Analysing the impact of leadership styles and employee engagement on job satisfaction of salespeople in the speciality chemical industry PS Claassen 24785083 Mini-dissertation submitted in partial fulfilment of the requirements for the degree Master of Business Administration at the Potchefstroom Campus of the North- West University Supervisor: Prof CJ Botha October 2015 PREFACE AND ACKNOWLEDGEMENTS Firstly I must express my gratitude to our Lord and Saviour, Jesus Christ, for making this study possible. Without Him this work would not have realised. Thank you Lord!! Next I would like to express my sincere appreciation to the following people:  My wife, Marjórie, for her continuous support, love and understanding, and giving me the encouragement, time and space to develop myself and my career;  My study leader, Prof Christoff Botha, for all his support, guidance and inspiration;  Ms Christine Bronkhorst, information specialist from the Ferdinand Postma Library at the NWU Potchefstroom Campus for her information finding and research support;  Dr Erika Fourie and Ms Marelize Pretorius, statisticians from the Statistical Consultation Services at the NWU, for the compiling of the internet-based research questionnaire, statistical analysis of my data and support in the writing up thereof;  My MBA study group, Take 5! members, for their support and friendship;  Ms Antoinette Bisschoff, for the language, technical and typographic editing of this mini- dissertation. i ABSTRACT The study was performed to determine the impact of leadership styles and employee engagement on the job satisfaction of salespeople in the speciality chemical industry in South Africa. The normal working environment of the respondents in the identified organisation was utilized to conduct the study. The study involved a cross-sectional design at a single time point. Purposive target sampling as a form of non-probability sampling was used to ensure that a definite, systematic sampling method was followed. A questionnaire - specifically for the study - was designed by the researcher in order to find comprehensive information regarding the perceptions, opinions and understanding of the research variables form the salespeople in the identified organisation. A total of 190 questionnaires were electronically distributed to the identified respondents which formed part of the “Sales Stream” of the identified organisation by means of a group email. 82 questionnaires were electronically submitted and all 82 were usable (N=190; n=82), representing a response rate of 42.3%. The research data was analysed by means of descriptive statistics, exploratory factor analysis and correlation coefficients. The statistical results defined leadership style and employee engagement in terms of job satisfaction. Both transformational and transactional leadership is present at the identified organisation with respondents agreeing that laissez-faire leadership style is not being practised at the organisation. The results indicate that transformational leadership has a positive relation to job satisfaction. Transactional leadership also has a positive relationship with job satisfaction. The results clearly indicated that laissez-faire leadership style has a negative relationship with job satisfaction. Leadership styles do have a positive or negative relationship with job satisfaction and employee engagement will positively influence job satisfaction. As the study has shown that leadership styles and employee engagement do impact job satisfaction of employees it is important that the organisation strongly focus on these variables to ensure that their employees are satisfied with their jobs. The organisation also needs to properly equip leaders through leadership development programs to ensure leaders have the means to encourage salespeople with high levels of job satisfaction. Employee engagement is a term not clearly understood and the organisation needs to ensure that their salespeople ii understand what the term means. An engaged culture of employees needs to be promoted through awareness campaigns. Key Terms: leadership style, job satisfaction, employee engagement, transformational leadership style, transactional leadership style, laissez-faire leadership style iii TABLE OF CONTENTS PREFACE AND ACKNOWLEDGEMENTS ................................................................................ I ABSTRACT .............................................................................................................................. II CHAPTER 1: NATURE AND SCOPE OF THE STUDY ............................................................ 1 1.1 Introduction ....................................................................................................... 1 1.2 Background to the research area .................................................................... 1 1.3 Motivation of the study..................................................................................... 2 1.3.1 Contribution for the individual ............................................................................. 3 1.3.2 Contribution for the organisation ......................................................................... 3 1.3.3 Contribution for the organisational literature........................................................ 3 1.4 Problem statement and research question ..................................................... 3 1.4.1 Research questions ............................................................................................ 4 1.5 Research objectives ......................................................................................... 5 1.5.1 General objective ................................................................................................ 5 1.5.2 Specific objectives .............................................................................................. 5 1.5.3 Research Hypotheses ........................................................................................ 5 1.6 Research design/method ................................................................................. 6 1.6.1 Literature review ................................................................................................. 6 1.6.2 Empirical research: ............................................................................................. 7 1.6.2.1 Research participants ......................................................................................... 7 1.6.2.2 Research approach ............................................................................................ 8 1.6.2.3 Research procedure ........................................................................................... 8 1.6.2.4 Measuring instrument(s) ..................................................................................... 9 iv 1.6.2.5 Data analysis methods ..................................................................................... 10 1.7 Possible limitations of the study ................................................................... 11 1.8 Expected Benefits ........................................................................................... 11 1.9 Layout of chapters .......................................................................................... 12 1.10 Chapter summary ........................................................................................... 13 CHAPTER 2: LEADERSHIP STYLES, JOB SATISFACTION AND EMPLOYEE ENGAGEMENT ....................................................................................................................... 14 2.1 Introduction ..................................................................................................... 14 2.2 Operationalisation of the major concepts ..................................................... 14 2.2.1 Leadership ........................................................................................................ 14 2.2.2 Leadership style ............................................................................................... 14 2.2.2.1 Transformational leadership style ..................................................................... 14 2.2.2.2 Transactional leadership style........................................................................... 16 2.2.2.3 Laissez-faire leadership style ............................................................................ 18 2.2.3 Job satisfaction ................................................................................................. 19 2.2.4 Employee engagement ..................................................................................... 20 2.3 Theoretical framework.................................................................................... 21 2.4 Leadership ...................................................................................................... 21 2.5 Leadership styles ........................................................................................... 22 2.5.1 Transformational leadership style ..................................................................... 23 2.5.2 Transactional leadership style........................................................................... 28 2.5.3 Transformational versus transactional leadership ............................................. 31 2.5.4 Laissez-faire or passive/avoidance leadership style .......................................... 33 v 2.6 Job satisfaction .............................................................................................. 34 2.7 Employee engagement ................................................................................... 38 2.8 Chapter summary ........................................................................................... 41 CHAPTER 3: RESEARCH METHODOLOGY ......................................................................... 42 3.1 Introduction ..................................................................................................... 42 3.2 Research Approach ........................................................................................ 42 3.3 Research procedure ....................................................................................... 42 3.4 Ethical considerations.................................................................................... 44 3.5 Target population and sampling .................................................................... 44 3.5.1 Target Population ............................................................................................. 45 3.5.2 Sampling .......................................................................................................... 45 3.6 Time horizon ................................................................................................... 46 3.7 Measuring Instrument .................................................................................... 46 3.7.1 Demographic Information.................................................................................. 47 3.7.2 Leadership Styles ............................................................................................. 47 3.7.2.1 Transformational leadership ............................................................................. 47 3.7.2.2 Transactional leadership ................................................................................... 48 3.7.2.3 Passive/Avoidant .............................................................................................. 48 3.7.2.4 Open ended questions ...................................................................................... 48 3.7.3 Job satisfaction ................................................................................................. 48 3.7.4 Employee engagement ..................................................................................... 48 3.7.4.1 Open ended questions ...................................................................................... 49 3.8 Data analysis methods ................................................................................... 49 vi 3.9 Research objectives ....................................................................................... 50 3.10 Research hypotheses ..................................................................................... 50 3.11 Chapter summary ........................................................................................... 51 CHAPTER 4: RESULTS ......................................................................................................... 52 4.1 Introduction ..................................................................................................... 52 4.2 Demographic profile ....................................................................................... 52 4.2.1 Gender distribution ........................................................................................... 53 4.2.2 Age distribution ................................................................................................. 54 4.2.3 Race distribution ............................................................................................... 54 4.2.4 Highest qualification distribution ........................................................................ 55 4.2.5 Duration of employment distribution .................................................................. 56 4.2.6 Job grading distribution ..................................................................................... 57 4.3 Descriptive statistics ...................................................................................... 57 4.3.1 Leadership styles .............................................................................................. 58 4.3.2 Job satisfaction ................................................................................................. 60 4.3.1 Employee engagement ..................................................................................... 61 4.4 Exploratory Factor Analysis .......................................................................... 63 4.4.1 Leadership Styles ............................................................................................. 63 4.4.1.1 Factor 1: Transformational Leadership Style ..................................................... 64 4.4.1.2 Factor 2: Transactional leadership style ............................................................ 65 4.4.1.3 Factor 3: Laissez-faire or passive/avoidance leadership style ........................... 65 4.4.1.4 Total variance ................................................................................................... 66 4.4.1.5 Leadership styles summary .............................................................................. 67 vii 4.4.2 Job satisfaction ................................................................................................. 67 4.4.2.1 Factor 1: Intrinsic factor of job satisfaction ........................................................ 68 4.4.2.2 Factor 2: Extrinsic factor of job satisfaction ....................................................... 69 4.4.2.3 Total variance ................................................................................................... 69 4.4.2.4 Job satisfaction summary ................................................................................. 70 4.4.3 Employee engagement ..................................................................................... 70 4.4.3.1 Factor 1: Engage leadership ............................................................................. 72 4.4.3.2 Factor 2: Engage feeling ................................................................................... 72 4.4.3.3 Factor 3: Capacity to engage ............................................................................ 73 4.4.3.4 Factor 4: Reason to engage ............................................................................. 73 4.4.3.5 Cumulative variance ......................................................................................... 74 4.4.3.6 Employee engagement summary ..................................................................... 74 4.4.4 Reliability .......................................................................................................... 74 4.5 Correlation Analysis ....................................................................................... 76 4.6 Open-ended questions ................................................................................... 78 4.6.1 Leadership styles .............................................................................................. 78 4.6.1.1 Explain in your own words what you perceive as the ideal leadership style a manager must possess ..................................................................................... 79 4.6.1.2 Give general comments about your organisation’s leadership. ......................... 81 4.6.2 Employee engagement ..................................................................................... 83 4.6.2.1 What would be different if employees at your organisation were maximally engaged? ......................................................................................................... 83 4.6.2.2 Give your understanding of what employee engagement is. ............................. 84 4.6.2.3 Are your organisations leadership perceived to be engaged? ........................... 85 viii 4.7 Chapter summary ........................................................................................... 85 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS .................................................... 87 5.1 Introduction ..................................................................................................... 87 5.2 Conclusions .................................................................................................... 87 5.3 Hypothesis ...................................................................................................... 88 5.4 Limitations of the study ................................................................................. 89 5.5 Recommendations .......................................................................................... 90 5.6 Future research............................................................................................... 90 5.7 Chapter summary ........................................................................................... 91 LIST OF REFERENCE ............................................................................................................ 92 ANNEXURE 1: QUANTITATIVE RESEARCH QUESTIONS ............................................. 100 ANNEXURE 2: RESEARCH SURVEY QUESTIONNAIRE ................................................ 104 ANNEXURE 3: LANGUAGE EDITING CERTIFICATE ...................................................... 113 ix