i

MANAGERIAL STYLES: THEIR IMPACT ON THE RETENTION OF HIGH PERFORMING

EMPLOYEES

by

Mark Johnson

October, 2014

ii

Abstract

Various types of leadership styles, or “management styles can impact employee retention

rates” (Burks, 2012, p.1), such as authoritarian, democratic, laissez-faire, transactional, and

transformational. More than just utilizing an appropriate style, is being able to apply it in

appropriate situation. Implementing the right style requires that the leader be able to apply

personality typing skills, as well as understanding how their style will be applicable to various

generations that are composing the workforce. When these high performing employees are not

having basic needs met in the workplace their engagement waivers causing a possible departure.

The specific reasons for high performing employees’ departure are numerous, but there

are general factors that lead to this outcome. High performing employees or peak performers

demonstrate behaviors that seek opportunity while consistently embracing their actions and

taking accountability for the results. Some of the factors determining whether an employee will

stay, or not, are intrinsically and extrinsically motivated. There are reasons that continue to be

represented in the data, such as management or leadership styles that can impact the retention of

high performing employees. This paper will attempt to identify which of the management styles

are considered to be productive? Which of the management styles are considered to be non-

productive? And how are the various productive and non-productive management styles related

to the retention of high performing employees?

In answering the previous questions, an organization can then begin the process of

developing an in-house strategy, or the purchase of an off the shelf leadership training program

for implementation, attempting to reduce high expenditures and the cyclical nature of turn over.

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TABLE OF CONTENTS

CHAPTER 1 – INTRODUCTION

Background………………………………………………………………………….......1

Statement of the Problem………………………………………………………….….....3

Purpose of the Study…………………………………………………………………….3

Research Questions……………………………………………………………………...3

Definition of Terms……………………………………………………………………...3

CHAPTER 2 - REVIEW OF RELATED LITERATURE

Overview………………………………………………………………………………...6

Challenges Facing Organizations………………………………………………………..7

Cost of Employee Turnover……………………………………………………………..8

Motivation……………………………………………………………………………….8

Intrinsic motivation……………………………………………………………...11

Extrinsic motivation……………………………………………………………..12

Management Styles……………………………………………………………………...13

CHAPTER 3—SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

Summary…………………………………………………………………………………17

Findings ………………………………………………………………………………….17

Research Questions………………………………………………………………………18

Conclusions………………………………………………………………………………20

Recommendations……………………………………………………………………......21

REFERENCES…………………………………………………………………………………...23

1

CHAPTER 1

INTRODUCTION

Background

There's no shortage of studies and surveys that claim researchers and poll takers have

managed to pinpoint the top reasons employees quit their jobs (Burks, 2012). The specific

reasons for high performing employees’ departure are numerous, but there are general factors

that lead to this outcome. High performing employees or peak performers demonstrate behaviors

that seek opportunity while consistently embracing their actions and taking accountability for the

results (Granko, Poppe & Daniels, 2012). Some of the factors determining whether an employee

will stay, or not, are intrinsically and extrinsically motivated. When intrinsically motivated a

person is moved to act for the fun or challenge entailed rather than because of external prods,

pressures, or rewards (Ryan & Deci, 2000). Leahy (2012) provided some intrinsic reasons that

employees may not be fully engaged at work, also contributing to a departure:

Job satisfaction

Opportunity to perform well at challenging work

Recognition and positive feedback

Understanding the link between the job and the organization’s mission

Ryan and Deci (2000a) also defined extrinsic motivation as “a construct that pertains whenever

an activity is done in order to attain some separable outcome. The motivation to completing a

task that is considered an extrinsic motivator are those that could provide financial gain, awards,

or personal recognition” (p. 60). An example of an extrinsic reason for an employee to consider

in determining whether to stay, is a lack of discussion about professional development. When

2

asking employees where they think that they will be in five years, “most employees don’t know

what they’ll be doing in 5 years…about less than 5% of people could tell you if you asked”

(Jackson, 2011, p. 2). Further, Jackson wrote that “most bosses never engage with their

employees about where they want to go in their careers…If your best people know that you think

there’s a path for them going forward, they’ll be more likely to hang around” (p. 2).

There are reasons that continue to be represented in the data, such as management or

leadership styles that can impact the retention of high performing employees. Psychological

contract theory (Rousseau, 1989, 1998) assumes that employees consider promises from the

supervisor to be promises from the organization (Eisenberger et. al., 2010). The issues that have

been expressed are, in particular, “a lack of trust or confidence in leaders” (Brady, 2006, p. 2).

The Harvard Business Review goes further in stating that some managers view all employees the

same way instead of recognizing their job strengths. In addition to not being able to identify

employee strengths, the various types of leadership styles, or “management styles can impact

employee retention rates” (Burks, 2012, p.1), such as authoritarian, democratic, laissez-faire,

transactional, and transformational. More than just utilizing an appropriate style, is being able to

apply it in appropriate situation. Implementing the right style requires that the leader be able to

apply personality typing skills, as well as understanding how their style will be applicable to

various generations that are composing the workforce.

Furthermore, the reasons executives start to become more concerned about the turnover is

due to the costs. “You may be surprised to learn that the calculations can easily reach 150% of

the employee's annual compensation figure” (Bliss, 2004, p. 1). If the employee happens to be a

high performer or a manager, the costs can be significantly higher. Also, the cost of replacing

3

one of those employees can be 200% to 250% of annual compensation; Hester, (2013) supports

this claim by stating that a conservative estimate of the cost of turnover is 30% of annual salary

to replace a lower-skilled, entry-level employee, to as much as 250% of annual salary to replace

a highly specialized or difficult-to-replace position [peak performer] (p. 20).

Statement of the Problem

Organizations continue to lose high performing employees to a various number of

intrinsic and extrinsic reasons that are centered on management or leadership styles. Executives

and managers need to re-evaluate their strategic management styles and adapt to a more diverse

and intelligent workforce.

Purpose of the Study

The purpose of this research analysis is to determine the impact of various management

styles on the retention of high performing employees within an organization. More specifically,

the study will attempt to identify specific productive and non-productive styles that have the

greatest impact on the high performing employees of an organization.

Research Questions

1. Which of the management styles are considered to be productive?

2. Which of the management styles are considered to be non-productive?

3. How are the various productive and non-productive management styles related to the

retention of high performing employees?

Definition of Terms

Authoritarian Management Style: An autocratic leader is one who would come up with a

solution for the entire group on their own, (Val & Kemp, 2012, p. 28).

4

Democratic Management style: The democratic leaders were those who took a very

relaxed yet in-control approach to leading the group. Participative leaders, more often

than not, would consult the group when approaching an issue and consider their

suggestions, but the leader retains the final say in what particular approach is taken, (Val

& Kemp, 2012, p. 29).

Laissez-Faire Management style: The laissez-fair approach to leadership is the idea that

the participants should be able to work problems out and make their way through an

expedition without too much extra guidance, (Val & Kemp, 2012, p. 29)

Transactional Management style: Offering rewards to others in return for compliance.

(Sims, Faraj & Yun, 2009, p. 132).

Transformational Management style: Transformational leaders express a clear,

compelling vision of the future, intellectually inspire followers, identify individual

differences and assist followers to develop their strengths (Sims, Faraj & Yun, 2009, p.

132).

Intrinsic Motivation: Intrinsic motivation is defined as the doing of an activity for its

inherent satisfactions rather than for some separable consequence. When intrinsically

motivated a person is moved to act for the fun or challenge entailed rather than because

of external prods, pressures, or rewards (Ryan & Deci, 2000a, p. 56).

Extrinsic Motivation: Extrinsic Motivation refers to motivation to work primarily in

response to some factor apart from the work itself, and refers to doing something because

it leads to a separable outcome (Meyer & Gagne, 2008, p. 60).

5

Strategic Management: Managing the “pattern or plan that integrates an organizations

major goals, policies, and action sequences into a cohesive whole.” This can be a generic

approach or specific adjustments. (Noe, Hollenbeck, Gerhart & Wright, 2010, p. 75).

6

CHAPTER 2

REVIEW OF RELATED LITERATURE

Overview

The purpose of this literature review is to determine the impact of various management

styles on the retention of high performing employees within an organization. More specifically,

the study will attempt to identify specific productive and non-productive management styles that

have the greatest impact on the high performing employees of an organization.

In retrieving the literature for this review, the researcher utilized the Morris Library,

Southern Illinois University Carbondale. Once accessing the Morris Library the “frequently

used” section became available and within it the options for finding scholarly reviewed,

academic journals, business journals, and various research studies. When using either the

academic search premier, or the business search premier the phrase management style and

“leadership style” were used in the selected fields needed for conducting the search. After

selecting the Boolean/phrase option, the “limit your search” to scholarly (peer reviewed) journals

was then selected, followed by “all types” as it pertained to articles, abstracts, bibliographies, etc.

was selected. The date parameters were selected to encompass a 10 year span, 2003 through

2014, and the language that was selected for displaying all retrieved documents was to be in

English. Utilizing Yahoo, the search phrases entered were “why do companies lose high

performing employees,” and “reasons high performing employees leave,” returning multiple

empirical and theoretical documents pertaining to each search phrase. Using google scholar, the

search phrase “management styles and high performing employees” was implemented, also had a

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return of numerous empirical and theoretical research documents that were utilized to expand

upon, and attempt to provide a more clear and defined answer to the research questions.

Challenges Facing Organizations

There are issues facing organizations today that are effecting the bottom line, however

there is little attention being placed on each of those issues. According to the Society for Human

Resource Management (SHRM, 2012);

HR professionals say that the three biggest challenges facing HR executives over the next

10 years are retaining and rewarding the best employees (59%), developing the next

generation of corporate leaders (52%), and creating a corporate culture that attracts the

best employees to organizations (36%). (p. 2)

Some big data that organizations should be examining as a monthly metrics to track performance

is the retention rates of their organization and why employees leave. “Big data refers to datasets

whose size is beyond the ability of typical database software tools to capture, store, manage, and

analyze,” (Manyika, Chui, Brown, Bughin, Dobbs, Roxburgh & Byers, 2011, p. 1). Retention

data can be an effective tool in trying to address the loss of employees; however, a better

indication of the true impact of the departure of good-performing employees on an organization,

might be to look at data that spans a period of three years (O'Connell & Kung, 2007, p. 16).

O’Connell and Kung also tried to assist in differentiating the loss of poor performers versus good

performers, this is called turnover functionality vs. frequency. When using their formula, a

positive number means that more “good-performing employees” are staying, where negative

numbers indicate “poor performing employees” are staying, and it is these negative numbers that

identify a larger problem for the organization.

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The Cost of Employee Turnover

Attracting and retaining top performing knowledge workers whose levels of performance

are extremely high may significantly influence organizational effectiveness (Cappelli, 2000;

Lepak & Snell 1999; Randall 1987; Sturman et al. 2003) The larger issue facing organizations in

regards to retaining and rewarding employees and preventing employee turnover, whether they

are good-, or poor- performing employees, is the associated cost in replacing those employees.

The associated costs incorporate more than just salary and the cost of advertisements required to

try and refill the vacancy. In addition to replacement fees, there are hidden costs such as

productivity loss, work- place safety issues, and morale damage (O’Connell & Kung, 2007).

Some of the costs that need to be accounted for are pre-departure; the amount of time that is

spent preparing for and conducting exit interviews, recruitment process, selection, orientation

and training, and productivity loss (Tracey & Hinkin, 2008). The reason that the executives start

to become more concerned about the turnover is due to the costs. When the discussion turns to

dollars, executives then want to act.

Let’s assume the average salary of employees in a given company is $50,000 per year.

Taking the cost of turnover at 150% of salary, the expense would then be $75,000 per

departing employee. For the mid-sized company of 1,000 employees that has a 10%

annual rate of turnover, the annual total is $7.5 million! Do you know any CEO who

would not want to add $7.5 million to their revenue? (Bliss, 2004, p. 5)

Motivation

There are studies on the broad scope of employee engagement that are classified into two

groups, intrinsic and extrinsic motivators. Unfortunately for organizational leaders, there are as

9

many varying intrinsic or extrinsic motivators, as there are employees. Although motivation is

often treated as a singular construct, even superficial reflection suggests that people are moved to

act by very different types of factors, with highly varied experiences and consequences. People

can be motivated because they value an activity or because there is strong external coercion

(Ryan & Deci, 2000b, p. 69). It is obvious that motivation is one of the main factors that

determine the work performance of employees and highly motivated employees are crucial to an

organization's success (Cinar, Bektas & Aslan, 2011). The term motivation derives from the

Latin word movere, meaning “to move” (Cinar et. al., 2011; Tansky, 2003). The ability to

maximize an employee’s efforts requires motivation, “for employees to be motivated means to

be moved to do something. A person who feels no impetus or inspiration to act is thus

characterized as unmotivated, whereas someone who is energized or activated toward an end is

considered motivated” (Ryan & Deci, 2000, p. 54).

In one study, the researchers were trying to “tests the influence of intrinsic motivation on

employee attitudes and explores three factors conditioning the effects of intrinsic motivation:

managerial trustworthiness, goal directedness, and extrinsic reward expectancy” (Cho & Perry,

2011, p. 1). Branham (2005) points out that everyone wants to feel important, yet many

organizations manage to make their people feel quite the opposite… that no one in any kind of

position above them listens to them or even knows they exist, much less work there. However,

top performers develop organizational commitment, a critical factor of employee retention, when

they are treated in fair and favorable ways (Kwan, Bae & Lawler, 2011, p. 73). Diagnosing and

supporting employees’ motivation is complex and challenging (Bono & Judge, 2003; Thomas,

2000), but it is well worth the effort in terms of potential gains in both productivity and

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workplace climate (Deci, Connell & Ryan, 1989, p. 581). “It's when employees lose that sense of

fulfillment that they think about leaving. You need to do all you can to keep them engaged”

(Hestor, 2013, p. 20). The level of engagement that each employee is driven to give at work is

distinctly unique to each individual, this is because of it being an intrinsic or extrinsic

motivation.

Organizations continue to try and offer extrinsic motivators.

They implement programs with the implicit belief that you cannot only lead a horse to

water, but you can make it drink. Yet, these efforts fundamentally demean and disregard

the heart and spirit of employees. They demonstrate a lack of faith in the possibility that

people want to take pride in their work, want to do a good job and want to contribute

something of value. (Hansen, Smith & Hansen, 2002, p. 64)

Why employees drive to want to contribute has been researched repeatedly. Brady (2006)

wrote that nearly 90% of bosses think their employees quit to make more money. That means

nearly 90% of bosses are wrong. Burks (2006, p. 1) quoted a study “of more than 19,000

employee exit interviews by the Saratoga Institute…only 12 percent of employees left their jobs

in pursuit of higher-paying positions. Burks, in the same paper states “nearly 90 percent of

employers think workers leave for higher salaries.” The commitment that employees have

toward their organization and its constituents is a crucial work attitude (Johnson, Chang & Yang,

2010). In managing employee attitudes, scholars and practitioners have emphasized the

importance of motivation (Cho & Perry, 2011). Macey and Schneider (2008, p. 7) drew on

numerous theories to explain what engagement is and how it is similar to, and different from,

related constructs in the organizational behavior literature.

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Engagement is above and beyond simple satisfaction with the employment arrangement

or basic loyalty to the employer—characteristics that most companies have measured for

many years. Engagement, in contrast, is about passion and commitment—the willing-

ness to invest oneself and expend one’s discretionary effort to help the employer succeed.

Strickler (2006) studied at methods of rewarding workers first identified by Skinner and still

practiced by American business.

By identifying the best way to motivate the American work force is to offer financial

incentives. In fact, the last several decades have spawned a plethora of behaviorist

programs for motivating people, including bonus programs, merit pay plans, balanced

scorecard, annual performance reviews, 360° feedback programs, and many others (p. 1).

However, many questions as to what motivates a worker still persist, as well as the many ways

that employees maintain work engagement.

Intrinsic Motivation

Intrinsic Motivation is one of those catalysts for engagement, “intrinsic motivation is the

doing of an activity for its inherent satisfactions rather than for some separable consequence.

When intrinsically motivated a person is moved to act for the fun or challenge entailed rather

than because of external prods, pressures, or rewards” (Ryan & Deci, 2000, p. 56). Additionally,

intrinsic rewards are part of the job itself and the personal satisfaction of accomplishing

something worthwhile, i.e., responsibility, challenge, autonomy, purpose and feedback; or

rewards that are self-administered (Brown, 2010). The value of intrinsic motivation was

identified with the research conducted by Cho and Perry which was focused on Intrinsic

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Motivation and Employee Attitudes: Role of Managerial Trustworthiness, Goal Directedness,

and Extrinsic Reward Expectancy:

Intrinsic motivation is positively associated with employee satisfaction, whereas it is

negatively related to intent to leave. Managerial trustworthiness also shows comparable

strong associations with those attitudes. More important, regarding employee satisfaction,

it interacts with intrinsic motivation in a way that produces a salutary result for

organizations. Like managerial trustworthiness, goal directedness also strengthens the

association between intrinsic motivation and employee satisfaction. On the contrary, high

levels of extrinsic reward expectancy weaken the tie (Cho & Perry, 2011, p. 20).

Several recent studies suggest that bad bosses are responsible for most employee dissatisfaction

at work…the top reasons employees left their jobs included: a lack of recognition, internal

politics, a lack of empowerment and simply not liking their boss (Sorensen, 2013).

Extrinsic Motivation

Extrinsic motivation is a construct that pertains whenever an activity is done in order to

attain some separable outcome. Extrinsic motivation thus contrasts with intrinsic motivation,

which refers to doing an activity simply for the enjoyment of the activity itself, rather than its

instrumental value (Ryan & Deci, 2000). Extrinsic motivators are rewards that are external to the

job, i.e., pay, bonuses, promotion, incentives, fringe benefits or tangible awards; or rewards that

are administered by someone else (i.e. the carrot.) (Brown, 2010).

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Management Styles

A high-performance workplace is where each person can say: "I know what is

expected of me, I can achieve my goals and I have the support of my team" (Dee, 2013, p. 32).

Senge (1990) indicated that shared visions bring together the goals and vision of the individual

with the goals and vision of facilitate participation and the organization to build reciprocal

commitments. In one study it was found that employee commitment reflects the quality of the

leadership in an organization (Stum, 1999).

As described in the research conducted by the consulting firm Hay/McBer, a random

sampling of 3,871 executives from a pool of 20,000 executives worldwide found six distinct

management styles (Goleman, 2002). In Goleman’s Harvard Business Review article, it

identified each style employed by the executives, a description of each, the personality types that

may employ them, and situations when best utilized. Based on the research conducted it was

found that executives, to be successful, needed to develop and utilize as many of the various

styles as possible. The relationships between leadership styles and organizational commitment

has shown how leadership dimensions can influence employee organizational commitment

(Keskes, 2014). One definition of leadership is ‘a multifaceted process of identifying a goal,

motivating other people to act, and providing support and motivation to achieve mutually

negotiated goals’ (Porter-O’Grady 2003).

High performance management techniques are only fully integrated with the commitment

of senior leadership, including the chief executive office and the board of directors. Additionally

“ethical leadership was an effective predictor of job satisfaction, organization commitment,

moral identity, voice behavior, and organizational citizen- ship behavior” (Brown & Trevino,

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2006). The competition to retain key employees is intense. Top level executives and HR

department spend large amounts of time, effort, and money trying to figure out how to keep their

people from leaving (Mitchell, Holtom, & Lee, 2001).

Few leaders understand the full significance of how influential their leadership style is on

the performance and satisfaction of their employees. Leaders control both interpersonal

and material rewards and punishments that often shape employee behavior and influence

an employee’s performance, motivation, and attitude. (Warrick, 1981, p. 155)

Transformational leadership attributes, such as empowerment and clear vision, are often seen as

important elements for employee job satisfaction and commitment Productive Management

Styles (Lok & Crawford, 2003). Effective leaders motivate their followers to do what is best for

the organization. They have the ability to get followers to do work that is well beyond the

minimum required of them (Andreescu & Vito, 2010).

In Goleman’s Harvard Business Review article, it identified each style employed by the

executives, a description of each, the personality types that may employ them, and situations

when best utilized. Based on the research conducted it was found that executives, to be

successful, needed to develop and utilize as many of the various styles as possible. However, in

drilling down the data it was found that there were leadership styles that had a positive

correlation (productive) and negative correlations (less productive) effect on subordinates. The

leadership styles that had a strong positive correlation were Affiliative (.46), Democratic (.43),

and Coaching (.42), with the Authoritative (.56) management style having a strong positive

correlation, or an overall impact on climate of most strongly positive (Goleman, 2002). In

conducting a closer look at each management style and what its positive effects are on the

15

employee, we can then draw a correlation to that particular management style being positive and

therefore a productive management style.

Cherry (2011) Describes that participative leadership, also known as democratic

leadership, as generally the most effective leadership style. Democratic leaders offer guidance to

group members, but they also participate in the group and allow input from other group members

or engagement. Employees with the highest levels of commitment perform 20% better and are

87% less likely to leave the organization, which indicates that engagement is linked to

organizational performance (Lockwood, 2007).

Organizations that perpetuate traditional procedures without critical analysis may

find their enterprise resembling a system that fails to initiate rapid change (Agrusa & Lema,

2007). These traditional procedures, or management styles, have pros and cons to each, and the

application of each of these styles effect the motivation of employees. Further, being intrinsically

motivated to pursue the welfare of the group or organization is essential to increase the quality of

performance and cooperation (De Cremer, 2006; De Cremer & Tyler, 2005).

Autocratic leadership is an example of transactional leadership. Autocratic leaders have

been described as controlling, power-orientated and closed-minded (Bass 2008). When

addressing the Coercive style, it has been stated that it should be used with extreme caution and

in few situations (Goleman, 2002). Furthermore Goleman wrote that “if a leader relies solely on

this style, or continues to use it once the emergency passes the long-term impact of his

insensitivity to the moral and feelings of those he leads will be ruinous (p. 83).” Spreier, Fontain

and Malloy (2006), pointed out that among the leaders who created neutral or demotivating

climates, the dominate style was pacesetting, which can drive short-term growth, but at the

16

expense of long-term profitability. Pacesetting has also been identified by Goleman (2002) as

having an overall “negative” impact on climate. Those leaders who score high on the laissez-

faire leadership style, avoid making decisions, hesitate in taking action, and are absent when

needed (Judge & Piccolo, 2004). This particular styles seems counterproductive based on recent

studies, which show that employees are motivated to produce when management is engaged.

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CHAPTER 3

SUMMARY, FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

Summary

The purpose of this literature review was to identify the reasons that employees depart

their jobs, and the reasons are as numerous as there are perceptions in the workforce. However

there are more specific factors that lead to the outcome of good performing employees departing,

even when facing the offer of a higher salary. As Brady (2006) stated, nearly 90% of bosses

think their employees quit to make more money. That means nearly 90% of bosses are wrong.

Some of those factors in determining whether an employee will stay, or not, are intrinsically and

extrinsically motivated (Ryan & Deci, 2000, p. 54).

Furthermore, it has been shown through research, (Stum, 1999), (Goleman, 2002),

(Brown & Trevino, 2006), that there is a correlation between various management styles and the

impact that they have on the retention of high performing employees within an organization.

More specifically, the study attempted to identify specific productive and non-productive styles

that had the greatest impact on the high performing employees of an organization.

Findings

Based on the statement of problem, “organizations continue to lose high performing

employees to a various number of intrinsic and extrinsic reasons that are centered on

management or leadership styles.” The findings of this study are outlined in the discussion of the

research questions.

18

Research Question 1: Which of the management styles are considered to be productive?

In drilling down the data, it was found that there were leadership styles that had a positive

correlation (productive) and negative correlations (less productive) effect on subordinates. The

leadership styles that had a strong positive correlation were Affiliative (.46), Democratic (.43),

and Coaching (.42), with the Authoritative (.56) management style having a strong positive

correlation, or an overall impact on climate of most strongly positive (Goleman, 2002). In

conducting a closer look at each management style and what its positive effects are on the

employee, we can then draw a correlation to that particular management style being positive and

therefore a productive management style. An example is from the Goleman (2002) research

which he paraphrases the styles as; Authoritative; come with me, Affiliative; people come first,

Democratic; what do you think, and Coaching; try this.

When employees are lead with these styles they feel as if they are part of the team, a part

of the decision making process, and therefore become more engaged in the team and workplace.

The employees strive to accomplish their personal goals and by association, the goals of the

organization. Furthermore, when there is employee engagement, the correlation can be made that

the leaders are utilizing either all, or at least one of the styles that have been identified as

productive.

Research Question 2: Which of the management styles are considered to be non-

productive?

When addressing the Coercive style, it has been stated that it should be used with extreme

caution and in few situations, such as urgent or an emergency (Goleman, 2002, p. 83).

Furthermore Goleman wrote that “if a leader relies solely on this style, or continues to use it once

19

the emergency passes the long-term impact of his/her insensitivity to the moral and feelings of

those he leads will be ruinous.” Spreier, Fontain and Malloy (2006, p. 5) pointed out that among

the leaders who created neutral or demotivating climates, the dominate style was pacesetting,

which can drive short-term growth, but at the expense of long-term profitability. Pacesetting has

also been identified by Goldman’s research as having an overall impact on climate as “negative.”

The examples from the Goleman (2002) research in which he paraphrases the styles; Coercive;

do what I tell you, and Pacesetting; Do as I do, shows that through the research, those employees

that departed felt that these leadership styles were non-productive. In addition to the six that have

been discussed, there is the Laissez-faire leadership style defined; avoid making decisions,

hesitate in taking action, and are absent when needed (Judge & Piccolo, 2004). This particular

styles embodies the lack of leadership employees desire to feel valued and engaged, also non-

productive.

Research Question 3: How are the various productive and non-productive management

styles related to the retention of high performing employees?

In answering the previous questions it has been touched on as to how the productive and

non-productive leadership styles impact the motivation of employees. Going forward we will

address how that motivation, or lack of is a driver of retention:

Although motivation is often treated as a singular construct, even superficial reflection

suggests that people are moved to act by very different types of factors, with highly

varied experiences and consequences. People can be motivated because they value an

activity or because there is strong external coercion, (Ryan & Deci, 2000, p. 69).

20

What Ryan and Deci are describing are intrinsic and extrinsic motivation, and each of the distinct

leadership styles being discussed offer various motivation that an employee will feel is internally

or externally driven. The value of intrinsic motivation was identified with the research conducted

by Cho and Perry (2011) which was focused on Intrinsic Motivation and Employee Attitudes,

Role of Managerial Trustworthiness, Goal Directedness, and Extrinsic Reward Expectancy:

Intrinsic motivation is positively associated with employee satisfaction, whereas it is

negatively related to intent to leave. Managerial trustworthiness also shows comparable

strong associations with those attitudes. More important, regarding employee satisfaction,

it interacts with intrinsic motivation in a way that produces a salutary result for

organizations. Like managerial trustworthiness, goal directedness also strengthens the

association between intrinsic motivation and employee satisfaction. On the contrary, high

levels of extrinsic reward expectancy weaken the tie (p. 20).

Several recent studies suggest that bad bosses are responsible for most employee

dissatisfaction at work…the top reasons employees left their jobs included: a lack of recognition,

internal politics, a lack of empowerment and simply not liking their boss (Sorensen, 2013).

If the reasons that employees leave are then correlated to a specific management style they could

be the Autocratic, Coercive, and/or Laissez-faire.

Conclusions

Executives and managers need to re-evaluate their strategic management styles and adapt

to a more diverse and intelligent workforce. Through numerous studies and research that has

been conducted, it is becoming quite apparent that to reduce costs, and the impact to the

organizations bottom line, they need to reduce the departure of high performing employees. The

21

ability to reduce the amount of voluntary departures rests with the executives of an organization.

The organization needs to have a better understanding that with a more intelligent workforce

being employed today, extrinsic motivation, i.e. offering an employee more money, will not

always work. Burks (2006, p. 1) quoted a study “of more than 19,000 employee exit interviews

by the Saratoga Institute…only 12 percent of employees left their jobs in pursuit of higher-

paying positions. Burks, in the same paper states “nearly 90 percent of employers think workers

leave for higher salaries.”

Researchers have been conducting studies that “tests the influence of intrinsic motivation

on employee attitudes and explores three factors conditioning the effects of intrinsic motivation:

managerial trustworthiness, goal directedness, and extrinsic reward expectancy” (Cho & Perry,

2011, p. 1). There are plenty of studies that show that if a manager can employ multiple

leadership styles they will have a more engaged workforce. Along with the leadership styles, the

researchers found that there were “links among leadership and emotional intelligence, and

climate and performance” (Goleman, 2000, p. 81). The Hay/McBer study observed how each

executive motivated direct reports? Manage change initiatives? Handled crises…and which

emotional intelligence capabilities drive the six leadership styles.”

Recommendations

Based on the findings of the study, it is recommended that more organizations invest in

creating a cultural shift which will focus on the worker and their engagement through the

institutionalizing the continuous process of training and coaching of supervisors, managers, and

executives. The inclusion of all stakeholders will educate all levels of an organization as to the

22

true costs involved with having to replace high performing workers, specifically organization

executives who need to see these associated costs, and how they affect the bottom line.

It is also recommended that further in-depth studies be conducted which focuses on the

specific reasons that an employee voluntarily departs their employment. The study needs to

address whether or not any specific leadership styles, which had been employed by their direct

supervisor or manager, have an intrinsic or extrinsic element that impacted the decision to depart

their employment. After gathering this data, a correlation between each leadership style and the

various motivating factors could be drawn to acquire the necessary information to establish true

facts as to why employees depart. The primary reason for this is to be able to provide focused

coaching to the executives and managers that address the real reasons that most employees

voluntarily depart, and provide management with the tools to implement the change in a way that

management engages employees organically and naturally.

This study may need to occur in two parts, one to identify a “mean” with the various

leadership styles and their correlation with the implementation of intrinsic or extrinsic motivating

techniques. Secondly, identify the specific reasons that an employee departs their employment,

either because of conflict with supervisors, managers, insufficient pay, lack of inclusion or work

engagement. These two parts can then provide the most comprehensive voluntary employee

departure data to date.

23

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