Transactional Leadership
Literature Review
Since employee commitment is associated with leadership behaviour in organisations, a rational projection could be that organisations need managers who exhibit leadership behaviour that lends itself to employee commitment. It is unknown whether this situation applies in South African SOEs, which is why this study sought to determine if recognized TLS behaviours demonstrate any relationship with employee commitment in Black-manager-led work units in South African SOEs. The literature review of the study therefore covers the concepts of leadership and employee commitment. Subsequently, the possible connections between facets of the TLS and employee commitment are discussed as part of the process of a deductive approach for hypotheses formulation.
Leadership
In the context of an organization, leadership refers to the power relationship between managers and their employees, while also encapsulating the process of using power to affect the behaviour of others (Northouse, 2016) with the aim of achieving organizational goals. A leadership style is typically a habitual pattern of displayed behaviours that may be moulded by factors such as philosophy, culture or values, character, education, preparation and experience. Given that leadership is based on a social exchange relationship between the organization and employees and the managers are drivers in these relationships, their behaviours are inevitably important. This rationale is in line with the concept of the leader-member exchange (LMX) theory which emphasises the employees' dependence on leadership. According to Harb et al., the LMX theory explicates the reciprocal influence processes within vertical manager-employee dyads in which the managers, who should provide leadership, have direct authority over their employees.
Transactional leadership
Daft and Marcic contend that the transactional leadership theory is founded on a traditional management process of planning, organising, leading and controlling. In essence, transactional leaders are responsible for creating proper structures, providing rewards and incentives, and considering the needs of employees in decision-making. According to Mufti et al. (2020), this style of leadership is particularly suited to managers who work in organizations in which assignments are simple and routine. It would seem, however, that the TLS involves a process of conditional exchange between a leader and subordinate, given that Pastor and Mayo argue that both parties perceive the other as being useful for the fulfilment of each other's needs. This belief signals the existence of a psychological contract between the manager and the employees that is characterised by 'give-and-take' dependencies. In harmony with this position, Daft posits that the use of the TLS requires managers to provide the guidance that their subordinates value. The fundamental course of transactional leadership is linked to managers' accurate judgement of situational factors which are inclusive of subordinates' expectations.
Liu et al. note that managers with a TLS usually operate within the strict confines of an established system. Indeed, managers who exhibit behaviours linked to the TLS typically rely on legitimate power, which gives them the formal authority to ensure that tasks are executed as directed. According to Bass and Avolio, there are three different behavioural facets that characterise the TLS and these are the contingent-reward (CR) behaviour, management-by-exception (Active) (MbE_A) behaviour and the management-by-exception (Passive) (MbE_P) behaviour. The Contingent-Reward (CR) behaviour is expressed when the manager aligns objectives with a reward, clarifies expectations through a discussion with the employees and makes resources available for task-execution.
Studies by Burroughs et al. as well as Eisenberger and Aselage affirm that the use of the CR facet of the TLS enhances innovation, especially when employees find the promised rewards attractive. However, Faraz, et al. warn that with time the controlling effect of rewards diminishes. This is consistent with the view of Folakemi et al., who opine that the potency of the CR facet of the TLS may be enhanced if it is complemented by other leadership behaviours.
The MbE_A behaviour manifests when a manager exercises control by closely tracking and monitoring the performance of subordinates. Emerging deviations from the set standards are corrected to ensure good performance. When the performance falls below the expected standards, the manager often feeds back the information to the subordinates, sometimes with consequences as may be deemed fit. Kark, et al. aver that this type of leadership behaviour may discourage additional effort on the part of the employees because they are usually interested in fulfilling only basic obligations.
The MbE_P behaviour is evident when the manager does not act, except when there are escalations or when objectives have not been met. This approach means the manager does not intervene in employees' work, except in the face of a problem that cannot be ignored. Jones and Jones posit that given that leadership behaviours are transmissible, passive managers send organisationally damaging signals to employees, who might then become passive as well.
Employee commitment
Allen and Meyer's study presents employee commitment as the psychological state that differentiates employees' desire to remain within an organization and their likelihood to quit. There are three types of employee commitment: affective commitment, continuous commitment and normative commitment. Affective commitment refers to the employees' emotional attachment to, identification with, and involvement in the organization. Continuous commitment stems from considerations of costs associated with leaving the organization, while normative commitment reflects the employees' feeling of obligation to remain within the organization. In effect, according to Bergman, employees may choose to remain within an organization because they want to (affective), they have to (normative) or they need to (continuance).
and Meyer's study presents employee commitment as the psychological state that differentiates employees' desire to remain within an organization and their likelihood to quit. There are three types of employee commitment: affective commitment, continuous commitment and normative commitment. Affective commitment refers to the employees' emotional attachment to, identification with, and involvement in the organization. Continuous commitment refers to commitment based on costs associated with leaving the organization, while normative commitment refers to the employees' feeling of obligation to remain within the organization. In effect, according to Bergman, employees may choose to remain within an organization because they want to (affective), they have to (normative) or they need to (continuance).
The employee commitment construct can be considered from a multidimensional perspective because as subordinates become involved in different aspects of their work, their depth of involvement varies over time. This practice suggests that the application of specific TLS facets by Black top-managers in SOEs may be associated with different employee commitment types. It would be rational to project that the manifestation of a particular commitment type, as observed by Georges, might depend upon the way that employees perceive the specific transactional leadership behaviour of managers. This position is reinforced by the assertion of Landis et al. that in recognition of the variances in employees' preferences, and in line with the proposition of behavioural and situational leadership theories, effective leadership is contextual. The implication of this submission is that results from previous studies conducted in other settings, particularly in developed countries, cannot provide a veritable premise to determine the nature of the relationships that might exist between different behaviours linked to the TLS and employee commitment in South African SOEs.
Facets of TLS and employee commitment
Several studies have revealed that a positive relationship exists between TLS and employee commitment. Conversely, studies by Cho et al. as well as Wulani et al. reveal that managers' TLS demonstrates a negative association with employee commitment. Despite the lack of harmony in research findings pertaining to the direction of the relationship between a TLS and employee commitment, Baloch et al. insist that TLS, considered as a mono-construct, remains a strong predictor of employee commitment.
More specifically, some studies have shown that TLS demonstrates a significant relationship with affective commitment. In particular, Yahaya and Ebrahim assert that managers who adopt the CR facet of the TLS provide followers with material and psychological rewards based on the fulfilment of contractual obligations. In light of theories such as the LMX theory, social exchange theory and organizational justice theory, it is clear that these rewards are personal, and the determination of whether the rewards are equitable or not is dependent upon the employees. In essence, the existence of the employee-organization exchange relationship, facilitated by the manager, does not necessarily ensure employee commitment. As it pertains to the MbE_A facet of the TLS, Emery and Barker argue that MbE_A may be ineffectual when employees view it as tantamount to micromanagement or disempowerment practices by the manager.
Regarding the MbE_P facet of the TLS, which Sayadi refers to as a non-leadership approach, Lee et al. argue that managers who use it are unlikely to invest any effort in-building relationships with employees. The feature of infrequent exchanges characteristic of the use of MbE_P could erode any implications this approach might have for the affective commitment of employees. Cognizant of the different positions in the extant literature with respect to the possible associations between facets of TLS and affective commitment of employees, within the context of South African SOEs, the following null hypotheses are formulated for this study:
H1: There is no relationship between Black top-managers' use of the CR facet of the TLS and the affective commitment of their employees.
H2: There is no relationship between Black top-managers' use of the MbE_A facet of the TLS and the affective commitment of their employees.
H3: There is no relationship between Black top-managers' use of the MbE_P facet of the TLS and the affective commitment of their employees.
With respect to continuance commitment, studies by Mash and Cohen as well as Silva and Mendis established that a significant positive relationship exists between the TLS and continuance commitment. Conversely, research undertaken by Devi and Zaraket and Sawma's found that there is a negative relationship between a manager's use of the TLS and employees' continuance commitment.
More specifically, Bycio et al. claim that the use of the CR facet of the TLS does not correlate with employees' continuance commitment. This fact may be because CR behaviour of the TLS is displayed by managers who are dependent upon favourable transactions with employees to satisfy both employee and organizational expectations. In the specific context of public organizations, Ko and Hur established that while the use of various tactics, such as performance-contingent rewards, may be prevalent, such organizations are continually grappling with the challenge of increasing financial difficulties, and these problems make it more arduous to continue with the rewards practice.
While the MbE_A behaviour requires managers to monitor deviations and errors in order to maintain workplace stability, the MbE_P facet of the TLS is generally considered as a passive-avoidance approach. Given that employee continuance commitment is contingent upon the availability of external opportunities, managers' display of behaviours that are concomitant with the facets of a TLS, therefore, may not influence this type of employee commitment. The different positions advanced by scholars highlight the importance of context in the examination of the relationship between managers' use of facets of TLS and employees' continuance commitment. Consequently, with respect to the situation in South African SOEs, this study hypothesises that:
H4: There is no relationship between Black top-managers' use of the CR facet of the TLS and the continuance commitment of their employees.
H5: There is no relationship between Black top-managers' use of the MbE_A facet of the TLS and the continuance commitment of their employees.
H6: There is no relationship between Black top-managers' use of the MbE_P facet of the TLS and the continuance commitment of their employees.
Focusing on normative commitment, the findings of Donkor and Zhou's study show that a positive relationship exists between the TLS of a manager and the normative commitment of employees, though Biza and Irbo contend that the identified relationship is weak. In contrast, however, Khan et al. found no correlation between the manager's TLS and employees' normative commitment.
According to Jabeen et al., the TLS entails an economic exchange between the organization and its employees. Stemming from this observation, Valaei and Rezaei found that the CR behaviour of a manager correlates positively with the normative commitment of employees. Notably, the financial strain experienced by organizations compels them to change their focus from a patriarchal employer-employee relationship in which the employer takes care of the employees by providing them with upward mobility and job security to a strict transactional employer-employee relationship. This latter relationship implies that it becomes more challenging for managers to display behaviours linked to the TLS with the hope of nurturing normative commitment of employees because doing so may not necessarily encourage employees to remain within the organization. It is against this backdrop that this study proposes that within South African SOEs:
H7: There is no relationship between Black top-managers' use of the CR facet of the TLS and the normative commitment of their employees.
H8: There is no relationship between Black top-managers' use of the MbE_A facet of the TLS and the normative commitment of their employees.
H9: There is no relationship between Black top-managers' use of the MbE_P facet of the TLS and the normative commitment of their employees.