The role of transformational leadership behaviors in affective employee engagement an empirical study in the two industries of

LIST OF TABLESTable 1: Location for paper survey, sample size and response rates...28 Table 2: Independent and Dependent variables...32 Table 3: Summary of Employees’ profile...35 Table

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH

CITY

- -HUYNH NGOC DUY

THE ROLE OF TRANSFORMATIONAL

LEADERSHIP BEHAVIORS IN AFFECTIVE EMPLOYEE ENGAGEMENT: AN EMPIRICAL STUDY IN THE TWO INDUSTRIES OF RETAIL AND FINANCIAL SERVICES IN HCM CITY

Subject: Master of Business Administration Code: 60.34.01.02

MASTER THESIS OF BUSINESS ADMINISTRATION

HO CHI MINH CITY – 2012

The findings of the study indicated that transformational leadership behaviorsincluding intellectual stimulation, idealized influence behaviors and individualconsideration have significant and positive correlations with affective employeeengagement Among the independent variables, individual consideration is found to

be the most important factor in driving affective employee engagement

The research results have contributed to the literature and provided more evidencesfor the managers in their decisions of their workforce planning However, thesample for the research is still limited due to the application of convenient samplingmethod and surveyed only in Ho Chi Minh City Therefore, the generalization is not

so high; the study might have not covered all the demographic factors; and alsosome other important variables were not considered all due to the scope of thestudy All the restrictions will motivate the next researchers in this interesting topic.

I am deeply grateful to my advisors, Dr Nguyen Huu Lam and Dr Nguyen DinhTho for the guidance and comments through the process of completing this thesis.Without the support and encouragement from Dr Lam and Dr Tho, the thesismight not be possible in meeting the requirements and expectations of the research

I also extend my thanks my classmates in sharing with me the ideas; store managers

in Crescent Mall in district 7 and MBA students at the University of HCMCEconomics in filling in the questionnaires

I would like to acknowledge the support and encouragement of my family in theconcession of time, money and effort to complete the program Most of all, I wouldlike to be grateful to my Buddha for giving me good health, optimism and strength

to finish the study

TABLE OF CONTENTS

ABSTRACT 1

ACKNOWLEDGEMENTS 3

TABLE OF CONTENTS 4

CHAPTER ONE: INTRODUCTION 8

1.1BACKGROUND OF THE STUDY 8

1.2STATEMENT OF THE PROBLEM 10

1.3OBJECTIVES OF THE STUDY 11

1.4RESEARCH QUESTIONS 12

1.5SIGNIFICANCE OF THE STUDY 12

1.6SCOPE OF THE STUDY 13

1.7STRUCTURE OF THE STUDY 13

CHAPTER TWO: LITERATURE REVIEW 14

2.1INTRODUCTION 14

2.2THE CONCEPT OF LEADERSHIP 15

2.3THE EVOLUTION OF LEADERSHIP THEORIES 15

2.4LEADERSHIP MODEL 17

2.5FIVE DIMENSIONS OF TRANSFORMATIONAL LEADERSHIP BEHAVIORS 18

2.5.1 Idealized influence (Attributes) (IIA): leaders instill pride and build trust .18

2.5.2 Idealized influence (Behaviors) (IIB): leaders emphasize collective sense of mission, talk about values and beliefs 18

2.5.3 Inspirational motivation (IM): leaders communicate and express enthusiasm, optimism, confidence, and emotional appeals 18

2.5.4 Intellectual stimulation (IS): leaders stimulate followers to view the world from new perspectives; encourages problem solving, critical thinking and creativity 18

2.5.5 Individual consideration (IC): leaders develop, coach, and teach each follower to grow individually by paying attention to individual needs, desires and assigning projects 18

2.6THE CONCEPT OF EMPLOYEE ENGAGEMENT 19

2.7THE EVOLUTION OF EMPLOYEE ENGAGEMENT 20

2.8TWO DIMENSIONS OF AFFECTIVE EMPLOYEE ENGAGEMENT 21

2.9THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP BEHAVIORS AND EMPLOYEE ENGAGEMENT 22

2.10RESEARCH MODEL AND HYPOTHESES 24

CHAPTER THREE: RESEARCH METHODOLOGY 26

3.1QUALITATIVE RESEARCH 26

3.1.1 Sampling 26

3.1.2 Data collection and In-depth interview 26

3.2QUANTITATIVE RESEARCH 27

3.2.1 Response rate and sample size 27

3.2.2 Data sources and type 29

3.2.3 Data gathering instruments 30

3.2.3.1 Multifactor leadership questionnaire 30

3.2.3.2 Affective employee engagement questionnaire 31

3.2.4 Independent and dependent variables of the study 32

3.2.5 Data analysis and presentation procedures 33

CHAPTER FOUR: RESULTS AND FINDINGS 34

4.1DEMOGRAPHIC CHARACTERISTICS OF THE PARTICIPANTS 34

4.2DESCRIPTIVE STATISTICS FOR TRANSFORMATIONAL LEADERSHIP BEHAVIORS AND AFFECTIVE EMPLOYEE ENGAGEMENT 36

4.2.1 Employees perception to Transformational leadership behaviors 37

4.2.2 Employees perception to their organizational engagement 37

4.3THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP BEHAVIORS AND AFFECTIVE EMPLOYEE ENGAGEMENT 38

4.4SCALE ASSESSMENT 40

4.4.1 Cronbach Alpha 40

4.4.2 Exploratory Factor Analysis (EFA) 42

4.4.2.1 Independent variables 43

4.4.2.2 Dependent variables 44

4.5CORRELATION AND REGRESSION ANALYSIS 44

4.5.1 Correlation analysis 44

4.5.2 Regression analysis 45

4.5.2.1 Assessment of the model 45

4.5.2.2 Testing of the hypotheses 49

4.6RESULTS AND DISCUSSION 51

4.6.1 Regression analysis 51

4.6.1.1 Intellectual stimulation 51

4.6.1.2 Idealized influence behaviors 52

4.6.1.3 Idealized influence attributes and inspirational motivation 52

4.6.1.4 Individual consideration 52

4.6.2 Industry analysis 53

4.6.3 Discussion of the results 53

4.6.4 Summary 54

CHAPTER FIVE: DISCUSSION, RECOMMENDATION AND CONCLUSION

55 CONCLUSIONS5.1 55

5.2THE CONTRIBUTIONS OF THE STUDY 56

5.2.1 Contributions to the literature 56

5.2.2 Contributions to the practices 56

5.3RECOMMENDATIONS 57

5.3.1 Recommendations for the organizations and managers in Ho Chi Minh City 57

5.3.2 Recommendation for future research 59

5.4LIMITATIONS OF THE STUDY 60

REFERENCES 61

Appendix A: Total Variance Explained 66

Appendix B: Rotated Component Matrixa 67

Appendix C: Total Variance Explained 68

Appendix D: Rotated Component Matrixa 69

Appendix E: KMO and Bartlett's Test 69

Appendix F: KMO and Bartlett's Test 69

Appendix G: ANOVAa 70

Appendix H: Histogram Dependent Variable AC 70

Appendix I: Normal P-P Plot of Regression Standardized Residual Dependent Variable A C 71

Appendix J: Scatterplot Dependent Variable AC 72

Appendix K: ANOVAa 72

Appendix L: Histogram Dependent Variable SC 73

Appendix M: Normal P-P Plot of Regression Standardized Residual Dependent Variable SC 74

Appendix N: Scatterplot Dependent Variable SC 75

Appendix O: Questionnaire (in English) 76

Appendix P: Questionnaire (in Vietnamese) 81

LIST OF TABLES

Table 1: Location for paper survey, sample size and response rates 28

Table 2: Independent and Dependent variables 32

Table 3: Summary of Employees’ profile 35

Table 4: Mean and Standard Deviations of Transformational Leadership Behaviors and Affective Employee Engagement for employees’ responses 36

Table 5: Pearson correlation matrix between transformational leadership behaviors and affective employee engagement dimensions 39

Table 6: Cronbach Alpha 41

Table 7: Result of EFA for Independent variables 43

Table 8: Result of EFA for Dependent variables 44

Table 9: Correlation analysis 45

Table 10: Summary (AC) 46

Table 11: Summary (SC) 46

Table 12: Anova (AC) 46

Table 13: Anova (SC) 47

Table 14:Profile of Independent variables 47

Table 15: Profile of Independent variables 48

Table 16: Summary of results of hypotheses 50

Table 17: Industry analysis 53

LIST OF FIGURES Figure 1: Proposed Research Model 24

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In Vietnam News (2002), it showed that:

More than 43% of employees in Vietnam express high levels of commitment

to both their job and the company they work for In its global employeecommitment report 2002 Taylor Nelson Sofre says the commitmentpercentage in Vietnam is higher than the average in the Asia-Pacific regionand Europe, but slightly lower than in the United States and Latin America.”

And then in Thanhnien News (2008), it is suggested that:

Vietnam needs more skilled workers since its WTO accession The survey byGrant Thornton, a global accounting, tax and business advisory firm whichinvolved over 7,800 privately held businesses in 34 countries shows that 84percent of Vietnamese companies focus on recruiting and retaining staff,compared to a global average of only 59 percent Vietnamese companiesfocus more on attracting and retaining employees than do companieselsewhere

Employee retention is considered the greatest challenge for businesses in Vietnamand becomes a hot topic for discussions for any workshops of human resourcemanagers Vietnamese employees aggressively accelerate their career to better

positions, challenging jobs and better pay In a survey of Navigos Group, theleading and largest executive recruitment solution provider reported in VietnamPlus (2010) “63,8 percent of respondents from 168 companies operating in Vietnamincluding foreign-invested ones ranked the employee retention as the number onehuman resource challenge in 2010” And it also confirmed “getting the right peopleinto the right job with the right skills and to have them stay and grow are missionswhich will keep human resource personnel busy in 2010 As long as this is the fact,employee retention is hard work.”

According to Towers Watson (2011) in a briefing of engagement indicator survey,Vietnam labor market has experienced a fierce talent war in which Vietnameseemployers are trying to engage their talent through some employee engagementprograms In the Towers Watson’s data, it also showed that “employee engagementlevels in Vietnam have remained steady over the last five years (currently 78%favorable) and higher than employee engagement levels in the overall Asia PacificRegion (currently 74% favorable) However, employee intent to continue workingfor their current companies is lower in Vietnam (54%) compared to Asia Pacific(61%) In other words, the war for talent is fiercer in Vietnam than elsewhere inAsia Pacific because employees are at higher risk of leaving.”

It is clear evidence that employee engagement has become one of the most leadingpriorities for human resource practitioners and senior managers in the organizationtoday in Vietnam It is also the role of HR managers and line mangers to understandwhat are the critical factors affecting employees to get their high commitment to thecompany Based on that, the managers come up with strategic action plans toengage their employees into the sustainability of the organization Theserequirements from the reality are really urgent for the managers in Vietnam to dealwith them in their daily managerial works

1.2 STATEMENT OF THE PROBLEM

Nowadays, the workplace changes day by day and requires products and services tokeep in line with this demand In order to remain competitive, employeeengagement is one of the most important factors in the face of these pressures.Sinceemployee engagement is strongly correlated to the leadership behaviors of directmangers and this concerns a focus on improving the quality of leadership inachieving greater employees to engage to the organization and its sustainablegrowth, and the profitability as well Many researchers have revealed that employeeengagement and leadership behaviors are of crucial determinants in theorganizational success However, leadership is one of the least understood concepts

in the corporate world and the term of employee engagement should also beconsidered in many dimensions to result in a full picture of this relationship

Beverly and John (2008) shows indisputable links between employee engagementand various measurements of financial success in which a US survey of 24 publiclylisted traded companies with a total of over 250,000 employees over the last 5 yearsrecognized the stock prices of 11 companies with highest engagement increased anaverage of 19.4% in comparison to only 8% of those in the same industries Severalsurveys also reveals that companies with high employee engagement levelsexperienced a higher operating margin, net profit margin, revenue growth andearnings per share than those with low employee engagement

It is clear that employee performance or behavior on the job is influenced by his orher immediate manager and its positive relationship will be essential tostrengthening employee engagement So, to improve the quality of leadership andmanagement can be the most important step in keeping the employee committed tothe organization

On the contrary, engagement is also complicated and continuous for furtherresearch then it requires a simultaneous solution as the employees can beemotionally engaged, cognitively engaged or physically engaged.

According to Towers Watson (2012), the voluntary turnover rate in Vietnam was15,8% in 2010 and 13,1% in 2011 The main reason is due to the conflicts anddisagreement with their direct managers’ behaviors Academicians, researchers andpractitioners have highlighted the significant influence that managers can have onengagement levels of the employees Effective managers can have more engagedstaffs and the quality of the relationship between a manager and employees is one ofthe most crucial factors driving engagement Towers Perrin (2006, as cited inGemma and Carl, 2009) posits that “many of the factors that influence employeeengagement and retention are factors directly and indirectly within the manager’scontrol.”

Many previous researches have demonstrated the positive relationship betweenleadership behaviors and employee engagement However, the number of studiesconducted in Vietnam in general and in specific organizations or industries arelacking and limited Therefore, this research is considered important to test the linkbetween transformational leadership behaviors and affective employee engagement

in the industry of retail and financial services in Ho Chi Minh City and also toexplore employees’ perceptions on these behaviors

1.3 OBJECTIVES OF THE STUDY

The research is to explore the relationship between transformational leadershipbehaviors and affective employee engagement in the industry of retail and financialservices in Ho Chi Minh City To achieve the goal, the specific objectives of thestudy are:

 To examine the relationship between transformational leadership behaviorsand two dimensions of affective employee engagement.

 To identify the employees’ perceptions about the transformational leadershipbehaviors and two dimensions of affective employee engagement

1.4 RESEARCH QUESTIONS

Specific research questions are:

1) What are the perceptions of employees in the industry of retail and financialservices about transformational leadership behaviors and two dimensions ofaffective employee engagement?

2) What is the relationship between transformational leadership behaviors andtwo dimensions of affective employee engagement?

1.5 SIGNIFICANCE OF THE STUDY

Firstly, the result of the research is important to bring the awareness to themanagers in Ho Chi Minh City about the determinant variables in influencing theengagement level of the employees in their organization

Secondly, it will be useful as the reference or guidance for the others to conduct further studies in related topics and other organizations regards to similar problems.Thirdly, it is believed the research can add more value to the literature on leadershipbehaviors and employee engagement, especially in Vietnam setting

1.6 SCOPE OF THE STUDY

The focus of this study is to examine the relationship between transformationalleadership behaviors and affective employee engagement in the industry of retailand financial services in Ho Chi Minh City, Vietnam Of course, the data for thestudy is delimited to the surveyed employees of the two industries in Ho Chi MinhCity

The study can also cover its limited share of the sampling frame which onlyconsidered a particular group and therefore the results cannot be generalized torepresent for the whole industry or other various types of organizations in Vietnam

1.7 STRUCTURE OF THE STUDY

The thesis is organized into five chapters as follows

 Chapter one: presents the background of the study, describes the problemstatements, research objectives, significance of the study

 Chapter two: provides literature review

 Chapter three: focuses on the research methodology, describes datacollection and analysis methods

 Chapter four: analyses and presents the research findings by showing howeach of the questions has been answered and how the findings contribute tothe purpose of the study

 Chapter five: provides the conclusions, limitations and recommendations.The end of the thesis includes references, appendices and questionnaires of thesurvey form to collect primary data for the work

CHAPTER TWO: LITERATURE REVIEW

2.1 INTRODUCTION

Leadership refers to the tools, behaviors and capability that a person needs in order

to be successful at motivating and directing others While employee engagement(Kahn, cited in Jessica and Helena, 2011) concerns the degree to which individualsmake full use of their cognitive, emotional, and physical resources to perform role-related work

When people talk about high-performing employee retention, they often focus onfinancial and non-financial incentives However, researches from all over the worldshow that there is another mutual link of leadership behaviors in keeping the staffengaged at work All organizations expect to have engaged employees and willingly

to spend their resources to improve employee engagement And one of theantecedents of employee engagement is leadership behaviors

Researchers believe that leadership is one of the most important organizationalfactors having direct impact on the motivation, satisfaction and the performance ofindividuals Tichy and Cohen (as cited in Salman, Riaz, Saifullah, and Rashid,2011) said that “the scarcest resource in the world today is the leadership talentcapable of continuously transforming organizations to win in tomorrow’s world.The individuals and organizations that build leadership engines and invest in leadersdeveloping other leaders have a sustainable competitive advantage”

Moreover, Kotter and Haskett (as cited in Salman et al, 2011) consider leadership as

a single most important factor in making organizational change and establish itsstrategic direction In reality, the relationship between the leaders and employees is

a causal link and has a mutual link on each other The leader behaviors will have adirect impact on staff performance and engagement.

2.2 THE CONCEPT OF LEADERSHIP

There is no single correct definition of leadership as various researchers explore indifferent aspects and leadership is also a complex phenomenon involving the leader,the followers and the situation Researchers may focus on the relationships betweenthe leader and the followers; the physical traits, behaviors, personality; or thesituations that affect the ways the leader acts

Leadership can be understood in different definitions as the process a leader induces

a subordinate to behave in a desired manner; direction and coordination for thework of group members; an interpersonal relation others comply because they wantto; the process of influencing a group towards achieving the goals; or the actionsthat focus resources to create opportunities (Richard, Robert, and Gordon, 2009)

2.3 THE EVOLUTION OF LEADERSHIP THEORIES

Leadership traits

The theory considers leaders to possess some abnormal abilities to set them apart,make them different from others and bring them to success It also supports theleaders might obtain some universal characteristics that the others cannot The study

of leadership is to attend to the traits of the person, also called Great Man theoryand assumes leaders are born rather than are made (Sharon, 2003).Theshortcomings of this theory are that they cannot measure the leader’s performanceand attend to different circumstances

Situation leadership also can be leadership traits or leadership behaviors depending

on the leaders’ actions or responses in a given situation

Contingency leadership

It is to focus on the situational variables to predict the appropriate leadership styles

in comparison to the given circumstances In the same meaning, the leadershipeffectiveness is combined both the qualities of the leaders and the demands of thesituations In order to make a good decision, the leaders have to address tosituational variables

Transactional leadership

The model focuses on social contract between the leaders and the followers inrelation to the effectiveness; the mutual benefits which the leaders deliver to

followers the rewards or recognition in exchange for the commitment or loyalty ofthe followers.

Transformational leadership

Transformational leadership does not aim to replace the transactional leadership but

to contribute to describe more attributes of the leaders Transformational leadersfocus on the needs of the followers, engage them to the organization and implementthe organizational performance

2.4 LEADERSHIP MODEL

Transformational leadership

The concept of transformational leadership was firstly introduced by Burns with thedefinition of transformational leadership as a process both the leaders and thefollowers promote each other to motivation, rationality, problem solving andmorality

Transformational leaders enhance the followers’ capability by creating newdemands and values so that they can grow their performance Moreover,transformational leaders often challenge others for changes, extraordinary worksand drive the organization effectively They have an important role in influencingthe organization changes; designing a very clear picture for the organization andshare the vision so that the employees can be inspired of it (Burns, 1978, as cited inGholamreza, Hasan, and Ali, 2009)

Transformational leaders always encourage the followers to think of newperspectives in solving problems; help the followers to try harder their capabilityand inspire them to focus on the organizational objectives They also influence the

followers to attempt higher results by providing new perspectives and higher efforts

in attaining the goals “The transformational leader asks followers to transcend theirown self-interests for the good of the group, organization, or society; to considertheir longer-term needs to develop themselves, rather than their needs of themoment; and to become more aware of what is really important Hence, followersare converted into leaders” (Bass, 1990, as cited in John, 2006)

Evidences from researchers show that transformational leaders focus on the task,value and vision (Bass, 1985, as cited in Gholamreza et al, 2009) Transformationalleaders treat each employee individually, provide them personal attention and tend

to manage through inspired motivation and individualized consideration (Burns et

al, as cited in Yueh-shian, n.d.)

2.5 FIVE DIMENSIONS OF TRANSFORMATIONAL LEADERSHIP

BEHAVIORS

2.5.1 Idealized influence (Attributes) (IIA): leaders instill pride and build trust 2.5.2 Idealized influence (Behaviors) (IIB): leaders emphasize collective sense of

mission, talk about values and beliefs

2.5.3 Inspirational motivation (IM): leaders communicate and express enthusiasm,

optimism, confidence, and emotional appeals

2.5.4 Intellectual stimulation (IS): leaders stimulate followers to view the world

from new perspectives; encourages problem solving, critical thinking and creativity

2.5.5 Individual consideration (IC): leaders develop, coach, and teach each

follower to grow individually by paying attention to individual needs, desires

and assigning projects

The five constructs are measured by MLQ form 5X (Bass & Avolio, 1997, as cited

in Ronald and Rebecca, 2008)

2.6 THE CONCEPT OF EMPLOYEE ENGAGEMENT

Numerous definitions of employee engagement can be referred to a condition inwhich the employee has an organization purpose and show their enthusiasm,effectiveness, effort, commitment, involvement, passion to the work Inengagement, employees tend to express themselves physically, cognitively andemotionally during their role performances Employee engagement also captures theextent to which employees are motivated to contribute to the organizational successand provide discretionary effort to accomplishing their tasks for the achievement oforganizational goals

According to Nitin (2005), employee engagement is the level of commitment andinvolvement that an employee has towards their organization and its value Anengaged employee can be aware of business context and works to improveperformance for the benefit of the organization Kahn (as cited in Sandeep, Mark,Chris, Emma, and Katie, 2008) defines “employee engagement is the harnessing oforganization members’ selves to their work roles.”In addition, engagement alsorelates to the degree of discretionary effort that the employees willingly apply intheir work; choose whether to contribute at minimum level of their performance or

to go beyond the minimum to offer outstanding effort (Beverly and John, 2008)

There are three components of employee engagement: cognitive engagement refers

to ‘thinking’, affective or emotional engagement refers to ‘feeling’, and behavioralengagement refers to ‘doing’ The cognitive aspect concerns the employees’ beliefabout the organization; their managers and working conditions The emotional oraffective aspect refers to how employees feel whether they have positive ornegative

attitudes And the physical or behavioral aspect implies the physical energies of theemployees to accomplish their roles.

2.7 THE EVOLUTION OF EMPLOYEE ENGAGEMENT

Wave 1 (1990-1999)

This wave begins with the concept of personal engagement by Kahn (as cited inMary, 2011) as “the harnessing of organizational members’ selves to their workroles; in engagement, people employ and express themselves physically,cognitively, and emotionally during role performance” Then Buckingham andCoffman (as cited in Mary) come up with the definition of an engaged employee if

he or she can answer yes to all 12 questions of Gallup questionnaire

Wave 2 (2000-2005)

This wave witnesses the emergence of many consultancy firms in measuringemployee engagement through the perceptions of work and the satisfaction with theorganization And Harter (as cited in Mary) defines “employee engagement as acombination of cognitive and emotional antecedent variables in the workplace Thisomits Kahn’s (1990) behavioral element represented by his physical engagementcomponent.”

Schaufeli and Bakker (as cited in Mary) influence the concept in reference to theorganization context and job engagement with dimensions: cognitive, emotional andphysical

Wave 3 (2006-2010)

In this period, Saks extended Kahn’s viewpoint in considering both job engagementand organization engagement And the CIPD (as cited in Mary) with the literaturesupport from some academics also identifies the three dimensions of employeeengagement: “emotional engagement (being very involved emotionally with one’swork; cognitive engagement (focusing very hard while at work); and physicalengagement (being willing to go the extra mile for your employer).”This wave alsodraws the interest of many researchers such as: Macey and Schneider, Kular, Shuckand Wollard, Attridge, Albrecht to contribute to the diversifications of the literaturereview of employee engagement

2.8 TWO DIMENSIONS OF AFFECTIVE EMPLOYEE ENGAGEMENT

Affective employee engagement comprises two components: affective commitmentand supervisory commitment

Affective engagement is a multi-dimensional construct focusing on the individuals’relationships with their roles, organizational commitment, job involvement and jobsatisfaction Researches from academicians and practitioners have showed a strongcorrelation between the work outcomes and the line manager, leadership andfollower thinking and behavior Therefore, affective engagement is measured by theemployee’s feelings of commitment to their immediate supervisor in particular andthe organization in general

According to Allen and Mayer (1990, as cited in Dilys, Sarah, and Sue, 2004),affective commitment is the most important form of commitment because itindicates the most potential benefits for the organizations Employees with highaffective commitment will go beyond their role and duty for the good of the

organization Moreover, affective engagement is a positive feeling about doing agood job (Kerstin, Catherine, Emma, Chris, and Mark, 2010).

Supervisory commitment engagement is also a multi-dimensional construct toattend to the relationships between the direct supervisor and the subordinates Theemployees tend to engage to the organization if they commit to their line manager.Researches from academicians and practitioners also provide positive correlationbetween the line manager and the followers

The construct of affective commitment is measured by Allen and Mayer’sorganizational commitment scale and the construct of supervisory commitment ismeasured by Becker’s job satisfaction (as cited in Jonnie, 2009)

2.9 THE RELATIONSHIP BETWEEN TRANSFORMATIONAL

LEADERSHIP BEHAVIORS AND EMPLOYEE ENGAGEMENT

According to Hai Nam and Sherif (2011), transformational leadership lies in theleaders’ ability to inspire trust, loyalty and admiration in followers It buildsrelationships, gives larger meaning to activities and enlists followers by focusing onintangible qualities such as vision, shared values, and ideas

Transformational leadership is strongly positively correlated with follower jobsatisfaction, follower motivation and organizational commitment (Jessica andHelena, 2011) In addition, transformational leadership behaviors are associatedmore with positive attitudes from employees; result in higher levels of individual,group, and organizational performance (Bass, 2003, as cited in Nichola, Matthew,Lew, Calum, and James, 2009); look for potential motives in followers, seek tosatisfy higher needs, and engage the full person of the follower (Burns, 1978, ascited in Priyanka and Venkat, 2000); predict higher follower OCB, employee

performance, satisfaction and perceived leader effectiveness (Bass & Avolio, 1990,

as cited in Caroline, 2007); and enhance job satisfaction, reduction of workpressures and increase on employees’ morale (Dahlen, 2002, as cited in Sulieman,Hussein, and Ayat, 2011)

Report from Lowe et al (as cited in Caroline, 2007) shows meta-analytical evidence

to support the findings that transformational leadership is effective, productive,innovative, and satisfying to followers Transformational leadership uses softinfluence tactics, such as inspirational appeals and ingratiation to motivatefollowers (Charbonneau, 2004, as cited in Caroline, 2007)

Individuals exhibiting transformational leadership are considered to be moreeffective leaders It is also true for higher and lower level leaders in public andprivate settings (Lowe et al, 1996, as cited in Sulieman et al, 2011) The ability ofthe transformational leaders has an important influence on individual outcome andperceptions of justice (Greenberg, 2003, as cited in Azman, Mohd, Hassan,Nurhana, and Karen, 2010); serves the function to engage followers into their workand generates task performance (Tsang-lang, Li-chu, Chih-wei, and Yi-li, 2011)

From the above-mentioned evidences, the transformational leadership behaviorsprovide clear links with engagement constructs Transformational leaders movefollowers beyond their self-interest for the great good of the organization bycreating a blame-free environment and building trust in leader to enable employeeengagement (Kahn, as cited in Jessica and Helena, 2011); to engage the followers’higher needs (Hunt, 1996, as cited in Robert and Beverly, 2000); to positivelycorrelate with how effective subordinates perceive leaders, how much effort theywill expend, how satisfied they are and how well subordinates perform as rated bythe leader (Hater and Bass, 1988, as cited in Cheryl, Delene, and Gert, 2003)

Idealized influence attributes (IIA)

Individual consideration (IC) H5b+

2.10 RESEARCH MODEL AND HYPOTHESES

Based on the literature review and prior research, I

propose: Research Model:

Figure 1: Proposed Research Model

H1: Idealized influence (attributes) is related positively to both affective

commitment and supervisory commitment

H2: Idealized influence (behaviors) is related positively to both affective

commitment and supervisory commitment

H3: Inspirational motivation is related positively to both affective commitment and

CHAPTER THREE: RESEARCH

METHODOLOGY

This chapter shows the methods studying the relationships between independentvariables and dependent variables It also outlines the research design, unit ofanalysis, the population, the sample, the sampling technique, the measurement, thecollection and administration of data, the technique of analyzing data The studywas intended to be carried out in Ho Chi Minh City and was designed for thequantitative study to collect the relevant information regard to transformationalleadership behaviors and employee engagement It is also considered as surveyresearch

3.1.2 Data collection and In-depth interview

Firstly, the interviews were conducted by asking the employees how theyunderstood the measurement scales Secondly, they received the questionnaire and

went into details of each item And finally, the researcher recorded the results forfurther in-depth interviews.

Based on the results, the measurement scales were modified into the questionnaire.After that, the second interviews were conducted by also asking the same questions

in the first interview The result this time showed clear evidence that theparticipants had understood the meaning and the Vietnamese translation of themeasurement scales Then the quantitative research was implemented for furtherexplorations

3.2 QUANTITATIVE RESEARCH

The purpose of the study is to explore the relationship between transformationalleadership behaviors and affective employee engagement by surveying theemployees The target population of the study included the employees in Ho ChiMinh City currently working in the industry of retailing and financial services

In summary, the combination of purposive and simple convenient samplingtechniques was applied to select samples It was to ensure the target groups withinthe population are adequately represented in the sample and to improve efficiency

by gaining greater control on the composition of the sample

The sample consisted of participants of the study surveyed in Ho Chi Minh City Icombined both paper survey distributing the questionnaires to the employees inCrescent Mall, in the University of HCMC Economics and online survey throughGoogle Docs

The study includes 26 variables in which 15 variables are independent and 11variables are dependent As a general term, the sample size should be greater than

100 and the minimum sample should obtain the ratio of 5 observations per variable

As such, the minimum sample size is equal to 130 at least (Hair, Black, Babin, andAnderson, 2010)

However, in order to increase the accuracy of the data for further analysis a sample

of 320 respondents was selected from the employees in Ho Chi Minh City currentlyworking in the industry of retailing and financial services

For paper survey, I distributed 130 questionnaires to the employees in CrescentMall and 115 questionnaires to the employees currently joining MBA, Financemajor at night time in the University of HCMC Economics whereas 104 employeesquestionnaires in Crescent Mall and 109 employees questionnaires in the University

of HCMC Economics were successfully completed and returned with a response rate of 20% and 5,2% respectively The total sample size of 213respondents including the employees in Crescent Mall and in the University ofHCMC Economics were used in this study amounting to a total non-response rate of13,1% from the beginning sample

non-Table 1: Location for paper survey, sample size and response rates

The questionnaires were distributed to the employees by handout and online survey

in October 2012 in which handout contributed to 213 samples and online surveycontributed to 107 samples

3.2.2 Data sources and type

In order to come up with the relevant data for the study, both primary and secondarydate sources were applied Primary data is the information that the researcher findsout by himself/herself regard to the specific topic and the advantage of this type ofdata collection is to help collect the information fit for the researcher’s purpose Theinformation resulting from this type is more consistent with the research questions,purpose and directly linked to the study

As the study is empirical in nature, primary data was collected from the employees

in Crescent Mall and in the University of HCMC Economics to answer thequestions So, the questionnaires were designed on Likert scale of measurementbasis to collect primary data and the variables were ranked to measure the degree oftheir strength, agreement or disagreement of the respondents

Secondary data is to serve the researcher to better understand and explain theresearch problem So it is necessary to review the existing data for what to beaccomplished in the study This saves time and effort for the researcher becausehe/she can discard the data that is not fit for the study and also results in theinformation that can only serve for the specific study The secondary data of thisstudy is also referred to many sources to get better insight on the research topic and

to establish the theoretical framework for the research; to design the sample frameand questionnaire for primary data It was also considered to validate and comparethe data with the questionnaire and existing literature, articles as well

3.2.3 Data gathering instruments

The quantitative methodology involving the questionnaire with 5-point Likert scalewas used as the measurement instrument The instruments included multifactorleadership questionnaire (MLQ) and employee engagement questionnaire wasemployed in the research to get the quantitative information on transformationalleadership behaviors and affective employee engagement respectively

3.2.3.1 Multifactor leadership questionnaire

Before selecting the Multifactor Leadership Questionnaire for the research, otherinstruments such as 360 degree leadership feedback, managerial grid, situationalleadership questionnaire were also considered as optional measurements ofleadership behaviors Since the subscales and items of these instruments do notfocus on the differentiation of the transformational leadership behaviors but to placeemphasis on identifying the behaviors appropriate for situational or task basis, thennone of them was suitable for the research

The Multifactor Leadership Questionnaire has been introduced and improved since

1985 and it was also developed through many versions of the questionnaire Bass &Avolio (1995) introduced the MLQ form 5X with nine subscales of leadershipbehaviors

Participants were asked to judge the extent to which they recognized thetransformational leadership behaviors of their manager measured by the MLQ TheMLQ form 5X is self-scoring and used 15 items to measure 5 subscales (3 items foreach) in the study The items using a 5-point Likert scale labeled as 1= stronglydisagree, 2= disagree, 3= neutral, 4= agree, 5= strongly agree High score showshigh effectiveness of transformational leadership behaviors of the manager

Examples of items from the MLQ form 5X questionnaire:

Idealized influence attributes (IIA): instills pride in me for being associated withhim/her

Idealized influence behaviors (IIB): talks about the most important values andbeliefs

Inspirational motivation (IM): talks optimistically about the future

Intellectual stimulation (IS): re-examines critical assumption to question whetherthey are appropriate

Individual consideration (IC): spend time teaching and coaching

3.2.3.2 2Affective employee engagement questionnaire

For this specific study the affective commitment and supervisory commitment wereselected as the measure of affective employee engagement Affective commitmentscale was employed from Meyer & Allen (1990, as cited in Jonnie, 2009) andSupervisory commitment scale was from Becker, Eveleth & Gilbert (1996, as cited

in Jonnie, 2009)

The affective employee engagement consists of two dimensions as affectivecommitment and supervisory commitment The selected questionnaire is also a self-scoring and the responses to each of 11 items (5 items for affective commitment and

6 items for supervisory commitment) are rated by a 5-point Likert scale labeled as1= strongly disagree, 2= disagree, 3= neutral, 4= agree, 5= strongly agree Highscore shows high employees’ engagement perception to the organization and lowscore implies low perception in the scale

Examples of items from the affective employee engagement questionnaire:

Affective commitment: I would be very happy to spend the rest of my career in thisorganization

Supervisory commitment: When I talk about my supervisor, I usually say “we”rather than “they”

3.2.4 Independent and dependent variables of the study

The variables in Multifactor Leadership Questionnaire (MLQ form 5X) wereconsidered as independent variables with the subscales inside In addition, twoseparate measures of affective employee engagement were employed as dependentvariables including affective commitment and supervisory commitment as follows

in the table 2

Table 2: Independent and Dependent variables

Independent variable measures

- Idealized influence attributes

- Idealized influence behaviors

- Inspirational motivation

- Intellectual stimulation

- Individual consideration

Dependent variable measures

Employee Engagement

Questionnaire

(Meyer & Allen, 1990;

Becker, Eveleth & Gilbert,

1996)

Affective Employee Engagement

- Affective commitment

- Supervisory commitment

3.2.5 Data analysis and presentation procedures

After the data was collected, the statistical techniques were employed to analyze theinformation as the quantitative research So, the survey data was processed byStatistical Package for the Social Sciences (SPSS); the relevant data was coded andthen transferred to SPSS for analysis and presentation

The analysis of data begins with reliability test for the scales through CronbachAlpha And in Cronbach Alpha’s reliability analysis, the closer it is to 1.0 the higherthe internal consistency reliability In addition, two-tailed Pearson correlationcoefficient analysis was carried out to investigate the relationship betweentransformational leadership behaviors and affective employee engagementdimensions

Then multiple regression analysis was also conducted to examine which among thefive independent variables is the most important in explaining affective employeeengagement In this part, the correlation coefficient R will indicate the strength ofrelationship between the variables and also provide how much of the variance in thedependent variables explain R Square is also provided to show the amount ofvariance in explaining the dependent variables, F statistic and the significance levelhelp interpret the results

In the research presentation, frequency table was to summarize the respondentsprofile of frequency and percentages whereas the descriptive statistics such as meanand standard deviations of employees’ answers to transformational leadershipbehaviors and employees commitment to the organization The details of thepresentation on variables with the interpretations will be discussed in the nextchapter

CHAPTER FOUR: RESULTS AND FINDINGS

The chapter presents, discusses the results of the study and also provides theassociation amongst transformational leadership behaviors and affective employeeengagement

The main purpose of the study is to examine the relationship amongst theindependent variables namely IIA, IIB, IC, IS, IM with the dependent variablesnamely affective commitment and supervisory commitment It targets to achieve theresearch objectives, to answer the research questions in the chapter one and toverify the hypotheses in the chapter two

The statistical method of Pearson correlation is to determine the existence of therelationships between the independent and dependent variables Regression analysis

is to examine which among the five levels of independent variables which one is themost important in explaining employee affective engagement Findings on thedemographics of the participants and the statistical analyzes are also presented tointerpret and understand the results

4.1 DEMOGRAPHIC CHARACTERISTICS OF THE PARTICIPANTS

There was a total sample of 320 full-time employees participating in this study fromthe industry of retailing and financial services in Ho Chi Minh City In the summary

of employees’ profile, male and female were equal in the percent by sharing 50%for each The majority’s age group was between 26 to 35 years (49.4%), followed

by those under 26 years old (46.9%)

Most of the employees have worked for their current organization under 3 years(60.3%), followed by 3 to 5 years (25.3%); worked under the current manager 2 to 3years (45.3%), followed by under 2 years (37.5%) as the minimum requirement was

that the employees had at least 3 years of working experience and at least 1 year ofworking under the current manager.

The majority of employees have worked in private organizations (55.3%) andfollowed by foreign-owned companies (44.7%); in financial services industry(53.4%) and in retail industry (46.6%) respectively From the total participants,most of the employees were single (76.3%), followed by 23.8% married; 80.6% ofthe employees had bachelor degree, followed by 16.3% for master degree

Table 3: Summary of Employees’ profile

Female

160 160

50 50

4.2 DESCRIPTIVE STATISTICS FOR TRANSFORMATIONAL

ENGAGEMENT

The descriptive statistics was used to examine the mean, standard deviation andother information that are not clear in the data It was also employed to determinethe employees’ perception to the transformational leadership behaviors andemployee engagement Table 4as below contained descriptive data for fivetransformational leadership subscales and two employee engagement scales Thedistribution of scores for the sample showed reasonable variance and normality insubsequent analyses

Table 4: Mean and Standard Deviations of Transformational Leadership

Behaviors and Affective Employee Engagement for employees’ responses

Each subscale of transformational leadership behaviors has 3 items

Subscale of affective commitment and supervisory commitment has 5 items and 6items respectively

4.2.1 Employees perception to Transformational leadership behaviors

The sample size of 320 for all variables showed that the purpose of the research was

to determine employees’ perception to the current organization’s transformationalleadership behaviors and their engagement to the organization The mean values foreach of transformational leadership behaviors’ subscales ranged from 3.17 to 3.64;individual consideration had the highest standard deviation 1.00, followed byinspirational motivation scored at 0.89

The overall scores of data for transformational subscales were fit for the ideal levelsfor effective leadership which suggests the mean of 3.0 or higher for idealizedinfluence attributes, idealized influence behaviors, inspirational motivation,intellectual stimulation, and individual consideration

4.2.2 Employees perception to their organizational engagement

In addition to the scores of transformational leadership behaviors, the mean andstandard deviations of the employee engagement to their organization also werepresented in the table 4 as indicated by the respondents The mean and standarddeviation scores for each of the affective employee engagement scales ranked byrespondents as affective commitment (AC) has 3.10 and 0.99, supervisorycommitment has 2.88 and 0.97 respectively

From the table, the respondents perceived their affective engagement with highermean of 3.10 whereas their supervisory engagement was at 2.88 The standard

deviation score of affective engagement was also higher than supervisoryengagement.

According to some previous researchers, they did not provide the benchmarks foraverage, required or ideal mean scores for affective engagement or supervisoryengagement but focused on identifying the relationship amongst the different types

of organizational commitment, the outcomes, the findings, and the level ofinfluence However, they also proposed the required ranking from affectivecommitment as the leading factor, then other kinds of commitment

The results of the study reflected the mean scores were consistent with the mentioned by showing that the affective commitment had the highest score,followed by the supervisory commitment This also indicated the employees had astrong affective commitment towards their organizations where they consideredthemselves as belonging to the organizations In addition, they also committed toengage with their manager and organization through the high mean score ofsupervisory commitment only after affective commitment

ENGAGEMENT

In the section, the relationship between transformational leadership behaviors andaffective employee engagement was explored by two-tailed Pearson correlationanalysis

It also provided correlation coefficients which indicated the strength and direction

of relationship; the p value also indicated the probability of the significance of therelationship The findings are presented below

Table 5: Pearson correlation matrix between transformational leadership behaviors and affective employee engagement dimensions

** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)