Article

Drivers of Employee Engagement: The Role of Leadership Style

Global Business Review 17(4) 965–979 © 2016 IMI SAGE Publications sagepub.in/home.nav DOI: 10.1177/0972150916645701 http://gbr.sagepub.com

Sapna Popli1 Irfan A. Rizvi2 Abstract The primary objective of this research article is to study the drivers of employee engagement especially the influence of leadership style. The article has used a multi-cross-sectional descriptive design. The empirical study is based on the data collected from 340 front-line employees from five organizations across the service sector in the Delhi—National Capital Region (NCR). The results from this study reveal significant relationships between leadership styles and employee engagement. A moderating influence of age and education was also found in the relationship between leadership styles and employee engagement. The study highlights the importance and the significant role of employee engagement and the role leadership styles play in developing a culture of engagement. Appropriate leadership styles and human resource (HR) practices that drive engagement need to be fostered in organizations to drive performance. The instruments used for the study are Multi-factor Leadership Questionnaire (MLQ-5X Short Rater Form) for leadership style and E3 (Development Dimensions International [DDI]) to capture employee engagement. Keywords Employee engagement, transformational leadership, transactional leadership, leadership style, passiveavoidant leadership, India

Introduction Employee engagement has found its way up from the relatively lower quarters of being housed in one forgotten corner of the human resources (HR) or training and development departments to its own villa in the C-suite. This change indicates the realization by top executives that they need to be responsible and accountable for employee engagement, rather than leaving it for HR to action. Jack Welch, the former CEO of General Electric, while citing the best measures for a company’s health placed employee engagement as the top measure, with customer satisfaction and free cash flow being second and third, respectively (Welch & Welch, 2006). In the current environment of increasing global competition and 1   2  

Professor, Marketing (Adjunct), IMT, Ghaziabad and Fellow, International Management Institute (IMI), New Delhi, India. Professor of Leadership & Change Management, International Management Institute, New Delhi, India.

Corresponding author: Sapna Popli, International Management Institute, B-10, Qutub Institutional Area, New Delhi-110016, India. E-mail: [email protected]

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slower growth prospects, raising employee engagement is seen as a key strategy for organizational success. According to the Society for Human Resource Management (SHRM)/Globoforce (2013) survey, nearly half of HR professionals indicated employee engagement amongst the top three challenges their organization faces, followed by succession planning, culture management, employee retention and turnover and performance management. The article focuses on employee engagement and its drivers, specifically leadership style. The article is structured as follows. The first section contains the literature review, identification of gaps and development of objectives and hypotheses. The methodology is discussed in the second section and also includes sample, instruments and data collection design. The third section contains the analysis, conclusions and implications of the study.

Review of Literature and Development of Objectives Outcomes of Employee Engagement Research by academics and consulting organizations has provided substantive evidence on the positive outcomes of engagement. For example, a large-scale Gallup (2013) research which examined 49,928 business or work units and covering about 1.4 million employees in 192 organizations, across 49 industries, in 34 countries, concluded that employee engagement strongly relates to key organizational outcomes in any economic climate, and that employee engagement is an important competitive differentiator for organizations. More specifically, the research found that 1. Business or work units that score in the top half of their organization in employee engagement have nearly double the odds of success (based on a composite of financial, customer, retention, safety, quality, shrinkage and absenteeism metrics) when compared with those in the bottom half. Those at the 99th percentile have four times the success rate compared with those at the first percentile. 2. Compared with bottom-quartile units, top-quartile units on engagement have • 37 per cent lower absenteeism, • 25 per cent lower turnover (in high-turnover organizations), • 65 per cent lower turnover (in low-turnover organizations), • 28 per cent less shrinkage, • 48 per cent fewer safety incidents, • 41 per cent fewer patient safety incidents, • 41 per cent fewer quality incidents (defects), • 10 per cent higher customer metrics, • 21 per cent higher productivity and • 22 per cent higher profitability. Another analysis of engagement database of thousands of employees across 200 organizations by Wellins, Brenthal and Phelps (2006) for Development Dimensions International (DDI) showed that employees with higher engagement scores are more satisfied with their jobs, less likely to leave their companies and more capable of achieving their performance goals. Quality errors (as measured by external and internal parts per million) stood at 5,658 for the low-engagement group and only 52 for the high-engagement group. In a services organization, highly engaged employees achieved an average of 99 per cent of their sales goals, while disengaged sales reps averaged 91 per cent.

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While academic response to the popularity of employee engagement was initially slow, in the last 10 years academic research has also started validating and accepting the positive outcomes of employee engagement. According to Witemeyer (2013), engaged employees display a number of behaviours of potential benefit to their organizations including going the extra mile, speaking highly of the company, collaboration, proactive problem-solving, staying late, putting in extra hours, assisting colleagues, sharing knowledge, offering creativity and participating in organizational dialogue. Other researchers have provided evidence of positive association of engagement with productivity, performance, profitability, enhanced safety and customer loyalty and satisfaction (Coffman, 2000; Ellis & Sorensen, 2007; Gallup, 2008; Heintzman & Marson, 2005; Hewitt Associates LLC, 2004; Markos & Sridevi, 2010; Towers Perrin, 2003). Various other documented benefits of employee engagement include reduced employee turnover, improved individual performance, increased advocacy of the organization, positive impacts on health and well-being, increased self-efficacy and receptivity to change initiatives (Bhattacharya, 2014; Blessing White 2008; Luthans & Peterson, 2002; Shaw, 2005; Truss et al., 2006). Empirical evidence suggests that the presence of high levels of employee engagement enhances job performance, task performance, organizational citizenship behaviours, productivity, discretionary effort, affective commitment, continuance commitment, levels of psychological climate and customer service (Christian, Garza & Slaughter, 2011; Rich, LePine & Crawford, 2010). Employee engagement has also been associated with higher levels of profit, overall revenue generation and growth (Xanthopoulou, Bakker, Demerouti & Schaufeli, 2009). There is thus enough research to claim that employee engagement has a strong positive relationship with business success, at both the individual and the firm levels, and it yields multiple positive outcomes including retention, productivity, profitability and customer loyalty and satisfaction.

Drivers of Employee Engagement Having evidenced that engagement produces various positive individual-level outcomes and also impacts critical organizational outcomes, the next logical question is to explore the drivers of employee engagement. A review of literature provides several answers, noteworthy among them are discussed in the following paragraphs. Saks (2006) while identifying employee engagement as a multidimensional construct specified perceived supervisor support, rewards and recognition, procedural justice, distributive justice and perceived organizational support as the predictors of employee engagement. Bakker and Demerouti (2008) in their model included job resources (e.g., autonomy and performance feedback) and personal resources (e.g., self-efficacy and optimism) as antecedents of work engagement, which lead to performance. Zhang (2010) extracted eight commonly cited positive predictors of employee engagement from the literature that included expansive communication, trust and integrity, rich and involving job, effective and supportive direct supervisors, career advancement opportunities, contribution to organizational success, pride in the organization and supportive colleagues/team members. Wollard and Shuck (2011) identified 42 antecedents of engagement through a structured literature review of which half were individual antecedents (e.g., optimism and self-esteem) and the other half were organizational antecedents (e.g., feedback and supportive organizational culture). Other drivers of engagement cited in studies include management practices, immediate supervisor, career development opportunities, recognition, teamwork and supportive environment, pay rewards and benefits (Aon Hewitt, 2014; Branham & Hirschfield, 2010; Gallup, 2008; Gibbons, 2006; Hewitt Associates, 2008; Robinson, et al. 2004; SHRM/Globoforce, 2013; Vance, 2006). Additional drivers of

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employee engagement include employee input in decision-making, constructive feedback, receiving formal appraisals and the implementation of performance development plans (Gallup, 2008; Robinson, Perryman & Hayday, 2004). A close analysis of these drivers indicates that conceptually leadership has a critical input in fostering employee engagement. Support for this argument comes from research by Wang and Walumbwa (2007) and Macey and Schneider (2008) that suggests leadership as being one of the single biggest factors affecting employee perceptions in the workplace and workforce engagement. Attridge (2009) asserted that leadership style, applying to leader–follower interactions, is critical for promoting employee engagement. Wellins et al. (2006) in their research for DDI suggested that organizations drive engagement by proactively leveraging three sources of influence for change, that is, employees, leaders and organizational systems and strategies. These three drivers need to work in concert to create an engaging work environment where leadership plays a critical role. Many of the ‘work environment factors’ in their model are directly affected by the quality of leadership. Additionally, the DDI studies show that changes in leader behaviours can have a real and significant impact on employee engagement. A study of pre- and post-training engagement scores showed that improvement in leadership skills through training led to higher employee engagement scores. In the light of the above, organizations in contemporary times are holding their leaders responsible for driving employee engagement.

Leadership Style and Employee Engagement Aon Hewitt’s (2014) Trends in Global Employee Engagement Report suggests that leaders hold the key to employee engagement: Leaders play an important role in employee engagement and becoming a best employer company. They do this in direct and indirect ways. First, leaders have an indirect ‘multiplier effect’ on all the top engagement drivers and other best employer indices. Ultimately, leaders make the decisions on brands, performance goals, pay and recognition, communication to employees, work process and innovation.

Most of the recent workforce and engagement reports from Gallup (2013), Aon Hewitt (2014) and SHRM (2014) have highlighted the role of effective leadership in building employee engagement. In academic research, the impact of leadership on employee engagement is well documented. Kahn (1990) proposed that leadership has the greatest potential to influence follower feelings of psychological safety by providing a supportive environment in which one feels safe to fully engage in a task. Luthans and Peterson (2002, p. 376) in their study using a sample of 2,900 participants concluded that ‘the most profitable work units of companies have people doing what they do best, with people they like, and with a strong sense of psychological ownership’. Findings from their research extended the theory about a manager’s role in creating a supportive psychological climate (Brown & Leigh, 1996) and paralleled early theories of engagement (Kahn, 1990; Maslach, Schaufeli & Leiter, 2001; Schaufeli, Salanova, Gonzalez-Romá & Bakker, 2002) by suggesting that employees must have a supportive environment, job resources and support necessary to complete their work. Hay (2002, p. 53) in the article ‘Strategies for Survival in the War for Talent’, based on results of survey data from 330 companies in 50 countries on employee perceptions and intentions towards their employers, quoted that many employees ‘leave their jobs because they are unhappy with their boss’. A leader’s behaviour is said to influence not only the overall organizational and customer outcomes but also employee attitudes, behaviours and various employee outcomes. Some researchers have suggested that leadership is one of the single biggest factors affecting employee perceptions in the workplace and workforce engagement (Attridge, 2009; Harter, Schmidt & Hayes, 2002; May, Gibson & Harter, 2004; Macey & Schneider, 2008; Wang & Walumbwa, 2007; Xu & Thomas, 2011).

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As highlighted in these paragraphs, in some way or the other the top leadership and supervisory leadership are responsible for ensuring the drivers of engagement, such as management practices, career development and advancement, recognition and appreciation of employee contributions, teamwork and a supportive working environment, the nature of the work, pay, rewards and benefits, constructive feedback, receiving formal appraisals and availability of necessary work resources. Judge and Piccolo (2004) and Erkutlu (2008) provide evidence for association between positive leader behaviours and follower attitude and behaviours linked with engagement. May et al. (2004), Saks (2006) and Bakker, Hakanen, Demerouti and Xanthopoulou (2007) show that when supervisors exhibit more relationshiprelated behaviours towards employees, higher levels of engagement is observed in them. Research has also indicated that the qualities of transformational leadership result in outcomes, such as lower intention to turnover and higher productivity, that are similar to those resulting from employee engagement (Macey & Schneider, 2008; Walumbwa & Hartnell, 2011). Authentic and supportive leadership is also theorized to impact employee engagement of followers in the sense of increasing their involvement, satisfaction and enthusiasm for work (Gardner, Avolio, Luthans, May & Walumbwa, 2005; Macey, Schneider, Barbera & Young, 2009). Over the last 5 years, various researchers have explored the transformational–transactional leadership styles and their linkage with employee engagement. Zhang (2010) in his study found negative associations between classical leadership style and employee engagement, transactional leadership style and employee engagement, and positive associations between visionary leadership style and engagement and also between organic leadership style and employee engagement. Xu and Thomas (2011) investigated the evidence for a link between leadership behaviours (supports team, performs effectively and displays integrity) and employee engagement. Their analysis showed that ‘supports team’ behaviour of the leaders was the strongest predictor of engagement and that the three leadership factors overlapped in their relationships with engagement. Ghadi et al., (2013) in their study based on a sample of 530 full-time employees explored the mediating influence of meaning at work on the relationship between transformational leadership and work engagement. The results revealed that the transformational leadership style influences followers’ attributes of work engagement. Hayati, Charkhabi and Naami (2014) in their study aimed to determine the effects of transformational leadership and its components on work engagement among hospital nurses. Their findings indicated that transformational leadership had a significant and positive impact on work engagement and its facets. In addition, their research illustrated that transformational leaders transfer their enthusiasm and high power to their subordinates by the way of modelling. In an India-specific context, leadership–employee engagement association has not been researched much, and there are not many studies that link engagement with antecedent or outcome variables of interest. Some recent works by Popli and Rizvi (2015), Singh and Krishnan (2014), Balaji and Krishnan (2014), Bhatnagar (2007, 2012) and Mohapatra and Sharma (2010) do reflect a growing interest in both leadership and engagement. Bhatnagar (2007) in the study on managers in the information technology (IT)/information technology-enabled service (ITES) sector found that one of the factors that increase engagement is supportive management, which is a trait that transformational leaders have. Sharma and Krishnan (2012) in a study on the impact of pay satisfaction and transformational leadership on employee engagement with a sample of 93 employees from the IT sector showed that transformational leadership is a significant determinant of employee engagement. Popli and Rizvi (2015) in their research with 104 cross-industry managers concluded that there is a positive relationship between transformational leadership and employee engagement. As evidenced in various articles, academic research and practice, engagement has emerged as critical for organizations and leadership seems to be the driving force for engagement to happen. Recent studies of employee engagement however show that maintaining high levels of engagement has become fairly

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challenging and engagement levels continue to be low across industries and countries. There is also a lack of quality empirical work in the leadership–engagement association, especially in India. Shuck and Herd (2012, p. 159) stated that very little research could be located that examined the relation, conceptual or empirical, specifically between leadership and employee engagement throughout the broader human resource literature base, and no article could be located in any of the academy-sponsored journals that included both the key phrases leadership and employee engagement.

A recent literature review on the leadership–engagement relationship by Carasco-Saul, Kim and Kim (2014) recommends that there is a need for empirical research to validate the frameworks of leadership– employee engagement; to have more explorations that examine the leadership–engagement relationship from the perspectives of many leadership styles or an integrated one as a whole; and to examine the moderation effects of factors such as gender, spatial distance, follower characteristics, promotion and culture on the leadership–engagement association. The relational review of leadership–engagement highlights the fact that many of the studies focus on largely the visionary and transformational leadership when discussing engagement. As suggested in the conceptual framework given by Shuck and Herd (2012), transactional leadership may also contribute to the development of employee engagement along with transformational leadership, but has not been tested much. In the Indian context, there is a clear lack of such studies. Our study therefore aims at exploring the leadership–engagement association in this context. The study tries to bridge some of the research gaps by using the full-range leadership model (Avolio & Bass, 1991) that helps incorporate all three leadership styles of transformational, transactional and passive-avoidant. In addition to addressing the gap in the transactional–employee engagement relationship, the research also hopes to study the negative association of passive-avoidant leadership, and thereby looks at the ‘not to do’ behaviours that influence employee engagement negatively. The impact of leadership style on behavioural outcomes like employee engagement as measured in this research will add to the body of research in the leadership– behavioural outcomes domain. The empirical evidence of leadership–employee engagement relationship in the Indian context is rather limited; the research hopes to add to this body of research. The specific research objective of this article is ‘To understand the association between leadership and employee engagement’. The three hypotheses that the article expects to test are the specific associations with each of the three leadership styles propositioned as (i) there is a positive association between transformational leadership style and employee engagement; (ii) there is a positive association between transactional leadership style and employee engagement; and (iii) there is a negative association between employee perception of passive-avoidant style and employee engagement.

Methodology Sample and Data Collection This study was conducted using a cross-sectional descriptive design. Quantitative data were collected using simple random basis from the list of front-line employees shared by five selected organizations located in National Capital Region (NCR) of Delhi; 329 valid responses were obtained from a total of 415 self-reporting forms circulated to these employees. The demographic profile of the respondents is detailed in Table 1.

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Popli and Rizvi Table 1. Demographic Profile of Respondents Type of Classification

Category

Age

Less than 25 years 25–30 years More than 30 Up to graduate Postgraduate Male Female

Education Gender Number of Respondents

Number of Respondents

Percentage in Sample

118 125  86 212 117 213 116 329

35.9 38.0 26.1 64.4 35.6 64.7 35.3

Source: Authors’ calculations.

Research Instruments Data on employee engagement were collected using the engagement survey designed by DDI, E3sm Phelps (2009). It is a 20-item scale with each statement marked on a standard five-point Likert scale of strongly agree to strongly disagree. The self-rating instrument is used extensively and has an established validity and reliability. The Cronbach’s alpha for this scale was measured to be 0.898 for this study. A higher aggregate score on this scale would indicate a higher level of engagement. To capture the leadership style, a subordinate’s perception of his superior’s leadership style was collected using the Multi-factor Leadership Questionnaire (MLQ-5X) Short Rater Form. The MLQ (Bass, 1985; Bass & Avolio, 1995) is the most widely used instrument to assess transformational leadership theory (Avolio & Bass, 1991; Hunt, 1999; Kirkbride, 2006; Yukl, 1999) and ‘is considered the best validated measure of transformational and transactional leadership’ (Ozaralli, 2003, p. 338). The measure consists of 45 items of which 36 statements measure the nine leadership behaviours of idealized influence (attributed), idealized influence (behavioural), inspirational motivation, individualized consideration, intellectual stimulation, contingent rewards, management by exception (active), management by exception (passive) and laissez-faire. These nine behaviours are measured through specific items that are grouped together, with the first five behaviours loading on to transformational leadership style, the next two on transactional and the last two on passive-avoidant leadership style. The Cronbach’s alpha for each of the three styles was measured at 0.902 for transformational items (TSL), 0.747 for transactional (TCL) and 0.785 for passive-avoidant (PAL). The Cronbach’s alpha for the full scale was measured at 0.931. For the purpose of this study, the three-factor structure of the MLQ has been used instead of the nine-factor structure that considers each of these subscales. The permission to use MLQ was obtained from Mind Garden, Inc. and for the employee engagement scale from DDI.

Analysis and Conclusions Results and Analysis To understand the association between leadership and employee engagement, correlation and regression analyses were used. The correlation coefficients in Table 2 are interpreted on the basis of effect sizes as suggested by Cohen (1988). According to him, as per the effect size evaluation criterion for correlation coefficients,

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Table 2. Correlations for Leadership Styles and Engagement Correlations

Employee Engagement Score

Transformational Score

Transactional Score

0.422** 0.000 329

0.480** 0.000 329

Pearson Correlation Sig. (2-tailed) N

Passive-avoidant Employee Score Engagement Score –0.166** 0.003 329

  1 329

Source: Authors’ calculations. Note: **Correlation is significant at 0.01 level (2-tailed).

coefficients less than 0.28 are considered small effects, medium effects range from 0.28 to 0.49 and large effects are greater than 0.49. The correlation analysis reflects moderate positive relationship between transformation leadership and employee engagement (r = 0.422, p < 0.001); moderate positive relationship between transactional leadership and employee engagement (r = 0.480, p < 0.001); and low negative correlation between passive-avoidant Leadership and employee engagement (r = –0.166, p = 0.003). The values reflected in the analysis provide evidence to be able to conclude that the associations of leadership style and engagement are significant. To further confirm and understand the amount of variance in engagement due to leadership styles, multiple regression was applied on the data. Prior to testing the hypotheses, the underlying assumptions and conditions of multicollinearity, linearity and normality were examined. According to Green (1991), to avoid multicollinearity, correlation between predictor variables greater than 0.90 should be removed or combined. On these lines, the inter-correlations between predictor variables were checked and no correlation between predictor variables was found to be greater than 0.90. The variance inflation factor (VIF) that assesses how much the variance of an estimated regression coefficient increases if the predictors are correlated is one of the other ways to measure multicollinearity. A VIF between 5 and 10 indicates high correlation and if the VIF goes above 10, one can assume that the regression coefficients are poorly estimated due to multicollinearity. In the case of this sample, the VIFs are reflected in Table 3; none of these are above five and therefore can be concluded that the multicollinearity among the three leadership styles of transformational, transactional and passive-avoidant is negligible to Table 3. Regression

Model 1

R

R2

0.508a

0.258

Std Error of the Adjusted Estimate R2 0.251

8.56627

Change Statistics R Change

F Change

df1

df2

Sig. F Change

0.258

37.716

3

325

0.000

2

ANOVAa Model 1

Regression Residual Total

Sum of Squares

df

Mean Square

F

Sig.

 8302.815 23848.822 32151.637

  3 325 328

2767.605   73.381

37.716

0.000b

Note: aDependent variable: employee engagement; bpredictors: (constant), passive-avoidant score, transformational score and transactional score.

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Popli and Rizvi Coefficientsa Unstandardized Coefficients Model 1

(Constant) Transformational score Transactional score Passive-avoidant score

Standardized Coefficients

Collinearity Statistics

B

Std Error

Beta

T

Sig.

Tolerance

VIF

53.546 3.021 6.285 –1.521

2.991 1.323 1.204 0.588

0.156 0.358 –0.124

17.905 2.282 5.222 –2.585

0.000 0.023 0.000 0.010

0.487 0.486 0.992

2.055 2.056 1.008

Source: Authors’ calculations. Note: aDependent variable: employee engagement.

impact the model. An examination of the bivariate scatter plots showed that they formed relatively linear lines, and thus no serious violations of the assumption of linearity. All the variables were checked for normality using histograms and values of skewness and kurtosis. No serious violations of normality were observed. As reflected in Table 3, the regression model is stable and fit at F = 37.76, p < 0.001 for further data analysis. All three leadership styles are found significant in this model at p < 0.05 and hence the three styles independently also reflect a statistically significant relationship with engagement. The model predicts that up to 25.1 per cent (adjusted R2 is 0.251) of variance in employee engagement is due to leadership styles. The beta values for transformational and transactional leadership are 3.021 and 6.285, respectively, and that of passive-avoidant is –1.521 and all are significant at a 0.05 level. Thus, the results of correlations and multiple regressions provide evidence to reject the null hypothesis and say that there exists a positive relationship between transformational leadership and engagement, between transactional leadership and engagement and a negative relationship between passive-avoidant leadership and engagement. While evaluating the influence of the demographics on overall engagement scores, absolute differences in mean engagement scores were reflected in age, gender and education categories. The differences were however found to be significant due to age and education but not due to gender (Table 4). These were tested using the independent sample t test (for the two categories—gender and education) and one-way analysis of variance (ANOVA) (for the three categories of age).

Table 4. Engagement Scores across Categories Category Gender Education Age

Female Male Postgraduate Graduate or less Less than 25 25–30 More than 30

Source: Authors’ calculations.

N

Mean Engagement Score

Std Deviation

Std Error Mean

116 213 117 212 118 125  86

74.8900 74.5016 72.8871 75.6849 78.4539 71.0906 76.7659

10.85245 12.14501 12.26131 11.25743  9.32323 12.04944 11.82075

0.92719 0.74606 0.99781 0.71056 0.84757 0.88114 1.21922

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Table 5. Fisher’s Z Transformation to Compare Correlations across Age Groups Age Group

Correlations

Less Than 25 (1)

25–30 Years (2)

More Than 30 (3)

Difference between 1 and 2*

TSL–EE

0.527**

0.457**

0.311**

NS

TCL–EE PAL–EE

0.459** NS

0.561** NS

0.425** –0.334**

NS NS

N

118

125

Difference between 1 and 3*

Difference between 2 and 3*

Significant at p < 0.05 NS Significant at p < 0.05

NS NS Significant at p < 0.05

86

Source: Authors’ calculations. Note:  **values are significant at p < 0.05; *values were tested using the Fisher’s Z transformation calculator given by Preacher (2002). Available from http://quantpsy.org

The impact of age and education on employee engagement was then further tested along with leadership styles by dummy coding and adding them as independent variables to the regression model. The two variables were not found to be significant in the linear regression model. The reasons for nonsignificant impacts could also be non-linear associations besides other factors. Therefore, to provide some more insight, moderating influences of age and education were tested by comparing correlations across categories using ‘Fisher’s Z transformation of r’. Table 5 reflects the correlations across categories and whether the differences are significant across these categories. Table 5 shows that the associations between leadership styles and engagement are significant not only across the full sample of 329 but also across age groups. Transformational leadership–engagement relationship is different for age groups less than 25 when compared with those more than 30. While in both age groups there is a positive association, this association is stronger in the less-than-25 age group. In addition, the negative association of passive-avoidant leadership style is significant only in the more-than-30-years age category. The correlations across education levels are reflected in Table 6, which shows that the differences in correlations across graduates and postgraduates are not significant at 0.05 levels. In the case of the passive-avoidant style, the association with engagement is significant only in the postgraduate group. On the basis of the age and education analysis of the data, it can be concluded that age and education both have some ‘moderating influence’ on the leadership styles–employee engagement associations. These influences may be useful to explore in further research. Table 6. Fisher’s Z Transformation to Compare Correlations across Education Groups Education Groups Correlations TSL–EE TCL–EE PAL–EE N

Postgraduates (1)

Graduates or less (2)

Difference between 1 and 2*

0.378** 0.519** –0.212 117

0.476** 0.457** NS 212

NS NS NS

Source: Authors’ calculations. Note:  **values are significant at p < 0.05; *values were tested using the Fisher’s Z transformation calculator given by Preacher (2002). Available from http://quantpsy.org

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Conclusions On the basis of the analysis, it can be concluded that transformational leadership style has a positive association with employee engagement. This style enthuses, inspires and motivates employees to work towards the organizational goals and the leaders are able to draw out the best in the subordinates by expressing confidence in their abilities. Transactional leadership style also has a positive association with employee engagement and using this style leaders motivate subordinates by rewarding and appreciating their followers in lieu of task accomplishment. The study not only found support for previously established transformational leadership–employee engagement association but more crucially it establishes the transactional leadership–employee engagement association, especially during early stages of career and amongst young employees. One of the salient contributions of the study is the importance of both transactional and transformational leadership styles in enabling engagement. This finding is supported in research by Bass (1985) who had viewed both transactional and transformational leadership as positive and recommended an optimal use of the styles for maximum effectiveness. Bass and Avolio (1997) were of the opinion that although transformational leadership may be more effective in changing times, the transactional process of clarifying certain expectancies for a reward is an essential component of the full range of effective leadership. These ideas of the proponents of the transformational–transactional leadership style seemed to have been out of focus with emphasis on the transformational leadership style research in recent times. In the past few years, however, some studies have started evaluating and recommending a leadership style that uses both transactional and transformational styles for specific outcomes (Deichmann & Stam, 2015; Shuck & Herd, 2012). The study evidenced the negative association of passive-avoidant leadership style and engagement. Passive-avoidant behaviours, such as ‘failing to interfere until problems became serious’ and ‘delaying or avoiding decisions’, have a negative association with employee engagement. Leaders need to watch for such behaviours and need to be trained to be able to change these behaviours and be able to contribute constructively to employee engagement. Employee age impacts the level of employee engagement to a certain extent. The engagement scores were higher for the employees in the age groups less than 25 (most of these employees were in their first jobs) as well as for those in the age group more than 30. The engagement level of employees in the age group 25–30 years was significantly lower than the other two age groups. The difference in engagement scores across age groups in this study was found to be significant and can be generalized; however, the findings about moderating influence of age need further exploration. The employees with up to graduate level of education were more engaged when compared to employees with postgraduate education, implying that education level also impacts employee engagement. The possible reasons being, a higher education not only raises the aspirations of the employees in terms of their own careers but also raises their expectations from their existing employment. They expect a higher education to translate into getting a better treatment, appreciation, recognition and reward. The negative influence of passiveavoidant style was significant for those with higher education, meaning where employees have higher education their expectations of the leader are higher, a passive leader will fail to engage them.

Implications As evidenced in the research, employees can be engaged in the presence of both transformational and transactional leadership styles. The leaders need to be able to identify the style that works best in a

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particular situation and matches the expectations of the employees for them to be engaged for better performance. Employee engagement is a ‘dynamic condition’ in the form of enthusiasm and interest and what the fully engaged employees bring to their work each day would be directly tied to both a more unified workplace culture and the extra efforts, better ideas and innovations that make organizations thrive (SHRM, 2014). Employee engagement is a crucial variable impacting many organizational outcomes. Besides leadership styles, other drivers of employee engagement such as supportive organizational culture, feedback, trust, career advancement opportunities, effective and transparent HR practices highlighted in literature can be focused on through the right training of supervisors and leaders. Since the study considered the immediate supervisors as leaders, it may be worthwhile for organizations to focus on them through management development programmes and training for all those employees who are supervising colleagues at customer interface level and not just leadership development programmes that are restricted to employees at the senior and top management levels of the organization. Additionally, organizations need to watch for behaviours that can be termed as ‘avoidant’ in managerial and leadership roles. While trainings will focus on inculcating behaviours that are positive, some amount of focus on ‘what not to do’ while leading teams would be useful in reducing the passive-avoidant behaviours. Employee engagement is considered critical for productive workplaces; despite differences in its conceptualization and measurement, researchers and consulting firms all agree that increased engagement drives various performance outcomes and results at all levels. Aon Hewitt’s (2014) global engagement report suggests that ‘companies will need employees to go above and beyond in different ways—not just to engage by working harder, but to engage in ways that show resiliency, learning, adaptability and speed’. In summary, what the study implies for organizations and managers is the strong need to focus on ‘employee engagement’ and leadership behaviours that need to be calibrated often to keep employees engaged. Creating a culture of engagement will need to be a priority for organizations and it will be important to take a holistic view beyond the employee engagement outcome alone. Those companies that focus on building engaging leaders will see an exponential impact on employee engagement. (Aon Hewitt, 2014)

Acknowledgement The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the article. Usual disclaimers apply.

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