Assignment: Variables of Job Attitudes Antecedents

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Perception is reality: change leadership and work engagement

Jay L. Caulfield and Anthony Senger Marquette University, Milwaukee, Wisconsin, USA

Abstract Purpose – The purpose of this paper is to investigate how employee perceptions of change and leadership might impact work engagement following major organizational change. Design/methodology/approach – Social media invited US workers recently experiencing major organizational change to anonymously complete a web-based survey requesting qualitative and quantitative responses. Values-based coding and thematic analysis were used to explore qualitative data. Hierarchical and linear regression, and bootstrapped mediation were used to analyze quantitative data. Findings – Analysis of qualitative data identified employees’ perceptions of ideal change and ideal leadership were well supported in the change leadership literature. Analysis of quantitative data indicated that employee perceptions of leadership fully mediated the relationship between employee perceptions of change and work engagement. Practical implications – Study findings imply that how employees perceive change is explained by how they perceive leadership during change, and that these perceptions impact work engagement. Although these findings appear commonsensical, the less than stellar statistics on major organizational change may encourage leaders to become more follower-focused throughout the change process. Originality/value – The study makes a contribution to an understudied area of organizational research, specifically applied information processing theory. This is the first study that identifies employee perceptions of leadership as a mediator for perceptions of change and work engagement. From a value perspective, leaders as successful change agents recognize significant cost savings in dollars and human welfare by maintaining healthy workplaces with highly engaged workers. Keywords Transformational leadership, Mediation, Work engagement, Change leadership, Organizational change, Employee perceptions Paper type Research paper

1. Introduction The world is dynamic. Globally, leaders assess the environment and enact organizational change to pursue opportunities and conquer challenges. Organizations that adapt and innovate remain viable. However, enacting change has had less than a stellar track record. Consider the following examples. The America Online/Time Warner Cable merger resulted in an estimated loss of $100 billion (Dumon, 2008; McGrath, 2015). Boeing’s 787 Dreamliner project with an estimated cost and development timeline of $6 billion over four years instead cost $32 billion over eight years (Ausick, 2014). The UK government canceled its largest civilian information technology (IT) project after spending $4 billion and ten years on it (Gibbons, 2015). Examples like this illustrate that failed change is costly with reported failure rates of 70 percent (Beer and Nohria, 2000) to 20 percent (Weiner et al., 2008).

Human welfare costs related to failed change (decreased engagement, job insecurity and increased stress) are less quantifiable, but equally important. Willis Towers Watson (2015) reports that employee engagement declines during major organizational change while Aon Hewitt (2013) asserts it takes years for engagement to fully recover. Competitively, this is concerning as studies report that disengaged employees are costly to organizations due to increased absenteeism, attrition and decreased productivity (Ghadi et al., 2013; Vance, 2006).

Research suggests the outcome of change is largely dependent upon leadership (Kotter and Cohen, 2002; Willis Towers Watson, 2015). Effective leaders enable followers to understand the reason for change and to see its personal and organizational benefits (Kotter and Cohen, 2002; Sinek, 2009). Over the past 30 years, the seminal work of Lord (1985) on information processing and Lord and Maher (1991) on leadership and information

Leadership & Organization Development Journal Vol. 38 No. 7, 2017

pp. 927-945 © Emerald Publishing Limited

0143-7739 DOI 10.1108/LODJ-07-2016-0166

Received 11 July 2016 Revised 21 July 2016

29 March 2017 Accepted 3 May 2017

The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/0143-7739.htm

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processing, in addition to research on implicit leadership theories (ILTs) (Shondrick et al., 2010; Shondrick and Lord, 2010) and on implicit followership theories (IFTs) (Shondrick and Lord, 2010; Sy, 2010; Whiteley et al., 2012), has contributed to the dominance of socio-cognitive research for several decades. In the context of leader and follower relationships, socio-cognitive theory (SCT) focuses on learning by observation of social interactions and by participating in them (Bandura, 1989). SCT includes under its umbrella information processing theories. To date, most studies of information processing have taken place in controlled settings outside the realm of organizations (Epitropaki et al., 2013), although the findings from those studies have significant application to leader-follower relationships, job attitudes and work performance within organizations (Epitropaki et al., 2013). Thus, the aim of this study is to make a contribution to an understudied area in organizational research by applying perception and information processing theories as a means of studying change leadership from a follower perspective, as followship has also been understudied (Baker, 2007). This goal is achieved by exploring follower perceptions of change leadership and their impact on work engagement. Gaining a better understanding of how follower perceptions influence change leadership through this study and future applied studies in information processing within organizations may lead to measurable improvement in organizational change outcomes.

2. Literature review and hypotheses The literature approaches change leadership from either an organizational change theory (OCT) or leadership theory perspective (Herold et al., 2008). OCT proposes the need for change as originating from external and internal drivers, thereby focusing on the relationship between the organization and its environment. Resource dependency theory (RDT) (Hillman et al., 2009) and IT (Scott, 2007) are two OCTs identifying change drivers.

The leadership theory perspective links specific leadership theories to change. Transformational leadership theory is most cited as its premise is transformation, and behaviors identified as transformational have been reported most effective during change (Bass and Riggio, 2006; Epitropaki et al., 2013, Kotter and Cohen, 2002).

2.1 RDT and IT as components of OCT RDT focuses on external drivers (Hillman et al., 2009). As an influential theory in organizational science, it suggests organizations are not self-sufficient; rather they function as open systems where viability depends on adapting to the external environment. Strategies that organizations take to reduce dependency include mergers and acquisitions, joint ventures, political action, composition of board membership and succession planning (Hillman et al., 2009). These strategies drive major organizational change, which is of prime interest in this study.

IT focuses on internal behaviors as drivers (Scott, 2007). IT is based on four major assumptions: institutions act as governance structures, establishing norms for behavior; those institutions abiding by norms are considered legitimate, enhancing long-term viability; institutions that resist change, threaten their long-term viability; and past institutional structures influence future innovation (Scott, 2004). IT suggests that organizations establish social identities through organizational structure, values, norms and culture (Scott, 2007). Though social identity is often viewed positively, it may become a barrier to change when employees perceive change as threatening organizational values, norms and culture (Jones et al., 2008). In a study of vanguard organizations, Kanter (2008) reports, “Values turn out to be the key ingredient in the most vibrant and successful of today’s multinationals […] They offer people a basis of engagement for their work, a sense of membership and a stability in the midst of constant change” (p. 45). Employees reaction to change depends upon how they perceive it ( Jones et al., 2008). Thus, follower perception is a key construct in this study.

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2.2 Followership and follower perception Theoretical foundations of followship are evolving. What is emerging from the literature is that both followership and leadership are active and essential roles integral to organizations’ success (Baker, 2007). The roles may be interchangeable specific to the situation and expertise needed (Berg as cited in Baker, 2007); thus, followers and leaders should be studied in the context of their relationship with one another (Baker, 2007). This last point is relevant in that this study focuses on followers’ perceptions of leadership during change, exploring how those perceptions influence leadership, followership and the change process.

Lord’s (1985) seminal work on information processing approach to social perception identifies how employees recognize, encode, store and retrieve information. A cognitive schema refers to a system that organizes and stores information based upon past experience (Lord, 1985). During retrieval, judgment related to existing schemas influences perception (Lord, 1985). This rationale applies to change, and leadership during change, whereby followers form laymen implicit leadership theories (ILTs) (Shondrick and Lord, 2010) that are similar to the definition of schemas specific to leadership. These leadership schemas, now sometimes referred to as leadership prototypes, serve as a measuring stick for any future leadership encounters. Followers will either perceive change leadership positively or negatively dependent upon whether their perceptions of change leadership interactions align with their ideal prototypes of change leadership. How then are employees’ perceptions of change leadership measured? Because past studies have assessed employees’ perceptions of change by its influence on work engagement (Aon Hewitt, 2013; Willis Towers Watson, 2015), work engagement is of interest in this study.

2.3 Work engagement As a construct in the psychological literature, work engagement aligns with positive psychology, characterized by its focus on well-being and optimal functioning. Grounded theory derived from Kahn’s (1990) earlier research laid the foundation for more recent work in engagement theory. Kahn (1990) described personal engagement and disengagement in terms of role theory and social systems. Simply put, role theory proposes that organizations are social systems whereby individuals act upon socially defined roles and expect others to do the same (Lorette, 2016). Specifically, Kahn (1990) defines personal engagement as “harnessing of organization members’ selves to their work roles” while defining disengagement as “the uncoupling of selves from work roles” (p. 694).

Following Kahn’s (1990) work, Schaufeli et al. (2002) defined work engagement as “a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption” (p. 74). In a subsequent study (Schaufeli et al., 2006), vigor is described as possessing high levels of energy and mental resilience when working, with workers investing considerable effort and persistence despite road blocks. Dedication is characterized as being strongly involved with work, experiencing a sense of significance, enthusiasm, inspiration, pride and challenge. Finally, absorption is described as engrossed in work, where time passes quickly and it is difficult for one to detach. The change leadership literature reports that employee perceptions of change influence work engagement and that employees perceive leadership as pivotal to change (Aon Hewitt, 2013; Kotter and Cohen, 2002; Willis Towers Watson, 2015). As the purpose of this study is to determine whether follower perceptions of change might be explained by follower perceptions of leadership, work engagement was selected as the outcome variable.

2.4 RDT, IT and work engagement RDT and IT provide insight on varied reactions to change. If employees are aware of external changes driving the internal need for change and they perceive that it will ultimately benefit them and the organization, they embrace change. Conversely, if they are

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unaware of the external forces driving change or do not perceive its benefits, they are likely to resist change as it disrupts organizational identity (Jones et al., 2008). When employees perceive change positively, it creates a positive, work-related state of mind, which Schaufeli et al. (2002) describe as work engagement. However, when employees perceive change negatively, it results in disengagement (Kahn, 1990; Vance, 2006). The perceived alignment between employees’ schemas or prototypes of change and their perceptions of observed change is referred to hereinafter as “employee perceived aligned change,” and according to past research (Aon Hewitt, 2013; Schaufeli et al., 2002; Willis Towers Watson, 2015), these employee perceptions influence work engagement, leading to our initial hypothesis:

H1. Employee perceived aligned change is directly related to work engagement.

2.5 Transformational leadership theory The change leadership literature identifies transformational leadership as highly beneficial during major change (Bass and Riggio, 2006; Epitropaki et al., 2013; Kotter and Cohen, 2002; Kegan and Lahey, 2009). Bass and Riggio (2006, p. 4) describe transformational leadership as “inspiring followers to commit to a shared vision and goals for an organization or unit, challenging them to be innovative problem solvers, and developing followers’ leadership capacity via coaching, mentoring, and provision of both challenge and support.” Notable transformational leadership behaviors include clearly communicating purpose, being respectful, portraying confidence in goal achievement, including followers in problem solving, supporting innovation that encourages learning and investing in followers’ development (Bass and Riggio, 2006). Transactional leadership behaviors differ in that they focus on providing incentives to followers to achieve specific goals that have been identified and agreed upon by leaders and followers (Bass and Riggio, 2006). Several leadership studies have reported findings that followers across cultures have more positive schemas or prototypes of leadership when exposed to leaders who predominantly practice transformational leadership behaviors (Bass and Riggio, 2006; Bass, 1997; Den Hartog et al., 1999; Judge and Piccolo, 2004)

2.6 Linking follower perceptions of organizational change to leadership Organizational change is a social process (Poole et al., 2000, p. 337) involving leaders and followers. SCT (Bandura, 1989) purports that individuals learn from observing and experiencing social interactions, including those of leaders and followers. Thus, followers categorize leaders according to how they have been socialized to understand and construct leadership (Shondrick and Lord, 2010), identifying individuals that exemplify their leadership prototypes, and judging the success or failure of leaders as change agents according to the degree of prototype alignment (Shondrick and Lord, 2010). Because leaders are viewed as change agents (Kotter and Cohen, 2002), followers associate change with leadership (Willis Towers Watson, 2015). This implies that employees’ perceived degree of aligned change is associated with how their leadership prototype aligns with their perception of observed leadership, hereinafter referred to as “employee perceived aligned leadership,” leading to the second hypothesis:

H2. Employee perceived aligned change is directly related to employee perceived aligned leadership.

2.7 Leadership and work engagement In the Willis Towers Watson (2015) study, employees identified leadership as the most significant driver of work engagement, with effective change leaders characterized by four attributes. Specifically, those attributes were communicating vision in engaging ways, such

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as storytelling; involving employees in modeling the future; paying attention to barriers to change, addressing them promptly; and fostering trust and confidence by authenticity and role modeling the way. This study, as well as several others (Ghadi et al., 2013; Gözükara and Simsek, 2015; Persson, 2010; Salanova et al., 2011; Tims et al., 2011), reports findings indicating that transformational leadership is a predictor of work engagement. The findings further imply that when leaders demonstrate transformational leadership behaviors, followers perceive them positively as these transformational leadership behaviors exemplify existing leadership prototypes of ideal leaders (Epitropaki et al., 2013). Further implied is that this leadership alignment influences work engagement, leading to Hypothesis:

H3. Employee perceived aligned leadership is directly related to work engagement.

2.8 Leadership as a mediator A primary purpose of mediation is to investigate how an observed relationship between a predictor variable and an outcome variable occurs, referred to as an explanatory approach (MacKinnon, 2008). As previously noted, leaders are recognized as change agents (Kotter and Cohen, 2002), linking change to leadership, and leadership has been linked to work engagement (Aon Hewitt, 2013; Bass and Riggio, 2006; Bass, 1997; Den Hartog et al., 1999; Willis Towers Watson, 2015). Thus, an important explanatory link between change and work engagement is leadership.

Second, mediation explores variables that research identifies as having significant relationships with an outcome variable, referred to as a design approach (MacKinnon, 2008). Studies previously cited reported statistically significant relationships between change and work engagement (Aon Hewitt, 2013; Schaufeli et al., 2002; Kahn, 1990; Vance, 2006; Willis Towers Watson, 2015), change and leadership (Bass and Riggio, 2006; Epitropaki et al., 2013; Kotter and Cohen, 2002; Kegan and Lahey, 2009), and leadership and work engagement (Ghadi et al., 2013; Gözükara and Simsek, 2015; Persson, 2010; Salanova et al., 2011; Tims et al., 2011). Thus, based upon research supporting explanatory and design associations for mediation, the final hypothesis is proposed:

H4. Employee perceived aligned leadership mediates the association between employee perceived aligned change and work engagement.

The research model is portrayed in Figure 1.

H2 H3

Employee perceived aligned

leadership (M )

Work engagement (Y)

Employee perceived aligned

change (X )

ĆH4

CH1

Notes: Where: X= predictor variable; M= mediator; Y= outcome variable; a= direct relationship between X and M; b= direct relationship between M and Y; C= direct relationship between X and Y; Ć= indirect (mediated) relationship between X and Y

Figure 1. Direct/indirect

relationships of employee perceived aligned change to work engagement

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3. Methods 3.1 Sample Anonymous, non-probability snowball sampling was used to recruit a heterogeneous employee sample from the USA. Age verification and consent were built into the survey. To be included, participants had to report experiencing a major organizational change during the past 24 months. Examples of major changes included forced changes in leadership, mergers, acquisitions, new product lines and geographical re-location. Within 30 days, 105 usable surveys were collected.

3.2 Demographic and organizational data summary 3.2.1 Demographics. In total, 61 percent reported being male. Age ranges reported: 26-30 (6.1 percent); 31-35 (8.8 percent) 36-40 (30.8 percent), 41-45 (20.2 percent), 46-50 (11.5 percent); 51-55 (10.6 percent); 56-60 (7.0 percent); 61-65 (2.6 percent) and 66-70 (less than 1 percent). In total, 69 percent reported working at for-profit organizations. Level of education reported: 12 percent held doctoral degrees; 39 percent held graduate degrees, over 20 percent completed graduate work and another 25 percent held bachelor’s degrees, notably a highly educated group as compared to US residents 25 years and older (United States Census Bureau, 2016).

3.2.2 Organizational data. Number of employees reported: 25 percent, 100 or less; 24 percent, W100 and o500; 21 percent, W500 and o1,000; 13 percent, W1,000 and o5,000 and 18 percent, W5,000. Number of organizational layers reported between the participant and the primary change agent: 22 percent, one layer; 37 percent, two layers; 14 percent, three layers; 15 percent, four layers and the remaining 12 percent reported over five layers. In total, 42 percent reported supervising employees. Average tenure reported was ten years. Average time since the change occurred was reported as nine months.

3.3 Qualitative measures First, qualitative data were collected for the purpose of determining whether participant responses were supported by change leadership research, thereby adding credibility to responses (Conway and Lance, 2010; Klenke, 2008). Second, qualitative data provided the means by which participants could compare existing schema to observation (Lord, 1985; Lord and Maher, 1991). Finally, qualitative data aided participants in reflecting upon the degree of alignment of existing schemas with observations (Lord, 1985; Lord and Maher, 1991), preparing them to numerically rank the degree of perceived alignment.

First, participants were asked to reflect upon the major change experienced. They were then instructed, “Around the time of the major organizational change that you have in mind, list the top three things you believe your organization really needed to change. These three things are your ideal changes for the organization. In other words, these are the things that you felt your organization really needed to change if you had been in charge.” Second, in precisely the same manner, participants were asked to list the top three ideal leadership behaviors. Responses comprised the qualitative data.

3.4 Quantitative measures 3.4.1 Predictor and mediator variable measures. Upon review of measures for personal alignment with a target, past studies in organizational research have employed Venn diagram scales. Bergami and Bagozzi (2000) used a Venn diagram scale to measure the alignment between employee perceptions of self-definition and organizational identity. Shamir and Kark (2004) used a Venn diagram scale to measure alignment between employee perceptions of self-identity with the identity of the organizational unit that employed them, and Van Quaquebeke et al. (2010) employed a Venn diagram scale to measure the alignment

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between employee perceived leader and follower values. A major objective of this study was to measure alignment with a target as well, specifically employee perceived alignment of ideal changes with changes observed and employee perceived alignment of ideal leadership with leadership observed. Thus, one Venn diagram scale measured aligned change and a second Venn diagram scale measured aligned leadership. These self-reported measures were used based on the personal nature of the constructs. Past methodologists substantiate the use of self-reporting measures as appropriate for private events (Chan, 2009; Conway and Lance, 2010). As an example, Judge et al. (2000) used employee perceptions of job characteristics as a mediator in their study.

Steps were taken to clarify the use of Venn diagram scales and to focus participants on the definition of the predictor and mediator variables being measured. They were told that the changes and leadership behaviors they previously identified were not intended to limit their comparisons. In fact, participants were asked to consider as many ideal change and leadership conditions they recalled. Finally, a somewhat humorous scenario of what one might perceive as a “good night’s sleep” was applied to a Venn diagram scale, illustrating alignment and misalignment of that concept. A Venn diagram scale is depicted in Figure 2. Participants were instructed to select a numerical point on the scale that best represented their alignment with the target concept (ideal changes to changes observed); “7” indicated total alignment and “1” indicated total misalignment. This reported score measured “employee perceived aligned change.” Precisely, the same procedure was used to measure “employee perceived aligned leadership.”

3.4.2 Outcome variable measure. Although work engagement may fluctuate somewhat during change, it is reported as a relatively stable construct that does not show significant fluctuation for several years following major change (Aon Hewitt, 2013; Mauno et al., 2007), indicating that work engagement reported within a 24-month period after change did not vary substantially. The Utrecht Work Engagement Scale (UWES-17) was used to measure work engagement. The UWES-17 scale has a reported internal reliability, Cronbach’s α of 0.93, and has demonstrated test-retest reliability, stability coefficient rt, ranging from 0.63 to 0.72 (Schaufeli and Bakker, 2004). Validity investigations of the UWES-17 indicate work engagement appears to be a highly stable construct measuring what it is intended to measure (Seppälä et al., 2009). Sample statements from the UWES-17 include: “At my work I feel bursting with energy” (vigor); “I am enthusiastic about my job” (dedication); and “Time flies when I am working” (absorption) (Schaufeli and Bakker, 2004). Immediately following completion of the Venn diagram scales, participants completed the seven-point work engagement scale.

4. Results 4.1 Qualitative analysis Mostly, participant responses identified values and beliefs about change and leadership. Thus, values coding was applied to the data. Saldaña (2013) defines values coding as the application of codes to qualitative data that reflect participants’ values, attitudes,

Ideal changes that needed to

occur

Changes that you observed

occurring

1 2 3 4 5 6 7

Figure 2. Venn diagram scale: alignment between ideal changes and observed changes

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and beliefs, representing their perspectives or worldviews (p. 268). Values coding is particularly relevant when exploring intrapersonal and interpersonal responses, such as those collected in this study (Saldaña, 2013). After coding the data and grouping codes according to association, themes were extracted (Saldaña, 2013). Change and leadership themes that follow are ordered by number of associated codes, highest to lowest.

4.2 Ideal change themes 4.2.1 Communication. According to past studies (Bass and Riggio, 2006; Elving, 2005; Lewis, 1999), frequent communication throughout the change process is vital. Major change events often generate chaos and uncertainty, which increases resistance to change (Elving, 2005). Communication is a major tool with the potential to decrease resistance. Example participant responses included, “better communication between departments” and “timely communication.”

4.2.2 Planning. An important planning step emphasized in the change management literature is to include an internal assessment regarding the organization’s readiness for change (Weiner et al., 2008). None of the participants mentioned such an assessment, but participants did identify planning as important. Examples of responses included, “better planning for team changes” and “plan for employee development.”

4.2.3 Values-driven change. Participants spoke to values-driven change. Examples included “trust our peers,” “commitment,” and “pride in doing good work.” As previously noted, Kanter (2008, p. 45) states, “Values turn out to be the key ingredient in the most vibrant and successful of today’s multinationals […] They offer people a basis of engagement for their work” (emphasis added). IT, too, emphasizes values as being important to social identity.

4.2.4 Inclusivity. Miller (1998) defines inclusion during change as identifying who is permitted to participate and contribute. Barriers to inclusion may be subtle or not. Regardless, perceptions of exclusion result in decreased commitment and decreased contributions (Glaser, 2013; Miller, 1998). Example participant phrases included, “avoid top down process” and “feedback from primary members involved.”

4.2.5 Quality. According to Strebel (1996), during change employees need to be part of redefining quality of services and products, or companies will be unsuccessful in meeting change objectives. Examples of quality responses included, “use our people and skills to achieve better product” and “deliver products that resonate well with customers.”

4.2.6 Training. Uma (2013) reports that employee training improves morale and increases productivity and performance, which surpasses the cost of training. However, some employees find training for new job roles nearly as threatening as job loss (Pardey, 2007). Thus, addressing fear of inadequacies early in the training may help employees focus on learning new skills needed as a result of change. Participant responses supporting training included, “support for training and skill building” and “encourage training.”

In summary, for this participant group, the general description of the schema or prototype for ideal change included one where bi-directional communication flowed freely from one level of the organization to another and across departments, giving voice to all those involved with and being impacted by the change so that inclusive and informed decision-making transpired. Furthermore, ideal change processes mirrored the espoused values of the organization, and followed a well-developed and transparent plan. Part of that plan included employee training for new skills needed as a result of the changes occurring. Finally, it was important for the change to be quality driven from both the employee and customer perspectives.

4.3 Ideal leadership themes 4.3.1 Inspiring communicator. Communication is a key strategy for change-oriented leaders (Willis Towers Watson, 2015; Seyranian, 2014). In a 25-year longitudinal study where

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participants identified characteristics most admired in leaders, inspiring communicator ranked fourth on the list (Kouzes and Posner, 2012). In this study, it ranked first. Example participant responses included, “Share the vision through extraordinary communication skills” and “Communicate the reasons for change.”

4.3.2 Honesty. In the same study, honesty was the behavior most admired in a leader, receiving over 83 percent of votes for each five-year data collection point (Kouzes and Posner, 2012). In this study, it ranked second. Participant responses included, “Be honest,” and “Tell the truth.”

4.3.3 Competency. Kouzes and Posner (2012) report competency as the third most desirable leadership behavior, receiving over 60 percent of votes for each five-year point in which data were collected. In this study, it also ranked third. “Competent in change” and “Excellent skills” are examples of responses associated with this theme.

4.3.4 Inclusivity. Groysberg and Connolly (2013) found that a culture of inclusion is values driven, supporting Kanter’s (2008) work. Gen Y, comprising over 50 percent of participants in this study, is reported to especially value inclusion (Kane, 2016). Examples of phrases describing inclusion were “value all employees” and “get buy-in from the whole company.”

4.3.5 Respect. In a study of nearly 20,000 employees, Porath (2014) reports that those who believed their leaders respected them were 55 percent more engaged on the job. Respect had more influence on work engagement than any outcome measured in the Porath study. In this study, it ranked fourth. Example participant responses included, “Treat people with respect” and “Respect the individual.”

4.3.6 Decision-making. During change, decisions occur in a turbulent environment, making high quality decision-making difficult. Yet decision-making that balances emotion with reason is considered a critical leadership skill (Kase, 2010; Vroom, 2000). Participants in this study agreed; responses included “makes tough decisions” and “competent decision-maker.”

In summary, for this participant group, the generally described schema or prototype for ideal leadership included one of inspirational and honest communication that reflected the vision and values of the organization. Communication occurred frequently throughout the change process and included all employees. Leadership demonstrated competent and impartial decision-making, treating all with respect as demonstrated by actively listening and engaging others in the change process as appropriate. Leadership behaviors consistently reflected honesty and competency in leading change, thereby earning employee respect.

In conclusion, qualitative themes identified from participant responses were used to describe participants’ prototypical perceptions of ideal change and ideal leadership. These identified prototypes portrayed the importance of intrapersonal values and beliefs associated with ideal change and ideal leadership prototypes. The qualitative themes extracted from the coded data through the use of values coding are supported in the change leadership literature and many have been cited within this study’s literature review, adding credibility to participant responses (Conway and Lance, 2010; Klenke, 2008).

4.4 Quantitative analysis Table I displays the means, standard deviations and intercorrelations among main variables and associated covariates. The statistically significant positive correlational relationships between the main variables are initial indicators supporting mediation.

In past studies, age has been positively and significantly related to work engagement (Simpson, 2008; Pitt-Catsouphes and Matz-Costa, 2008; Schaufeli and Bakker, 2004); however, that was not the case in this study. Results of gender differences in work engagement have varied with most studies reporting no difference (Korunka et al., 2009;

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Schaufeli and Bakker, 2004; Persson, 2010). In this study, a statistically significant gender difference existed in the number of reported layers between the change agent and the employee; women reported less layers then men. There was also a statistically significant gender difference in the number of supervisors with women outnumbering men; on average, supervisors perceived higher alignment with leadership. The predominance of women supervisors and higher overall supervisor engagement may explain the statistically significant higher engagement reported by women.

A statistically significant negative correlation existed in the number of layers between change agents and engagement, and in the number of employees and engagement. This finding supports previous research where employees in smaller organizations (as measured by number of employees and less layers) reported higher work engagement than those in larger organizations reporting more employees and more layers (Kahn et al., 2009).

Aligned with 2013 Gallop poll findings, a negative correlation existed between reported level of education and work engagement (Lopez and Sidhu, 2013). Second, a negative relationship existed between number of layers and level of education reported, supporting the notion that more highly educated individuals are generally in positions closer to the top of the organizational chart. Importantly, the insignificant relationship between time passed and work engagement supports past research indicating that work engagement remains stable for years following change (Aon Hewitt, 2013; Mauno et al., 2007).

Controlling for covariates, hierarchical regression was used to determine whether perceived aligned change was positively related to work engagement and if the addition of perceived aligned leadership further explained the influence of perceived aligned change on work engagement. Results of the hierarchical regression analysis are reported in Table II, confirming H1 and H3, meeting two of the four steps required for mediation, specifically that both the predictor variable and the mediator are significantly related to the outcome variable (Baron and Kenny, 1986).

Linearity was evident by assessing partial regression plots and a plot of studentized residuals against predicted values. The Durbin-Watson statistic of 2.035 indicated independence of residuals. Homoscedasticity was assessed by visual inspection of a plot of studentized residuals against unstandardized predicted values. Multicollinearity was not evident as tolerance values ranged from 0.728 to 0.997. Studentized deleted residuals were not greater than +/−3 standard deviations, no leverage values were less than 0.2 nor were values for Cook’s distance above 1. The assumption of normality was met as assessed by visualizing a Q-Q plot.

Linear regression was used to test H2. Regression results indicated a significantly positive relationship between perceived aligned change and perceived aligned leadership, F (1, 104) ¼ 32.654, po0.001, R2 ¼ 23.3 percent, supporting H2 and another step of

Variable Mean SD 1 2 3 4 5 6 7 8 9

1. Empl. perc. aligned change 3.29 1.48 – 2. Empl. perc. aligned leader 3.48 1.71 0.49*** 3. Work engagement 3.75 0.93 0.24** 0.47*** 4. Age category 4.05 1.79 0.06 −0.01 0.06 5. Gender 1.62 0.49 −0.01 −0.01 −0.16* 0.09 6. Educ. level 3.30 1.10 −0.13 0.01 −0.17* 0.11 0.05 7. Months passed since event 9.30 6.83 −0.04 −0.02 −0.04 −0.02 0.04 −0.06 8. Org layers between change agent and employee 2.67 1.46 0.03 −0.02 −0.21* −0.09 0.29** −0.24** 0.11

9. No. employed by category 3.63 1.59 −0.18* −0.23* −0.17* −0.05 0.23* −0.10 0.26* 0.41*** 10. Supervisory status −0.05 −0.17* −0.13 −0.05 0.25** −0.01 0.04 0.20* 0.05 Notes: n ¼ 105. *po0.05; **po0.01; ***po0.001

Table I. Means, standard deviations and correlation matrix for main study variables and associated covariates

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Baron and Kenny’s (1986) four steps, specifically that the predictor variable is significantly related to the mediator.

Bootstrapping is reported to be particularly effective with small sample sizes, which was the case in this study (José, 2013). Thus, to test H4 and Baron and Kenny’s (1986) final step, a basic mediation analysis was conducted in AMOS using bootstrapping (n ¼ 5,000) and bias-corrected confidence intervals. Please refer to Figure 3 (left) to view the AMOS fully saturated model.

With the exception of Hoelter’s critical N, AMOS reported model fit indices indicated a fairly good fit. Based on the work of José (2013, p. 104), who states that in basic mediation models where the direct relationship between the predictor variable and the outcome variable is reduced to insignificance by mediation (as is the case with this model), pruning the model by deleting the direct path, which results in one degree of freedom vs a fully saturated model, may lead to a better fitting model as the degree of freedom permits model fit indices to be estimated. Thus, the direct path was pruned (Figure 3, right), which improved Hoelter’s critical N substantially and also improved the root mean square error of

Work engagement Model 1 Model 2 Model 3 Model 4

Variable B β B β B β B β

Constant 3.69*** Age 0.03 0.06 Gender −0.34 −1.78 Educ. level 0.15 0.18 Constant 4.02*** Months passed 0.00 0.01 Org layers −0.06 −0.10 No. employed 0.06 −0.09 Constant 3.322*** Employee perc. aligned change 0.17** 0.27 Constant 2.88*** Employee perc. aligned leadership 0.24*** 0.45 R2 0.06 0.09 0.15 0.30 F 2.26 1.52 2.49 5.09 ΔR2 0.06 0.02 0.07* 0.15*** ΔF 2.26 0.79 7.66** 5.09*** Notes: n ¼ 105. *po0.05; **po0.01; ***po0.001

Table II. Hierarchical multiple regression predicting

work engagement from predictor

variables and selected demographic and

organizational covariates

e2 e2 0.49 0.49

0.46 0.47

0.01

Employee perceived aligned leadership Employee perceived

aligned leadership

Work engagement Work engagement Employee perceived

aligned change Employee perceived

aligned change

(a) (b)

Notes: (a) Where path a= 0.49; path b= 0.46 and path ć= 0.01; (b) where path a= 0.49 and path b= 0.47

Figure 3. AMOS fully saturated model (a) and AMOS

pruned model (b) listed with mediation model standardized

coefficients

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approximation (RMSEA). AMOS reported the following fit indices for the pruned model: goodness of fit (GFI) ¼ 1.00; RMSEA of less than 0.001; comparative fit index (CFI) ¼ 1; relative fit index (RFI) ¼ 0.99, Hoelter’s Critical n ¼ 23,958, standardized root mean residual (sRMR) ¼ 0.0040 and adjusted goodness of fit index (AGFI) ¼ 0.99. It is noted that the size of the indirect path (ab) as reported by AMOS changed slightly from 0.224 in the saturated model to 0.230 in the pruned model. According to José (2013, p. 106), this only occurs when the mediated ć path has been reduced to nearly zero.

MacKinnon (2008) recommends calculating asymmetrical confidence intervals if the indirect effect has been calculated as a×b, which was the case in this study. Thus, asymmetrical confidence intervals are reported using asymmetrical confidence limit values of 1.6175 (lower confidence limit) and 2.2540 (upper confidence limit) (MacKinnon, 2008, p. 97). The size of the standardized indirect effect, 0.230 (standard error ¼ 0.054) was statistically significant, 95 percent CI ¼ 0.142-0.352, po0.001, supporting H4 as well as Baron and Kenny’s (1986) fourth and final criterion whereby the relationship between perceived aligned change and work engagement was mediated by perceived aligned leadership.

According to Kenny (2016), the effect size of a boot strapped model may be estimated by dividing the indirect effect (ab) by the total effect (c) when the standardized c is at least +/−0.20. If the effect size is W0.80, full mediation has occurred. Kenny (2016) further states that this measure is informative when ć is statistically insignificant, as is the case in this model. Thus, ab/c was applied to estimate effect size, reported as 0.98.

According to MacKinnon (2008, p. 61), for basic mediation models, it is important to check for an interaction effect between the predictor variable and the mediator, which when statistically significant indicates that the outcome variable differs across different levels of the predictor variable. When checked, no interaction effect was noted ( p ¼ 0.23).

In summary, drawing from the change leadership literature, the purpose of this mixed methods study was to investigate whether employee-identified perceptions of ideal change and ideal leadership when compared to observed change and observed leadership influenced work engagement. Qualitative data were values coded, and themes were extracted from the coding. Themes identified were supported in the change leadership literature. To explore the relationship between the main variables, aligned change and aligned leadership, mediation was used. All hypotheses were supported, indicating change was fully mediated by leadership as measured by work engagement.

5. Discussion 5.1 Implications for practice First, study results emphasize the importance of leaders’ awareness of how their actions affect employees’ perceptions of leadership during change. Studies on IFTs (Duong, 2012; Goodwin et al., 2000; Sy, 2010) report that leaders who hold positive IFTs are those who also practice transformational leadership, which leads to high follower performance. These findings highlight three things relevant to this study. First of all, congruent with the change leadership literature, participant identified ideal leadership behaviors were those associated with transformational leadership, and when employees perceived those behaviors to be present, they positively influenced work engagement. Next, findings support the positive relationship between transformational leadership and follower performance where work engagement has been demonstrated to be an antecedent of work performance (Bakker and Bal, 2010; Salanova et al., 2005; Yalabik et al., 2013). Finally, the findings support research indicating that IFTs influence how leaders interact with employees (Shondrick et al., 2010; Shondrick and Lord, 2010). To illustrate, if a follower behaves according to the leader’s ideal follower prototype, the leader is likely to act more favorably toward that follower while the reverse might be true for a follower who is atypical to the leader’s prototype. This implies that leaders benefit from being aware of their

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followership prototypes in order to evolve those prototypes to align with how leadership and followership interactions need to evolve to be more successful in working together during times of change in today’s complex global environment.

The second implication is that throughout the change leadership literature, it has been suggested that transformational leadership behaviors are most successful during change. As transformational leadership may be learned (Nielsena and Munir, 2009), educational programs in leadership should encourage leadership students to learn and practice transformational leadership behaviors, which have been shown to improve employee performance (Epitropaki et al., 2013; Goodwin et al., 2000). Ultimately, improved work performance may lead to successful change outcomes.

Third, drawn from past research on perception (Lord, 1985; Lord and Maher, 1991), leaders and followers need to understand that their past change experiences, though relevant, bias their judgment of future change. Leaders especially need to realize that how employees perceive change is very personal; thus, how leaders communicate change should be personal as well, applying the individual consideration construct in Bass and Riggio’s (2006) model of transformational leadership. Active listening and frequent two-way communication may increase leaders’ awareness of employee perceptions, informing leaders of how to modify their behavior accordingly. A leadership coach may prove helpful in this regard.

Fourth, although participants’ ideal leadership behaviors were mainly associated with transformational leadership, some behaviors suggest application of other leadership theories. The inclusivity theme appearing in both the change and leadership categories of the qualitative data, although relevant to transformational leadership, might also be applied to distributive leadership in that inclusivity encourages looking beyond formal leadership and instead focusing on role fluidity whereby followers may become informal leaders as related to situation, experience and competency (Baker, 2007; Brown and Gioia, 2002; Pearce and Conger, 2002). Furthermore, leaders and followers need to recognize that leadership and followship are roles that are assumed by individuals as the situation warrants vs traits that are permanently attributed to individuals, which is supportive of a distributive leadership approach (Baker, 2007). However, to encourage distributive leadership requires that both followers’ and leaders’ implicit theories evolve to include positive prototypes regarding distributive leadership. According to Epitropaki et al. (2013), research does not currently identify what those prototypes might be, presenting an opportunity for future research in this area.

One last implication is that leaders who are successful change agents possess the wisdom to recognize that chaos and complexity need to be grounded in stability (Mustafa et al., 2012). Change does not mean that values are no longer relevant. In fact, participant responses in this study were predominantly values driven. As Kanter (2008) reports, enduring values offer employees a basis for work engagement. Thus, leaders as inspiring communicators, might encourage acceptance to change by linking it to organization values.

5.2 Limitations There are several limitations to this study. First, cross-sectional data makes the assumption that model parameters remain stable over time. However, perceptions of leadership and change likely vary over time as prototypes continually evolve from social interactions.

Second, though participants identified a number of ideal conditions, being informed of additional conditions they likely considered could have benefitted the analysis. Due to anonymity, details about participants and major changes were lacking and irretrievable. Recruiting participants directly with implementation of a control group and a longitudinal design would provide a stronger analysis.

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Third, participants were recruited using social media. Although online data collection provides efficiencies, it increases biases by excluding those unfamiliar with online surveys and those having limited access to the internet. Finally, as with all non-probability sampling, generalization is limited.

5.3 Future research Additional change leadership research in the area of applied information processing would add insight regarding the relationships between change, leadership and followership, ultimately leading to enhanced change outcomes. Organizational studies exploring how leader and follower relationships might evolve to reflect contemporary leadership theory beyond that of transformational leadership may prove valuable. Finally, exploring how distributive leadership might universally become part of leader and follower prototypes may improve change outcomes by practicing interchangeability in follower and leader roles as the situation warrants.

5.4 Conclusion While organizational change has become the norm in today’s dynamic work environment, its benefits are often dispiriting. For decades, leadership has been identified as integral to change. Findings from this study support that claim. Although socio-cognitive research, which includes information processing theories, has dominated the social science literature for decades, the research has predominantly taken place outside of organizations. However, findings from these studies have significant implications for leader and follower relationships within organizations. The aim of this study was to make a contribution to this understudied area of applied organizational research. Taking a less frequently studied follower-centric approach, the study highlights how follower perceptions of leadership fully mediated the relationship between change and work engagement. Aligned with past research, perceptions of ideal leadership behaviors were associated with transformational leadership, emphasizing the need for leaders to model transformational behaviors, leading to positive follower prototypes of leadership and increased potential to improve change outcomes through a highly engaged workforce.

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