Unit I Discussion Introduction to Leadership

Article

The impact of transformational, transactional and non-leadership styles on employee job satisfaction in the German hospitality industry

Kathrin Rothfelder Reutlingen University, Germany

Michael C Ottenbacher Heilbronn University, Germany

Robert J Harrington University of Arkansas, USA

Abstract This work examines the influence of different leadership behaviours of hospitality managers on employee job satisfaction to close open gaps in leadership research, especially in the German context. Bass’s (1985) full- range leadership model was selected as a framework of this study. A quantitative survey methodology was used to assess leadership influence on employee job satisfaction, and 101 hotel employees in Germany completed the survey. The data analysis involved three major stages: correlation analysis, multiple regres- sion analysis and MANOVA. The results from this study suggest that German hotel employee job satisfaction is strongly affected by leadership behaviour. In this regard, the influence of transformational leadership on employee job satisfaction differs widely from transactional and non-leadership behaviour. Earlier studies have indicated a situational or cultural impact on appropriate leadership style, and this study furthers this concept with a new geographic area (Germany), which can therewith be added to the hospitality leadership research.

Keywords transformational leadership, transactional leadership, non-leadership, employee job satisfaction, hospitality industry, Germany

Introduction

The hospitality industry is, in general, a labor-

intensive industry that depends on the abilities and

motivations of its employees (King, 2010). Front-line

employees play an important role because of their cus-

tomer–employee interactions. Employees influence

how customers perceive an organisation (Harris and

de Chernatony, 2001) and how the organisation itself

performs in the long term (King, 2010). Employees

directly influence the perceived service quality as well

as customer satisfaction (Ottenbacher, 2007). After

all, the service industry always claims that in order to

guarantee customer satisfaction, an organisation at

first needs to ensure employee job satisfaction

(Hoffman and Ingram, 1992), and thus, the widely

established perception ‘happy employees are necessary

for happy customers’ indeed holds true in the hospi-

tality context (Garlick, 2010). Indeed, employee job

satisfaction seems a particularly relevant outcome

variable in the hospitality industry to enhance

Tourism and Hospitality Research

12(4) 201–214

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DOI: 10.1177/1467358413493636

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Corresponding author: Kathrin Rothfelder, ESB Business School, Reutlingen University, 72762 Reutlingen, Germany. Email: [email protected]

guest satisfaction. Consequently, an appropriate lead-

ership style to guarantee and enhance employee job

satisfaction is critical. Therefore, this study examines

the influence of leadership behaviour on employee job

satisfaction in the hotel context.

The past couple of years were extremely challenging

for the hospitality industry around the world. As a

result, ‘doing it like it was done in the past’ is no

longer a formula for success; but, major changes are

required to compete and survive in this increasingly

harsh environment. Within the context of change,

there is always one central theme that arises: leader-

ship. Kotter (1998) claims that change always

demands more leadership. Leaders inspire followers

by creating shared values, beliefs and visions in an

organisation. Leadership is the system used by an indi-

vidual to impact group members towards the accom-

plishment of objectives (West and Tonarelli-Frey,

2008). Transactional leadership refers to all these lead-

ership models, which primarily focus on the exchange

dimension between leaders and followers. Leaders,

applying a transactional leadership style, either use

rewards or disciplines in order to influence followers’

performance (Bass, 1985). They clarify their expect-

ations and clearly communicate how followers will get

rewarded for successful task completion.

Transformational leadership, however, involves

more than the administration of rewards or punish-

ments. As the name implies, transformational leaders

are concerned with the transformation or change of

followers’ fundamental values, goals and aspirations.

The basic difference is that followers, under a trans-

formational leader, share the organisation’s values and

are committed to the organisational goals. They

accomplish work tasks out of motivation and not

because they get rewarded for accomplishments

(Mac Kenzie et al., 2001). Yukl (1989: 204) refers to

transformational leadership as ‘the process of influen-

cing major changes in the attitudes and assumptions of

organisation members and building commitment for

the organisation’s mission or objectives’. Northouse

(2007) concludes that transformational leaders assess

followers’ motives, satisfy their needs and treat them as

important human beings. This treatment makes fol-

lowers accomplish more than what they are expected.

While several studies have focused on assessing

leadership in general, only a limited number have

been completed assessing leadership style and its

effectiveness in a German context. Culture of a variety

of types has been shown to impact leadership practice,

and national culture has been an important cultural

contributor (Brodbeck et al., 2002; Coquitt et al.,

2007). Further, empirical research has been con-

ducted in several industries; however, leadership as a

subject of research has been rather neglected within

the hospitality sector. There are very few studies con-

cerned with leadership in the specific context of the

hospitality industry (e.g., Maier, 2011; Pittaway

et al., 1998), and the few studies that specifically

examined the influence of transformational and trans-

actional leadership behaviour (Gill et al., 2006; Hinkin

and Tracey, 1994) were conducted in the United

States. So far, there have been no studies published

regarding transformational and transactional leader-

ship in the German hospitality industry. Therefore,

this study concentrates on dimensions of transform-

ational, transactional and non-leadership styles. The

dimensions of these leadership styles are examined

within the context of the German hotel industry. The

primary purpose of this study is to examine the influ-

ence of leadership behaviour on hotel employee job

satisfaction.

Literature review

Cultural impacts on leadership style

Cultural studies suggest that culture differs at multiple

levels of organisations and society based on values,

beliefs and expectations that members within these

levels come to share. Common levels of cultural dif-

ferences include organisational culture (Schein, 1985)

and national culture (Hofstede, 1983). Other sources

of culture may include age, social class, education,

profession, length of tenure with a firm and religion

(Usunier and Lee, 2005). Therefore, a key rationale

for the importance of the current study is to assess the

impact of culture on leadership style perceptions.

Earlier studies have demonstrated differences between

national culture and leadership styles. Kuchinke

(1999) examined differences in leadership styles and

work-related values among managers, engineers and

production employees of US and German telecommu-

nication employees. The results indicated that

German employees demonstrated lower levels of

value to transformational leadership styles than the

US counterparts, but no differences in leadership

styles were apparent among different job categories

in either country. There were country-level differences

in culture that explained a portion of the variance in

leadership scores. Job category also had a main effect

on cultural values. The study points to patterns of

work-related values different from those predicted in

earlier research and to the need for further refinement

of research in leadership theory and our understanding

of culture.

The GLOBE project assessed the impact of culture

and leadership in 61 countries worldwide. The find-

ings support the assumption that leadership concepts

are culturally endorsed. Further, clusters of European

202 Tourism and Hospitality Research 12(4)

countries that share similar cultural values seem to

support similar leadership concepts or the assumption

that effective leadership is in the eye of the beholder

(Coquitt et al., 2007). In general, the GLOBE pro-

ject found that Germanic and Anglo cultures

rated the value of transformational leadership higher

than did participants from Latin Europe cultures

such as Spain and Portugal (House et al., 2004).

As part of the GLOBE project, Brodbeck et al.

(2002) found that leadership in Germany is generally

‘tough on the issue, tough on the person’, whereas they

suggest that the right recipe for German managers

would be ‘tough on the issue, soft on the person’ to

ensure the ability to be adaptive to change in the 21st

century.

While the GLOBE study was executed more than a

decade ago, more recent studies indicate that changes

are taking place in more current German leadership

practices. For instance, in 2005, McCarthy (2005)

found that German managers and firms were begin-

ning to adopt modern leadership practices, and where

these were adopted, the practices appeared to be more

consistently implemented as compared to their coun-

terparts in the UK. Further, the study found the stra-

tegic management to be more commonly deployed

compared to previous researchers. In a hospitality set-

ting, Ottenbacher and Harrington (2009) indicated

that innovation leadership style of Michelin-star chefs

appeared to be influenced by institutional, cultural and

other contextual factors. Specifically, the innovation

leadership style varied with the involvement of

other members of the firm. Spanish chefs used the

most individualistic approach, US chefs the most par-

ticipative and German chefs used a combination of

approaches. Both these studies neglected to evaluate

the effectiveness of the leadership approaches

identified.

A synthesis of these studies points to the impact of

culture on work-related values and how these values

on leadership style may change based on location, time

and industry. These studies also identified the need for

further refinement of research in leadership theory and

a better understanding of the impact of culture. Based

on these findings, the following assumptions were

made according to this study. First, as with earlier

studies and theory, it was assumed that effective lead-

ership style was situational. This view was based on the

proposition that differing beliefs and values of different

situations will present different methods or practices

contingent on the culture. Cultural elements of inter-

est in this study included national culture (Germany)

and profession (the hotel industry). Because other fac-

tors may impact leadership practice and perceptions,

age and length of tenure with the firm were included as

control variables of interest. These variables and

assessment are discussed in greater detail in upcoming

sections.

Leadership theory

Bass’s (1985) full-range leadership theory involves the

three components ‘transformational leadership’,

‘transactional leadership’ and ‘non-leadership’. These

three leadership behaviours consist of different dimen-

sions (see Figure 1). All components have been iden-

tified in a variety of ways, for example, by using factor

analyses, conducting interviews, through observations

or by the descriptions of followers’ ideal leaders (Bass

et al., 2003).

Transformational leadership

Bass (1998, 1990) and his colleagues (Bass and

Avolio, 1989; Seltzer and Bass, 1990) characterised

Bass’ Leadership Factors

Transformational leadership

Transactional leadership

Non-leadership

Dimension 1 idealised influence

Dimension 2 inspirational motivation

Dimension 3 intellectual stimulation

Dimension 4 individualised consideration

Dimension 5 contingent reward

Dimension 6 active management-by-exception

Dimension 7 passive management-by-exception

Dimension 8 laissez-faire

Figure 1. Bass’ leadership factors.

Rothfelder et al. 203

transformational leadership as being composed of four

behavioural components, which are unique but inter-

related: idealised influence, inspirational motivation,

intellectual stimulation and individualised consider-

ation. The first two dimensions represent the notion

of ‘charisma’ and are based on a follower’s admiration

for a leader, in equal measures as a follower’s confi-

dence in a leader’s vision and his or her values. The

third dimension, intellectual stimulation is concerned

with providing followers with challenging tasks.

Individualised consideration, as the last transform-

ational dimension, describes the degree to which lea-

ders are concerned with the follower’s individual needs

and wants. As all four transformational dimensions

start with the letter ‘l’, literature often refers to them

as the ‘four l’s’. Bass and Avolio (1994) found that

transformational leaders achieve higher results by

employing one or more of the transformational dimen-

sions. Specifically, significant leadership research indi-

cates that subordinates of transformational leaders

experience higher overall work satisfaction (Bass and

Avolio, 1994; Bryman, 1992; Howell and Frost, 1989;

Keller, 1992; Seltzer and Bass, 1990). Within the hos-

pitality context, Erkutlu (2008) found that this con-

nection also exists. But, little research has been

performed to demonstrate this relationship with spe-

cific dimensions of transformational leadership and if

these relationships hold in a German hotel context.

The first transformational dimension is called idea-

lised influence; sometimes also referred to as charisma.

The term describes leaders who demonstrate high

standards of moral and ethical conduct and who can

be counted on to do the right thing. As these leaders

see what is particularly important, they establish a

vision as well as a sense of mission. Such leaders are

determined, persistent, self-confident, highly compe-

tent and willing to take risks (Bass, 1997). They fur-

thermore sacrifice their personal interests for the

benefit of the group or organisation, set a personal

example and therewith act as role models. This behav-

iour results in followers’ respect, trust and admiration.

The determination and conviction with which these

leaders act make followers want to identify with and

emulate them (Bass and Avolio, 1994).

In the common leadership literature, idealised influ-

ence is sometimes divided into attributed idealised

influence and behavioural idealised influence. The

first type refers to whether a leader is perceived as

being self-confident and committed to high-order

ideals. It basically is a perception in the beholder’s

eye. Behavioural idealised influence, on the other

hand, refers to a leader’s charismatic actions, which

are based on his or her values, ideals or beliefs

(Harms and Credé, 2010).

Inspirational motivation, sometimes also called

inspirational leadership, is the second transformational

dimension. It is highly correlated to idealised influence

but conceptually not the same (Bass, 1997). This

dimension describes a leader’s behaviour that provides

meaning and sets challenging goals to followers’ work.

This behaviour motivates and inspires followers. As a

result, followers become committed and are

more likely to share the organisation’s vision.

Inspirational leadership demonstrates commitment to

Overall Transformational Leadership

Individual Transformational Dimensions (idealised influence, inspirational

motivation, intellectual stimulation, individualised consideration)

Overall Transactional Leadership

Individual Transactional Dimensions (contingent reward,

active management-by-exception)

Individual Transactional Dimension (passive management-by-exception)

Laissez-faire

H1a(+)

H1b(+)

H2a(+)

H2b(–)

H2c(–)

H3(–)

Employee Job Satisfaction

Figure 2. Proposed hypotheses.

204 Tourism and Hospitality Research 12(4)

organisational goals, enhances team spirit and clearly

articulates high expectations. The latter is done by

using appealing symbols, metaphors and simple lan-

guage (Bass, 1990). In addition, inspirational leaders

increase the optimism and enthusiasm of followers and

provide an attractive but achievable vision of the

future. With this effort, they help followers to increase

their self-confidence and to accomplish more than they

initially felt was possible (Dubinsky et al., 1995).

Dimension three, intellectual stimulation, is

descriptive of leaders who stimulate followers to be

innovative, creative and to participate intellectually.

This leadership behaviour aims at increasing followers’

awareness of problems, challenges followers to look at

problems and procedures from new perspectives and

encourages novel approaches for performing work in

order to achieve the organisation’s goals and object-

ives. These leaders encourage using intuition by

using reasoning and rationality rather than unsup-

ported opinions. However, they do not criticise fol-

lowers’ ideas, because they differ from their own.

Intellectually stimulating leaders question existing

values and beliefs and provoke rethinking and re-

examination of set assumptions on which capabilities

and strategies are based (Bass, 1997). In other words,

they look at old problems in new ways and make their

employees do the same. As a result, subordinates

under this kind of leadership alter their way of think-

ing, openly communicate their ideas, become critical

and effective in their problem-solving and become

adept at responding to different needs and wants

(Dubinsky et al., 1995).

Individualised consideration is the fourth and last

dimension of the transformational ones. It refers to the

leader’s awareness and appreciation for followers’

uniqueness as well as individual needs and concerns.

These supervisors pay attention to each subordinate

individually, are attentive to the unique concerns of

their employees and make each one feel important

and valued. Additionally, they consider followers’

growth needs and take all necessary actions to foster

followers’ personal development (Bass, 1997). In this

regard, individualised considerate leaders provide

socio-emotional support. This involves attentive listen-

ing, maintaining frequent contact with followers and

encouraging subordinates’ self-actualisation while

empowering employees. Leaders displaying individua-

lised consideration act as coaches or mentors

(Northouse, 2007) and therewith encourage two-way

communication on a one-to-one basis. They practice

‘walk around management’ and often use delegation to

help followers grow through personal challenges.

However, as individualised considerate leaders treat

each employee individually, they may give a lot of

space to some employees and provide others with

more structure and specific directions. As a result, sub-

ordinates under such a supervisor tend to feel coa-

ched, supported and listened to. They respect their

leaders and feel more self-confident through the lea-

der’s individual support at esteem-building (Dubinsky

et al., 1995).

Transactional leadership

Transactional leadership behaviour is composed

of three dimensions: contingent reward, active man-

agement-by-exception and passive management-

by-exception. Contingent rewarding leaders get

agreement on what needs to be done by followers

and provide rewards in exchange for effective task

completion. Management-by-exception can be prac-

ticed either actively or passively. The active form is

mainly based on constant monitoring and taking cor-

rective action, whereas, at the passive form of manage-

ment-by-exception, corrective actions are only taken if

things go wrong (Bass, 1997). In earlier research, Bass

and Avolio (1994), Bryman (1992), Keller (1992) and

Seltzer and Bass (1990) as well as Howell and Frost

(1989) found that subordinates of transactional lea-

ders experience lower overall work satisfaction than

the subordinates of transformational leaders. Here

again, little research has been performed to demon-

strate this relationship with specific dimensions

of transactional leadership and if these relation-

ships hold in differing cultural contexts. To bridge

this gap in the literature, this study aimed to ana-

lyse the influence of contingent reward and manage-

ment-by-exception on employee job satisfaction,

individually.

Contingent reward, as the first transactional leader-

ship dimension, describes an exchange process that

takes place between leaders and followers. Efforts

by followers are exchanged for pre-decided specified

rewards. Contingent rewarding leaders set out

clear goals and assignments and communicate their

expectation to followers. They focus on giving followers

a clear understanding of what needs to be done and how

they will get rewarded for completing agreed-on tasks.

Rewards can occur in the form of praise, commenda-

tions, bonuses or pay increases (Bass, 1997). Thus,

contingent rewards can be seen as a positive reinforce-

ment pattern or as a constructive transaction.

Active management-by-exception is mainly based

on taking corrective action. Leaders actively monitor

and control followers’ performance and watch

closely for any mistakes they cause or for any

rules they violate. If leaders, applying active manage-

ment-by-exception, detect any failures, errors or devi-

ations from standards, they take corrective actions as

quickly as possible (Bass, 1997).

Rothfelder et al. 205

Contrary to the active version of management-

by-exception, passive management-by-exception

describes leaders who only intervene after certain

standards have failed or problems have occurred.

These leaders wait for things to go wrong and for mis-

takes to occur before they act to correct failures

(Harms and Credé, 2010). Passive management-

by-exception mainly consists of negative feedback

forms like criticism, correction or punishment admin-

istered by a leader contingent on insufficient or poor

performance. Due to that fact, literature also refers to

it as contingent punishment (Podsakoff et al., 1984),

corrective transactions or negative reinforcement

(Northouse, 2007). Only the contingency of the pun-

ishment distinguishes this behaviour from what Kohli

(1985) calls ‘arbitrary and punitive behaviour, thereby

making it a transactional one.

Non-leadership—laissez-faire. Non-leadership rep- resents an extremely inactive behaviour that is nei-

ther transformational nor transactional. For this

reason, literature also refers to it as non-transactional

leadership. Non-leadership involves laissez-faire

behaviour, which itself basically refers to the absence

of leadership.

Although laissez-faire leadership is conceptually

correlated to the passive form of management-

by-exception, it results in a lack of action even

when correction is needed. Laissez-faire leadership

describes an approach where managers take a

‘hands-off ’ approach and let things go their own

way. Supervisors applying this style usually abdicate

authority and responsibility, hesitate to take action,

delay decisions or avoid decision making completely.

They avoid taking positions, give no feedback to fol-

lowers and make little or no effort to help followers

grow. Laissez-faire managers are inactive, indifferent,

uninfluential, inattentive and, above all, typically

absent when needed. It can be said that laissez-

faire leaders do not event attempt to lead.

Metaphorically laissez-faire leadership behaviour

can be seen as a ‘sink or swim’ strategy in which

employees either make it on-their-own or do not

make it at all. Consequently, employees working

under this type of supervision seek assistance, direc-

tion and support from alternate sources, for exam-

ple, peers, other managers or even extra

organisational members (Bass, 1990). According to

Bass and Avolio (1989), laissez-faire leadership is

observed infrequently in industry, even though

there are still individual managers exhibiting this

type of non-leadership behaviour. Erkutlu (2008)

found that a laissez-faire leadership style was nega-

tively related to subordinates’ job satisfaction in a

hospitality setting.

Hypotheses

Transformational leaders show high standards of

moral and ethical conduct. Not just because trans-

formational leaders live up to their own set of expect-

ations but also because they have their subordinates’

best interests in mind; subordinates identify and emu-

late their transformational leaders. Followers feel

inspired and motivated and tend to truly respect and

admire their supervisors. Transformational leaders

provide an optimistic and attractive vision of the

future, stimulate followers’ creativity and furthermore

encourage team spirit. However, they never lose sight

of subordinates’ individual concerns. Quite the con-

trary, they appreciate followers’ uniqueness and indi-

vidually foster followers’ personal development. Based

on these arguments, it can be hypothesised that

employees led by a transformational leader feel more

satisfied with their job overall. Significant leadership

research proves that subordinates of transformational

leaders experience higher overall work satisfaction

than subordinates of transactional leaders (Bass and

Avolio, 1994; Bryman, 1992; Howell and Frost,

1989; Keller, 1992; Seltzer and Bass, 1990). Erkutlu

(2008) found that this connection also exists in the

hospitality industry. In order to support Erkutlu’s

(2008) findings, the following hypotheses were tested

in the German hotel industry context:

Hypothesis 1a: Greater overall use of a transform- ational leadership style is associated with an increase in

employee job satisfaction in the German hotel context.

Hypothesis 1b: Greater use of individual transform- ational dimensions (idealised influence, inspirational

motivation, individualised consideration and intellec-

tual stimulation) is associated with an increase in

employee job satisfaction in the German hotel context.

Transactional leaders demonstrating contingent

reward behaviour clearly articulate their expectations.

They additionally communicate how employees get

rewarded for completing agreed-on tasks. These

rewards occur in the form of praises, commendations,

bonuses or also in pay increases. This, beyond a doubt,

argues for the assumption that overall employee job

satisfaction can be increased by contingent rewarding

behaviour.

Transactional leaders, applying the active or passive

management-by-exception approach, however, watch

closely for any mistakes or deviations and take direct or

delayed corrective actions. There is a lot of controlling

and monitoring involved in these leadership styles.

Thus, these approaches are likely to slow down indi-

vidual development instead of encouraging it. For

these reasons, it can be argued that active and passive

management-by-exception reduce employee job satis-

faction. In previously conducted research, Bass and

Avolio (1994), Bryman (1992), Keller (1992) and

206 Tourism and Hospitality Research 12(4)

Seltzer and Bass (1990) as well as Howell and Frost

(1989) found that subordinates of transactional lea-

ders experience lower overall work satisfaction than

did the subordinates of transformational leaders.

Though most studies focused on transactional leader-

ship as a whole, this study aimed to analyse the

influence of contingent reward and management-

by-exception on employee job satisfaction, individu-

ally. The arguments and assumptions discussed led

to the following hypotheses:

Hypothesis 2a: Greater overall use of a transac- tional leadership style is associated with an increase

in employee job satisfaction in the German hotel

context.

Hypothesis 2b: Greater use of the individual trans- actional dimensions, contingent reward and active

management-by-exception is associated with an

increase in employee job satisfaction in the German

hotel context.

Hypothesis 2c: Greater use of the individual trans- actional dimension, passive management-by-excep-

tion, is associated with a decrease in employee job

satisfaction in the German hotel context.

Laissez-faire leadership basically refers to the

absence of leadership. Leaders, applying this leader-

ship style, neither instruct their subordinates nor

motivate or inspire them extrinsically. Research find-

ings by Erkutlu (2008) indicated that laissez-faire lead-

ership was negatively related to subordinates’ job

satisfaction in hospitality. Accordingly, the following

was proposed:

Hypothesis 3: Greater use of laissez-faire leadership is associated with a decrease in employee job satisfac-

tion in the German hotel context.

Methodology

A quantitative survey methodology among hotel

employees was used to assess leadership influence on

employee job satisfaction. The sample of the current

study was drawn from hotels in Germany. General

managers were first contacted via telephone. The

goal and purpose of this study was explained, and

the general managers were asked if they were willing

to let their employees participate in this study.

Participating hotel managers were asked if they pre-

ferred print-questionnaires or an on-line survey.

Questionnaire packets were then mailed to the man-

agers who either directly distributed the questionnaires

to employees or to division managers who continued

the distribution within their department. A total of

116 hotel employees (57 print questionnaires and 59

online questionnaires) participated in this study.

Incomplete questionnaires reduced the sample size to

101 subjects. To determine if collection method

(print or online) affected results, t tests were per-

formed to test for significant differences between

print and online groups for leadership dimensions.

For these t tests, results were non-significant, indicat-

ing no method effects.

To remain consistent with previously conducted

research, all measures used in this study were adapted

from noteworthy leadership studies. Therefore, all the

scales used in this study had strong, construct validity

already established in the literature with substantial

tests using factor analysis and other means.

Leadership behaviour was measured using

scales adapted from the Multifactor Leadership

Questionnaire (MLQ) developed by Bass and Avolio

(1989). The MLQ was used as a basis, as there is a

substantial evidence that it is an adequately reliable

and valid measure of these three leadership types

(e.g., Bass and Avolio, 1989; Chemers and Ayman,

1993; Hinkin and Tracey, 1994). It is regarded to be

the benchmark measurement for transformational and

transactional leadership. However, while Bass and

Avolio (1994) provide a conceptual distinction

among the ‘four l’s’, Hinkin and Tracey (1998)

found that Bass’ ‘four I’s’ overlap and highly correlate

with each other. In addition, Tejeda et al. (2001) state

that some transformational dimensions correlate with

transactional and non-leadership dimensions. This

means that they may not be unique to the transform-

ational approach.

All in all, 40 questions were asked about leadership

behaviour. The construct transformational leadership

(23 items) was divided into the sub-constructs’ idea-

lised influence (6 items), inspirational motivation

(6 items), intellectual stimulation (6 items) and indi-

vidualised consideration (5 items). Transactional lead-

ership (12 items) consisted of the sub-constructs’

contingent reward (4 items), active management--

by-exception (4 items) and passive management--

by-exception (4 items). Non-leadership was

composed of the sub-construct laissez-faire leadership

(5 items). Hospitality employees were asked to

indicate on a five-point Likert scale, if they either

(1) agreed or (5) disagreed with statements regarding

the leadership behaviour of their immediate

supervisor.

Job satisfaction was measured using a self-

constructed eight-item scale mainly adopted from

work by Brown and Peterson (1993) as well as Clark

et al. (2009). The scale was appropriately readjusted

and extended by the authors of this study. Employees

had to answer on a five-point Likert scale, how much

they were (1) satisfied to (5) dissatisfied with a variety of

job dimensions, which add to overall job satisfaction.

The data set was analysed using several

different techniques in SPSS involving the three

Rothfelder et al. 207

main stages: correlation analysis, multiple regression

analysis and multiple t tests. Because this study used

previous scales that have undergone substantial tests

for validity, the first step was to assess reliability of the

measures in the current context. Cronbach’s alpha was

used as a diagnostic measure to assess the consistency

of each section of the instrument. In research, the gen-

eral, agreed on, lower limit for Cronbach’s alpha was

0.70 (Hair et al., 1998), which was applied in the cur-

rent study. One leadership dimension did not meet this

criterion (transactional dimension ‘active manage-

ment-by-exception’, a¼0.54); therefore, the dimen- sion was excluded from testing in the current study.

The remaining instrument dimensions alpha ranged

from 0.73 to 0.94 and included four transformational

dimensions, two transactional dimensions, one

non-leadership dimension and job satisfaction. Table

1 provided each dimension, items included in each

instrument section and the Cronbach’s alpha for each.

In a second stage, correlation analysis, all measures

used in the study were intercorrelated to measure the

relationships among variables and to examine consis-

tencies of results with previously conducted research.

If correlation coefficients were significant at the *0.05

or **0.01 level was indicated. While one advantage to

multiple regression was that predictors do not need to

be orthogonal, highly correlated run the risk of multi-

collinearity resulting in inaccurate results. An inspec-

tion of the intercorrelation matrix indicated no issues

with threats to multicollinearity for age group, firm

tenure, the overall transformational measure, the over-

all transactional measure and non-leadership measure.

Further, tolerance ranges indicated a sufficient level of

unique information by variables included in the mul-

tiple regression of this study. Therefore, multiple

regression analysis was conducted to analyse and pre-

dict a single dependent variable from the knowledge of

several independent ones (Hair et al., 1998).

Significance levels were indicated in y p < 0.10,

*p < 0.05 and **p < 0.01 (Table 2).

Results

The results of the correlation analysis showed that sev-

eral variables were interrelated. The overall measure of

transformational leadership was weakly correlated to

the overall measure of transactional leadership. But,

it was moderately and negatively correlated with

non-leadership (�0.68, p < 0.01). This relationship was consistent with the earlier research on leadership

(Tejeda et al., 2001). Overall, transactional leadership

and non-leadership were weakly and non-significantly

interrelated. The individual dimensions for transform-

ational leadership were significantly interrelated

(ranging from 0.56 to 0.79). Individual transactional

leadership dimensions were moderately negatively cor-

related (�0.47, p < 0.01). The study used hierarchical regression to evaluate

the direct effects of leadership styles on levels of job

satisfaction. For all tests, standardised beta coefficients

were used to maintain a common scale for interpret-

ation. Table 3 provides results of job satisfaction (DVs)

regressed on two control variables (age group and

tenure with the firm), an overall assessment of trans-

formational style, an overall assessment of transac-

tional style and a laissez-faire (non-leadership) style.

When job satisfaction was used as the dependent

variable, the test resulted in a highly significant finding

overall (F¼25.44, p¼0.001). The control variables of

age group and tenure with the firm were non-signifi-

cant. Only one leadership style was a significant

predictor of job satisfaction levels. The overall trans-

formational leadership measure had a positive and sig-

nificant relationship with job satisfaction (b¼0.80, p < 0.001); the overall transactional leadership measure and non-leadership had a non-significant

relationship.

Multiple t tests were used to compare the relation-

ship among perceived leadership dimensions and high

and low levels of job satisfaction for participants in this

study (Table 4). The six sub-dimensions of leadership

used in this analysis included four sub-dimensions of

transformational leadership (idealised influence,

inspirational motivation, intellectual stimulation and

individualised consideration) and two sub-dimensions

of transactional leadership (contingent rewards and

passive management-by-exception).

The t tests showed that there was a significant dif-

ference between high and low levels of job satisfaction

with all four transformational sub-dimensions: TF1

idealised influence, TF2 inspirational motivation,

TF3 intellectual stimulation and TF4 individualised

consideration (all with p < 0.001). Hence, the findings of this study indicated a higher level of job satisfaction

with higher perceived use of leadership behaviours by

supervisors in the transformational dimensions of

idealised influence, inspirational motivation, intellec-

tual stimulation and individualised consideration.

The t test results for job satisfaction groups and the

transactional dimensions were also highly significant,

indicating a substantive relationship between transac-

tional dimensions and job satisfaction levels.

Specifically, the tests showed that there was a signifi-

cant difference between high and low levels of job

satisfaction of both transactional dimensions: TA1

contingent rewards and TA2 passive management-

by-exception (p < 0.000). As predicted, this finding indicated a higher level of job satisfaction with higher

perceived use of leadership behaviours by supervisors

208 Tourism and Hospitality Research 12(4)

Table 1. Reliability of instrument dimensions.

Transformational leadership dimensions

TF1_idealised influence (six items, Cronbach’s �¼0.92) 1. My supervisor articulates a clear vision. 2. My supervisor sets a personal example and acts as a role model for me to follow. 3. My supervisor talks to us about his or her most important values and beliefs. 4. My supervisor behaves in ways that are consistent with his or her expressed values. 5. My supervisor makes me proud to be associated with him or her. 6. I have complete faith in my supervisor.

TF2_inspirational motivation (six items, Cronbach’s �¼0.73) 1. My supervisor talks and acts optimistically and enthusiastic. 2. My supervisor sets high standards for my work and insists on only the best performance. 3. My supervisor expresses his or her confidence that I will achieve my goals. 4. I feel motivated and inspired by my supervisor. 5. My supervisor provides meaning to my work. 6. I feel committed to organisational goals.

TF3_intellectual stimulation (six items, Cronbach’s �¼0.79) 1. My supervisor challenges me to think about old problems in new ways. 2. My supervisor provides me with challenging roles. 3. My supervisor stimulates me to achieve individual and organisational goals. 4. My supervisor wants me to participate intellectually. 5. My supervisor requires that I back up my opinions with good reasoning. 6. I feel free to openly communicate my ideas.

TF4_individualised consideration (five items, Cronbach’s �¼0.89) 1. My supervisor helps me to develop my strengths. 2. My supervisor treats each of us as individuals with different needs, abilities and aspirations. 3. My supervisor finds out what I want and helps me to get it. 4. My supervisor always listens attentively. 5. My supervisor rather acts as a coach or mentor than my boss.

Transactional leadership dimensions

TA1_contingent reward (four items, Cronbach’s �¼0.84) 1. My supervisor clearly articulates what he or she expects from me and how I will get rewarded for completing agreed-on tasks. 2. My supervisor uses rewards for reinforcing outcomes of individual performance. 3. My supervisor always gives me positive feedback when I perform well. 4. My supervisor personally compliments me when I do outstanding work.

TA2a_active management-by-exception (four items, Cronbach’s �¼0.54) 1. My supervisor focuses on poor performance of his or her employees. 2. My supervisor quickly takes corrective actions if he or she detects any failure or deviations from standards. 3. My supervisor constantly monitors my performance. 4. My supervisor tells me what I have done wrong rather than what I have done right.

TA2b_passive management-by-exception (four items, Cronbach’s �¼0.82) 1. It requires a failure to meet an objective for my supervisor to take action. 2. My supervisor does not care about solving problems. 3. My supervisor does not start making decisions until problems become serious or a crisis situation arises. 4. My supervisor directs his or her attention toward failure to meet standards.

Non-leadership dimension

NL1_laissez-faire (5 items, Cronbach’s �¼0.94) 1. My supervisor avoids making decisions. 2. My supervisor abdicates authority and responsibility. 3. My supervisor does not act when his or her help and support is needed. 4. My supervisor gives me neither instructions nor feedback. 5. My supervisor is not interested in my work or in my colleagues’ work.

Employee job satisfaction (How satisfied are you with. . .?) (eight items, Cronbach’s �¼0.88)

1. Your overall job? 2. Your immediate supervisor? 3. Your organisation’s policies? 4. The support provided by your supervisor? 5. Your opportunities for advancement with this organisation? 6. The overall communication at your company? 7. The training and development provided by your company? 8. The fairness of the way the company treats all employees?

Rothfelder et al. 209

in the transactional dimension of contingent rewards

and lower job satisfaction for perceived passive man-

agement-by-exception behaviours in the German hotel

context.

Overall, the study’s results showed that employee

job satisfaction was closely affected by leadership

behaviour. In particular, it was found that idealised

influence, inspirational motivation, individualised consid-

eration, intellectual stimulation and contingent reward

behaviours were positively related to employee job sat-

isfaction. Study findings furthermore suggested that

passive management-by-exception had a negative influ-

ence on employee job satisfaction. Laissez-faire leader-

ship was not considered influential by participants in

the results of this study.T a

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Table 3. Job satisfaction regressed on controls (age group, tenure w/firm) and IVs (overall transformational leadership, overall transactional leadership and non-lea- dership perceptions) N¼101.

Variables Model

Control variables Age group 0.11

Tenure w/firm 0.07

Leadership variables Overall transformational 0.80***

Overall transactional 0.02

Non-leadership �0.06

F 25.44***

R 0.76

R2 0.58

Adj. R 0.56

***p < 0.001; **p < 0.01; *p < 0.05; +p < 0.10. All betas are standardised.

Table 4. Mean differences between job satisfaction groups for leadership factors.

Leadership factor

Job satisfaction mean

High Low Sig.

TF1_idealised influence 1.59 2.81 0.000

TF2_inspirational motivation 1.64 2.24 0.000

TF3_intellectual stimulation 1.72 2.42 0.000

TF4_individualised consideration 1.98 3.15 0.000

TA1_contingent reward 2.11 3.25 0.000

TA2_passive management- by-exception

4.30 3.23 0.000

TF: transformational; TA: transactional.

210 Tourism and Hospitality Research 12(4)

Discussion

In line with hypotheses 1a and 1b, all components of

transformational leadership (idealised influence,

inspirational motivation and individualised consider-

ation as well as intellectual stimulation) were positively

related to employee job satisfaction. These results were

consistent with the previously conducted research and

support prior findings in other contexts (Bass and

Avolio, 1994; Bryman, 1992; Erkutlu, 2008; Howell

and Frost, 1989; Keller, 1992; Seltzer and Bass,

1990). Reduced to practice, this meant that German

hotel employees were more satisfied when their super-

visors articulated a clear vision, set a personal exam-

ple, motivated and inspired, provided meaning to

subordinates’ work, acted in ways that made followers

want to trust them, showed support and understand-

ing and treated subordinates as individuals with differ-

ent needs, abilities and aspirations (Table 5).

Interestingly, contingent reward behaviour also had

a strong positive relationship on employee job satisfac-

tion. This result supported hypothesis 2b and sug-

gested that German hotel employees were more

satisfied with their overall work when leaders clearly

formulated expectations, provided followers with feed-

back and used rewards or compliments to show appre-

ciation for outstanding work. This finding was

consistent with Bass’ theoretical explanation that

executives may use transformational and transactional

leadership and that transactional leadership can be

seen as a basis and transformational leadership as a

complement to it. In fact, the correlation analysis

showed that transformational leadership was highly

correlated with contingent rewarding behaviour,

meaning that leaders applying transformational

leadership also demonstrate contingent rewarding

behaviour.

This theoretical explanation did not find proof in

the current study with regard to the transactional

dimension management-by-exception. In line with

hypothesis 2c, passive management-by-exception was

found to decrease German hotel employee job satis-

faction. This result was not surprising, since it was

comprehensible that employees were dissatisfied

when supervisors directed their attention towards fail-

ure to meet standards and when they did not care

about solving customers’ or employees’ problems. In

addition to that, employees’ job satisfaction decreased

when supervisors only took action after failures already

occurred or did not make decisions before crises arose.

This finding supported previous results from other

contexts, which indicated that subordinates of transac-

tional leaders experienced lower overall work satisfac-

tion than subordinates of transformational leaders

(Bass and Avolio, 1994; Bryman, 1992; Howell and

Frost, 1989; Keller, 1992; Seltzer and Bass, 1990).

Study findings also implied that laissez-faire leader-

ship, contrary to hypothesis 3, had no effect on

employee job satisfaction. This finding was not con-

sistent with the research results of Erkutlu (2008) who

found laissez-faire leadership to be negatively related

to subordinates’ job satisfaction. The fact that passive

management-by-exception and laissez-faire leadership

were highly correlated in the present study also favours

the assumption that laissez-faire leadership decreases

employee job satisfaction. However, study findings did

not support this assumption. A possible explanation

for the non-existing relationship may be the actual

effective appearance of this leadership style in

the German hospitality industry. Due to close

Table 5. Summary of predictions and results.

Dependent variable Hypothesis Predicted sign Independent variable Overall results

Job satisfaction 1a + Overall transformational leadership Highly supported

H/L job satisfaction 1b.1 + TF1_idealised influence Highly supported

H/L job satisfaction 1b.2 + TF2_inspirational motivation Highly supported

H/L job satisfaction 1b.3 + TF3_intellectual stimulation Highly supported

H/L job satisfaction 1b.4 + TF4_individualised consideration Highly supported

Job satisfaction 2a + Overall transactional leadership Not supported

H/L job satisfaction 2b.1 + TA1_contingent reward Highly supported

H/L job satisfaction 2b.2 + TA2a_active management-by-exception Excluded

H/L job satisfaction 2c � TA2_passive management-by-exception Highly supported

Job satisfaction 3 � Non-leadership Not supported

Rothfelder et al. 211

leader–follower relationships, it is very unlikely that

laissez-faire leadership occurs often. As a result, the

effects on dependent variables can hardly be assessed.

These findings supported the proposition in earlier

studies that German leadership was moving away from

the ‘tough on the issue, tough on the person’ leader-

ship approach—at least in high-contact service indus-

tries such as the hotel industry. Or, at least, lower level

German hotel employees had a preference for trans-

formational leadership approaches. Of course, it

remains to be seen if transformational leadership’s

relationship to job satisfaction also translates to overall

higher staff and firm performance.

Managerial implications

The study results suggested that leadership matters

with regard to influencing employees’ job satisfaction

in the German hospitality industry. Employee job sat-

isfaction seems especially important, considering the

fact that guests rarely interact with management but

with employees and that satisfied employees were

more likely and more willing to provide quality service

to customers. So, it was noted that hospitality man-

agers must work to positively influence employees by

adopting an adequate leadership behaviour. Based on

current study findings, it can be argued that the ade-

quate leadership behaviour for managing hospitality

employees is primarily transformational, because

transformational behaviour increases employee job

satisfaction. Findings furthermore indicated the need

for leaders to use transactional style in the form of

contingent rewarding to satisfy employees. Hence, it

can be recommended for hospitality executives to use

transformational leadership behaviours and contingent

rewarding leadership and to avoid passive-manage-

ment as well as the laissez-faire approach. This balance

between the four transformational leadership dimen-

sions and the transactional contingent reward dimen-

sion indicates the need to perform a leadership style

‘juggling act’ to balance the needs of the task and

employee in order to maximise job satisfaction of

employees in the hotel industry.

Reduced to praxis, the results about transform-

ational leadership mean that hospitality executives,

no matter if the general manager or division managers,

have to demonstrate high standards of moral and eth-

ical conduct themselves. Employees feel the need to be

able to trust and count on their supervisors to do the

right thing. Hospitality executives furthermore need to

think more carefully about how they can do a better

job of articulating the corporate vision to provide

employees with guidance and understanding of

where the organisation is heading. If employees under-

stand the thoughts, processes and strategies behind the

tasks or orders, they appear more likely know what

they must do to help accomplish the leader’s vision.

If subordinates understand the ‘big picture’, they will

furthermore feel more satisfied, because they perceive

their work as meaningful and they may develop higher

levels of motivation and commitment, which subse-

quently influence other work outcomes.

As with other contexts, one of the best ways for

German managers to transfer corporate principles is

to lead by example. Leading by example becomes par-

ticularly important in the hospitality industry due to

the close contact between employees and supervisor.

Furthermore, German supervisors need to pay more

attention to their intellectually stimulating leadership

behaviour. Reduced to praxis, this means that they

need to create a climate in which employees feel chal-

lenged to always re-examine set assumptions, to be

innovative and creative, but also feel supported to

openly communicate their ideas. In the German

hotel context, this means addressing tough problems

with a balance between the concern for the task at

hand and concern for the people involved. This, of

course, includes maintaining an awareness of the

employees’ uniqueness and diversity of beliefs and

values.

The study findings also indicated that German hos-

pitality managers should not ignore the potential

impact of contingent rewarding behaviour, since a

positive effect on employee job satisfaction was

assessed. This means providing clear expectations, so

that followers can fulfill their assignments and know

what they must do to help accomplish desired object-

ives. Managers can use timely rewards, for example, in

the form of praise, commendations, bonuses, incen-

tives or small pay increases to acknowledge employees’

work and to show employees that their work is import-

ant and meaningful.

In terms of specific recommendations, it is sug-

gested that management attaches great importance to

the recruitment and selection of German hotel man-

agers that exhibit characteristics of transformational

and contingent rewarding behaviour. Second, training

and development seem to be particularly important in

the hospitality setting as the German hotel industry is

known for having managers who worked their way up

without having a strong academic background or pro-

fessional development program regarding leadership.

Therefore, the implementation of seminars or train-

ings about leadership style is critical to change institu-

tional and cultural expectations and assumptions.

Thus, it is suggested that hotel administration assess

and evaluate leadership behaviour and employees per-

ceived work outcomes in each division of the organisa-

tion with a corresponding survey. According to the

results, problems may be solved in discussions or by

212 Tourism and Hospitality Research 12(4)

training individual division managers who demon-

strate doubtful leadership behaviour.

Conclusion

This study was conducted in the German hospitality

industry and aimed to measure the influence of trans-

formational, transactional and non-leadership behav-

iour on employee job satisfaction. Contrary to most

studies on this subject, this study was not only con-

cerned with the positive effects of transformational

leadership but also looked into the effects of transac-

tional and non-leadership. These three leadership

behaviours were furthermore analysed in their particu-

lar components (dimensions) and not as a whole,

which makes results not only more accurate but also

valuable. In conclusion, study findings suggest that

leadership behaviour influences employee job satisfac-

tion quite to the extent hypothesised.

Based on the current study results, it can be argued

that the most appropriate behaviour for positively

influencing employee job satisfaction is transform-

ational and contingent rewarding. Consequently, it is

important that these leadership behaviours are practic-

ally applied and that structures within the organisa-

tions are established that make the application

possible. As the majority of earlier studies have focused

on US samples, this study tested relationships in a

German national culture and unique profession

(hotels). The findings support a more universal

approach to leadership style preferences rather than a

‘beauty is in the eye of the beholder’ or cultural per-

spective to leadership style. Particularly, age groups,

firm tenure, national location and industry effects sup-

ported propositions of the effectiveness of transform-

ational and contingent reward approaches to

leadership in general.

Limitations

The findings of this study should be viewed in light of

its limitations. The first limitation refers to the sample

size of 101 questionnaires. While the sample size is

relatively small, the size of the current study attempts

to establish both statistical and practical significance.

A weakness of a smaller sample size is a lack of statis-

tical power to identify differences that exist, and the

weakness of a larger sample (200 or more) is that the

statistical tests become overly sensitive (Hair et al.,

1998). The current study used a sample of appropriate

size to balance the need for both statistical and prac-

tical significance. Of course, a limitation of this

approach is less generalisability. Thus, a second limi-

tation is the question of generalisabilty due to not only

sample size but also the context. The research scope of

this study was the German hospitality industry; while

this limitation may limit the generalisability of the find-

ings, a key objective was to assess the impact of lead-

ership style in this specific cultural (Germanic) and

institutional (hotel field) situation. The study drew a

broad cross-section through the German hospitality

industry by covering different areas and by including

different types of hotels ranging from the budget to the

luxury segment. Further research on this subject can

investigate if study findings can be applied to other

industries and other countries.

While common-method bias cannot be totally ruled

out due to the use of exclusively survey data based on

staff perceptions, the correlations found in the study

are consistent with earlier studies in the area (e.g.,

Tajeda et al., 2001). But, in any case, results should

be interpreted with caution, given the potential for any

common-method bias effects.

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