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- International Journal of Management (IJM)
Volume 11, Issue 5, May 2020, pp. 210-221, Article ID: IJM_11_05_021
Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=5
Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: 10.34218/IJM.11.5.2020.021
© IAEME Publication Scopus Indexed
A STUDY ON THE IMPACT OF
TRANSFORMATIONAL LEADERSHIP STYLE
ON EMPLOYEE ENGAGEMENT AND
EMPLOYEE PERFORMANCE IN ICT
INDUSTRY - (A STUDY WITH REFERENCE TO
THE ICT INDUSTRY IN UNITED ARAB
EMIRATES)
Srinivasa Raghavan Murali
Research Scholar, Banasthali Vidyapith, Jaipur, Rajasthan, India
Dr. Megha Aggarwal
Professor, Banasthali Vidyapith, Jaipur, Rajasthan, India
ABSTRACT
The study is an effort to investigate the impact of transformational leadership on
employee engagement and employee performance in ICT industry in UAE. As the
country has been giving much attention to the application of knowledge management,
the development of ICT and related industries are crucial as it plays a prominent role
in knowledge management application. But many of the firms operating in this sector
of business activity have been facing serious problems related to employee retention,
employee engagement and employee commitment. Since employee engagement is very
crucial for the performance of the employees and their productivity, the study attempts
to find out the impact of transformational leadership style on employee engagement
variables such as vigor, dedication and absorption and explores how these variables
influence the employee performance in terms of task performance, adaptive
performance and contextual performance. The study reveals strong positive
correlation between transformational leadership style with employee engagement and
employee productivity in ICT industry in UAE.
Key words: Employee Engagement, Employee, ICT Industry, United Arab Emirate,
UAE
http://www.iaeme.com/IJM/index.asp 210 editor@iaeme.com
- A Study on the Impact of Transformational Leadership Style on Employee Engagement and Employee
Performance in ICT Industry - (A Study with Reference to the ICT Industry in United Arab Emirates)
Cite this Article: Srinivasa Raghavan Murali and Dr. Megha Aggarwal, A Study on
the Impact of Transformational Leadership Style on Employee Engagement and
Employee Performance in ICT Industry - (A Study with Reference to the ICT Industry
in United Arab Emirates). International Journal of Management, 11 (5), 2020, pp.
210-221.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=5
1. INTRODUCTION
A great deal of general concerns and disagreements have occurred among academics
concerning the best way to manage a company and the development of varying approaches in
management science forced experts to re-invent various methods and methodologies in
managing an enterprise. It has been observed by experts that one of the most important factors
in the success of an enterprise is the leadership capability of the entrepreneur or the owner of
an organization (Bass, 1985). According to Tom Peters and Robert Waterman (1982),
Fortune 500 companies share certain common features and background experience and it
could be noticed that these companies have become the leading companies in the world
primarily due to the fact that in the past, these companies were blessed with a Chief Executive
Officer (CEO) or Managing Director who was a leader. This proves that leadership occupies a
prominent role in guiding and directing a company to success in a world where the
competitive framework has become unpredictable, unknown and ill-structured with unparallel
saga of history due to sudden transformation that engulf the environment of business (Cabeza-
Erikson, Edwards, and Van Brabant, 2008)
2. BACKGROUND OF THE STUDY
Among the Middle East countries, UAE is considered as a developed and high income
country with a GDP ranking of 29th in the world in nominal terms. In nominal terms the GDP
per capita is $39,709 which occupies 23rd position in the world (IMF, 2018). The economy is
an oil rich economy which fuelled its growth to become a leading economy with most modern
infrastructure facilities. Article 20 of the UAE Constitution specifically emphasizes the
development of human capital for the sustained growth of the nation. Various programs are
envisaged by Dubai and Abu Dhabi to become knowledge centers by introducing knowledge
management system. In Vision 2021, skilled human capital is considered as one of the seven
strategic enablers to develop strategic capabilities for the nation (Wright and McMahan, 1992;
Scott Jackson et al., 2014). The business environment friendly approach, rich quality of life
and modern infrastructure has helped the nation to become a hub of IT and operating centre
for many IT companies across the Middle East. The migration of population to UAE is quite
high as it is one of the most lucrative destinations for all the job seekers around the world,
especially from countries such as India, Pakistan, Sri Lanka and Philippines. The foreign
expat workers and business people get attracted to the country, especially after 2000s which
gave attractive impetus to hiring of vast number of foreign workers from different parts of the
world. The rapid economic drive generated by oil boom has tempted the economy to diversify
into various areas of activities. The country has shown accelerated strides in the development
of knowledge management and knowledge based industries. The spending on ICT industry in
UAE is expected to reach $16.7 billion in 2019, which is forecasted to grow by about 2.5%
yearly. Out of the total spending of $16.7 billion, the IT spending is about $7.9 billion in
2019 as compared to $7.6 billion in 2018 (TechRadar, 2019). One of the major problems
faced by many companies in this sector is the difficulty to engage the employees and thereby
promotes the productivity and performance as people move from one company to the other
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- Srinivasa Raghavan Murali and Dr. Megha Aggarwal
during a short span of time. Hence, this research work is an effort to analyze the impact of
transformational leadership style on employee engagement and performance.
3. LITERATURE REVIEW
3.1. Leadership and Leadership Styles
Leadership is defined as the ability to develop plans that should succeed and faculty to
persuade others to implement the plan even at the face of difficulties (Hersey & Blanchard,
1982). The same view has been shared by Northouse (1997) when he defines leadership as a
process by which individuals influence groups to achieve shared goals or commonly desired
outcomes. Thus the definition highlights the ability of a person to influence the will of others
towards a desired direction which is achieved by the support of a cohesive group by instilling
strong level of confidence among the followers (Gardner, 1993). The leadership style reflects
a distinct way of behaving and hence shows the behavior of a leader in leading the followers.
According to Robbins (2009), the leadership style is meant to describe leaders who are
successful and it is quite difficult on the part of a leader to apply a single style of leadership as
it should vary in between different situations as well as among varying culture. According to
Hersey and Blanchard (1982), the leadership style depend on the level of the maturity of the
subordinates, subordinates readiness to assume responsibility, level of experience, education
and motivation for achievement. The styles may range from telling, selling, participating and
delegating (Robbins and Coulter, 2005). The study is based on transformational leadership
style developed by Bass (1985). The leadership styles can be classified into transformational
leadership style, transactional leadership style, culture based leadership, charismatic
leadership and visionary leadership, laissez-faire leadership style (Harris, 2007).
3.2. Transformational Leadership Style
This style is one of the most effective styles which have been applied by various organizations
and leaders. The concept was developed by Burns (1978) and later extended by Bass, et al.,
(2003). The model got developed out of the assumption that followers follow a leader who is
capable of inspiring and motivating them. The leader motivates and inspires the subordinates
by laying the foundation of a compelling vision, selling it and gives importance on developing
strong relationship with the followers by acting as a teacher, coach and mentor (Bass &
Riggio, 2006). The four components of transformational leadership styles are identified as
idealized influence, inspirational motivation, intellectual stimulation and individualized
consideration (Kinicki &Kreitner, 2008). The primary importance is given to make change
happen in our self, groups, others and organization (Burns, 1978).
3.3. Employee Engagement and Employee Performance
The term employee engagement refers to the involvement of an employee and the enthusiasm
and satisfaction displayed in work related activities in an organization (Harter, Schmidt, &
Hayes, 2002). The terminology was developed by Kahn (1990) and it describes the motivated
involvement showed in a task within the framework of the work experience of an individual.
When the employees are engaged, they are emotionally attached to others and cognitively
cautious about the direction of the team and its activities (Harter et al., 2002). The level of
engagement intensifies when the individuals performing a task realizes what to expect, feels
that sufficient resources are available to fulfill the task, active participation is given in those
areas of opportunities where growth can be achieved etc. Employee engagement can pave the
way for organizational commitment which ultimately promotes employee performance. In this
study, the researcher has considered the model of employee engagement developed by
Schaufeli and Bakker (2003) in analyzing various factors in employee engagement such as
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- A Study on the Impact of Transformational Leadership Style on Employee Engagement and Employee
Performance in ICT Industry - (A Study with Reference to the ICT Industry in United Arab Emirates)
vigor, dedication and absorption of the staff employed in ICT industry in UAE. The Utrecht
Work Engagement Scale (UWES-17) developed by Schaufeli and Bakker (2003) is used to
measure the level of engagement by the employees in the organization.
Employee performance is a term which refers to the quality of work of an employee
(Caillier, 2010). The committed employees are invaluable assets to an organization as they
perform and behave in such a way as to achieve the goals of the organization by
demonstrating strong involvement in task and job (Sutanto, 1999). In addition to this, it can be
found that the staff who are committed to an organization are happy to be the members of it,
always identify strongly with the organization by feeling good about it, consistently show
perennial sincerity in supporting the organization and always engaging in doing activities
which are good and beneficial to the organization (George and Jones, 1996). Since
organizational commitment is positively correlated with job satisfaction (Bateman & Stasser,
1984; Mowday, Porter, & Steers, 1982), motivation of the employees (Mowday, Steers, &
Porter, 1979), and attendance (Mathieu & Zajac, 1990; Steers & Rhodes, 1978) and
negatively correlated to absenteeism and turnover (Clegg, 1983), it can contribute to better
performance of the organization by better engagement. The stronger is the commitment and
engagement, the lesser will be the turnover and absenteeism and thus the productivity of the
organization get enhanced (Schuler & Jackson, 1996). In this research study, the researcher
attempts to utilize the employee performance model developed by Pradhan and Jena (2016)
by applying performance dimensions such task performance, adaptive performance and
contextual performance.
Task performance is defined as the competency or proficiency with which an employee
performs major tasks involved in a job (Campbell, 1990). In management jargon, the term
implies work quantity, quality of work and job knowledge possessed by an individual
working in a particular job position in an organization (Campbell, 1990). Adaptive
performance is defined as the ability of an individual to adapt with changes that occur in the
work system or work roles (Griffin, Neal and Parker, 2007). It consists of abilities such as
creative problem solving, management of uncertainty or unpredictability in work settings,
learning tasks, procedures and adapting to other members of the group, their culture and the
physical environment. Contextual performance is defined as the behavior of individuals that
support the organizational setting, its social and psychological environment in which the
technical core tasks are performed (Borman and Motowidlo, 1993). This terminology is used
in different names in management such as organizational citizenship behavior (Rotundo and
Sackett, 2002; Fluegge, 2009), non-job task proficiency (Wisecarver, Carpenter and Kilcullen,
2007; Campbell, Ford and Rumsey, 1990) or inter-personal relationship (Murphy, 1989).
4. PURPOSE OF THE STUDY
The purpose of the study is to explore the influence of transformational leadership style on
employee engagement and employee performance. The study is conducted on the employees
of ICT industry in the UAE for a period from 2017 to 2019. The employee engagement is
measured by vigor, dedication and absorption as per the model developed by Schaufeli &
Bakker (2003) and the employee performance is measured based on task performance,
adaptive performance and contextual performance (Pradhan and Jena, 2016).
5. RESEARCH OBJECTIVES
To study the association between transformational leadership styles and employee
engagement in ICT industry in UAE.
To explore the relationship between employee engagement and employee performance
in ICT industry in UAE.
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- Srinivasa Raghavan Murali and Dr. Megha Aggarwal
To suggest a viable and effective model of employee engagement and employee
performance for organizations operating in ICT industry in UAE.
6. RESEARCH QUESTIONS
In order to explore the relationship between leadership styles, employee engagement and
employee performance, the following questions are posed based on the objectives furnished
above.
Question 1
What is the influence of transformational leadership style on employee engagement and
employee performance in ICT industry in UAE?
Question 2
What are the various dimensions of transformational leadership which influence employee
engagement and employee performance in ICT industry in UAE?
Question 3
What are the various components of employee engagement that influence the employee
performance and its related variables?
7. RESEARCH HYPOTHESIS
H01: The transformational leadership style does not have any impact on employee
performance in ICT industry in the UAE
H02: The various components of transformational leadership do not have any substantial
influence on employee engagement in ICT industry in UAE.
H03: The employee engagement and its components may not have any appreciable impact on
employee performance and its related variables.
8. CONCEPTUAL FRAMEWORK
The conceptual framework of the research paper is designed based on the models developed
by Pradhan and Jena (2016) and the Utrecht Work Engagement Scale (UWES-17) developed
by Schaufeli & Bakker (2003). The relationship between the various components of the study
is furnished in figure 1 which is developed on the basis of the research objectives as well as
the hypotheses developed.
Ha1
3. Tranformational Style
- Idealized Influence
- Inspirational Motivation Employee Engagement Employee Performance
- Intellectual Stimulation Ha2 - Vigor - Task Performance
- Individualized Consideration - Dedication
Ha3
- Adaptive Performance
- Absorption - Contextual Performance
-
Source: Source: 1. Pradhan, R.K & Jena, L.K. (2016); Utrecht Work Engagement Scale (UWES-17)
by Schaufeli & Bakker (2003).
Figure 1 The Conceptual Framework of the Study
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- A Study on the Impact of Transformational Leadership Style on Employee Engagement and Employee
Performance in ICT Industry - (A Study with Reference to the ICT Industry in United Arab Emirates)
9. RESEARCH METHODOLOGY
The research study adopted a descriptive approach as this method is highly useful in exploring
the answers to the question of who, what, when, where and how that is related to the research
issue under consideration. The design will enable the researcher to find out the link between
transformational leadership style with employee engagement and employee performance.
Thus the objective of using this method is to examine the nature of a situation as it exists at
the time of the research study and to investigate the impact of the variables that are mentioned
in the conceptual framework.
9.1. Population and Sample
The population of the study is the total staff employed in ICT industry in the UAE. The total
industry was considered for selecting the samples pertaining to this study. The total sample
selected is 300 staff working in various positions in the firms which are operating in ICT
industry sector. The sample was selected using stratified random sampling method as the staff
is categorized on the basis of their position in the organizations. The major criteria for
selection of the sample staff is their length of service in the organizations. The sample is
categorized into three on the basis of the period of their service such as two years and less,
two to four years and four years above. Since the employment visa is issued by the country is
for a period of two years, these categorizations seem to be relevant in selecting the sample
respondents.
9.2. Data Collection
The data for the study is collected through primary sources by administering a questionnaire
that consists of 80 questions related to various dimensions mentioned in the conceptual
framework. The scale used in the questionnaire is Likert five point scale with magnitudes
ranging from 1 to 5 on the degree of agreeableness of the respondents related to the questions
asked. The range of degree of agreeableness is mentioned as Highly Agree (5), Agree (4),
Nuetral (3), Disagree (2) and Highly Disagree (1). The secondary data is used to support the
study and it is obtained from trade journals, articles, magazines, text books, websites as well
as news papers.
9.3. Data Analysis
The collected data is analyzed by using descriptive statics such as averages and standard
deviation. The relationship between the variables is analyzed by using inferential statics such
as Pearsons Correlation Coefficient and F-Test.
9.3.1. Reliability Statistics
Table 1 Reliability Statistics Value for Different Variables
RELIABILITY STATISTICS ON TRANSFORMATIONAL LEADERSHIP
Cronbach's Alpha
Sl. Cronbach's Based on Standardized No of
No: Elements Alpha Items Items
1 Idealized Influence 0.779 0.775 8
2 Inspirational Motivation 0.812 0.810 8
3 Intellectual Stimulation 0.706 0.705 8
4 Individualized Consideration 0.733 0.730 8
RELIABILITY STATISTICS ON EMPLOYEE ENGAGEMENT
1 Vigor 0.881 0.880 8
2 Dedication 0.802 0.800 8
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- Srinivasa Raghavan Murali and Dr. Megha Aggarwal
3 Absorption 0.698 0.690 8
RELIABILITY STATISTICS ON EMPLOYEE PERFORMANCE
1 Task Performance 0.788 0.785 8
2 Adaptive Performance 0.716 0.715 8
3 Contextual Performance 0.880 0.880 8
The result indicates that all the variables stand above the acceptable threshold value 0.7 of
Cronbach‟s alpha and hence it can be concluded that the reliability and validity is high for the
data collected from the respondents.
9.3.2. Descriptive Statistics
The table 2 shows the descriptive statistic related to the data collected.
Table 2 Mean and Standard Deviation Values of Different Variables
Sl. Sl.
No Variables No Factors Mean SD
1 Transformational Leadership Style a Idealized Influence 4.35 0.524
b Inspirational Motivation 4.89 0.459
c Intellectual Stimulation 3.56 0.572
d Individualized Consideration 4.22 0.627
2 Employee Engagement a Vigor 4.02 0.633
b Dedication 4.12 0.678
c Absorption 4.36 0.588
3 Employee Performance a Task Performance 4.55 0.596
b Adaptive Performance 4.39 0.655
c Contextual Performance 4.11 0.639
The aggregate mean value is 4.26 which imply that there is high degree of unanimity in
the opinion of the respondents. The average of aggregate standard deviation values is 0.597
which is relatively less and hence, it can be stated that there exists lesser degree of variability
in the data.
9.3.3. Bi-Variate Correlation –Pearson’s Correlation Test
Table 3 Correlation between Transformational Leadership and Employee Engagement
Employee Engagement
Vigor Dedication Absorption
Transformational Energy Feeling Happy Carried
Feel Enthusi- Inspira- Feeling
Leadership Style in of in Immersed Away
Strong asm in tion in Proud
Doing Going Doing in Job when
in Job Job Job of Job
Job for Job Job Working
1.Idealized
0.789 0.812 0.764 0.657 0.876 0.884 0.663 0.521 0.531
Influence
2.Inspiratonal
0.677 0.513 0.834 0.811 0.827 0.544 0.754 0.803 0.724
Motivation
3.Intellectual
0.587 0.833 0.664 0.541 0.593 0.527 0.633 0.552 0.544
Stimulation
4.Individualized
0.711 0.668 0.702 0.643 0.599 0.711 0.655 0.423 0.534
Consideration
From table 3, it is obvious that there is strong positive correlation between the different
dimensions of transformational leadership and the dimensions of employee engagement. The
only dimension that is relatively weaker is the relationship between „individualized
consideration‟ of the transformational leader with that of immersed in job which comes under
absorption dimension of employee engagement.
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- A Study on the Impact of Transformational Leadership Style on Employee Engagement and Employee
Performance in ICT Industry - (A Study with Reference to the ICT Industry in United Arab Emirates)
Table 4 Correlation Test on Relationship between Employee Engagement and Employee Performance
Employee Performance
Contextual
Task Performance
Adaptive Performance Performance
Employee Engagement Managin
Job Creative Adaptabil Speed of
Quantity Quality g NJTP
Knowle Problem -ity with Learnin OCB1 IPR2 3
of Job of Job Uncertain
dge Solving Team g
ty
Energy in
Vigor .911 .891 .623 .428 .501 .716 .466 .539 .511 .439
Doing Job
Feel Strong
.889 .807 .722 .523 .734 .799 .503 .622 .677 .559
in Job
Feeling of
Going to .777 .922 .878 .820 .811 .833 .428 .776 .765 .661
Job
Dedicati Enthusiasm
.886 .784 .944 .868 .714 .664 .826 .663 .674 .554
on in Job
Inspiration
.843 .881 .774 .706 .660 .549 .648 .801 .739 .637
in Job
Feeling
Proud of .664 .725 .553 .422 .351 .526 .329 .758 .539 .588
Job
Absorpti Happy in
.738 .699 .793 .667 .558 .726 .664 .764 .568 .498
on Doing Job
Immersed
.881 .784 .683 .574 .463 .327 .774 .399 .377 .302
in Job
Carried
Away
.622 .711 .659 .553 .429 .443 .558 .406 .411 .389
when
Working
1. OCB - Organizational Citizenship Behavior/2. IPR - Interpersonal Relationship/3 NJTP - Non-Job Task Proficiency
The table explains the relationship between employee engagement and employee
performance in ICT industry in UAE. The Pearson‟s Correlation coefficient shows positive
relationship between the various elements of employee engagement and the different
dimensions of employee performance. All the different dimensions of vigor show positive
correlation with different dimensions of task performance, adaptive performance and
contextual performance. In the case of dedication, the various elements show strong positive
correlation except feeling of proud with creative problems solving, managing uncertainty and
speed of learning for which the correlation coefficient values are .442, .351 and .329
respectively. In the case of absorption, variable such as immersed in job shows lesser
coefficient values with managing uncertainty, adaptability with team, OCB, IPR and NJTP for
which the values are .463, .327,.399, .377 and .302 respectively. In the case of carried away
when working, the correlation ship is very weak for NJTP for which the value is .389.
Table 5 T-TEST for Equality of Means and One-way ANOVA showing the relationship between
Transformational Leadership Style and Employee Engagement
T Test and Equality of Means One-Way ANOVA
Sig. (2 Mean
T F Mean Square Significance (p)
Tailed) Difference
3.237 0.000 1.72 11.71 138 0.00
From the table, it can be find that the Sig (two tailed) for the t-test and the values of
ANOVA are 0.00 and as the p values is less than 0.05, it can be proved that there is strong
relationship between transformational leadership and employee engagement. Hence, H01
(null hypothesis) is rejected.
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- Srinivasa Raghavan Murali and Dr. Megha Aggarwal
Table 6 T-TEST for Equality of Means and One-way ANOVA showing the relationship between
Employee Engagement and Employee Performance
T Test and Equality of Means One-Way ANOVA
Sig. (2 Significance
T Mean Difference F Mean Square
Tailed) (p)
4.16 0.000 1.98 23.97 212.32 0.00
Since the p value is less than 0.05, it can be proved that the null hypothesis that states that
there is negligible influence of employee engagement on employee performance, can be
rejected and it can be confirmed that the employee engagement strongly influence the
employee performance in ICT industry in the UAE.
10. DISCUSSION
The various dimensions of transformational leadership style show strong positive influence on
various dimensions of employee engagement such as vigor, dedication and absorption.
Idealized influence of the leader influences strongly the vigor of attending the job and the
dedication of the staff. The inspirational motivation approach of the leader is highly
influential in developing enthusiasm and inspiration in job ((Avolio, Walumbwa, & Weber,
2009). The intellectual stimulation by the leader influences the vigor of doing the job more
strongly than the dedication and absorption part of employee engagement. It generates more
confidence in doing the job as it makes the employees to feel stronger in their job. Thus the
transformational leadership style can positively impact the employee performance through
employee engagement in the ICT industry in the UAE. The organizations and the managers
operating in ICT industry should consider the importance of transformational leadership
dimensions such as idealized influence, inspirational motivation, intellectual stimulation and
individualized consideration for engaging the employee by promoting vigor, dedication and
absorption so that the performance of the employees can be increased.
11. CONCLUSION
The leadership quality of managers is an important factor that determines the engagement and
performance of employees in the organization. Of late, the management literature highlights
the role of transformational leadership in playing a crucial role in employee performance in
different types of industries across the world. Based on this premise, a study is done to
investigate the role of transformational leadership on employee engagement and performance
in ICT industry in the UAE as the country has been giving much importance to the
development of this industry due to its crucial role in knowledge management application,
which is one of the prime objectives of the rulers of this country now. The study proves that
there is appreciable impact of transformational leadership on employee engagement and
employee performance in this industry in the UAE.
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