The Influence of Leadership Style on Employee Engagement

Abstract

Organisations and leaders seek to have engaged employees and spend considerable time and
resources to improve engagement which has enormous influence on employee productivity and
organisational performance. Although there have been previous studies in Malaysia, little research
has been done on leadership’s influence on employee engagement across industries.
Transformational and transactional leadership is stated to be positively correlated with employee
motivation and employee satisfaction, and indirectly employee engagement. This study examines
the leadership style practised by leaders in five organisations in Malaysia, its influence on
employee motivation and satisfaction which lead to an increase or decrease in employee
engagement. Data on leadership style, employee motivation, satisfaction and engagement, and
organisational culture was gathered through a web based questionnaire from employees.
Quantitative data from leaders on their leadership style, motivation, satisfaction, engagement
whereas those on organisational culture was gathered qualitatively. Responses from the web based
employee questionnaire were processed using IBM’s Statistical Package for the Social Sciences
(SPSS) 22. The qualitative data gathered from leaders were processed via the in vivo technique,
clustered and classified into patterns according to the emerging common themes using Microsoft
Excel, together with quantitative data. The findings of the study show that transformational and
transactional leadership style influences employee satisfaction more than employee motivation,
which impacts employee engagement. Employees led by transformational leaders have the highest
satisfaction levels with their job, leadership style and organisation whereas teamwork outshines
while working with a transactional leader. Finally, in project-related industries, the laissez-faire
leadership style is prominent as in encouraging employee empowerment and autonomy in decision
making which ultimately results in higher employee engagement. Sub-unit culture rather than
organisational culture has a moderating influence on the relationship between leadership style and
employee engagement.