Influence of leadership style on job satisfaction of NGO employee: The mediating role of psychological empowerment
Abstract
The objective of this investigation is to analyze the impact of leadership styles on frontline employee psychological empowerment, and thereby, improving the job satisfaction level of employees. A questionnaire-based survey was conducted in nongovernmental organization (NGO) functioning in two major cities (Islamabad and Peshawar) of Pakistan, analyzing a total sample size of 319. Structural equation modeling results revealed that transformational leadership style has a significant association with job satisfaction, and the effect is partially mediated by the psychological empowerment. Conversely, findings showed that the relationship between transactional leadership and psychological empowerment was insignificant. Though, there existed a direct positive relationship between transactional leadership and job satisfaction. This research makes an important contribution in the area of leadership, which can be useful for NGOs to recognize the importance of leadership and encourage psychological empowerment of frontline employees. The findings also provide significant implications for organizations to understand better the importance of leadership, which will be helpful to enhance organizational success.
1 INTRODUCTION
Due to significant growth in number, the NGOs in Pakistan are under immense competitive pressures. To survive and progress in such competitive environment, more than ever, these organizations want to keep their employees to be contented and satisfied. Many studies recommend the “perfect worker” is the one who is highly satisfied, who has the will to go an extra mile to help the organization achieve its goal (Aydogmus, Camgoz, Ergeneli, & Ekmekci, 2018). It has been well established that satisfied personnel are more likely to be committed to their organization (Humborstad & Perry, 2011), have higher level of job performance (Yang & Hwang, 2014), lower levels of turnover (Lu, Zhao, & While, 2019). Research on leadership identifies a range of leadership styles and their possible influence on employee's job satisfaction. However, in case of Pakistan-based local NGOs, the impact of leadership styles on frontline employees' job satisfaction is poorly understood. Evidently, frontline employees in the NGO sector are recruited based on contract that expires with the end of each project. Thus, reshuffling and engagement in another new project often requires them to learn different skills because as sector of projects frequently changes. This uncertainty is considered as one of the major factor behind frontline employee's dissatisfaction with their job. Moreover, there has been witnessed a substantial difference of remuneration provided by local and multinational NGOs. Employees often express displeasure over their salaries when they learn about reputed organizations compensating more to the employees sharing the same designation. Moreover, previous research suggests that the tangible support plays an influential role in employee's satisfaction and eventually job retention (Bonenberger, Aikins, Akweongo, & Wyss, 2014; Currall, Towler, Judge, & Kohn, 2005). Considering these irrefutable problems, the objective of the current study is to identify which leadership style influence the psychological empowerment and job satisfaction among frontline employees of Pakistan-based local NGOs.
Research on leadership have shown that styles that have been most commonly used are autocratic, bureaucratic, laissez-faire, charismatic, democratic, participative, situational, transactional, and transformational leadership (Mosadegh, 2003), but out of all these the transformational and transactional leadership styles have generally been found to be associated with job satisfaction of employees (Hanaysha et al., 2012; Sayadi, 2016). Bass and Avolio (1994) define transformational leadership as the one which helps increasing employee's concern and strengthening their level of perception as well as their acceptance of the group vision and aims. Consensus exists among scholars that transformational leadership gain the trust of follower by being engage with them, this engagement result in desire outcomes (Arnold, Turner, Barling, Kelloway, & McKee, 2007; Dirks & Ferrin, 2002; Jung, Chow, & Wu, 2003). For instance, when employee feels trusted, they get encourage and become more involved in job. Empowerment is the enrichment of autonomy of employees in their job and increase involvement in decisions to enhance organizational effectiveness. Encouraging and taking feedback from employee result in employee confidence in his or her competencies to perform work in better way (Masi & Cooke, 2000), overall psychological empowerment that is positively associated to job satisfaction (Amundsen & Martinsen, 2015). In this process, emotional connections occur between the leader and employee involves employee in decision-making processes, and communicate and share information (Loganathan, 2013).
Some studies suggest a link between transformational and transactional leadership styles that are generally associated with the job satisfaction of employees (Ahmad, Adi, Noor, Rahman, & Yushuang, 2013; Powell, Butterfield, & Bartol, 2008). However, such links are less understandable with regard to their underlying mechanisms (Hinkin & Schriesheim, 2008). The evidence about the role of job satisfaction on various organizational outcomes motivated us to investigate the predictors of frontline employee's job satisfaction in the context of local NGOs operating in Pakistan. Previous work has failed to address leadership styles in the NGOs sector; it has not received adequate attention from an empirical viewpoint (Hailey & James, 2004). On the basis of previous research breach and lacking information onleadership styles in NGOs. This paper aims to fill gap by addressing leadership styles in NGOs. It draws on the existing studies and analyzes the relationship of job satisfaction with the transformational leadership style and the transactional leadership style. We propose psychological empowerment as a possible intervening factor in the relationship between two leadership styles and job satisfaction. The relationship of current study is presented in Figure 1.
2 LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT
2.1 Leadership
Human capital is regarded as inevitable resource to run organization in an efficient and precise way (Mohammad Mosadegh Rad & Hossein Yarmohammadian, 2006). Talented and enthusiastic workforce is an essential aspect, in the context to reach desired or targeted goals of an organization. Leaders can play an important role in fostering needs, goals, and interests of employee more inclined to achieve goals of organization (Walumbwa, Orwa, Wang, & Lawler, 2005). Thus, managing employees is entirely dependent upon quality of leadership (Arnold, Connelly, Walsh, & Martin Ginis, 2015). Currently, organizations predominantly require leaders “to lead and encourage not only individuals but also whole group” (Chen, Kirkman, Kanfer, Allen, & Rosen, 2007). Successful leadership encourages to take innovative and creative approach to solve problems. Leadership styles are different techniques adopted by leaders to present direction and motivates involvement of subordinates in a specific manner (Jones & Rudd, 2008). Hence, in the context of our study leadership is workplace relationship, associated to the individual assigned by the organization to examine and manage activities of the organization and to whom the subordinates presents report. Researchers recognize that leadership styles are of key aspect to the organizational achievements or failure (Bass, Avolio, Jung, & Berson, 2003; Trottier, Van Wart, & Wang, 2008).
According to “Great Man” theory, leaders are born with inherent qualities that cannot be learned. According to Bolden (2004), in the beginning, men were only considered to be leaders. For many years, researchers in management persist to be in support of the great man idea. Later on, leadership theory focused on behavioral patterns; thus, other individuals could be offered guidance to behave like leaders (Fong & Snape, 2015). Preliminary a leader or prospective leader was considered to have traits such as motivated, adaptive achievement-orientated, dominance, self-assurance, determined, and active. Later, leadership was analyzed according to situation and adoption of behavior to different situations, which is also called situational or contingency theory (Daft & Lane, 2005). Essential situational variables comprise characteristic of the subordinates, nature of the work atmosphere, and subordinates' tasks. Transactional and transformational leadership styles are considered most prevailing (Mester, Visser, Roodt, & Kellerman, 2003), and both of these have been concentrating on leader's traits, manners, and the situational or contingency factors.
2.2 Job satisfaction
Employees are intangible assets that can help to achieve organizational objectives. This intangible resource is major contributor to performance of organization (Judge, Weiss, Kammeyer-Mueller, & Hulin, 2017). Therefore, employees are considered primary means to attain the goals. When employees are satisfied, they enhance the performance and productivity of the organization. Organizations with satisfied employees have good reputation and exceeds from other organizations. Therefore, job satisfaction has become foremost organizational aim for various practical and organizational achievements. Job satisfaction has been acknowledged as very important to organizational success, subsequently construct being widely studied over the past years. Features of job satisfaction means the extent to which employees are satisfied with diverse aspects of work. Smith (1969) indicated that there are five facets that are typically used in measuring job satisfaction including wage, promotion, association with coworkers, administration or relationship with leader, and the work itself. A supportive working environment improves job satisfaction levels among employees. Besides, other components employee's moods and feelings are major element of job satisfaction. Jobs satisfaction is the amount of positive feelings in general related to job, and low satisfaction levels is related to negative feelings (Peerbhai, 2006). According to Lim and Noriega (2007), employees consider job satisfaction as a reason to restrain in or abandon the organization. Employees are always very cautious about their job and pay attention to get sufficient satisfaction. Job satisfaction has main impact on employees' efficiency. As a result, job satisfaction has turned into a foremost organizational aim for rational organizational success and excellence. Human capital management professionals conclude that if employees do not feel satisfied, then organization cannot satisfies clients as several employees have direct relationship with clients.
Likewise, Naidu and Van der Walt (2005) mentions that an efficient leader brings significance modification and generates momentum for transformation. Leadership is considered necessary to lead organizational achievement. Hence, the part of a leader is critical to organizational success in the current situations. There are various aspects that might increase job satisfaction of employees like working environment, type of work, management, strategy and supervision, development, interpersonal interaction, rewards, appreciation, and empowerment (Cano & Castillo, 2004), but leadership is considered as key aspect to increase employee's job satisfaction.
2.3 Psychological empowerment
According to Spreitzer (1995), empowerment is defined as “increased intrinsic task motivation manifested in a set of four cognitions reflecting an individual's orientation to his or her work role: competence, impact, meaning, and self-determination.” Competence is associated to thoughts of self-efficacy that one is able to efficiently execute a task (Conger & Kanungo, 1988). Impact is related to the extent to which a person's efforts have an influence on accomplishing the goals and the extent to which person thinks that he or she can determine organizational outcome. Meaning is associated as effect an individual place on a given assignment based on an individual's norms, and self-determination related to feelings of independence in making choice about task. Wong and Laschinger (2013) highlighted the importance of empowerment as it strongly influences job satisfaction, result in pursuit of organizational values. Psychologically empowered employee not only exerts efforts in workplace but also wish to stay in the organization. Numerous studies have reported consequence of empowerment; job satisfaction have been acknowledged often (Amundsen & Martinsen, 2015; Aydogmus et al., 2018; Humborstad & Perry, 2011). Efficiently implementing empowerment among employee depends on leadership, which results in enhancement of employee involvement in work and giving autonomy. To develop empowerment among employee, leaders encourage participation of employee and show concern for employees.
2.4 Transformational leadership and job satisfaction
Transformational leadership encourages collaborations and focus on team as a whole; it is more a people-oriented style and ensures that subordinates perform beyond the normal level for organizational interest. In this process of exchange between the leader and follower develops emotional association (Mester et al., 2003). Transformational leader inspires and stimulates employees to go beyond expectations of planned work. Transformational leaders are motivational, involving, encouraging, and helpful to employees in order to achieve the combined objective and encourages and inspire employees with individual recognition, appreciation, and team coordination.
Transformational leadership changes employee's mindset and beliefs, which benefits the organization (Qu, Janssen, & Shi, 2015) and never show discrimination on the basis of ethnicity, social class, gender identity, age, and religious belief (Okwendi, 2013). Transformational leadership encourages advancement and strategic thinking in the organization. Working with supportive and optimistic leaders, subordinates confidence in his or her competence to perform task is likely to be raised (Qu et al., 2015). Transformational leader is more engaged with the subordinates, and know how to handle workload in a friendly environment and comfortable way, so that subordinates also feel contented and satisfied with their work. Because of this friendly and comfortable environment employees intellectually stimulate, inspire each other, and achieve the organization's goals. If an employee is getting right direction in a receptive environment, then he/she will be more involved with the organization's aim and objectives. Hence, this behavior of leader changes follower's morals, self-perceptions, and emotional requirements. Environment of an organization is an important aspect and is one of the major reasons employees stay or quit (Bass et al., 2003). Transformational leadership decreases job turnover, increases job satisfaction, and increases efficiencies (Masi & Cooke, 2000; Sparks & Schenk, 2001). Emery and Barker (2007) assess relationship, which shows that employees supervise under a transformational leadership style pose higher levels of job satisfaction, compared with related aspects, for example, intellectual stimulation and charisma it is correctly modified. It has been found that transformational leaders motivate and develop trust via perceptions of employee compassion (Burke, Sims, Lazzara, & Salas, 2007). Employees consider satisfied with leaders who are supportive in nature, and quality of relationship between leader and employee has significant relation with employee's job satisfaction (De Cremer, 2003).
H1.Transformational leadership style has significant positive relationship with the job satisfaction of employees working in the NGO sector.
2.5 Transactional leadership and job satisfaction
Transactional leadership is leader–follower exchanges and is a task-orientated, relay on reward-based efforts (Naidu & Van der Walt, 2005). Positive support and rewards are presented or interceded by the leader. Thus, transactional leaders are more realistic personality because of its concentration on achieving definite objective (James & Collins, 2008). Positive like appreciation or acknowledgment if the directions are obeyed and negative like compensation if instructions are neglected (Yahaya & Ebrahim, 2016). Transactional leadership maintains constancy by clearly defining expectations and endorses performance to achieve these levels, which improve employee's productivity and confidence (Daft & Lane, 2005). This style is more authoritative and strict in rules; things are more systematic and straight to the regular process so employees are not compulsorily expected to think innovatively. Employees have to listen to the orders of their leaders. Transactional leadership targets more on extrinsic motivation for the operation of work-related activities. A transactional leadership style is suitable in many situations and may maintain stickiness to routine criteria. The containment of this style is that employee cannot think innovatively and creatively and not allowed to work as per their level of understanding but are asked to follow and obey what is being ordered to them, and therefore, this regular practice becomes more like a cycle and innovation and creativity becomes difficult in this kind of leadership style (Bolden, 2004; Trottier et al., 2008). Emery and Barker (2007) concludes that employees display high levels of job dissatisfaction when supervise by transactional leadership style, related factors are management by exception. Although Epitropaki and Martin (2005) suggested, transactional leadership offered high satisfaction as well as organizational recognition in comparison with transformational leadership style. On the other hand, transformational leadership style provides better followers' performance and innovation (Boerner, Eisenbeiss, & Griesser, 2007). Both styles demonstrate significant and diverse relationship with job satisfaction in different settings or situations. Employee feels pressure when they have to function with unsupportive leader. There are various adverse effects of negative leader–employee relation as it diminishes productivity and creativity gives rise to absenteeism and the turnover intention (Peerbhai, 2006).
H2.Transactional leadership style has significant positive relationship with the job satisfaction of employees working in the NGO sector.
2.6 Mediating role of psychological empowerment between leadership styles and job satisfaction
According to Conger and Kanungo (1988), empowerment is perception or an approach of individual towards their role in work place. Considering individual dimension in organizational success, empowerment is considered as one of important factors. For enhancing the organizational outcome the mangers need to increase the empowerment at all individual level. This suggests importance of leadership for enhancement of psychological empowerment of employee. All-encompassing attention in psychological empowerment occurs when the organizations begin contending worldwide, which requires more employee involvement and high creativity. For better organizational performance, job satisfaction among employee is fundamental (Amundsen & Martinsen, 2015). Hackman and Oldham (1980) reported that critical psychological states, for example, sense of meaningfulness, responsibility, and knowledge about their work effect job satisfaction. It has now been shown that the positive association of different dimensions of individual empowerment with job satisfaction, there is strong evidence of a positive relationship between job satisfaction and meaning (Spreitzer, Kizilos, & Nason, 1997). Similarly, it is demonstrated that perceived meaningfulness is considered as an important determining factor of job satisfaction and results in commitment towards work (Guangping & Lee, 2009). Preceding studies confirms that meeting the psychological need of employee results in job satisfaction (Krishnan, 2012) showed positive effect of job independence and impact on job satisfaction. From preceding studies it is clear that employee's job having low impact can result in demotivation, because when employee considers him/herself as of no significance, this perception of having an inadequate impact with the employee's role results in intimidating and restraining. Spreitzer et al. (1997) reported that competence is significantly interrelated to job satisfaction, whereas Carless (2004) suggests that competence was negatively associated with job satisfaction. Other studies have explained no relationship between these variables (Holdsworth & Cartwright, 2003). Empowered employee feels capable, can work independently and put more efforts and energy to their organizational goal, and can play major role in driving organization towards success. Employee empowerment is associated to have positive effects on job satisfaction and result in reduction of exhaustion among employee (Wong & Laschinger, 2013). An increasing number of studies have found that leadership have strong influence in creating empowering work place environment and maintain satisfaction among their employee (Duffield, Roche, O'Brien-Pallas, Catling-Paull, & King, 2009; Weberg, 2010). Consequence of transformational leadership on the organizational outcomes, for example, better performance, employee's job satisfaction is previously established (Judge & Piccolo, 2004).
Transformational leadership style brings change in subordinate aspirations, uniqueness, and preference result in empowering their employee, which result in better performance. Transformational leader predicts better future and stimulates employee to be dedicated to achieving that future. They build high moral standard truthfulness, team spirit, and hopefulness. Leader having optimistic thinking and high ethical standards, challenge value and imagination of their employee, inspire and encourage them to think innovatively and creatively. It may be considered leader showing these qualities make their employee feel more empowered (Avolio, Gardner, Walumbwa, Luthans, & May, 2004; Walumbwa et al., 2005). When the employee are encouraged to work independently and find innovative approaches, this result in confidence in their own abilities (Boamah & Laschinger, 2016). It is suggested that empowered employees will feel capable, high concentration, resiliency, and will be able to impact their job and organizations in a more significant way.
H3.Psychological empowerment of employee positively mediates the relationship between transformational leadership style and job satisfaction.
H4.Psychological empowerment of employee positively mediates the relationship between transactional leadership style and job satisfaction.
3 RESEARCH DESIGN AND METHODOLOGY
3.1 Measures
The questionnaire was conducted to collect data on focal variables, for example, leadership styles, psychological empowerment, and employee's job satisfaction and about demographic characteristics of respondents. A 5-point Likert scale ranging from strongly agrees to strongly disagree was used to measure the responses of employee. The chosen construct adapted from the formally previous validated instrument. In this research study for leadership styles we adapted the Multifactor Leadership Questionnaire from Bass and Avolio (1990). Job descriptive index is employed to measure the level of job satisfaction, and instrument was taken Smith (1969). To assess psychological empowerment of employee, instrument was adapted from the research study of M. Spreitzer (1995).
3.2 Data collection
The survey approach was selected in order to test hypotheses. To verify research model and to validate relationship among construct structural equation model method was used. The cross-sectional survey is used to collect data by stratified sampling technique. For this purpose, a formal survey was manually collected from employee; the population of this survey was employee of NGOs in Pakistan. To carry out this research, Cochran sampling formula is used with 95% confidence level for the finite population. To ensure the high-quality response on questionnaire, we distributed 375 questionnaires in different NGOs in Pakistan. Of the study population, 56 responses were separated because of the missing data, so the remaining sample size was 319. Control variables in our analyses include gender, age, and tenure. Previous research studies have verified that these demographic variables are potential predictors of psychological empowerment. Tenure of service significantly regulates employee's response towards leadership and other organizational parameters. Literature shows that women tend to feel less empowered than men because they usually considered to be at less influential positions in organizations (Koberg, Boss, Senjem, & Goodman, 1999).
3.3 Demographic characteristic of respondent
The software programs used to analyze the data were IBM (SPSS) version 23 and AMOS 21. The questionnaire was split into two parts. First section contains demographic characteristic of respondents like gender, age, tenure, and educational level of respondents, and second section of questionnaire consists subitems for testing of proposed hypotheses. Demographic characteristic of respondent and descriptive statistics are demonstrated in Table 1. It can be seen from Table 1 approximately that two thirds of male respondents are 61.4% and female respondents were 38.6%. This shows that numbers of male employees are more than female. This distribution justified the results, because in Pakistan culture is followed by male orientation. The majority of employees are in 30 to above 40 years (50.5%). The percentage of respondents those had organizational tenures of 2 years or less is 46.4%. The sample included 32.9% respondents with tenure ranging from 2 to 3 years. Most of the respondents have master degree 41.4%. In addition, bachelor, PhD, and others (intermediate and matric) respondents have different contributions as 25.4%, 7.2%, and 1.9%, respectively.
| Measures | Frequency | Percentage (%) | |
|---|---|---|---|
| Gender | Male | 196 | 61.4 |
| Female | 123 | 38.6 | |
| Age | 20–30 years | 118 | 37.0 |
| 30–40 years | 161 | 50.5 | |
| 40–50 years | 33 | 10.3 | |
| 50–60 years | 7 | 2.2 | |
| Educational level | Intermediate | 6 | 1.9 |
| Bachelor | 81 | 25.4 | |
| Master | 132 | 41.4 | |
| MS/M. Phil | 77 | 24.1 | |
| PhD | 23 | 7.2 | |
| Tenure | <2 | 148 | 46.4 |
| 2–3 years | 105 | 32.9 | |
| 3–4 years | 53 | 16.6 | |
| Above 4 years | 13 | 4.1 |
3.4 Data analysis and results
First we calculated reliability, convergent, and discriminant validity of model; afterwards, for hypotheses, analysis and model fitness structure equation model was used. According to Hair (1995), Cronbach alpha should be greater than.7, which is an acceptable value for reliability of factor. Values for composite reliability and average variance extracted (AVE) should be above than 0.7 and 0.5, respectively (Hair, 2006). Similarly, discriminant validity was verified following Fornell and Larcker (1981) approach to increase the validity of data. To confirm discriminant validity, square root value of AVE for each construct should be higher than the correlation among constructs (Venkatraman, 1989). In this regard, values for Cronbach alpha, composite reliability, and AVE were found to meet the set criteria, as illustrated in Table 2.
| Variable | CR | AVE | α | M | SD | TS | TF | PE | JS |
|---|---|---|---|---|---|---|---|---|---|
| TS | 0.94 | 0.65 | 0.94 | 2.73 | 0.98 | 0.811 | |||
| TF | 0.96 | 0.61 | 0.96 | 2.92 | 0.83 | 0.038 | 0.785 | ||
| PE | 0.96 | 0.72 | 0.96 | 3.47 | 1.07 | 0.054 | 0.218** | 0.851 | |
| JS | 0.91 | 0.67 | 0.912 | 2.76 | 0.98 | 0.173** | 0.263** | 0.255** | 0.822 |
- Abbreviations: AVE: average variance extracted; CR: composite reliability; JS: job satisfaction; M: mean; PE: psychological empowerment; SD: standard deviation; TF: transformational leadership; TS: transactional leadership.
- ** Correlation is significant at .01 levels.
3.5 Model analysis
According to Anderson and Gerbing, structural equation modeling is applied to estimate the measurement and structural model at the same time. In order to test hypotheses and model of study we employed AMOS 21.
3.6 Model fitness
To examine goodness of fit for structural model and measurement is done by chi-square, Tucker–Lewis index, goodness-of-fit index (GFI), adjusted goodness-of-fit index (AGFI), comparative fit index, root-mean-squared error of approximation, and incremental fit index. According to Tabachnick, Fidell, and Ullman (2007), the value for chi-square (X2/df) should not be less than 2.0 and not greater than 5.0; for acceptable model fit the GFI, and CFI, Tucker–Lewis index should be greater than or equal to 0.90 (Arbuckle, 2003). Furthermore, it is recommended that AGFI value should be higher or equal to 0.8 (Doll, Xia, & Torkzadeh, 1994), Root-mean-squared error of approximation should be less than 0.08 (J. F. Hair, Ringle, & Sarstedt, 2011), and incremental fit index should be greater than 0.9 (Arbuckle, 2003). The results are shown in Table 3, which shows a good model fit.
| Model fitness index | Values |
|---|---|
| X2/df | 2.01 |
| TLI | 0.918 |
| GFI | 0.89 |
| AGFI | 0.8 |
| CFI | 0.923 |
| RMSEA | 0.056 |
| IFI | 0.923 |
- Abbreviations: AGFI: adjusted goodness-of-fit index; CFI: comparative fit index; GFI: goodness-of-fit index; IFI: incremental fit index; RMSEA: root-mean-squared error of approximation; TLI: Tucker–Lewis index.
3.7 Results of hypothesis testing
The first hypothesis suggested that transformational leadership has a positive impact on job satisfaction, which is supported as path coefficient was positive β = .18, statistically significant p < .01. Hypothesis 2 proposed that transactional leadership has a positive impact on job satisfaction; findings support the hypothesis with β = .134, and p < .05.
In addition, an expected positive relationship between transformational leadership and psychological empowerment was found. As proposed β = .17 and p < .01 supporting H3. On the other hand, the relationship between transactional leadership and psychological empowerment is insignificant β = .02 and not supporting H4. From the result it can seem that psychological empowerment had positive significant effect on job satisfaction. Our results are consistent with former studies (Holdsworth & Cartwright, 2003; Laschinger, Finegan, Shamian, & Casier, 2000; Wang & Lee, 2009) (Table 4).
| Path | Coefficient | SE | t value |
|---|---|---|---|
| Controls | |||
| Psychological empowerment ← Age | .12** | 0.08 | 2.35 |
| Psychological Empowerment ← Gender | .16** | 0.12 | 3.00 |
| Psychological Empowerment ← Experience | .17** | 0.07 | 3.05 |
| Job Satisfaction ← Age | −.03 | 0.08 | −0.56 |
| Job Satisfaction ← Gender | −.006 | 0.11 | −0.09 |
| Job Satisfaction ← Experience | −.12* | 0.07 | 2.07 |
| Main effects | |||
| Psychological empowerment ← transformational leadership | .17** | 0.07 | 3.04 |
| Psychological empowerment ← transactional leadership | .02 | 0.06 | 0.52 |
| Job satisfaction ← transformational leadership | .18** | 0.07 | 3.12 |
| Job satisfaction ← transactional leadership | .13* | 0.05 | 2.27 |
| Job satisfaction ← psychological empowerment | .17** | 0.05 | 2.90 |
- Note.
- * p < .05.
- ** p < .01.
3.8 Test of mediation
Mediation describes how an effect occurs, that is, how an independent variable (X) affects a dependent variable (Y) via a third variable that is called an intervening or mediator (Me). By this, the total effect of X on Y is decomposed into direct effect (X → Y) and the indirect effect (X → Me → Y). Following Hayes's suggestion, this study calculates the significance of mediation effect by bootstrapping 5,000 iterations and bias-corrected estimates. The reported mediation effect can be interpreted such that when the upper and lower 95% CIs are either both below or above zero, the mediation effect was significant, whereas if the lower and upper CIs include zero, it was concluded that the mediation was insignificant. The results of the analysis show that the indirect effect of transformational leadership on job satisfaction through mediator psychological empowerment was significant (β = .05, SE = 0.02, 95% CI = [0.02, 0.10]), leading to the acceptance of H3. However, the mediating role of psychological empowerment between transactional leadership and job satisfaction was found insignificant (β = .01, SE = 0.01, 95% CI = [−0.01, 0.04]), thereby, rejecting H4.
4 DISCUSSION AND CONCLUSION
This study makes an important contribution to existing literature on leadership style adoption in context of nongovernment organizations sector. The purpose of current study was to determine the aspects of transactional and transformational leadership that affect frontline employee's job satisfaction and how the psychological empowerment mediates the relation between both styles and job satisfaction. For an organization to be successful, the satisfied workforce is very important that influences organizational outcomes. Our research verified that leadership styles have important influence psychological empowerment of employee and in turn effect the on job satisfaction on the employee of NGOs. Transformational leaders motivates employee (Masi & Cooke, 2000; Sayadi, 2016); hence, employee feel empowered and work up to their full capacity, leading the job satisfaction. These results are consistent with the hypothesis that the psychological empowerment of employee working under the supervisor displaying transformational leadership qualities increases satisfaction towards their job because when employee feel empowered and consider that he/she have impact in organization results in improvement of performance. The results show that there exists positive significant relation between transactional leadership and job satisfaction; this may suggest that sometimes leader need to shift their style between transactional and transformational according to situation of workplace. Our anticipation was that leaders will focus highly on empowering and improving the feeling of satisfaction of followers at workplace irrespective of the leadership style. However, because we do not obtain any significant relation, this may be due to psychological empowerment is not a function of the transactional leadership. On other hand, when the transactional leadership style is adopted, it results in decrease in level of psychological empowerment of employee and does reduce the job satisfaction. This may be due to transactional leaders main concern is completion of process and do not focus on concerns at the individual and the team level (Yang & Hwang, 2014). Under transactional leaders, employees quit their job because their inaccuracy is being closely monitored (Caillier & Sa, 2017), and while correcting employees is important in a workplace environment, sometimes it leads to demotivation. The findings underline the importance of leadership style; the leader will be able to find and identity the important attributes needed to develop empowerment among workforce. Based on our analysis, it is suggested that transformational attributes and competencies are an NGO leader's prerequisite in handling future demands. NGOs need to put in more efforts in increasing leadership capacity and initiate the suitable systems and processes to support leadership development and execute leadership succession policies; otherwise, they may undergo turnover and dissatisfaction among their employee, which may influence their attainment of objective. Furthermore, this study provides contribution and benefits to those management of NGO sector.
The empirical findings provide noteworthy contributions to leadership debate in NGOs. First, consistent with previous studies, transformational leadership and transactional leadership both have positive effect on job satisfaction (Chen & Silverthorne, 2005; Mohammad Mosadegh Rad & Hossein Yarmohammadian, 2006). Second, in this study we have succeeded in demonstrating how transformational leadership affects psychological empowerment of employee and results in establishing positive feelings of job satisfaction. Third is that transactional leadership does not give positive effect on psychological empowerment of employee. Hence, to develop atmosphere of empowerment among employee, transactional leadership style should be avoided. Moreover, it may be suggested that the empowerment of employee in NGOs can be increase by improving working environment, satisfaction in form of benefits, and improving strategies (Mohammad Mosadegh Rad & Hossein Yarmohammadian, 2006). Along with these mention perquisites, the leader should mentor their employee, by developing encouraging working conditions and challenging and stimulating tasks. Overall, this investigation has presented that transformational leadership style has a positive relationship with job satisfaction. Leaders with transformational style will have a more positive influence on empowerment of their employees. This indicates that transformational leadership is considered appropriate for handling NGO organization. Leaders, who are capable of finding weakness and strength of employee, can efficiently guide employee. There should be effective relationship between leader and employee to have supportive and considerate environment. Previous studies have verified the vital role of leaders in generating empowering workplace and retaining a satisfied employee (Duffield et al., 2009; Masi & Cooke, 2000; Weberg, 2010). Leaders, who listen and respond to the employee concerns, result in establishing empowering environment at workplace. Permitting workforce having autonomy in decisions at workplace is necessary to efficient environment that in turn lead to increase job satisfaction of employee.
The previous research emphasizes that the importance of training program to learn different leadership styles (Dvir, Eden, Avolio, & Shamir, 2002) shows that to enhance empowerment among employee appropriate leadership style should be adopted. Consistent with previous studies, it is indicated that empowering employees is like considering the needs and abilities of employees and believing and assisting employees to make the most of their efforts in accomplishing organizational objectives (Carless, 2004). For leaders to be successful, it is suggested that they assume a transformational leadership style instead of transactional to increase employee's inspiration and creativeness constantly and effectively, which will result in better performance by employee, and goal of organization would be easily achieved. Leaders often adopt different leadership styles in order to control their employee. Previous research demonstrated relation of different dimensions of psychological empowerment to job satisfaction, that self-determination is significantly related to job satisfaction (Spreitzer et al., 1997). From the result of our study, it is revealed that transformational leadership is more significant in relations to employee job satisfaction than transactional leadership. Related to the outcomes of the present study, leader should be aware that transformational leadership style directs the improvement levels of job satisfaction and psychological empowerment of employee. Our results propose that dissimilarities in employee job satisfaction are described by the variances in how empowered employees feel while working with different leadership style.
5 FUTURE IMPLICATIONS AND LIMITATIONS
With respect to the previously mentioned understandings of the results, a number of caveats need to be noted regarding present study. Although results suggested clear positive relationship of psychological empowerment, we did not provide effect of every dimension separately. Further, research should concentrate on both questionnaires and interview session together in this study as it will offer more inclusive outcomes. Because current study was cross sectional in nature, future studies should investigate by longitudinal designs. In this study we have measure overall transactional and transformational variables in relation with psychological empowerment. Future studies can also be conducted by measuring each dimension of both leadership styles separately and their influence on the different dimension of psychological empowerment.
Based on the study findings, possible actions can be taken in NGOs to develop an encouraging atmosphere of empowerment among employee. Developing and supporting empowerment among employee would also help better their performance at workplace. Transformational leaders place trust in the employee capabilities and prospect them considerably to impact their work, which results more satisfaction associated to their job. To encourage better approaches to psychological empowerment, leaders should obviously express a vision that stimulates employees to take greater accountability for their efforts. Clarification of goals and task may also facilitate feelings of empowerment among employees. Recognizing employee requirements, generating an understanding environment, and developing confidence would also likely add to a more feeling of psychological empowerment (Choi, 2006). Empowerment of employee is of vital importance, when empowerments is established among the employee, the leader can effectively take benefit of employee capabilities rather than checking employees during the task. The findings also have a potential to help NGOs develop training programs for leaders from professionals and trainers to adopt style that results in empowerment and job satisfaction among employee. The outcome of this study summarized that leadership style, which would positively impact employee empowerment and job satisfaction. It is believed that this study would have added significance to the literatures on leadership styles, especially in NGOs setting because there were limited literatures. In addition to this, based on these findings, managerial plans need to be developed in NGOs to better leadership hence improving efficiency further.
Biographies
Mishal Mufti is a Master student under Chinese Government Scholarship (CSC) at School of Public Affairs, University of Science and Technology of China. She received her bachelor's degree from University of Peshawar, KPK Pakistan. Her research interests include social entrepreneurship and nongovernment organization and leadership development.
Peng Xiaobao is an Associate Professor and the Director of the Innovation Management Research Center of USTC and NCKU. He received his BSc from Jilin University in 2005 and MSc and PhD from University of Science and Technology of China in 2009 and 2012, respectively. His main research interests include innovation strategy, intellectual property, and organizational learning.
Syed Jamal Shah is a PhD student at the Harbin Institute of Technology. His research interest includes human resource management and strategic management. His research work has appeared in journals such as Sustainability (SSCI), International Journal of Occupational Safety and Ergonomics (SSCI), Human Systems Management (ESCI), and Journal of Chinese Economic and Foreign Trade Studies (ESCI). His target segment of research is front-line employees.
Asma Sarwar is a Master student under Chinese Government Scholarship at School of Public Affairs, University of Science and Technology of China. She received her bachelor's degree from University of Punjab, Lahore Pakistan. Her current research interest includes electronic education and technology adoption.
Yuan Zhenqing is a Master student at School of Public Affairs, University of Science and Technology of China. His current research interest includes nongovernment organization and organization behavior.
