The effects of leadership behaviors on employee satisfaction and loyalty in the hospitality industry

Employeeloyalty Asdefinedbymanyresearchers,theconceptofloyaltycanbeexpressedasa‘feeling’suchasidentificationwithidentificationwithBoroffandLewin,1997,attachmentLeckandSaunders,1992orcomm

TheEffectsofLeadership BehaviorsonEmployeeSatisfactionandLoyaltyintheHospitalit

yIndustryMaiNgocKhuon

factthatallvariablesshowedpositivecorrelationwithemployeeloyalty,onlyfivefactors,namelytaskorientedl e a d e r s h i p , relationsorientedleadership,changeorientedleadership,charismaticleadershipandautocraticl e a d e r s h i p hadsignificantinfluencesonemployeesatisfactionandloyalty.Recommendationswereprovidedforh o s p i t a l i t y c o m p a n i e s accordingly,w i t h a n e m

p h a s i s onh o w toi m p r o v e thefi v e s i g n i fi c a n t f a c t o r s , includingtaskorientedleadership,relationorientedleadership,changeorientedleadership,andcharismaticl e a d e r s h i p behaviorsinordertomaintainhighemployeeloyalty

Keywords:h o s p i t a l i t y i n d u s t r y , l e a d e r s h i p b e h a v i o r s , l e a d e r s h i p styles,e

mployeel o y a l t y , employeesatisfaction

1.Introduction

Humanresourcesareconsideredthemostimportantfactoraffectingorganizationalefficiencyandeffectiveness.Agoodplanwithoutahandfulteamofpersonnelstoexecuteisnodifferentfromuseless.Hence,

c o m p a n i e s nowadaysneedeffectiveleadersandemployeestoachieveoperationalandstrategicobjectivesasw e l l a s f o s t e r high-performingt e a m s A s S c h w a n d t

inorganizationsh a s r e c e i v e d moreinterestt h a n t h a t ofthel e a d e r ’ L e a d e r s h i p , accordingt o K u m a r a n d M e e n a k s h i (2009),is‘acomplex,multifacetedcapability,withmyriadnuancesandsubstleties’.However,justexcellentleaderaloneisnotenoughtobuildsubstainablesuccess.Companiesnowadaysareingreaterneedthane v e r fora s t r o n g s k i l l f u l workforcethatc a n h e l p c o

m p a n i e s d e t e r m i n e theirf u t u r e a c h i e v e m e n t Turkyilmazandcolleagues(2011)expressedthatitisimportantfororganizationstoachieveemployeejobsatisfaction,physicalandemotionalengagementwiththeirwork(BakkerandLeiter,2010;Agarwal,2014),loyaltyandcommitment(IbrahimandAlFalasi,2014)

Althought h e r e h a v e beena lotofr e s e a r c h e s devotingtol e a d e r s h i p b e h a v i o r s a n djobsatisfaction,employeeloyalty,fewofthemconcentrateinthehospitalityindustry.Hospitalityisoneofthefastestgrowings e c t o r s w i t h i n s e r v i c e i n d u s t r y I t c o n s i s t s ofd i ff e r e n t f u n c t i o n s ,

m o s t notablyi s hotels,lodging,accommodationa n d restaurants,e t c Hospitalityi s c h a r a c t e r i z

e d byi t s intangibility,inseparability,perishabilityandvariability.Inthisfield, firmscompetethroughintangibleproducts,suchasservicequalitya n d uniqueconcepts.Whenonenew play enters

theircreativestrategy,therefore,thisindustryisbecomingfiercerthanever.Thetotalrevenueofhospitalityandtourism

eh i g h e s t f o r e i g n c u r r e n c y incomei n Vietnam,a n d accommodations e c t o r c o n t r i b u t e s 7 0

% tothet o t a l r e v e n u e oftourismsector.Plus,thisindustryalonedirectlyandindirectlyattractsapproximately3billionpersonnelsannually(VietnamHotelAssociation),thus,contributinggreatlytotheeconomicdevelopmentofthecountry.H o w e v e r, hospitalityis well-

known fori t s highturnoverrate,withttheestimatedemployeeturnoverrateasmuchas300%annually(Milman,2001).Therefore,retainingkeyperformersisbecomingoneoftheprimaryconcernsoffirmsinthisindustry.Thisresearchaimstoprovideanempiricalanswertotheproblembymeasuringtheimpactofdifferentleadershipstylesonemployeejobsatisfactionandloyalty,basedonwhichresearcherwilldiscussandgiverelevantrecommendationtoimproveloyaltyofpersonnelsworkingi n hospitalityindustryinHoChiMinhCity

2.Literaturereview

2.1 Employeeloyalty

Asdefinedbymanyresearchers,theconceptofloyaltycanbeexpressedasa‘feeling’suchasidentificationwithidentificationwith(BoroffandLewin,1997),attachment(LeckandSaunders,1992)orcommitmentto(Johnsonetal.,2009;Yeeetal.,2009)theorganization.Itrepresentsastrongdesiretostaywithanorganization(Turkyilmazetal.,2011)

Employeeloyaltyisasubjectthathasbeenreceivingconsiderableinterestfromresearchersrecently.Ins u c h ever-

changing andcompetitive e nv ir onme nt , compa nies, morethanever, ne e d toachieveemployeeloyaltytowardsthecompany(IbrahimandAlFalasi,2014).Loyaltyisanextremelyimportantfactoraffectingorganizationalsuccess,asithasbeenempiricallyconfirmedbydifferentstudiesthathighemployeeloyaltyc a n maintainhighcustomerloyaltyaswellascorporateprofitability(Reichheld,1996).Themoreloyaltheemployeesare,themorewillingtheyaretoprovidehighereffortsandcontributiontothecompany,increasingprofitsandloweingturnoverratesandcosts(GuillonandCezanne,2014).AccordingtoChengandChew( 2 0 0 4 ) , leadershipb e h a v i o r s i s oneoftheninef a c t o r s w h o

s e p o s i t i v e i n fl u e n c e onemployeeloyaltyi s confirmedt h r o u g h theirs t u d i e s K l e i n m a n n( 2 0 0 4 ) statedthatloyaltyc a n bed i r e c t l y i m p r o v e d throughl e a d e r s h i p styles.Chen(2004)concludedthatemployeeswillbemoreloyaltotheorganizationiftheyaresatisfiedwith

theirjobsandtheirleader,viceversa, iftheyaredissatisfied,theyarelesscommittedandlookforotheropportunitiestoquit(Pepe,2010)

2.2 Employeesatisfaction

Employeej o bs a t i s f a c t i o n r e f e r s t o anempl oy ee ’s a t t i t ude orfe e li ngs a bo u t h i s orherjobordi ff e r e nt a s p e c t s ofthejob(Pool,1997).Itistheextendtowhichpeoplelikeordisliketheirjob(AllenandSpector,2002).Higherj o b satisfactioni s acknowledgedtoincreaseemployeemorale,jobperformance,p r o d u c t i v i t y a n d lowerabsenteenism( T ur k y i l ma z e t a l , 2 0 1 1 ) Employeeloyaltyc a n b

ep o s i t i v e l y influcedbysatisfaction(Abraham,2012) In fact, e mpir ic al evidencesfromprevious s t udi e s hav e demonstrateda s t r o n g positivec o r r e l a t i o n betweenthese

twofactors(Silvestro,2002),someevenclaimedthatjobsatisfactionisactuallytheantecedentofemployeeloyalty(Junetal.,2006;Changetal.,2010).Inthisresearch,employeesatisfactionbotha c t s asindependentvariableinfluencingloyaltyandmediatingfactoraffectingtoloyalty

Wu( 2 0 0 9 ) statedthatj o b satisfactionc a n beaffectedbytherelationshipb e t w e e n s u b o r d i

n a t e s a n d managers,workingenvironment,ordegreeoffulfillmentintheirwork.Amongdeterminants

ofemployeejobsatisfaction,l e a d e r s h i p behaviorsc a n bev i e w e d a s oneoftheimportantk e y

d r i v e r s ofemployeejob

ataskperfectly.Task-k T a s ataskperfectly.Task-k o r i e n t e d l e a d e r s a r e m o r e a d a p t i v e todifficultsituations(HigginsandEndler,1995),therefore,theycanadjustbetterandyieldhigherproductivity( C a u s e y a n d Dubow,1 9 9 3 ) Patchen(1963),Larson,Hunta n d Osborn( 1 9 7 4 ) confirmedtheeffectivenessoftaskorientedleadershiponperformance.BrownandDodd(1999)claimedthatcontingentr e w a r d leadershipbehaviorscanleadtohighersatisfactionwithsupervisorsandgreaterproductivity.

2.4 Relationsorientedleadership

Conversely,relationsorientedleadershipemphasizesonmaintainingharmoniousrelationshipwithfollowers,c r e a t i n g a f r i e n d l y a n d s u p p o r t i v e w o r k i n g e n v i r o n m e n t Sincet h e concentrationofr e l a t i o n s orientedl e a d e r s h i p i s f o l l o w e r s ’ w e l f a r e a n d i n t e r e s t s , l e a d e

r s oft h i s s t y l e m a i n l y u s e informalc o m m u n i c a t i o n methods(Yukl,1989),whichinturnfacilitatessubordinates’participationindecisionmakingprocess,misunderstandingavoidanceandfastermistakerecognition(Shamir,1995).Suchleadersalsoputalotofe ff o r t s intoencouraginga n d givingp r a i s

e s totheirsubordinates( L e w i n a n d L i p p i t t , 1938),hence,significantlyimprovejobsatisfaction(Houseetal.,1971)

2.5 Changeorientedleadership

ChangeorientedleadershipstylewasidentifiedbyEkvall(1988)inlate20thcentury.Thisbehaviormainlyc

o n c e r n s withtheaptitudetoadapttochanges.Changeorientedleader,accordingtoEkvallandArvonen( 1 9 9 4 ) , displaysfourcharacteristics,including ‘beinga promoterofchangeand growth,having acreativeattitude,beingarisktaker,andhavingvisionaryqualities’.Anotherprimarytheoriestofthisbehavior,Yulk,i n

2.6 Participativeleadership

Leadersofparticipativestyletendtoencourageandmotivatetheirsubordinatestotakepartinthedecisionm a k i n g processordiscussion.Theirfinaldecisionisbasedongroupmembers’ideasinsteadoftheirown(KoopmanandWierdsma,1998).Thisstyleofleadershipallowsgreaterautonomybycreatinginteractiveandinterdepentenvironmentwherefollowersarefreetosharetheiropinionswiththeleader.AccordingtoBoisota n d M c K e l v e y ( 2 0 1 0 ) , thisa d a p t i v e m a n a g e m e n t p r a c t i

c e s takeadvantageofopportunitiesanda v o i d negativityofchanges.Participativeleadershipalsoimprovesperformancethroughintrinsicmotivationandpsychologicalempowerment,makingemployeesfeelneededandvalued,therebyputtingmoreeffortsintocompletingthejob(Huang,2012;Huangetal.,2010)

2.7 Charismaticleadership

Charismaticleadersarethosewhohavehighcharismaticeffectsonfollowers,andfollowersarespirituallyinspirede n o u g h tooffertheirc o m m i t m e n t , loyaltya n d obediencetol e a d e r s Accordingt o Shamira n d c o l leagues(HouseandShamir,1993;Shamiretal.,1993)charismaticleadershipaffectsfollowers’motivationa t self-

conceptlevel.Subordinatesundercharismaticleadershiparemoreconfidentinthemselvesandwillingtoacceptnewchallenges.Houseclaimedthatcharismaticleadersdisplaycertaintraits,suchas‘rolemodeling,goalarticulation,highexpectations,confidentinfollowersandmotivearousalleaderbehaviors’.HowellandCostleyr e p o r t e d thatemployeesu n d e r charismaticl e a d e r s h i p h a v e highersatisfactiona n d c o

i m p r o p r i e t y a n d contributestotheo r g a n i z a t i o n a l success.Ethicalleadersareresponsiblefortheconsequencesoftheiractionsanddemonstrateempathyaswella s possessinghighertoleranceforstressandambiguity.Ethicalleadershipisimportantforthesolereasonthatemployeeswilltaketheleaderandleader’sactionsasrolemodeltofollow.Hence,iftheleadersareunethical,s u c h wrongbehavior isassumedto

&Roberts,2001).Ethicalleadershiphasbeenproventohavedirectpositiveimprovementonworkoutcome, jobinvolvementandcommitment ofl e a d e r s (KhuntiaandSuar,2004)

2.9 Autocraticleadership

Autocraticleadershipisdescribedasdominantandcanresultinsignificantnegativeimpactonemployees’m

o t i v a t i o n I t e m p h a s i z e s performancea n d l e a d e r ’ s a uthorityratherthanp e o p l e , hence,l e a d e r s decidep o l i c i e s , procedures,taskallocation,relationships,rewardandpunishment(VanVugtetal.2004)withouttakingi n t o a c c o u nt s u bo r d i n a t e s ’ s u g g e s t i o n s ( J u n g

e t a l , 2 0 1 4 ) Autocraticl e a de r s assumet h a t p e o p l e ’ s natureislazy,irresponsibleandunreliable,assuch,theemployeeswouldcausejobfuctionstobeunfinisheda n d disruptedif the leadersareleftuninvolved

Likert(1961)confirmedthatautocraticleadershipstyleusestopdownwardscommunication,whereauthorityandinstructioncomefromleaders,teamworkisnonexistenta n d interactionislimited.Autocraticleadersrelymostlyonauthority,control,manipulationandhardworktocompletetheirjob(Punietal.,2016).Autocraticstyleisnowtheleastpopularamongleadershipbehaviors,probablyduetofarilylowlevelsofjobsatisfactionofemployeesworkingunderthisstyle(Kerfoot,2013)

2.10 Modelhypotheses

Inordertoobtainalltheobjectivesandfurtheranalyses,thisstudyhypothesizedthat:

H1:T a s k oriented,relationoriented,changeoriented,charismatic,participative,e t h i c a l a n d autocraticl e a d e r s h i p directlyaffectemployeejobsatisfaction

H2:Taskoriented,relationoriented,changeoriented,charismatic,participative,ethical,autocrati

cl e a d e r s h i p , andjobsatisfactiondirectlyaffectemployeeloyalty

H3:Theeffectsoftaskoriented,relationoriented,changeoriented,charismatic,participative,ethical,andautocraticleadershiponemployeeloyaltyaremediatedbyemployeejobsatisfaction

3.Methodology

lineemployeeswhoareworkinginluxuryhotelsandrestaurantsinHoChiMinhcitytocollectdatawithclearguidanceforthemtoanswercorrectly.ThelistoffourandfivestarshotelwasbebasedontheapprovalofVietnamTourismMinistry.Inthisresearch,questionnairewasbeusedtocollectthestatisticsdata.Themainpurposeofthesurveywasto

findouttherelationshipbetweenleadershipandemployeeloyaltythroughthemediation

ofemployeesatisfaction.Thereweretwopartsinthequestionnaire.The

firstpart’squestionswasmainlyfortestingthehypothesesortheinfluenceofindependentvariablesondependentvariables.R e s p o n d e n t wereaskedtogive theiropinionbyfollowingthe5-pointLikertScalefrom1-StronglyDisagreeto5-

StronglyAgree.Thesecondpartfocusedonpersonalinformationofrespondentstohaveaclearerpictureofthesamplingpool’sdemographics

EFAwasappliedforbothgroupsofdependentandindependentvariables.KMOwasgreaterthan0.6and

B a r l e t t ’ s T e s t e q u a l e d p = 0 0 0 Thus,thisf a c t o r a n a l y s i s w a s a c c e p t a b l e C r o n b a c

h ’ s Alphaw a s u s e d t o m e a s u r e thereliability,orinternalconsistency,ofthevariables.Factor1hadCronbach’sAlphagreaterthan

.7,provingitsreliability,factor2hasCronbach’sAlphawithin.6and.69,indicatingthatthisvariablewasalsoacceptable

54.4%forthedependentvariablesand67.88%forindependentvariables,bothdeemedsatisfactoryfortherequirementofbeinggreaterthan50%

4.Researchfindings

4.1 ProfileofParticipantsintheResearch

Table3:Demographicsofparticipants

Frequency(N) Valid(%)

Female

1 0 years,a n d only0 6 % h a v e beenwitht h e samep l a c e formoret h a n 1 0 years.T he commoneducationallevelofthispopulationwerecollege(28.7%),university(28.4%)andvocationaltraining(23.3

%)graduates.Onlyasmallpercentage ofparticipantsgraduated fromhighschool (19.3%)orpostuniversity( 0 3 % ) Thedemographicssuggestedthatthesamplingpopulationisyoungandwell-educated

t e d w i t h employeel o y a l t y a n d t h e mediatingfactoremployeesatisfaction.Changeleadershipandtaskorientedleadershiphad thestrongestc o r r e l a t i o n withEMLOY,implyingthatthemoretaskandchangeorientedleadershiposused,themoreloyalemployeeswillbe.Furthermore,relationorientedand charismaticleadershipdisplayedstrong bondwithE M S A T I S , implyingthatanincreaseintheapplicationfrequencyofthesetwofactorswillleadtoariseinsatisfaction,inturnincreaseemployeeloyalty.

ETHILEAD 031 551 582 02

5

Task Oriented Leadership

.270 119

.225 Change Oriented Leadership

Variables UnstandardizedCoefficient

- Modelsummary:R 2 =.304

Table6 examinedw he t h e r theindependentv a r i a b l e s a n d mediatingv a r i a b l e d i r e c t l y a ff e

c t employeesatisfactionornot.Withp<.05,threevariablesAUTOLEAD,TASOLEADandCHANLEADshowedgoodc o r r e l a t i o n withEMLOY,correspondingstandardizedcoefficientswere.080,.270and.225respectively.Taskorientedl e a d e r s h i p w a s t h e m o s t s i g n i fi c a n t f a c t o r interpretinge

m p l o y e e l o y a l t y Otherf a c t o r s , n a m e l y E T H I L E A D , PARTLEAD,RELALEADand C H ARIL

E AD were e x c l u de d due tohi gh

p-values.M e di a t i ng f a c t o r EMSATISanddependentvariableEMLOYshowstrongpositiverelationshipwithβ=.135,p<.05.Themoresatisfiedtheemployeesfeel,themoreloyaltheyaretothecompany.R-

squareequaled.304,implyingthatthesevenindependentvariablesandmediatingvariableEMSATISexplained30.4%ofthevarianceinemployeeloyalty

5.3 PathDiagramofEmployeeLo y alty

Fromtheanalysisabove,apathdiagramtogeneralizedthefindingsofeffectsofleadershipbehavioronemployeeloyaltyisestablishedasfollows.Theindirecteffectofanindependentvariableonanothe

rd e p e n d e n t throughthemediationofathirdvariable wasthetotalofi n d e p e n d e n t variable’seffectonthe interveningvariableandinterveningvariable’s

effectonthedependentvariable(Preacher

andHayes,2008).A s c a n beobserved,E M S A T I S w a s theinterveningv a r i a b l e standingbetweenthel e a d e r s h i p stylesa n d EMLOY.Threevariableswhoseeffectswere significantonEMSATIS,includingTASOLEAD,RELALEAD,C H A R L E A D a l s o h a d i n d i r e c t e ff e c t s o n E M L O Y A U T

O L E A D a n d C H A N L E A D o n l y d i s p l a y e d directsignificanceonEMLOY