The impact of leadership on employee satisfaction

Abstract-

The present study aims to investigate the impact of leadership styles on job satisfaction and to see if perceived organizational politics has a mediating role or not. In this study descriptive research design was used and a quantitative research was conducted. The sample of this study was selected through non-probability convenience sampling. Research finding revealed that transformational leadership has a positive impact on job satisfaction and transactional leadership has a negative impact on job satisfaction. Findings also suggest that, perceived organizational politics partially mediate the relationship between both leadership style & job satisfaction.

Introduction-

Leadership has a stronger effect on the attitude of employees towards their jobs. The role of leaders in today’s organizations has changed and the success of any organization relies on the leadership styles practiced by the leaders. According to Mintzberg (2010) true leaders engage others with their consideration and modesty because they involve themselves in what they are actually doing not for individual gains. Although there are various theoretical approaches to study the leadership styles but transformational and transactional leadership framework has received considerable research support (Bass & Avolio, 1993). Research studies conducted on leadership mostly emphasis on transformational leadership but some other researches also give

Leadership has a stronger effect on the attitude of employees towards their jobs. The role of leaders in today’s organizations has changed and the success of any organization relies on the leadership styles practiced by the leaders. According to Mintzberg (2010) true leaders engage others with their consideration and modesty because they involve themselves in what they are actually doing not for individual gains. Although there are various theoretical approaches to study the leadership styles but transformational and transactional leadership framework has received considerable research support (Bass & Avolio, 1993). Research studies conducted on leadership mostly emphasis on transformational leadership but some other researches also give its negative outcomes.

Leadership style-

Northouse (2007) stated, “Leadership is a process through which an individual influence a group of people to attain common goals”. Leaders now don’t rely upon their legitimate power to persuade individuals to do as they are told but they take an interest in an interaction with their subordinates or they raise and widen the interest of their subordinates (Northouse, 2007). Since 1990 transformational and transactional leadership approaches presented by (Burns, 1978; Bass, 1985) are the most important and are most widely used and tested for the leadership studies. According to Burns (1978) transformational leadership is perceived when leaders encourage their subordinates to increase the level of their beliefs, morals, perceptions, motivations and coalitions with organizations objectives. Transformational leadership is such an engaging and inspiring relationship between leader and subordinates that enables subordinates to seriously examine the current assumptions and inspire them to think across new directions (Krishnan, 2012) and causes subordinates to give their appreciation, loyalty, obedience and trust to their leaders and to assigned tasks without any questioning (Yukl, 2006). Transformational leaders show confidence and respect in their subordinates and have the ability to influence their subordinate’s behavior in such a way that results in more work fulfillment and positive organizational outcomes (Givens, 2008). They help their subordinates to be productive, innovative and creative and adaptable to the various environmental conditions within organization (Furkan, Kara, Tascan, & Avsalli, 2010) and try to prevent the chances of work related problems (Berson & Avolio, 2004). Transaction means exchange and transactional leadership deals with the exchange between the leaders and their subordinate. According to Naidu & Van der walt (2005) this is a leader-follower exchange based leadership in-which leader exchange rewards or punishment with the follower for the task performed, and in return expects productivity, efforts and loyalty from the follower. Transactional leaders, on the part of satisfying their own self-interest practice control strategies to get subordinates to perform in the preferred way (Kanungo, 2001). Transactional leaders become less engaging, less appealing and become mediocre when transact with subordinates by rewards concentrated on realizing the work achieved, or concentrating on their mistakes, or delaying in making decisions, or avoiding to interfere until something has happened (Howell & Avolio, 1993). In accordance with Robbins (2003) more employees leave with the transactional leadership than with the transformational leadership.

Job satisfaction-

Job satisfaction defined by Wicker (2011) is a sense of pride and inner fulfillment achieved when doing a particular job. Hoppock (1935) in his book presented the idea of job satisfaction as a theoretical construct as being any number of mental, physiological, and environmental situations which prompts to a person to express fulfillment with their occupation. It is a positive psychological state that emerges when individuals evaluate their work and work experience (Poon J. M., 2003). According to Spector, (1997) job fulfillment is what individual feel about their job either they like or dislike their job, liking shows the satisfaction or disliking shows the dissatisfaction of employees. Literature reveals that job satisfaction is affected by various factors. Spector (1997) develop “job satisfaction measuring scale” to evaluate the level of satisfaction of employees regarding their job which covers various factors like pay, benefits, supervision; promotion, nature of work, and coworkers. If employees get the salary, benefits, promotion, nature of work, supervision and coworkers they want they will possibly be more satisfied and will also like to stay with organisation.

Now, more than ever, organizations need to engage employees. Rapid market change, disruptive technologies, and opportunities available to your key talent have forced organizations to reexamine the connections between business performance, leadership, and employee satisfaction.

Over the past several years, many organizations have focused on reigning in key financial indicators. By searching the global labor market for the most efficient resources, creating process improvements, and using technology to speed up operations, companies have improved financial performance and created competitive advantages. But downsizing, outsourcing, and off-shoring will soon reach upper limits on their ability to improve organizational performance. In addition, these actions are available to all competitors—making them, at best, temporary sources of competitive advantage.

So, where will the next force for performance improvement come from? Where can organizations find sources of sustainable (not temporary) competitive advantage? In a series of 14 individual studies, Wilson Learning Worldwide has found one answer—Fulfillment Satisfaction. Our research has repeatedly shown that there is a direct correlation between employee Fulfillment Satisfaction and job performance. These studies have shown that, on average, 39% of the workforce bottom line can be attributed to employee Fulfillment Satisfaction.

This research could not be more timely. A Gallup poll showed that 55% of employees say they are not engaged in their work, and turnover among executives and managers is at an all-time high (SHRM research). Furthermore, our research has clarified the greatest source of employee fulfillment. The single most important factor in creating a sense of fulfillment is the leadership skills of an employee's manager. This finding has significant implications for the importance of the role of the manager and how effective he or she is in creating Fulfillment Satisfaction.

Redefining Satisfaction

Employee satisfaction means different things to different people. While we intuitively believe that employee satisfaction is necessary for high performance, studies in the past have not supported this belief. Several years ago, Wilson Learning Worldwide began asking why and concluded that the problem was in the definition of satisfaction.

The dictionary defines satisfaction as "gratification of an appetite and pleasure." In general, people most often associate satisfaction with happiness and comfort. It is likely that in most of the previous studies, people responded to the question "Are you satisfied?" by interpreting the question as "Are you comfortable in your work? Do you feel secure and content?" While this may not have been the intent of the question, this understanding of the question does suggest why organizational performance has not been linked statistically to employee satisfaction. We don't often associate high performance with contentment, security, and comfort.

However, we do tend to associate high performance with enjoyment of the work, fulfillment in accomplishment, and effective work relationships. Therefore, the researchers at Wilson Learning Worldwide decided to explore a new definition of satisfaction, one that taps the elements of fulfillment, empowerment, and engagement. In the process, we have identified a powerful tool for creating a high-performance, high-fulfillment work environment.

Fulfillment Satisfaction

We call our approach "Fulfillment Satisfaction" (or just "fulfillment") to differentiate it from the traditional definition of satisfaction (that is, satisfaction as being comfortable). It is our belief that if you can identify and measure a more meaningful definition of satisfaction, you will find a closer causal relationship to organizational performance. We began our research by identifying the principal elements of fulfillment, empowerment, and engagement. We identified five principal elements:

• Satisfaction with the job: To be fulfilled, people need to value their day-to-day work activities. People need to have a sense of accomplishment or pleasure from the work itself.
• Satisfaction with relationships: People also need to value the relationships they have on the job to be fulfilled. People want to like working with their coworkers. While people know that conflicts will arise, they want to be assured that the focus is not on the interpersonal differences, but the task differences.
• Satisfaction with leadership: If people do not think they are being managed or led effectively, it is hard to have fulfillment in the work.
• Knowing that others are satisfied in their work: One of the key findings from our research is the importance of the open expression of fulfillment in the workplace. Knowing that others gain fulfillment in their work is a powerful motivator.
• Knowing that others are satisfied with the organization's leadership: It is difficult to be fulfilled if there is not open trust and support for leadership. Equally, when that open trust and support is present, it helps create an environment where people feel empowered and willing to give their full engagement.

This combination of both personal satisfaction and communication of group satisfaction is a critical distinction between Fulfillment Satisfaction and traditional definitions of satisfaction. In today's work environment, few objectives are met solely through one individual's efforts. In addition, as people work together in group settings, they are likely to influence each other's attitudes and beliefs. Because of the roles that teamwork and joint effort play in organizational success today, tapping into these elements seems critical. One might feel personally satisfied, but not perceive satisfaction in others. As a result, the overall sense of fulfillment that one feels will be diminished. Organizations that encourage open communication, where employees discuss their level of satisfaction, promotes high performance.

Studying the Relationship Between Fulfillment, Performance, and Leadership

From the work above, we were able to develop a reliable and valid measure of fulfillment. However, measuring the relationship between fulfillment and business performance requires reliable measures of performance in addition to a measure of fulfillment. It is nearly impossible to identify measures of performance that are consistent across industries, or even across organizations within an industry. As a result, the relationship between satisfaction and performance was examined in 14 separate studies, with each study using a unique measure of performance.

The Leader's Role in Improving Fulfillment

If organizational performance is strongly affected by employee fulfillment, as these studies indicate, then understanding what characteristics contribute to fulfillment can be critical in improving organizational success. Of the things an organization can do to impact employee fulfillment, we focused on the day-to-day interactions between an employee and his or her manager. We hypothesized that fulfillment is largely determined by the work environment and sense of teamwork created by the leader of the work unit.

In a business environment that requires employees who are flexible, creative, and willing to take risks, it is necessary to find ways to help employees feel fulfilled and empowered in their work.

At a time when research is showing that job satisfaction is at an all-time low (Conference Board, Towers Perrin) and that less than half of all employees feel a sense of loyalty to their organization, Wilson Learning Worldwide's research could not have come at a better time. Our research suggests that the single biggest contributor to these feelings of fulfillment, empowerment, and satisfaction lie in the day-to-day relationship between employees and their managers. These 14 separate studies show:

• Managers and leaders have the major impact on the Fulfillment Satisfaction of employees and, consequently, on how well they perform.
• Between 56% and 83% of fulfillment could be predicted from the skills and practices of the manager or leader.
• When employee fulfillment was high, so was performance; when employee fulfillment was low, so was performance.
• 39% of bottom-line performance can be attributed to employee fulfillment.

Clearly, while organizational leaders are rethinking how to manage the corporation, they must also rethink how they lead the people who drive it. We found that leadership skills directly related to employee satisfaction include having a clear direction for the group; having realistic and clear objectives; and being able to give appropriate feedback, recognition, and support. Perhaps most importantly, the results emphasize empowering and developing employees so they can do the work themselves and eliminate barriers to getting the work done. Managers who have the leadership skills to accomplish these conditions will create a high level of fulfillment in their employees with a direct impact to the bottom line.

These studies suggest that a person's manager is the primary contributor to fulfillment in an organization. Pay, compensation, work conditions, promotions, and benefits are important, but are more often associated with creating dissatisfaction than with fulfillment. In other words, when people feel their salaries are not fair, work conditions are poor, or the benefits are insufficient, they feel dissatisfied with the organization and their job. However, even if these conditions are perfect, this elimination of dissatisfaction does not mean that employees feel fulfilled, only that they no longer are dissatisfied. And it is employee fulfillment, not satisfaction, that predicts performance. It is the individual manager who creates, or fails to create, fulfillment.

Understanding the connection between business performance, leadership, and employee fulfillment can measurably impact the future competitiveness of a company. Employee satisfaction impacts the bottom line and is largely determined by employee day-to-day interactions with managers. Of all the factors an organization can improve to impact employee satisfaction, improving individual leadership is the most effective. Those leaders who see their role as a developer of people, and who are skilled in the new leadership practices, will have high-performing employees. Managers who do not are well advised to reconsider how they lead. If a company is prepared to invest in new equipment and new processes, then why not in the company's human assets who drive those initiatives and the people who lead them.

References

Hina saleem (2014) 'The impact of leadership styles on job satisfaction and mediating role of perceived organizational politics ', , 563-569(172-2015), pp. 563-564-565.

http://www.wilsonlearning.com/wlw/research-paper/l/employee-satisfaction