Journal of Psychology in Africa 2011, 21(3), 405–412 Printed in USA - All Rights Reserved
Copyright Ó2011
Journal of Psychology in Africa ISSN 1433-0237
Psychological Empowerment, Work Engagement and Turnover Intention: The Role of Leader Relations and Role Clarity in a Financial Institution Japie R. de Villiers Marius W. Stander North-West University, South Africa Address correspondence to Marius Stander, PO Box 1174, Vanderbilpark, 1900, South Africa,
[email protected]; This study investigated the relationship between leader-member exchange, role clarity, psychological empowerment, engagement and turnover intention within a financial institution in South Africa. A cross-sectional survey design was used. A convenience sample (N = 278) was taken (males =31%, females =60%; 88% younger than 35 years; 57% with 2 – 5 years service) from the total population (N = 889). They completed the Leader-Member Exchange Questionnaire (Liden, Wayne, & Stilwell, 1993) Role Conflict and Ambiguity Questionnaire (Rizzo, House, & Lirtzman, 1970), Measuring Empowerment Questionnaire (Spreitzer, 1995), Engagement Questionnaire (May, Gilson, & Harter, 2004) and Intention-to-leave Scale (Sjöberg & Sverke, 2000). A path model was tested with SPSS to determine the relationships of the variables. Furthermore, a theoretical model was tested through the use of structural equation modelling (Arbuckle, 2008). The latent variables included LMX (consisting of two parcels), role clarity (consisting of two parcels), psychological empowerment (consisting of four variables, namely meaning, competence, impact, and self-determination), work engagement (consisting of two parcels), and turnover intention (a manifest variable). Role clarity mediated the relationship between leader-member exchange and psychological empowerment, while psychological empowerment mediated the relationship between role clarity and work engagement as well as turnover intention. Leader-member relations lead to better understanding of roles, while role clarity empowers and engages employees. Keywords: psychological empowerment, leadership, LMX, work engagement, turnover intention In South Africa, turnover cost is estimated at several million rand per annum due to decreased productivity, quality problems and increased accidents (Grobler, Warnich, Carrell, Ebert, & Hatfield, 2006). Fegley (2006) adds that the lack of available skilled workers makes finding and retention of talented individuals a focal point for organisations. Currently the state of the world economy is also adding to the pressure of keeping talent and has become a top priority for organisations worldwide (Bhatnagar, 2007). The benefits of an effective talent management strategy are increased engagement, with direct operational improvement, financial performance and improved employee turnover intention (Hughes & Rog, 2008). These improvements can be made by implementing retention strategies (Drucker, 1999), such as creating a positive organisation climate (Brewster, Sparrow, & Harris, 2005; Youssef & Luthans, 2008) through improving leadership techniques (Aryee & Chen, 2006). Such strategies can lead to greater individual empowerment which would increase organisational commitment and engagement (Menon, 2001). The investigation of positive organisations has received attention in recent years (Luthans & Youssef, 2007; Spreitzer, 2006). Positive organisations focus not only on the absence of illness, but on the creation of health and overall wellness (Seligman & Csikszentmihalyi, 2000; Wilson, DeJoy, Vandenberg, Richardson, & McGrath, 2004). Some organisational qualities important for health and wellbeing include leader relations (Avey, Wernsing, & Luthans, 2008), empowerment (Kim & George, 2005), role clarity (Bliese & Castro, 2000), engagement (Steele & Fullager, 2008) and turnover in-
tention (Kahumuza & Schlechter, 2008). Buckingham and Coffman (1999) believed that the leader member relation is of paramount importance to organisation climate. For instance, the retention of employees is highly influenced by the relationship with the leader and leader-member relations are often the reason singled out as to why individuals leave organisations. Influences on Leadership Leadership is not only built on the leader and/or the subordinate but on the relationship formed, also referred to as leader-member exchange (LMX) (Graen & Uhl-Bien, 1995). In the adoption of leadership practices characterised by high-quality LMX, leaders are able to foster subordinates’ sense of empowerment (Avey, Hughes, Norman, & Luthans 2008; Keller & Dansereau, 1995). LMX is described by Sparrow and Liden (1997) as interaction where leaders form high-quality social exchanges with some organisational members and lower-quality economic exchanges, which do not extend beyond the employment contract, with other members. This interaction, coupled with more accurate role clarity, has been found to lead to greater psychological empowerment of employees (Greasley, Bryman, Dainty, Price, Naismith, & Soetanto, 2008), and could lead to a decrease in turnover intention (Kim & George, 2005; Stander & Rothmann, 2010). However, the mediating effect that leader-member exchange has on role clarity is still unclear. There is also evidence to suggest that the possible mediating or moderating effect of role clarity on the relationship between leader-member exchange (LMX), psychological empowerment and turnover intention exists.
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Leadership, Role Clarity and Psychological Empowerment The quality of LMX is determined by social exchanges including trust, interaction, support, rewards, mutual respect, liking and reciprocal influence, which have a significant effect on organisational performance (Dansereau, Graen, & Haga, 1975; Erdogan, Liden, & Kraimer, 2006; Graen, Novak, & Sommerkamp, 1982; Liden & Graen, 1980; Scandura & Graen, 1984). Bauer, Erdogan, Liden, and Wayne (2006) and Kramer (1995) found high-quality LMX to be associated with good role clarity and role adjustment while Gerstner and Day (1997) found a lack of role clarity to be associated with low-quality LMX. Hong, Nahm, and Doll (2004) observed that leaders who provide employees with appropriate guidance and instruction to do their task create less uncertainty. Role clarity is the extent to which employees feel they have an extensive understanding of their fit-and-function within the working environment (Foote, Seipel, Johnson, & Duffy, 2006). Spreitzer (1995) found that role clarity was positively associated with psychological empowerment. Hall (2008) found that role clarity has a positive influence on psychological empowerment. Allowing autonomy in decision making relates to high-quality LMX experienced by subordinates and enhanced empowerment cognitions (Aryee & Chen, 2006). High quality LMX is therefore associated with higher feelings of psychological empowerment (Greco, Laschinger, & Wong, 2006; Laschinger, Finegan, & Wilk, 2009). Empowered employees will contribute to organisations through increased productivity and the ability to adapt to change and be responsive (Greasley et al., 2008). Empowered individuals are more engaged and express themselves better on a physical, emotional and cognitive level during role performances (May, Gilson, & Harter, 2004). Engagement and Turnover Intention Engagement was conceptualised by Khan (1990) as the harnessing of organisational members’ selves to their work role. Turnover intention (intention to stay) is the perception of the likelihood estimated for continued membership in an organisation (Price & Mueller, 1981), and is also described as the final step in an employee’s decision-making process to stay with or leave an organisation (Mobley, Griffeth, Hand, & Meglino, 1979). Kahumuza and Schlechter (2008) found that individuals who intend to leave the organisation are usually psychologically detached from the work context.
(LMX), role clarity, psychological empowerment, engagement and turnover intention. Specific objectives. The specific objectives will be:
• • •
To conceptualise LMX, role clarity, psychological empowerment, work engagement and turnover intention from the literature. To study the relationships between LMX, role clarity, psychological empowerment, work engagement and turnover intention in a business unit. To test the theoretical model of LMX, role clarity, psychological empowerment, work engagement and turnover intention.
Method Participants and Setting Participants were a convenience sample of regional managers, branch managers and sales consultants of a financial institution (N = 889) in the Gauteng region of South Africa. Participation in the research was voluntary while anonymity and confidentiality was guaranteed. Participants did not receive any benefits or compensation for taking part in the study. Table 1 shows the characteristics of these participants and is representative of the population. The study population consisted of 31% male participants and 60% females. The sample furthermore consisted of African (86%), White (5%), Coloured (1%), and other (1%) participants. The ages of participants ranged from 35 years and younger (88%) to 36 years and older (8%). Of the participants 69 % are single and 39% are qualified at a diploma level. Measures The following measuring instruments were used in the empirical study: Leader-member exchange questionnaire; Measures of Role Conflict and Ambiguity Questionnaire; Measuring Empowerment Questionnaire; Work Engagement Questionnaire; and Turnover Intention Scale.
The Leader-member Exchange Questionnaire (LMX7; Liden, Wayne, & Stilwell, 1993) is a 7-item Likert type questionnaire to measure leader relations. Response options ranged from 1 (strongly disagree) to 7 (strongly agree). Sample items include “My immediate supervisor understands my problems The following research questions emerged from the and needs” and “My working relationship with my immediate supervisor is effective”. Cronbach’s alpha coefficients ranging above-mentioned description of the research problem: from .0.82 to 0.91 has been reported on the scale (Liden et al. • How are the constructs and relationships for LMX, role clar- 1993; Madlock, Martin, Bogdan, & Ervin, 2007). ity, psychological empowerment, engagement and turnover The Measures of Role Conflict and Ambiguity Questionnaire intention conceptualised in the literature? (MRCAQ; Rizzo, House, & Lirtzman, 1970) is a 6 item measure • What is the relationship between LMX, role clarity, psycho- of role clarity. Response options ranged from 1 (strongly dislogical empowerment, engagement and turnover intention? agree) to 7 (strongly agree). Sample items include “I know what • Is the theoretical model of LMX, role clarity, psychological my responsibilities are”. High scores indicate high role clarity. empowerment, work engagement and turnover intention Reported Cronbach’s alphas range from 0.81 to 0.85 (Rizzo et al., 1970; Steele & Fullager, 2009). valid? The Measuring Empowerment Questionnaire (MEQ; Research Objectives Spreitzer, 1995) is a 12-item measure of psychological empowThe research objectives of this study are divided into gen- erment. Response options ranged from (1=strongly disagree) to eral and specific objectives: 7 (strongly agree). Sample items for each of the four sub-diGeneral objective. The general research objective aims to mensions of psychological empowerment include (Spreitzer, establish the relationship between leader-member exchange 1995): “The work I do is meaningful to me” (meaning); “I have mastered the skills necessary for my job” (competence); “I have
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Table 1 Characteristics of the Participants (N=278) Item
Category
Frequency
Percentage
Gender
Male Female Missing values
85 169 26
31.0 60.0 9.0
Race
African White Coloured Other Missing values
240 13 3 5 19
86.0 5.0 1.0 1.0 7.0
Age
35 years and younger 36 years and older Missing values
247 21 10
88.0 8.0 4.0
Marital Status
Single
186
69.0
Married// Life partner Missing values
81 11
27.0 4.0
Qualifications
Up to grade 11 Grade 12 Diploma Degree and Degree + Missing values
7 135 105 19 12
3.0 49.0 39.0 5.0 4.0
Service
Less than 1 year 2 – 5 years 6 – 10 years More than 10 years Missing values
71 159 31 1 18
26.0 57.0 11.0 0.0 6.0
significant autonomy in determining how to do my job” (self-determination), and “I have a great deal of control over what happens in my department” (impact). Stander and Rothmann (2009) reported alpha coefficients of 0.88 (meaning), 0.81 (competence), 0.85 (self-determination) and 0.77 (impact) in a sample of selected organisations. The Work Engagement Questionnaire (WEQ; May et al., 2004) consists of 13-items to measure three dimensions of work engagement: physical (4 items), emotional (5 items) and cognitive engagement (4 items). Sample items include “I stay until the job is done” (physical), “I really put my heart into the job” (emotional) and “Time passes quickly when I perform my job” (cognitive engagement). A Likert scale was used varying from 1 (strongly disagree) to 5 (strongly agree). May et al. (2004) reported a Cronbach alpha coefficient of 0.77 for the WEQ. The Turnover Intention Scale (TIS; Sjöberg & Sverke, 2000) is a 3-item measure of intention to leave. An example of an item is “If I was completely free to choose I would leave this job” (Sjöberg & Sverke, 2000). Response options range from 1 (strongly disagree) to 5 (strongly agree). The Cronbach alpha coefficient of 0.83 was observed for this study.
Data Analysis The SPSS program (SPSS Inc, 2009) and AMOS program (Arbuckle, 2008) were utilised to analyse data. A model including the hypothesized relationships was tested using a path analysis. The latent variables included LMX (consisting of two parcels), role clarity (consisting of two parcels), psychological empowerment (consisting of four variables, namely meaning, competence, impact, and self-determination), work engagement (consisting of two parcels), and turnover intention (a manifest variable). Next, the hypothesised structural model (see Figure 1) was tested using structural equation modelling as implemented by AMOS (Arbuckle, 2008). The first hypothesis is that LMX predicts role clarity, which predicts psychological empowerment, which in turn predicts work engagement and turnover intention (model 1). The fit statistics showed a less than acceptable fit of the model 1 to the data: c² = 122.69 (df = 39, p > 0.01); GFI = 0.93, NFI = 0.91, CFI = 0.94, IFI = 0.94, and RMSEA = 0.09. The chi-square value is statistically significant, which indicates the data did not fit the theoretical model well. The CFI value was lower than the recommended value of 0.95. The RMSEA value was higher than the recommended 0.08 upper cut-off value,
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which indicates a problem with the parsimony of the model. Inspection of the regression coefficients showed that the path from role clarity to work engagement was not statistically significant (b = 0.09; p > 0.01). The path from LMX to psychological empowerment was also not statistically significant (b = 0.02; p > 0.01). Furthermore, the modification indices showed that the fit of the model could be improved by including a path from psychological empowerment to turnover intention (MI = 18).
Results Effects of Leadership on Psychological Empowerment The theoretical model was tested removing the paths from role clarity to work engagement and from LMX to psychological empowerment, and by including a path from psychological empowerment to turnover intention (model 2). The fit statistics for model 2 showed statistically significant increase of fit to the data: c² = 104.69 (df = 40, p > 0.01); GFI = 0.94, NFI = 0.92, CFI = 0.95, IFI = 0.95, and RMSEA = 0.08. Inspection of the regression coefficients showed that the path from work engagement to turnover intention was not statistically significant (b = 0.12; p > 0.01). Therefore it was decided to respecify model 2 by excluding the path from work engagement to turnover intention (model 3). The results showed an acceptable fit of model 3 to the data: c² = 105.73, (df = 41, p > 0.01); GFI = 0.93, NFI = 0.92, CFI = 0.95, IFI = 0.95, and RMSEA = 0.08. The model is given in Figure 1.
significant, meaning that the higher levels of psychological empowerment are associated with higher levels of work engagement. Psychological empowerment mediates the relationship between role clarity and work engagement. Furthermore, psychological empowerment was negatively related to turnover intention. Psychological empowerment mediates the relationship between role clarity and turnover intention. Following the procedure explained by Hayes (2009), bootstrapping was used to construct two-sided bias-corrected confidence intervals so as to evaluate mediation effects. Table 4 shows the bootstrap estimated indirect effects of LMX and role clarity. Table 4 shows that the bootstrap estimated indirect effects of LMX on psychological empowerment, work engagement, and turnover intention were statistically significant (p < 0.001). Effects of Role Clarity on Leadership and Psychological Empowerment The bootstrap estimated indirect effects of role clarity on work engagement and turnover intention were statistically significant (p < 0.001). Table 4 also shows that 90 percent bootstrap confidence intervals (2000 trials) for all indirect effects do not include zeros. Therefore, it is concluded that the indirect effects are different from zero, thereby providing support for the importance of mediation effects of role clarity on psychological empowerment. The results therefore show that role clarity fully mediates the relationship between LMX and psychological empowerment. Furthermore, the results indicate that Psychological empowerment fully mediates the relation between role clarity and engagement.
As can be seen in Figure 1 and Table 3, the path from LMX to role clarity was significant and positive. Role clarity mediates the relationship between LMX and psychological empowerIn the structural model (see Figure 1), LMX explained 40% ment. This means that employees who experience high-quality of the variance in role clarity, role clarity explained 69% of the LMX are likely to report higher levels of role clarity, which in turn variance in psychological empowerment, while psychological are associated with higher psychological empowerment. The empowerment explained 56% of the variance in work engagepath from psychological empowerment to work engagement is
Figure 1. The maximum likelihood estimates for the leader-member exchange and turnover intention model
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Table 2 Descriptive Statistics, Cronbach Alpha Coefficients and Correlation Coefficients of the Measuring Instruments Mean 1. LMX 2. Role clarity 3. Meaning 4. Impact 5. Competence 6. Self-determination 7. Work engagement 8. Turnover intention
3.40 5.54 5.66 4.96 6.03 5.03 3.96 3.22
SD
a
0.92 1.08 1.31 1.42 0.97 1.40 0.72 1.37
0.91 0.82 0.89 0.81 0.86 0.78 0.73 0.98
1
2
3
0.56**++ 0.32**+ 0.37**+ 0.19** 0.38**+ 0.35**+ -0.31**+
0.56**++ 0.38**+ 0.51**++ 0.54**++ 0.50**++ -0.35**+
0.48**+ 0.52**++ 0.42**+ 0.55**++ -0.38**+
4
5
0.29** 0.46**+ 0.37**+ -0.34**+
0.46**+ 0.40**+ 0.12*
-
6 0.34**+ -0.30**+
7 -0.25**
Note. ** Statistically significant p < 0.01; * Statistically significant p < 0.05; +Correlation in practically significant r > 0.30 (Medium effect); ++ Correlation in practically significant r > 0.50 (Large effect)
Table 3 Standardised Regression Weights Role clarity Psychological empowerment Engagement Parcel 1 LMX Parcel 2 LMX Parcel 1: Role clarity Parcel 2: Role clarity Parcel 1: Work engagement Parcel 2: Work engagement Self-determination Impact Competence Meaning Turnover intention
