Examining the Relationship Between Transformational Leadership and Employee Motivation in U.S. Public Companies: A Quantitative Study

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Abstract

According to the Gallup Organization, only 13% of employees worldwide are motivated. Transformational leadership is a type of leadership designed to increase employee motivation and that has been found to be associated with higher levels of employee motivation in several organizational settings.  However, it is not known whether transformational leadership works by augmenting the three traditionally recognized bases of motivation (self-efficacy, valence, and expectancy), whether there are novel and direct mechanisms by which transformational leadership increases motivation, and how covariates associated with employee and company demographics influence the relationship between transformational leadership and employee motivation. This correlational, mediation-based study grounded in transformational leadership theory and based in mediated regression explored the relationships between transformational leadership and employee motivation while taking expectancy, valence, self-efficacy, employee demographics, and company demographics into account. Data collected from anonymous Internet surveys analyzed through mediated regression generated the following results: (1) (2) (3). The social change implications of these findings were…

Section 1: Foundation of the Study 

According to management theorist Peter Drucker, advances in technology drove business productivity in the twentieth century, but advances in human resources management (HRM) will drive business productivity in the twenty-first century (Drucker, 2013, 2014a, 2014b). Employee motivation is one of the central concepts in HRM, and business leaders at all levels—including CEOs, Presidents, COOs, and VPs of human resources (HR)—are seeking ways to improve employee motivation (Zhang & Bartol, 2010). After taking technology, business processes, and related factors into account, motivation is the primary factor in employee productivity (Samnani & Singh, 2014). However, according to a recent Gallup survey (Crabtree, 2013), roughly 13% of all workers are motivated, representing the existence of a substantial motivation problem that affects all countries, industries, and sectors.  

Transformational leadership is an approach to leadership that emphasizes the utilization of charisma, fairness, example-setting, and other techniques designed to influence employees to achieve more than ordinarily expected (Nejad, Babelan, Nejad, & Kia, 2016; Schmitt, Den Hartog, & Belschak, 2016; Yahaya & Ebrahim, 2016). Many scholars have described transformational leadership as a key contributor to employee motivation; indeed, the main purpose of transformational leadership is to motivate employees (Cavazotte, Moreno, & Hickmann, 2012; Effelsberg, Solga, & Gurt, 2014; Ross, Fitzpatrick, Click, Krouse, & Clavelle, 2014). In advanced economies such as that of the United States, employee motivation is a more important driver of business success than technological or infrastructural development, and scholars have proposed that transformational leadership can invigorate the American economy by increasing employee motivation (C.H. Chan & Mak, 2014; Mesu, Sanders, & van Riemsdijk, 2015; Yahaya & Ebrahim, 2016; Yucel, McMillan, & Richard, 2014). However, because of gaps in the empirical research base, the relationship between transformational leadership and employee motivation is not comprehensively understood.      

Background of the Problem

Scholars no longer give credence to the trait theory of leadership (Colbert, Judge, Choi, & Wang, 2012; Dinh et al., 2014; Tal & Gordon, 2016). Instead, scholars recognize leadership as a learned and teachable quality (Collinson & Tourish, 2015; Crossan, Mazutis, Seijts, & Gandz, 2013; Hobson, Strupeck, Griffin, Szostek, & Rominger, 2013). Leadership is now part of the curriculum at nearly all business schools. Both scholars and business practitioners have expressed support for transformational leadership as the best leadership style in terms of increasing employee motivation and thereby business results (Nejad et al., 2016; Schmitt et al., 2016; Yahaya & Ebrahim, 2016). However, the exact impact of transformational leadership on motivation has not been adequately measured. 

The existing research base does not contain empirical designs of sufficient complexity and robustness to evaluate the nature of the transformational leadership-employee motivation link in light of two key frameworks: Self-efficacy theory (Bandura, 1997) and individual motivation theory (Hackman & Porter, 1968). There are numerous studies on the relationship between transformational leadership and employee motivation (Abdullah, Shamsuddin, & Wahab, 2015; Babalola, 2016; Breevaart et al., 2014; Bronkhorst, Steijn, & Vermeeren, 2015; C.H. Chan & Mak, 2014; Caillier, 2014; Deschamps, Rinfret, Lagace, & Tejeda, 2016; Feizi, Ebrahimi, & Beheshti, 2014; Fernet, Trépanier, Austin, Gagné, & Forest, 2015; Gillet & Vandenberghe, 2014; Hayati, Charkhabi, & Naami, 2014; Im, Campbell, & Jeong, 2016; Khan et al., 2014; Mesu et al., 2015; Nejad et al., 2016; Pongpearchan, 2016; Pradhan & Pradhan, 2015; Rawat, 2015; Schmitt et al., 2016; Shim, Jo, & Hoover, 2015; Sin & Youn, 2013; Top, Akdere, & Tarcan, 2015; Welty Peachey, Burton, & Wells, 2014; Yahaya & Ebrahim, 2016; Yucel et al., 2014). However, none of these studies have taken both the bases of motivation (valence and expectancy) and the variable of self-efficacy into account.  In the absence of such information, stakeholders such as business schools, CEOs, company Board members, and others cannot (a) know the return on investment of transformational leadership considered specifically as a driver of employee motivation; or (b) understand the magnitude of transformational leadership’s impacts on the mediators of valence, expectancy, and self-efficacy.  These gaps in the existing empirical knowledge base prevent the value and operational nature of transformational leadership from being appropriately quantified. 

Problem Statement

Business schools, business leaders, and other stakeholders often prioritize the importance of transformational leadership, perhaps under the influence of the widespread scholarly consensus that transformational leadership is the best form of business leadership (Nejad et al., 2016; Schmitt et al., 2016; Yahaya & Ebrahim, 2016). However, the impact of transformational leadership on employee motivation is only partially understood, in that no existing study has included valence, self-efficacy, and expectancy as mediators of the relationship between transformational leadership and employee motivation.  In the absence of an appropriate quantification of the impact of transformational leadership on employee motivation, business leaders, scholars, and other stakeholders lack a comprehensive understanding of the value of transformational leadership. The lack of this comprehensive understanding can weaken the business case for promoting transformational leadership in organizational settings in which the main goal is to utilize leadership to improve employee motivation. 

Purpose Statement

The purpose of this quantitative, correlational, mediation-oriented, cross-sectional study based in the use of mediated regression is to quantify the impact of transformational leadership on employee motivation, taking self-efficacy, valence, expectancy, employee demographics, and company demographics into account. The purpose of the study will be achieved by analyzing data drawn from a random sample of employees of American companies in a wide range of industries and sectors. As an advanced economy, the United States has improved its productivity through the creative application of advanced technology; further improvements in American productivity necessitate advances in employee motivation, which is the key dependent variable that the independent variable of transformational leadership attempts to influence. Therefore, a population of American employees is appropriate for this study.  

The social change implication of the study relies upon general improvements to business practice. In the presence of an improved understanding of the relationship between transformational leadership and employee motivation, business leaders can better deploy transformational leadership to increase employee motivation, which, in theory, will lead to improved business results. Improved business results can improve living standards and social outcomes across an entire society, representing the potential of positive social change.  

Nature of the Study

The study is quantitative, correlational, mediation-based, and cross-sectional. The problem identified in the study is an absence of appropriate knowledge pertaining to the magnitude and other characteristics of the relationship between transformational leadership and employee motivation, taking into account the mediators of valence, expectancy, and self-efficacy. Addressing the problem therefore requires modeling the relationship between multiple objectively existing variables, which, in turn, supports a quantitative methodology (Balnaves & Caputi, 2012; Bernard & Bernard, 2012; Davies & Hughes, 2014). The study is correlational in design because of (a) the absence of researcher-determined or naturally occurring divisions into case and control groups and (b) the absence of an experimental of pseudo-experimental intervention.   

Research Questions

The research questions of the study are as follows:

RQ1: Does valence mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics?

RQ2: Does expectancy mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics?

RQ3: Does self-efficacy mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics?

In RQ1, the two independent variables are transformational leadership and valence, and the dependent variable is employee motivation. In RQ2, the two independent variables are transformational leadership and expectancy, and the dependent variable is employee motivation. In RQ3, the two independent variables are transformational leadership and self-efficacy, and the dependent variable is employee motivation. In all three research questions, the covariates are: Employee age, employee race, employee gender, industry, size of company (annual revenue), size of company (number of employees), responsibility level of employee, company profit margin, employee’s years of experience with the company, and job satisfaction.

Hypotheses

The hypotheses of the study are as follows, to be tested at an α of .05. 

H10: Valence does not mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

H11: Valence mediates the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

H20: Expectancy does not mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

H21: Expectancy mediates the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

H30: Self-efficacy does not mediate the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

H31: Self-efficacy mediates the relationship between transformational leadership and employee motivation, taking into account employee demographics and company characteristics.

Theoretical Framework

The theoretical framework for the study is that of transformational leadership as defined in the seminal work of Bass and Avolio (Bass & Avolio, 1990). The theoretical characteristics of transformational leadership satisfy all three of Henderikus’s (2010) criteria for a good theory. According to Henderikus,  a theory “is normally aimed at providing explanatory leverage on a problem, describing innovative features of a phenomenon or providing predictive utility” (Henderikus, 2010, p. 1498).  In terms of the phenomenon of employee motivation, transformational leadership theory (a) explains the problem of lower business productivity in advanced economies such as that of the United States in terms of insufficiently transformational leadership and thus insufficient employee motivation, (b) describes employee motivation in terms of the impact of leadership development plans and orientations within an organizational setting, and (c) predicts that higher levels of transformational leadership result in higher levels of employee motivation. However, based on the existing theoretical and empirical work based in transformational leadership, it is not clear whether transformational leadership can be predicted to (a) increase employee motivation directly (that is, without the mediation of self-efficacy, valence, and expectancy); and (b) whether any aspects of the various relationships between transformational leadership, valence, expectancy, self-efficacy, and employee motivation will change based on employee and company demographics.   

Employee motivation, the dependent variable of the study, can be understood through two separate theoretical frameworks. One seminal theoretical account of motivation is that of expectancy theory. Expectancy theory has been defined as follows: 

Expectancy theory states that the strength of the tendency for an individual to perform a particular act is a function of (a) the strength with which he expects certain outcomes to be obtained from the act, times (b) the attractiveness to him of the expected outcomes. Thus, the theory frequently is summarized by the phrase, “Force equals expectancy times valence” (F = E x V). (Hackman & Porter, 1968, p. 418).  

What Hackman and Porter referred to as “the strength of the tendency for an individual to perform a particular act” (Hackman & Porter, 1968, p. 418) is what Pinder (2014, p. 11) defined as motivation. According to expectancy theory, the roots of motivation are outcome attractiveness, or valence; and the strength of the belief that an act will lead to a desired outcome, or expectancy. Thus, expectancy theorists define motivation as the end result of valence and expectancy. Understood from the perspective of transformational leadership theory, it is possible that transformational leaders improve the motivation of their employees by (a) influencing employees to see certain outcomes as attractive (valence); and (b) influencing employees to believe that they can bring about positive outcomes in an organizational setting (expectancy). However, it is just as possible that there is no causal effect of transformational leadership on either expectancy or valence, and that employees with pre-existing valence and expectancy are more likely to respond well to transformational leadership. The first and second research questions of the study are designed to test the mediating impact of valence and expectancy, respectively, in the relationship between transformational leadership and employee motivation.

Bandura (1997) understood motivation not only in terms of valence and expectancy, but in terms of a third force, self-efficacy. Bandura defined self-efficacy, sometimes merely termed efficacy, as follows:

Efficacy is a generative capability in which cognitive, social, emotional, and behavioral subskills must be organized and effectively orchestrated to serve innumerable purposes. There is a marked difference between possessing subskills and being able to integrate them into appropriate courses of action and to execute them well under difficult circumstances. People often fail to perform optimally even though they know full well what to do and possess the requisite skills to do it. (Bandura, 1997, pp. 36-37).

Bandura, like Hackman and Porter (1968) and Pinder (2014) described motivation as a measurable behavior traceable to mental states. In fact, Hackman and Porter used the term force in order to emphasize that the ultimate measure of motivation is in the real world of behavioral actions. Given this behavioral definition of motivation, Bandura argued that inner states such as expectancy and valence were precursors to the individual decision to take actions measurable as behavioral motivation. Bandura added self-efficacy as another precursor of motivational force, noting that self-efficacy is conceptually related to both expectancy and job valence, but is a different construct. The current consensus among researchers is that valence, expectancy, and self-efficacy are all comparably powerful predictors of motivation (Brown et al., 2014; Di Giunta et al., 2013; Klassen & Durksen, 2014; Pettijohn, Schaefer, & Burnett, 2014; Richardson et al., 2013; Schmitt et al., 2016; Tariq, Qualter, Roberts, Appleby, & Barnes, 2013). 

Figure 1 below is an illustration of the theoretical model of the study.  Figure 1 is not only a conceptual model but also a schema for a statistical approach to answering the research questions of the study. In this model, transformational leadership is assumed to have a direct effect on motivation, but transformational leadership’s effect on motivation is also assumed to be mediated by valence, expectancy, and self-efficacy. In keeping with the behaviorally oriented nature of both Hackman and Porter’s (1968) motivation theory and Bandura (1997) self-efficacy theory, valence, expectancy, self-efficacy, and transformational leadership are also presumed to call upon individual employees to orchestrate their skills in a manner that can be behaviorally measured.          

(Figure 1 omitted for preview. Available via download).

The main theory (transformational leadership) and subsidiary theories (self-efficacy and motivational theories) have been related to specific, empirically testable predictions in the research questions of the study.  RQ1 and RQ2 are based on valence and expectancy, respectively, as potential mediators of the relationship between transformational leadership and motivation; RQ3 is based on self-efficacy as a mediator of the relationship between transformational leadership and employee motivation. Transformational leadership theory is compatible with mediation models, as is apparent in empirical studies (Bronkhorst et al., 2015; Caillier, 2014), but transformational leadership is also compaible with the claim of direct, unmediated effects on employee mediation (Abdullah et al., 2015; Mesu et al., 2015).  The theoretical model of the study will be discussed at greater length in the review of literature. In this discussion, motivation is defined on the basis of Pinder’s (2014) and Hackman and Porter’s (1968) work, while self-efficacy is defined on the basis of Bandura’s (1997) work. 

Operational Definitions

The following operational definitions guide the study:

Expectancy: Expectancy is the degree to which an individual believes that his or her actions will lead to a desired goal (Hackman & Porter, 1968).  

Motivation: The definition of motivation adopted in this study is that of Pinder’s classic formulation: “Work motivation is a set of energetic forces that originate both within as well as beyond an individual’s being, to initiate work-related behavior, and to determine its form, direction, intensity, and duration” (Pinder, 2014, p. 11).  Pinder’s definition, like that of Hackman and Porter (1968) emphasized motivation as something that is measured in behavioral terms. 

Self-efficacy. Self-efficacy, also known as efficacy, has been defined its founder, Bandura, as follows:

Efficacy is a generative capability in which cognitive, social, emotional, and behavioral subskills must be organized and effectively orchestrated to serve innumerable purposes. There is a marked difference between possessing subskills and being able to integrate them into appropriate courses of action and to execute them well under difficult circumstances. People often fail to perform optimally even though they know full well what to do and possess the requisite skills to do it. (Bandura, 1997, pp. 36-37).

Transformational leadership: Northouse defined transformational leadership in the following fashion:

As its name implies, transformational leadership is a process that changes and transforms people. It is concerned with emotions, values, ethics, standards, and long-term goals. It includes assessing followers’ motives, satisfying their needs, and treating them as full human beings. Transformational leadership involves an exceptional form of influence that moves followers to accomplish more than what is usually expected of them. (Northouse, 2010, p. 171).

Valence: Valence is the perceived desirability of a job or task (Hackman & Porter, 1968).  

Assumptions, Limitations, and Delimitations

The study contains several assumptions, limitations, and delimitations. These assumptions, limitations, and delimitations are discussed below.  

Assumptions

The study contains two main assumptions. One assumption is that participants will answer questions as accurately and honestly as they are able to. Another assumption is that the scales chosen to operationalize the independent variable of transformational leadership, the dependent variable of employee motivation, and the mediating variables of self-efficacy, valence, and expectancy will, in fact, measure their respective constructs in a reliable and valid way. 

Limitations

The study contains several limitations. One limitation is that the study is cross-sectional. Because of the study’s cross-sectional nature, the study is incapable of measuring any of the evidence-based management longitudinal impact of variation in transformational leadership on variation in motivation. Another cross-sectional limitation is that of reporting. Study participants are employees who are asked to repeat on both their motivational state and on the transformational leadership skills of their leaders. Employees’ assessment of both their own motivation and of their leaders’ transformational leadership skills might change over time. However, because the data for this study will be gathered in a cross-sectional manner, the study cannot account for such time-dependent variation in participations’ impressions. A third limitation of the study is the examination of the psychological construct of motivation without a parallel examination of closely related psychological constructs such as self-efficacy or expectancy. This limitation of the study exists by design, as administering too many questions to study participants could reduce the accuracy of answers provided by participants.       

A fourth limitation of the study is that many, perhaps the majority, of employees have several bosses. Employees are likely to have differing levels of contact with different bosses. In this study, survey respondents will be asked to provide an evaluation of the transformational leadership capabilities not of their ultimate boss (for example, the CEO), but of the boss with whom they are in closest contact (for example, the head of a division in which a survey respondent works). Because an organization is likely to have several bosses, and because an employee cannot be expected to have deep insight into the leadership capacities of bosses further up the organizational chart, the study will contain neither a comparable cross-section of bosses nor employee opinions about all levels of leadership.

The study is limited by its nonrandom sampling approach. As the population for the study consists of people who work for American companies, the population is likely to consist of tens of millions of people. For simple random sampling to take place, each member of the population would have to have an equal chance of being contacted to participate in the study. The sheer size of the sample makes conducting a simple random sampling strategy extraordinarily difficult. However, the use of a nonrandom sampling strategy is a limitation, as such a strategy reduces the odds that the sample will be representative of the population. The use of an a priori sample size calculation might mitigate the concern that the study contains an insufficient number of respondents, but sample size cannot necessarily reduce the generalizability limitations posed by a nonrandom sample.        

The variables of expectancy and valence can apply to specific tasks, or they can apply to global perception of a job (Hackman & Porter, 1968). Self-efficacy, too, can apply to a specific task or to an entire job (Bandura, 1997). In this study, these variables are operationalized in terms of how they apply to a respondent’s global perception of his or her job. Thus, the study cannot measure self-efficacy, valence, or expectancy in terms of their applicability to specific job tasks.

Finally, although mediated regression has been cited (Abdullah et al., 2015; Ullman & Bentler, 2003) as possibly supporting causal inferences, mediated regression does not necessarily support causal conclusions. In the case of this study, the use of mediated regression cannot necessarily distinguish between (a) a scenario in which transformational leadership impacts self-efficacy, expectancy, and valence; or (b) a scenario in which transformational leadership is more effective among employees who are already in possession of high levels of self-efficacy, expectancy, and valence.   

Delimitations

The study is delimited to employees who work in the United States for companies that are also headquartered in the United States and that are publicly listed such as Google. The reason for delimiting the study to employees from public corporations is that the covariates of the study include several metrics pertaining to company revenue and other measurements that are available for public companies, but not for private ones. Thus, any study whose objectives include measuring the possible impact of a company’s characteristics (such as revenue, profit, industry, and number of employees) must be delimited to employees of companies for which these data are available. 

 In terms of psychometric qualities, the study is delimited to motivation and does not include closely related qualities such as expectancy or self-efficacy. The study is delimited to people who are not in leadership roles; participants in the study must have at least two layers of bosses, an inclusion criterion that will necessarily delimit the study to individuals who are fairly distant from leadership roles.  Finally, although transformational leadership is measured in a scale—the Multifactor Leadership Questionnaire (MLQ)—that includes measurement of other kinds of leadership, only transformational leadership is taken into account in the study.   

Significance of the Study

The significant of the study can be summarized in terms of contributions to business practice as well as implications for social change. The main contribution to business practice is the quantification of the value of transformational leadership relative to employee motivation. The main social change implication is the improvement of overall business efficiency, which is likely to have various positive effects on society in general. 

In terms of business practice, there appears to be a scholarly and practitioner consensus about the value of transformational leadership (Abdullah et al., 2015; Babalola, 2016; Breevaart et al., 2014; Bronkhorst et al., 2015; C.H. Chan & Mak, 2014; Caillier, 2014; Deschamps et al., 2016; Feizi et al., 2014; Fernet et al., 2015; Gillet & Vandenberghe, 2014; Hayati et al., 2014; Im et al., 2016; Khan et al., 2014; Mesu et al., 2015; Nejad et al., 2016; Pongpearchan, 2016; Pradhan & Pradhan, 2015; Rawat, 2015; Schmitt et al., 2016; Shim et al., 2015; Sin & Youn, 2013; Top et al., 2015; Welty Peachey et al., 2014; Yahaya & Ebrahim, 2016; Yucel et al., 2014). However, the question of whether transformational leadership works by amplifying the traditional bases of motivation (valence, expectancy, and self-efficacy) or through direct effects has not been conclusively settled. While there are several mediation studies involving transformational leadership, employee motivation, and selected mediating variables, none of these studies includes valence, expectancy, and self-efficacy as mediators. Thus, the current study has the potential to make a substantial addition to what is known of how, and the extent to which, transformational leadership acts on employee motivation. 

In terms of social change, discovering the mechanisms through which transformational leadership acts can better equip companies to improve their employee motivation. Improved motivation results in improved business outcomes (Drucker, 2013, 2014a, 2014b). As improved business outcomes benefit society as a whole, the findings of the study can play a role in generating positive social change. Therefore, the study has a rationale rooted in positive social change as well as in contributions to applied business knowledge and practice.    

A Review of the Professional and Academic Literature

The literature review has three main purposes. The first purpose is to briefly discuss the theoretical framework of transformational leadership. The second purpose is to review empirical articles on the link between transformational leadership and motivation, with an emphasis on describing, discussing, critically analyzing, and synthesizing the results of the empirical research base. The third purpose is to note the gaps in the empirical literature that justify the study.  The main themes in the literature review are (a) the existence of a positive correlational link between transformational leadership and employee motivation; and (b) the absence of scholarly work that has accounted for self-efficacy, valence, and expectancy as mediators in the link between transformational leadership and employee motivation. A review of theory supports the claim that self-efficacy, valence, and expectancy all influence the relationship between transformational leadership and motivation.   

Review of Transformational Leadership Theory

Transformational leadership theory emerged from the seminal work of Bass and Avolio (1990). Bass and Avolio based their seminal study of leadership on inputs from the previous five decades of business leadership research, created a questionnaire refined by expert input, and applied the statistical technique of principal components analysis to identify both factors and styles of leadership. These insights became part of the MLQ instrument created by Bass and Avolio. The components of the MLQ appear in Table 1 below.

Transformational leadership theory arose as part of a general scholarly effort to replace trait theory with a more valid and empirically reliable approach to the quantification of leadership. One of the main assumptions of trait theory was that leadership is an innate category, and that the best way to learn leadership is to observe and mimic the traits of people considered to be great leaders (Colbert et al., 2012; Dinh et al., 2014; Tal & Gordon, 2016). The work of Bass and Avolio (1990) was part of a trend of scholarly rejections of trait theory based in the identification of specific, replicable aspects of effective leadership that could be taught, whether in business schools or in applied business settings. 

The application of principal components analysis allowed Bass and Avolio (1990) to discover seven factors (idealized influence, inspirational motivation, intellectual stimulation, individualized consideration, continent reward, management by exception, and laissez faire) and three types (transformational, transactional, and laissez faire) of leadership. As is clear in Table 1 below, idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration are the factors associated with transformational leadership. The factors of contingent reward and management by exception are associated with transactional leadership. Finally, the laissez faire leadership style is associated with a sole factor, also known as laissez faire.  Thus, according to Bass and Avolio, leadership possesses transformational, transactional, and laissez faire dimensions. 

The MLQ instrument contains a number of questions designed to measure each factor, through the use of a seven-point Likert scale. Adding the scores for questions with each factor yields the total score for that factor, and adding together factor scores yields the leadership type score. The transformational leadership type is measured by a total of 16 questions that are distributed across the factors of idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration.  Given the use of a seven-point Likert scale with a starting value of one, the possible scope of transformational leadership scores ranges from a low of 16 to a high of 112, with higher values representing higher transformational leadership.  Thus, in Bass and Avolio’s framework, transformational leadership is measured as an interval variable, and is therefore suitable for inclusion in a wide range of statistical procedures, including all variations of regression.   This aspect of transformational useful is relevant in terms of the mediated regression approach taken in the current study. 

(Table 1 omitted for preview. Available via download). 

Transformational leadership theory is closely aligned with the concept of motivation (Nejad et al., 2016; Schmitt et al., 2016; Yahaya & Ebrahim, 2016). Transformational leadership is intended to transform employees—or, understood in another context, followers. Such transformations are based on eliciting unusual levels of commitment, focus, and other pre-existing but underutilized qualities from employees (Nejad et al., 2016; Schmitt et al., 2016; Yahaya & Ebrahim, 2016). Therefore, from its inception, transformational leadership has been based on the goal of improving employee motivation.  

Transformational motivation is both the independent variable and main theoretical framework of the study. However, the study also relies on self-efficacy and motivation theory. As formulated by Hackman and Porter (1968), motivation theory suggests that the degree of motivation is determined by the combination of (a) valence (the desirability of a goal such as the training of sales staff); and (b) expectancy (the strength of the belief that a particular set of actions will lead to the desired goal). Self-efficacy theory suggests that taking actions calibrated to achieve a desired goal relies on a separate sub-skill of being able to orchestrate existing skills (Bandura, 1997). As discussed in the next section of the study, there are several empirical studies that have found mediating effects of either self-efficacy, valence, or expectancy on the relationship between transformational leadership and self-efficacy. Such a mediated relationship is theoretically expected, as valence, expectancy, and self-efficacy are all proven precursors of motivation and therefore likely to amplify the effects of transformational leadership on motivation. However, none of the studies identified in the literature review included all three mediators of self-efficacy, valence, and expectancy.    

Review of Empirical Research

The main purpose of the review of empirical literature is to assess previous studies that contain quantitative approaches to understanding the relationship between transformational leadership and employee motivation. All of the studies chosen for inclusion in this section of the literature review are grounded in transformational theory, although certain studies also make use of subsidiary theoretical frameworks. The review of empirical literature is primarily oriented towards studies published from 2012 onwards.  

For purposes of analysis, the studies have been divided into two groups. The first group includes those studies in which either expectancy, valence, or self-efficacy have been included as mediators in the relationship between transformational leadership and motivation. The second group includes those studies in which expectancy, valence, or self-efficacy have not been included as mediators in the relationship between transformational leadership and motivation. The second group thus contains studies that measure the direct effect of transformational leadership on motivation, occasionally adding mediators, such as organizational culture or employee demographics. 

Because the current study contains expectancy, valence, and self-efficacy as mediators in the relationship between transformational leadership and employee motivation, studies that have at least one of these variables as mediators are discussed in greater length in the literature.  Before the presentation of empirical studies, the literature search strategy has been presented. This search strategy contains the specific parameters and results that guided the assembly of the studies discussed in the literature review. 

The following Boolean search strings were utilized in the literature search:

“Transformational leadership” AND “employee motivation”

“Transformational leadership” AND motivation AND organizations

“Transformational leadership” AND “organizational commitment”

“Transformational leadership” AND “organizational engagement”

“Transformational leadership” AND commitment AND organizations

“Transformational leadership” AND engagement AND organizations

These Boolean search strings were applied to the following academic databases:

Business Source Complete

ABI / Inform

EconLit

Academic Search

Google Scholar

EBSCO

IngentaConnect

ScienceDirect

JSTOR

Web of Science

The combination of Boolean search terms and academic databases yielded thousands of prospective studies for inclusion in the literature review. Numerous filters reduced the number of articles for consideration. These filters included the following delimitations:

Articles in English 

Articles appearing only in scholarly (peer-reviewed) publications

Articles published in 2012 or later

Articles sorted by relevance and appearing in the first 50 results returned by the database

After applying the filters, an evaluation of each abstract succeeded in identifying studies with the following qualities:

Application of the quantitative methodology

Not a statistical meta-analysis

Transformational leadership as an independent variable

Motivation as a dependent variable

After the number of studies had been reduced, the remaining studies were highly relevant. However, a few of the articles that passed through all of the automated filters and initial evaluation of abstracts included motivation not as a dependent variable, but as a mediator variable. These studies were retained in the literature review because the relationship between the independent variable of transformational leadership and the mediating variable of motivation was still informative. The thoroughness of the literature search strategy raised the likelihood that the chosen studies constitute a representative cross-section of the empirical literature on transformational leadership and employee motivation. 

Expectancy, valence, and self-efficacy mediation studies. There are a number of studies in which the impact of the independent variable of transformational leadership on the dependent variable of motivation has been understood through the mediation of either expectancy, valence, or self-efficacy. In rare cases, scholars have included two of these variables as mediators. However, no study appears to have included each of the variables of expectancy, valence, and self-efficacy as mediators between transformational leadership and employee motivation. 

Caillier (2014) found that the impact of transformational leadership on motivation was strongly and significantly mediated by mission valence. In other words, the more appealing employees find a desired mission to be, the more their motivation increases in response to transformational leadership. Caillier found that the demographic variable of age—but not the demographic variables of gender, race, education, or experience—was a significant mediator. With all control variables (including not only the demographic control variables but also measures such as job satisfaction) included, Caillier found that the impact of transformational leadership on employee motivation was statistically significant but fairly small, with variation in transformational leadership accounting for only 15% of the variation in employee motivation.  This measure of effect size included mission valence. When mission valence was removed, the effect size declined to 14%. However, in the version of Caillier’s model that had a 14% R2, the contributing explanatory power of transformational leadership was not measured separately. The model with 14% R2 was an omnibus model in which the effects of gender, race, education, experience, age, job satisfaction, and other variables were also present. 

Caillier’s (2014) findings suggested the importance of adding valence as a mediator between transformational leadership and employee motivation. However, there were important gaps in Caillier’s work that suggest the need for additional empirical research. First, despite the fact that valence interacts with expectancy to generate motivation (Hackman & Porter, 1968), Caillier did not include expectancy as a mediator. Second, Caillier did not measure the unique explanatory power of transformational leadership vis-à-vis employee motivation. As Caillier noted in the introduction to the study, from an applied business perspective, both leaders and scholars would like to know exactly how much transformational leadership contributes to employee motivation. In a standard regression format, achieving this goal means being able to compare the R2 contributed by transformational leadership alone to the R2 of models in which other predictors and mediators are added, one at a time. However, because Caillier presented omnibus results, Caillier’s study did not answer the important question of how much employee motivation can be accounted for by transformational leadership alone. Even though valence was found to be a significant mediator, it was not clear whether valence truly amplified the effect of transformational leadership, as valence could also have amplified the effects of the other predictors included alongside transformational leadership.   

Third, Caillier (2014) defined valence through the use of a seven-item scale that had not been previously validated. Although Caillier carried out confirmatory factor analysis to demonstrate that all seven of the items on this scale weighted heavily on the same component, Caillier did not offer any evidence that this scale had been developed according to the feedback of past studies on valence. Additionally, the Cronbach’s Alpha and other reliability and validity coefficients of the novel scale were not presented. The absence of a properly validated scale is, therefore, an important limitation of Caillier’s work. 

Gillet and Vandenberghe (2014) conducted a mediation study in which the independent variable was transformational leadership, the dependent variable was employee motivation (operationally defined as organizational commitment), and the mediators were job feedback, task variety, and decision-making autonomy. Conceptiall, the three mediators chosen by Gillet and Vandenberghe were very similar to valence and expectancy. Valence represents the attractiveness of a task or goal (Hackman & Porter, 1968). As Gillet and Vandenberghe argued, both task variety and decision-making autonomy are related to valence, because task variety and decision-making autonomy both help to determine how pleasant employees find a task or a job. As Gillet and Vandenberghe also argued, the variable of job feedback is conceptually related to expectancy, because feedback tells employees whether the steps they are taking are bringing them closer towards, or further away from, a goal. Expectancy is defined as the strength of belief in the ability of certain actions to lead to a desired goal (Hackman & Porter, 1968). Thus, just as decision-making autonomy and task variety appear to be conceptually related to valence, job feedback appears to be closely related to expectancy. 

Gillet and Vandenberghe (2014) utilized a structural equation model (SEM) to explore the relationships between transformational leadership and motivation. Gillet and Vandenberghe found a statistically significant but small effect of transformational leadership on four specific types of motivation (affective commitment, normative commitment, perceived sacrifice commitment, and few alternatives commitment). The variables of job feedback, decision-making autonomy, and task variety were found to be mediators of the relationship between transformational leadership and motivation. In other words, the effects of transformational leadership on employee motivation were stronger in the presence of appropriate job feedback, decision-making autonomy, and task variety. However, there were two important gaps in Gillet and Vandenberghe’s study that provided a rationale for additional research.

First, Gillet and Vandenberghe (2014) created an omnibus variable, that of job characteristics, to pool the explanatory power of job feedback, decision-making autonomy, and task variety. As explained by Hackman and Porter (1968), expectancy and valence make distinct contributions to motivation. Therefore, scholars treating measures of expectancy and valence as mediators should keep these two variables as separate mediators, so that the contributory power of each variable can be understood separately. Gillet and Vandenberghe did not take this approach. The SEM-measured effects of job characteristics on affective commitment (β = .49), normative commitment (β = .21), perceived sacrifice commitment (β = .17), and few alternatives commitment (β = -.18) therefore pooled the effects of three variables (job feedback, decision-making autonomy, and task variety) that ought to have been treated separately. 

Hackman and Porter’s (1968) theory offers a clear conceptual reason for mediating variables related to valence and expectancy to be treated as separate mediators in a model in which leadership is the independent variable and motivation is the dependent variable. However, even without the support of this theory, there would have been clear advantages for Gillet and Vandenberghe (2014) to separate the mediating effects of job feedback, decision-making autonomy, and task variety. For example, in considering the effect of job characteristic on affective commitment (β = .49), it would be helpful for business leaders to know whether it is job feedback perception, decision-making autonomy perception, or task variety perception that is more determinative of affective commitment in the presence of transformational leadership. Treating job feedback, decision-making autonomy, and task variety as separate mediators would have led to more precise and useful inferences about how transformational leadership acts upon employee motivation.

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