Professional Documents
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SURNAME : TSHAKA
STUDENT NO : 213042541
LECTURER : DR JOWAH
DECLARATION:
“I hereby declare that the attached essay/assignment/project is my own work that I have
not copied the whole or any part from any source whatsoever, and where I have copied,
verbatim or otherwise, I have acknowledged the source so utilized. I further understand
that if I’m suspected of plagiarism or any other form of cheating, disciplinary
proceedings will be instituted against me. This in turn may result in me being expelled
from this institution.
……………………………………………………………..
Title: Evaluating the impact of transformational leadership on employee performance at
a construction site
INTRODUCTION
According to Low (2010:20-27) the application of transformational leadership to
organizational settings over two decades ago, numerous studies have shown that
followers of transformational leaders display above average performance.
Transformational leadership is an inspiring leader beyond their personal interest and
able to bring the deep impact to their follower (Walumbwa, Avolio & Zhu 2008:793-825)
but Ben (2016:1119-1133) opines that transformational leader is often use legitimate
tactics and results on higher identification level and internalization, having better
performance of work and develop their follower. According to Ampofo & Dartey-Baah,
(2016:328-345) the impact of leadership on employee performance is not mediated by
OCB banks. Wong, Cheung, Yiu & Pang, (2008: 821–829) confirmed in an empirical
study that the follower performance is improved by transformational leadership by
stimulating organizational citizenship behavior. More empirical research is needed to
test the mediating role of organizational behavior in relationship between
transformational leadership and employee performance. Similar studies pertaining the
construction industry are rare. Therefore this research would improve the understanding
of functions of transformational leadership in construction sites by evaluating the impact
of transformational leadership on employee through empirical study. Employee
engagement has been separately linked to both transformational leadership, and job
performance (Han, Seo &Yoon 2016:130-149). However, despite these findings that
engaged employees perform well and that transformational leaders bring engaged
employees, no research has considered the possibility that employee engagement
mediates the relationship between transformational leadership and employee
performance, thus offering an explanation for how transformational leaders elicit
performance.
Background Study
Most of these theories seek to reveal the good traits and qualities for effective
leadership, there is no doubt that over the last decades there are many variations in
these theories (Khan, Bukhari and Channar, 2016:25-35). According to Afshan, Sobia,
Kamran and Nasir (2012: 646-661) to classify effective leadership styles (i.e. socially
oriented, target oriented, democratic or autocratic, etc.) and related them with different
conditions of organizational outcomes. Later, researchers4 however, shifted to focus on
the subordinates’ view, which proposed three main kinds of leadership.
Although Burns developed the idea or concept that a leader has a transactional or
transformational leadership profile (Palrecha, Spangler and Yammarino, 2012:5) later
Bass suggested that leaders possess both transformational and transactional
Leadership identities and conceptualized this taxonomy as the full range of the
leadership model (Ampofo and Dartey-Baah 2016:328-345). Ben (2016:1119-1133)
distinguishes between leaders as transformational and transactional based on their
superior profile disputed that transformational leadership augments the effect of
transactional leadership, hence leaders with transformational leadership characteristics
are more efficient as compared to leaders with just transactional leadership profiles.
Current theory of leadership focuses on transformational leadership and transactional
leadership as core concepts in the field. Transformational leadership is one of the most
widely researched forms of leadership (Kelloway 2012: 55). Furthermore, recent
researches consistently validate the advantages of transformational leadership style
over the more traditional ones, such as transactional leadership style, in terms of
achieving organizational goals (Wang 2011:28-32). The next sub-section will present
detailed review about transformational leadership and current empirical findings, and
how transformational leadership is measured, since it forms the main focus of this study.
Transformational leadership
From the above review it can be seen that transformational leadership has been tested
and proven to be useful in various sectors and fields globally. There seem to be
however little research specifically for transformational leadership and employee
performance in Construction industry, more specifically in Germany and Sweden. Since
Construction industry are the backbone in almost all economies Schiemann 2009, cited
by Franco & Matos, 2015(52-57), this then calls for further research in this area (i.e.
Construction industry) to fill in the knowledge gab or answer questions such as: what is
the impact of transformational leadership on employees in Construction industry? Or
what is the impact of transformations leadership on employees’ job satisfaction in
Construction industry especially in organizations? These questions are yet to be
answered, as there still remains missing knowledge in regard to the above-mentioned
countries,
There are research works from other parts of the world which came a little bit closer in
some answering the above questions. For example, Manaf and Latif 2014:300:305
investigated the impact of transformational leadership and job performance of
Construction industry technical personnel in Malaysia. Their results indicated that
adaptability of cultural trait mediates between the leadership style and employees’ job
performance in the Construction industry. Furthermore, Asiimwe, Kavoo-Linge, &
Sikalieh (2016-111) studied the relationship between transformational leadership style
and Construction industry growth in the top 100 Construction industry in Kenya. Their
findings revealed that transformational leadership style had a positive and significant
relationship with Construction industry growth. The correlation results also showed a
positive correlation between transformational leadership and Construction industry
growth. Based on the study findings, it was recommended that construction industry
Leaders should adopt a transformational leadership style in order to facilitate consensus
and growth of employees and the organisation at large.
Leadership Practices Inventory Further, another well used measure for transformational
leadership is the Leadership Practices Inventory (LPI); a questionnaire of 30 items
along Likert type scales. It measures the Five practices of exemplary leadership (Model
the Way, Inspire a Shared Vision, Challenge the Process, Enable Others to Act and
Encourage the Heart) and is seen as a robust method with high validity and reliability
due to its large respondent database (Posner, 2016:117-120). Chosen Measuring
Approach The method chosen for this study is the Multifactor Leadership Questionnaire,
because it seems to be the most commonly used from literature.
Also, it is used across the world, which shows its robustness regarding differences in
cultures (Powell Posner, 2016:500:515). Further, the items are divided into the same
characteristics that transformational leadership is divided into in its definition, which
makes a clear connection between questions and measured characteristics.
Employees Performance
From a journal search it is seen that research is currently done on how employee
performance appraisal should be done to increase employee performance and heighten
organizational performance (Rusu, 2016:667:669), and how pay-for-performance (an
important HR-practice) affects employee performance (Wang et al., 2016:670-672).
Here, pay-for-performance is suggested to increase employee performance, but only to
a certain degree, where after a certain point secondary negative effects are seen (ibid,
2016:210-219).
It is estimated that Construction industry make up 99% of all firms in the EU (European
Commission, (2017:19) and also for the whole of Europe, where it offers 67% of the
total employment. According to reports Statistisches Bundesam (2017:33-37)
Germany's economy is driven by the many Construction industry which generate a
sizable revenue and employs a high number of people in the country (i.e. around 61%
of the persons employed worked in Construction industry. The same can be said about
Sweden, where Construction industry are wide spread. Ekonomifakta (2017: 330)
indicated that 99.9% of the organisations in Sweden are made up of Construction
industry, however mid-sized organisations only make up for 0.5% which implies that
small organisations make up the largest part in this sector.
Mihai (2016:15-20) reported in their work that in Construction industry, as compared to
larger enterprises, workers feel the influence of the leadership style of the managers
much more direct and personally. This is as a result of the small number of hierarchical
levels and the constant interaction between the manager and the employees (ibid,
2016:89-95). Although there are many research in the field of leadership, very little work
has been done on Construction industry and especially in Germany and Sweden.
Franco & Matos (2015:36:39) findings in their work attested to the central role of
leadership in Construction Industry management. They demonstrated that different
levels of leadership results are identified in the Construction industry selected, i.e. their
results gave additional support to the argument that leadership plays an important role
in management in Construction industry. Further, other few research works found
(Lindgren, 2012:200-210) also focus on studies to identify leadership styles in
Construction industry, which deviates or does not answer the question on how these
leadership styles impacts employee performances in Construction industry.
It must be also noted that leadership in Construction industry are linked to family
businesses. For these reason, Construction industry owner-managers play an essential
role in encouraging and supporting the initiatives of individual employees and in
enhancing work procedures for the advantage of the organization (Moriano et al. 2011).
Further, there is a lot of research about entrepreneurship and innovation Construction
industry. Most entrepreneurial initiatives start as Construction industry instead as big
firms and entrepreneurial small companies are known to be the backbone of the
economic system, which guarantees an important part of employment and innovation
cited by Popescu ( 2014:5-7). As pointed out by GEDI8, without enterprises and
entrepreneurs, there would be little innovation, little productivity growth, and few new
jobs. GEDI is known among the leaders in this fields of research and offers an online
databank to compare information among various countries. Since this thesis is more
focused on transformational leadership and employee performance, it will not dive in to
the area of entrepreneurs and innovation in Construction industry.
Problem Statement
Leader behavior is shown to affect employee behavior (Kehoe & Wright, 2013:700-707).
This study aims to evaluate how transformational leadership in Construction industry
affect employee perceived performance, that is, how employees perceive their own
performance or capability of it. It is the hope of the researcher that this research will
succeed in evaluating the researchable knowledge regarding the topic in focus.
From the literature search it can be said that the existing research worldwide, regarding
Construction industry, concern how profitability and market position can be increased
(Rigas & Nawar, 2016:15-22). Existing research regarding leadership and performance,
from the literature search, mainly regards leadership, organizational performance,
innovation and ethical culture, and mainly focuses on large organizations. There is no
clear research found regarding how organizational leadership correlates with employee
self-perceived performance. Also, the literature search revealed little research in regard
to the relationship between leadership and employee performance in Construction
industry. This thesis aims to evaluate impact regarding transformation leadership style
and employee performance, since there is a clear gap in the field.
In view of the above, the problem for this thesis work is to establish the transformational
leadership characteristics which are commonly shown in Construction industry, and to
determine to which extent it impacts on performance as a whole.
Research Methodology
This part of the thesis work presents the research methodology applied in this work, i.e.
the conceptual model, the respective positive hypotheses, research design, etc. which
are used. Further, the approach used for the population and sample size, survey design
and data collection will be described in detail.
There are some researches which have shown positive relation between
transformational leadership and performance. For example, Cailliers (2014:41-50)
research revealed that transformational leadership had a direct positive effect on
employee evaluations and also positive relationship between transformational
leadership and performance. In another research by Bacha (2013:77:79), the results of
the study showed that there is a partial relationship between transformational leadership
and follower task performance. Over the years, many researches have also proved that
transformational leadership has a positive impact on performance. For this reason, this
work will evaluate the hypothesis:
A total population size12 of 5,000 was set as a target. This was derived based on the
Construction industry and people contacted through social media as can be seen in
Table 5 below. In must be noted that the Construction industry contacted were assumed
having each a total of 50 workforce. Also, the assumption was made that each
organization contacted, only 25% survey response rate can be expected
Data Collection
Due to limited time at the disposal of the authors, an online survey was deemed
appropriate although it is reported to have low response rate and considered sometimes
as spam Hoonakker & Carayon, (2009:226). In spite of these negative attributes, online
survey is known to have fast response time and it is easy to distribute to respondents as
compared with paper based survey (Saunders, 2011:450). The authors administered the
surveys personally through making contacts (i.e. through emails and phone calls) with
managers and human resources departments of selected construction Companies
around the world, and requesting for permission for their employees to take part in the
online survey. The contacted companies for this study were known companies in
Western Cape and all other companies with each having a workforce of less than 250
people, which is the standard definition of the total employees of a construction.
The survey questions were hosted online using Google forms, which presents a state of
the art platform to perform and administer an online survey. The survey was made
available in three languages (i.e. English, Afrikaans and German), to make it easier for
participants to answer the questions in their preferred language. Furthermore, this
research took advantage of the revolution of the social media and distributed our survey
link on social media networks for professionals (e.g. Linkedin), so as to reach out to
many participants. In all, participants were given nearly a week to answer the listed
questions online, which last between 5 - 10 minutes.
Data Analysis
This part of the work presents the results and analysis of the survey data. It starts with
the participant demographics which shows the background of respondents. This will
then be followed by analysis of data using principal component analysis, a check for
Cronbach’s alpha, multiple linear regression and correlation analysis. Finally, the
hypotheses defined derived from the multiple linear regression will be checked once
again through z-test
Gender
Female 41%
Male 59%
Country
South Africa 60%
Germany 13%
Sweden 10%
Other 13%
Industry
Production and 23%
Manufacturing
Construction 12%
Education/Research 3
Consulting services 17%
Engineering 13%
IT/Technology 10%
Multiple Linear Regression Analysis- In order to check the hypotheses stated in this
work, which based on the conceptual model, multiple linear regression and correlation
analysis were carried out on our data set. This was then followed by the hypotheses
testing and its validation using another method.
Table below shows the mean and standard deviation calculated for each component in
transformational leadership. It can be seen that inspirational motivation is graded with
the highest points by the respondents, suggesting that this is the component that their
managers exhibit the most.
Table: Observed mean and standard deviation values for the for types of TL
Component of
Mean SD
TL
Inspirational
3.14 0.86
motivation
Intellectual
2.95 0.80
stimulation
Conclusion
In this work, the impact of transformational leadership on employee performance in
Construction industry was studied. The final results of most of the tested hypotheses
were confirmed and comparable to literature and other research results. However, the
study failed to establish a link in two of the defined hypotheses. Furthermore, the survey
results showed inspirational motivation type of leadership style as being dominant in the
researched Construction industry.
These results are very important to fill knowledge in the leadership in Construction
industry research area and open the door for further research on these topics. There
authors of this work were limited in numerous ways during this research. In the first
place, there were a limited number of respondents to the online survey, although great
effort was put in place in contacting several Construction industries. The low turnout can
be attributed to the short duration to collect data, which lead to sample size with a large
margin of error based on our defined population size.
In order to keep the survey short to maximize response, a selection of items from scales
had to be done. If all complete scales would have been used, the survey would have
included 50 questions, which could impact response rate. For employee performance,
Cronbach’s alpha dropped to under 0.7 which would have been a good thumb rule to
pass? However, item numbers are also low, which in turn can give lower values of
Cronbach’s alpha.
Further, this inability to measure the desired variables is also shown in the factor
analysis, where the correlation table groups items into two factors which do not
correspond to the two variables chosen for the measurements. This could have been
affected by the choice to pick out only a few questions per scale.
The hypothesis for this study was set up with a positive correlation in mind. Therefore, it
must be assumed that some type of confirmation may have crept in to the results, since
the studies were specifically looking for these. Possibly, this could explain why the
regression confirmed hypothesis H4 and the z-test rejected it.
It must be state also that this study only looked at separate relations between the
variables, and how the two independent variables together affected each other.
In summary, it could be said that this study acts as a pilot study regarding variables
affecting performance in small and medium sized organizations. The results show a
tendency towards similar results as research for larger organizations and can in this
way be considered gap-filling, however more in-depth study is needed.
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