1984)seven-itemscaleonaseven-point Likert scale. A sample item included “do you have a positive working relationship with your supervisor?” The Cronbach’s alpha coefficient for the scale was 0.92. Because measuring turnover is rather difficult, many studies rely on turnover intentions. These intentions are correlated strongly with actual turnover (Hulin, 1991). This study used a five-item scale developed by Wayne et al. (1997). A sample item included “I am seriously thinking of quitting my job.” The Cronbach’s alpha coefficient for this scale was 0.90. Innovative behaviour was rated using Janssen’s (2000) nine-item measure. Respondents indicated how often they performed innovative activities, including “creating new ideas for difficult issues” (idea generation), “mobilising support for innovative ideas” (idea promotion), and “transforming innovative ideas into useful applications” (idea realisation). The three dimensions of innovative work behaviour were summed to create an overall scale of innovative behaviour. The Cronbach’s alpha coefficient for the scale was 0.92. A three-item measure of solitary work preference from Ramamoorthy and Flood (2004) was chosen as a marker variable for confirmatory factor analysis (CFA). The Cronbach’s alpha coefficient for the scale was 0.82. Research suggests age, gender, education, job level, and tenure relate to engagement (Schaufeli and Bakker, 2003). Since we are interested in examining the relationship between LMX, work engagement, innovative work behaviours, and intention to quit, the demographic variables mentioned above were controlled for in data analyses to rule out alternative explanations. These variables were measured as: gender ð0 ¼ male; 1 ¼ femaleÞ; job level ð0 ¼ junior level; 1 ¼ middle level; 2 ¼ senior level), and education level (0 ¼ bachelors; 1 ¼ Master’sÞ: Tenure and age were reported in years. Analysis approach Table I shows descriptive statistics and correlations for each variable. The constructs used in the study were reliable, with coefficients ranging from 0.88 to 0.92, exceeding the minimum of 0.70 (Nunnally, 1978). A significant relationship was observed between demographic variables and several of the primary variables in this study. Age and tenure were related to work engagement, turnover intentions, and innovative work behaviours. Gender was related to work engagement and innovative work behaviours.

3.7 5.8

30.4 1.20 3.9 4 1.3 4.9 3.3 4.5 0.7 0.85

0.16 * 0.03

7 1 0.40 20.19 * * 1.7 20.09 * 1.7 0.71 * 0.8 0.31 * 0.9 0.03 0.9 20.14 * 0.8 0.20 *

Age

20.16 * 0.02

1 20.01 20.09 * 20.11 * 20.02 0.01 20.05 * 0.08 20.02

1 20.17 * 0.08 * 20.01 20.02 20.03

Job level LMX

Turnover intention

0.12 * 0.17 * 2 0.04 2 0.01

0.20 * 0.15

20.09 * 0.23

(0.88)

WE

0.38 * 0.32

1 0.19 * 1 0.03 0.07 * 1 (0.92) 2 0.09 * 2 0.08 * 2 0.34 * 1 (0.90) 0.16 * 0.12 * 0.41 * 20.40 * 1

Gender Education Tenure

Note: n ¼ 979; alpha reliabilities are given in the parentheses; *p , 0.01; * * p , 0.001

Age Gender Education Tenure Job level LMX Turnover intention Work engagement (WE) Innovative work behaviour (IWB) Solitary work preference

Mean SD

1 (0.92) 1 (0.82)

IWB


Table I. Means, standard deviations, and correlations

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Job level was related to LMX, turnover intentions, work engagement, and innovative work behaviours. Therefore, we controlled for these effects in further analysis by adding only significant paths in the structural model. There were also sample differences observed among the variables (e.g. LMX, work engagement, and innovative work behaviours). Sample differences were expected since organisations naturally have varying business processes and challenges. To maintain diversity in our sample and capitalise on statistical power, we combined the samples to analyze hypothesised relationships. This methodology is followed by researchers in recent literature (Behery, 2009; Restubog et al., 2009). We tested hypotheses with structural equation modelling (SEM). The sample size of 979 managerial employees was sufficient for statistical analysis (Nunnally, 1967). The chi-square statistic, root mean square error of approximation (RMSEA), standardised root mean square residual (SRMR), comparative fit index (CFI), normed fit index (NFI), and the goodness of fit index (GFI) were assessed model fit. Hu and Bentler (1999) suggest that for CFI, NFI, and GFI, values 0.95 and above suggest good fit. SRMR values below 0.08 suggest an acceptable model fit. For RMSEA, researchers recommend values less than 0.05 indicate good fit, while values between 0.05 and 0.08 suggest acceptable fit (Kline, 2005). Preliminary analyses Common method variance To detect common method variance (CMV), we used the post-hoc CFA marker technique (Williams et al., 2010) recommended by Richardson et al. (2009). In this technique, common method variance is represented by the shared variance between a marker variable and substantive constructs. Application of the marker variable technique requires inclusion of a variable that is unrelated to at least one focal variable. The correlation observed between the marker variable and the unrelated variable is interpreted as an estimate of CMV (Lindell and Whitney, 2001). As suggested by Richardson et al. (2009), four models were estimated for each simulated independent-dependent construct pair: (1) a baseline model; (2) method-C model; (3) method-U model; and (4) method-R model. The baseline model forces correlations between the marker construct and both the independent and dependent constructs in the set to zero, and fixed marker construct-marker item loadings to the unstandardised values obtained from a basic CFA model of the substantive and marker constructs. The method-C model is identical to the baseline model but with the addition of factor loadings from the marker construct to each independent/dependent indicator. These loadings were constrained to be equal (i.e. non-congeneric). The method-U model is identical to the method-C model, but the marker construct independent/dependent item loadings are estimated freely (i.e. congeneric). Finally, the method-R model is identical to either the method-C/U model, though the independent-dependent construct correlation is constrained to its unstandardised value from the baseline model.

We chose the three-item solitary work preferences subscale of individualism and collectivism (Ramamoorthy and Flood, 2004) as a marker variable because solitary work preferences unrelated to the antecedent and outcomes of work engagement. Fit statistics for the Method-C model, Method-U model and Method-R model were not better than those for the baseline model. Chi-square difference tests comparing the baseline with the other models were not significant. Thus, it is unlikely CMV was a concern in subsequent analyses. Results Prior to testing the hypotheses, we conducted a confirmatory factor analysis (CFA) to examine the dimensionality and convergent and discriminant validity of measures. The model fit of a four-factor measurement model (LMX, work engagement, innovative work behaviour, and intention to quit) was compared to a one-factor model in which all constructs loaded on a single factor. The results for the four-factor model were x 2 ¼ 10228:2; df ¼ 4187; p , 0.01, while the single factor model was x 2 ¼ 44711:6; df ¼ 4280; p , 0.01. The chi-square of the four-factor model was significantly lower ðDx 2 ¼ 34483:6; Ddf ¼ 93; p , 0.01). The four-factor model also demonstrated better fit ðCFI ¼ 0:99; SRMR ¼ 0:05; GFI ¼ 0:82; RMSEA ¼ 0:04; NFI ¼ 0:96Þ; while the results of the one-factor model showed worse fit ðCFI ¼ 0:36; SRMR ¼ 0:08; GFI ¼ 0:83; RMSEA ¼ 0:05; NFI ¼ 0:42Þ: Thus, the four-factor model was retained for further analysis. We assessed hypotheses by adding predicted paths to the measurement model. The structural model provided adequate fit to the data ðx 2 ¼ 14990:6; df ¼ 2849; x 2 =df ¼ 5:2Þ; and the path coefficient in Figure 1 support all hypotheses. LMX correlated positively with work engagement ðb ¼ 0:23; p , 0.01). Work engagement correlated positively with innovative work behaviours ðb ¼ 0:33; p , 0.01), and negatively with turnover intention ðb ¼ 20:23; p , 0.01). These results support H1, H2a and H2b, respectively. Following guidelines offered by Baron and Kenny (1986) and consistent with extant research (Salanova and Schaufeli, 2008), we compared the fit of two models (M1 and M2) to assess the mediating role of work engagement. The first model (Figure 2), which we refer to as the fully mediated model, is equivalent to the hypothesised model. This model predicts mediation of work engagement, with no direct paths between LMX and outcomes. This model demonstrated good fit ðx 2 ¼ 14001:4; df ¼ 3500; x 2 =df ¼ 5:2; CFI ¼ 0:93; GFI ¼ 0:90; RMSEA ¼ 0:05; SRMR ¼ 0:05; NFI ¼ 0:91Þ: The second model (M2, Figure 3), the partially mediated model, adds two paths from LMX to innovative work behaviours and intention to quit. The fit of this model was better than the first ðx 2 ¼ 10000; df ¼ 2849; x 2 =df ¼ 3:5; CFI ¼ 0:93; GFI ¼ 0:95; RMSEA ¼ 0:04; SRMR ¼ 0:05; NFI ¼ 0:95Þ: However, the direct relationship between LMX and innovative work behaviours moved from significant ðb ¼ 0:23; p , 0.01) to non-significant ðb ¼ 0:13; n:sÞ; suggesting mediation; the direct relationship between LMX and turnover intention dropped ðb ¼ 20:23; p , 0.01, to b ¼ 20:13; p , 0.05), suggesting partial mediation. Thus, H3 was supported partially. To rule out innovative work behaviour as a mediator between LMX and engagement, an alternative model, M3, was fitted to the data (Figure 4). The fit of this model was inferior ðCFI ¼ 0:93; GFI ¼ 0:90; SRMR ¼ 0:06; RMSEA ¼ 0:05; NFI ¼ 0:90Þ to that of M1 (Figure 2) and M2 (Figure 3). Hence, innovative work behaviour


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Figure 2. M1 – mediated model

Figure 3. M2 – partially mediated model

Figure 4. M3 – alternative model

does not play a mediating role. For accuracy, we used the Sobel (1982) test to confirm the mediator or indirect relationships among constructs. The p-value of less than 0.05 confirmed that work engagement plays a mediating role for both innovative work behaviour ðz ¼ 5:60; p , 0.01) and turnover intention ðz ¼ 5:00; p , 0.01) of employees. The Sobel test results affirm that work engagement mediates relationships between LMX and outcomes.

Discussion and implications The reason executives are attracted to discretionary effort is that they recognise all activity is not subject to management design and control. Organisations increasingly need employees who do not need prodding and who not only sense the need for getting things done, but actually do it. They need energetic employees who go beyond job descriptions, employees who are engaged (Macey et al., 2009). Given its critical role, a need continues among executives and scholars for better understanding of the factors that stimulate engagement. This study investigates links between LMX and work engagement, testing relationships between work engagement, innovative work behaviours, and turnover intentions. Finally, it conceptualises work engagement as a mediator. The results we obtained lead to three conclusions. First, quality of exchanges between employees and immediate supervisors influence engagement levels. Second, work engagement relates positively to innovative work behaviour and negatively to turnover intentions. Third, work engagement mediates the relationship between LMX and innovative work behaviour. Findings from this study suggest a crucial role that an immediate leader plays in fostering engagement. Leaders who support subordinates (professionally and emotionally) give them direction and information, and unleash hidden potential and foster willingness among subordinates to dedicate efforts and abilities to accomplish work tasks (Meijman and Mulder, 1998). This critical role of the immediate leader on subordinate behaviour is significant contextually. Culturally, employees in collectivist cultures attach greater importance to organisation hierarchy (Varma et al., 2005). People in such societies possess greater associative and nurturing needs (Restubog et al., 2010), and look up to supervisors for support, protection, and guidance much more than employees in western cultures (Anand et al., 2010; Tripathi, 1990). When employees receive support and care from immediate supervisors, they reciprocate by dedicating efforts to accomplish tasks. This study highlights the attitudinal and behavioural contributions that engaged employees make to organisations. Since engaged employees experience positive emotions, including happiness, joy, interest, and enthusiasm in their work (Schaufeli et al., 2006), they possess a lower tendency to quit. Engaged employees promote organisational effectiveness by demonstrating discretionary innovative work behaviours (Borman and Motowidlo, 1997). The positive effects of work engagement on innovative behaviour are consistent with the Broaden-and-Build theory of positive emotions (Fredrickson, 2001), positing experiencing positive emotions broadens thought-action repertoires, thus increasing likelihood of innovative work behaviour. An important contribution made by this study lies in the relationship between LMX and outcomes via engagement. LMX does not influence innovative work behaviour directly; it impacts this variable indirectly through increased work engagement. Even if organisations demonstrate supportive practices, innovative behaviour depends on how engaged the employees are at work. Work engagement is pivotal for organisations that desire achieving competitive advantages through strategic objectives of innovative work behaviours and retaining talented employees. Implications for managers Since work engagement is an essential state with relevant consequences, firms must create and sustain the energy and passion that people bring to work. Results of the


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study suggest the critical role of supervisors in stimulating employee engagement. A number of implications for organisations and HR leaders follow. Organisations could create experiential settings where supervisors practice and learn to better utilise supportive work behaviours. For example, organisations with assessment centres could use them to create programs that help supervisors learn skills associated with supportive work behaviour (Zagenczyk et al., 2009). Organisations should strive to develop cultures in which employees support one another actively by enhancing communication between supervisors and employees. Bhal et al. (2009) recommend that work-related interactions are enhanced by encouraging seniors to coach, guide, and mentor subordinates. There is research evidence that perceptions of supervisory fairness influence extra-role behaviours (Macey et al., 2009; Skarlicki and Latham, 1996). Thus, organisations should conduct programs to train supervisors to treat subordinates fairly and politely, and improve supervisory and interpersonal skills. Nurturing leaders who build personal bonds with subordinates go a long way in stimulating affective reactions to work experience (Kuvaas and Dysvik, 2010). Organisations can create scenarios in which managers meet frequently subordinates informally. Company outings or meetings on festive occasions create a family-oriented organisation that help enrich quality of relationships between employees and managers (Restubog et al., 2009). Immediate supervisors develop personal relationships with their subordinates by remembering events important to the employee such as employment anniversary dates, birthdays, and family events (Tymon et al., 2011). Since supervisors play an important role in employee engagement and an employee’s decision to continue employment, HR professionals can provide better manager support training and hold managers accountable for retention. HR leaders should consider setting engagement levels for subordinates as a parameter of evaluation for managerial effectiveness at all levels. At the employee level, firms can introduce training programs that increase work engagement. In a study by Breso´ et al. (2008), a stress management intervention program among students that focused on enhancing positive emotional states as a source to self-efficacy was successful in increasing engagement, self-efficacy, and academic performance. However, engagement is not a transitory phenomenon. For sustained competitive advantage, firms should create and sustain a culture of engagement. Macey et al. (2009) suggest various steps that organisations can take to a build a culture of engagement to yield competitive advantage, including treating people fairly and as valued resources, building an environment of trust in management and in immediate supervisors, strengthening recruitment and socialisation by attracting people disposed to doing well in such work environment, and communicating engagement culture through an on-boarding process in which employees learn about the organisation’s culture. Designing meaningful and challenging jobs and providing autonomy and feedback with which people can do their best unleash psychic energy. Effective engagement undertaken by managers across the organisation should be shared and rewarded openly to institutionalise a culture of engagement. Theoretical contributions This study makes important theoretical contributions to three bodies of knowledge. In the domain of work engagement, the study joins a small but growing body of research

that addresses factors that influence employee engagement and its outcomes. Examining the role of LMX on work engagement, this study expands knowledge about organisational resources that foster willingness to dedicate efforts and abilities to a work task. For LMX, this study complements existing research by investigating work engagement as an outcome. Identifying LMX and work engagement as antecedents of innovative work behaviour, this study also extends research in that domain, still in its early stages. An important theoretical contribution of this study is positioning work engagement as a means through which job resources are linked to employee outcomes. Examining the mediating role of work engagement in the LMX-outcome relationship, this study addresses a call to examine the mechanisms that operate between LMX and attitudes and behaviours. Finally, the study contributes in terms of context. With multinational corporations increasingly opening businesses in India, an understanding of employee motivation is an important concern. This research is a rare examination of Indian manager engagement. Limitations and future research Despite substantive theoretical contributions, the study is not without limitations. The cross-sectional design of the study does not allow us to determine causality among variables. This limitation means arrows suggesting association among constructs should not be interpreted as causal relationships, but as associations that suggest causal ordering that should be confirmed with longitudinal research designs. That the alternative model of behaviour demonstrated poor fit suggests alternative causal ordering is unlikely. Only longitudinal research can disentangle cause and effect adequately. Results may partly be influenced by CMV because all data were collected through self-reports. We followed some procedural remedies advocated by Podsakoff et al. (2003). To reduce evaluation apprehension and prevent response distortion, participants were guaranteed confidentiality. All variables were measured with established scales, which mitigate measurement error and decrease common method bias (Spector, 1987). Results of the post-hoc, CFA marker technique (Richardson et al., 2009; Williams et al., 2010) and CFA revealed common method bias was not a serious concern. Nevertheless, future studies should collect data from multiple sources to avoid such problems. For example, innovative work behaviours could also be assessed through observer ratings. We employed only two criteria measures: (1) turnover intentions; and (2) innovative work behaviours. Future research should replicate the findings of this study on outcomes measured through methods other than self-report. Since data were collected from service organisations in western India, we cannot be sure of the generalisabilty of results to firms in other sectors or locations. However, these six service organisations differed in terms of size, structure, and business goals, which dilute concerns of generalisability. Future studies should evaluate the model in diverse geographic and occupational settings to enhance the external validity. Conclusion The motivational basis of employee work attitudes and behaviours is an important component of the research agenda relating to management practices, especially in


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employment relationships. This study contributes to the ongoing debate about the motivational potential of job resources on work engagement. Results suggest employee work engagement benefits organisations by motivating employees intrinsically to adopt an innovative work approach. These results reinforce the practical value of research examining factors that foster affective reactions (work engagement) and their consequences.

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Further reading Krosgaard, M.A. and Roberson, L. (1995), “Procedural justice in performance evaluation: the role of instrumental and non-instrumental voice in performance appraisal discussions”, Journal of Management, Vol. 21 No. 4, pp. 657-69. Robinson, D., Perryman, S. and Hayday, S. (2004), The Drivers of Employee Engagement, Institute for Employment Studies, Brighton.

230 Corresponding author Upasna A. Agarwal can be contacted at: [email protected]

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