HR researchers and employees in general have long known that effective leaders tailor their approach to the needs of specific employees and situations and use different styles when leading others. For example, one style applied with a new Gen Y employee who needs structure may not be the right approach to use with a Baby Boomer who is more tenured and experienced. We also know that trying to use a standard approach, or a “one size fits all” style with employees, can negatively influence the commitment and engagement of employees (Hersey and Blanchard, 1969)1. Workforce engagement is critical to an organization’s overall wellbeing and repeatedly has been shown to strongly influence organizational and business outcomes.
Gallagher defines employee engagement as “a pronounced state of enthusiasm characterized by effort, pride, and passion which fosters a mutually committed relationship between employees and organizations resulting in the enduring pursuit of organizational and personal goals.” An organization can directly affect a variety of key workplace experiences that impact and promote employee engagement. These factors often include such areas as career growth, teamwork, leadership, quality, and safety, among others.
It’s no surprise that higher level leaders in an organization often exhibit the most engagement. Such engagement becomes apparent when organizations track and quantify markers of engagement by job level throughout an organization. Our research also indicates that in many cases a leader’s engagement impacts that of the teams he or she leads. However, leaders use different styles in which they lead and manage through others.
Question 1: What role does leadership style play in the engagement of work groups?
Gallagher’s Human Resource and Compensation Consulting Practice recently conducted leadership and engagement research with healthcare clients. One of these clients has experienced a significant amount of structural and personnel change over the past few years. We found strong evidence with this client that when leaders balance their style to the needs of the individual or team appropriately, their teams become significantly more engaged in their work.
As a way to discuss leadership, we refer to transactional and transformational leadership styles as different means of leading others, generating different outcomes (Bass, 1985)2.
Let’s first define what we mean by transformational and transactional leadership styles.
Transformational leaders offer a purpose that goes beyond short-term goals and focus on higher order intrinsic needs. Transactional leaders, in contrast, focus on the proper exchange of resources. If transformational leadership results in followers identifying with the needs of the leader, the transactional leader gives employees something they want in exchange for something the leader wants.
Leaders who use a Transformational style often:
- Demonstrate charisma
- Sacrifice self-interest for the good of the team or organization
- Inspire others to commit to the organization
- Stimulate the creativity and thinking of others
- Provide a climate of support and consideration to others
Leaders who use a Transactional style often:
- Define clear expectations of others
- Provide rewards for those who meet expectations
- Provide rewards and/or assistance for those who are perceived as putting in effort
We augmented our client’s engagement survey with items that asked employees to evaluate their leaders on Transactional versus Transformational attributes.
The person I report to clearly defines how good work is rewarded.
The person I report to encourages me to solve problems in new ways.
I understand what I need to do to be successful in my job.
The person I report to goes beyond self-interest for the good of the team.
Clear goals are set for our department.
The person I report to takes an active interest in my growth and development.
When we looked at the engagement levels of teams across this hospital system, we were able to draw some interesting conclusions. Leaders whose employees perceived them as using a more transformational style led groups displaying higher engagement scores than those groups who saw their leaders as more transactional. However, leaders seen as “balanced” had significantly higher engaged groups than either of the two other groups. In other words, those leaders who knew how to adapt their transactional and transformational style of leadership based upon the situation were seen by their teams as leading more effectively.
Question 2: Can leaders be “coached” to change and improve their style when leading others?
Gallagher engaged with this client to create and implement a leadership coaching program to build the coaching skills of leaders. Skills and competencies targeted to these leaders included:
- Ethics and Integrity
- Establishing Intimacy and Trust
- Coaching Presence
- Active Listening
- Powerful Questioning
- Direct Communication
- Creating Awareness
- Designing Action
- Planning and Goal Setting
- Managing Accountability
Leaders initially participated in this program based on the lower engagement scores of their teams in 2018. We looked at change in the engagement scores of teams whose leaders received coaching, as well as changes in team engagement scores of those leaders who had not received coaching. We also looked at the impact of leaders’ perceived style of leadership (transactional, transformational, or balanced) on these engagement scores.
In addition to looking at improvements over time, we looked at how closely these scores correlated to our healthcare engagement database. Because these leaders participated initially due to their low scores and opportunity for coaching, we fully expected the scores of the coached leaders to be low relative to the norm. Additionally, this organization was undergoing a tremendous amount of change, and as such, expected a system-wide decline in engagement scores.
In looking only at how leadership style might affect team engagement, we found that engagement levels of teams led by transactional leaders dropped an average of 0.15 of a scale point from the previous year. While team engagement levels were comparatively better for those led by transformational leaders, engagement scores still dropped compared to the previous year.
Work units whose leaders underwent coaching increased on average +0.06 of a point in their overall team engagement score; leaders who did not receive coaching saw a slight decline in their team’s engagement scores.
However, those leaders who used a balanced leadership approach and received coaching increased on average +0.36 of a point. This is a substantial increase, significant beyond chance. It’s clear that those leaders who displayed a balanced approach were able to lead and adapt through organizational changes much more effectively than groups led by leaders who used either style of transactional or transformational style, but not both. Engagement of the other two groups actually declined slightly, even if their leaders received coaching.
Summary and Conclusion
Organizations can leverage tremendous opportunities to equip their leaders better to handle change and to lead their teams more effectively. Transactional leaders always will have opportunities to adapt their style and become more empowering, inspirational and supportive. Transformational leaders will need to choose moments when their team members need more direction and a clearer understanding of expectations, rewards, and consequences. Leaders may not always recognize when these moments occur or how to shift their style to respond to opportunities. This is why fundamental leadership development principles and solid executive coaching can aid these leaders in truly becoming more “balanced.”
We at Gallagher believe that every organization should be equipped with the means to measure the engagement of their workforce as well to use the tools and programs to enhance the talent and capability of their leaders. The right measurement and leadership will help to improve the organization’s overall wellbeing.
For more information or to discuss your questions, call Gallagher, 816-795-1947, or visit GallagherHRCC.com.
1 Hersey, P. and Blanchard, K. H. (1977). Management of Organizational Behavior 3rd Edition– Utilizing Human Resources. New Jersey/Prentice Hall.
2 Bass, B. M. (1985). Leadership and performance beyond expectations. New York: Free Press
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Contact any of the authors with your questions or feedback:
- Mitchell Gold, Ph.D., Managing Director, Employee Engagement
- Kathryn Beabout, M.S., Research Director, Employee Engagement
- Tom Romeo, M.S., Research Manager, Employee Engagement
- Terry R. Hobbs, Managing Director, Employee Engagement