Research Report: Leadership Styles and Employee Satisfaction

This professional project report investigates the impact of leadership styles on employee satisfaction and turnover. The report begins with an executive summary, project context, aims, objectives, and research questions. It then reviews relevant literature on leadership styles, including transformational, transactional, and laissez-faire approaches, and their effects on employee outcomes. A project plan outlines the sampling and measurement models used. The research findings, derived from regression analysis, indicate that transformational leadership is most effective in boosting employee satisfaction. The report concludes with a discussion of research gaps, recommendations for future studies, and a project schedule.

Running Head: PROFESSIONAL PROJECT1
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Executive Summary:
The research report was aimed at resolving the issue of the impact of leadership style in
employee satisfaction and employee turnover. The report presented initial introductory basis
for beginning the research project that was supported by an illustration of the project
background, aims, objectives and research questions. The report also reflected on literature
pertaining to research studies in context of leadership styles and their distinct impact on
employee satisfaction. The theoretical aspects reviewed from the literature primarily included
references to the three basic typologies of leadership behaviour in context of management i.e.
transactional, transformational and laissez-faire leadership. Furthermore, the literature review
also comprised of references to the consequences for employee satisfaction and turnover
drawn from distinct leadership styles. The literature review is followed by a brief project plan
discussing the sampling and measurement model applied for the research that would
contribute to effectiveness of data analysis and research findings section. The findings of the
research were drawn from the regression analysis pertaining to the relationship between
leadership styles and satisfaction of employees. Transformational leadership style was found
to be the most effective on employee satisfaction as compared to other leadership styles. The
report concluded with depiction of research gaps, milestones and schedule for the project and
recommendations for future research.

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Contents
Introduction:...............................................................................................................................4
Project context:...........................................................................................................................4
Project proposal:.........................................................................................................................5
Background:...........................................................................................................................5
Aims and objectives:..............................................................................................................5
Research questions:................................................................................................................6
Literature review:.......................................................................................................................6
Leadership styles:...................................................................................................................7
Consequence of different leadership styles:...........................................................................9
Project Plan:.............................................................................................................................10
Data analysis and research findings:........................................................................................10
Research gap:...........................................................................................................................11
Future recommendations:.........................................................................................................12
Milestones and schedule:.........................................................................................................12
Conclusion:..............................................................................................................................13
References................................................................................................................................13

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Introduction:
Leadership has acquired drastic recognition as a niche topic in business management
research and the outcomes of previous research studies imply the fact that distinct leadership
styles have the capability to promote employee satisfaction and reduce employee turnover.
However,Aydin, Sarier & Uysal said that, there has been a clear lack of understanding
pertaining to the interrelation between leadership and organizational outcomes such as
employee satisfaction and turnover (Aydin, Sarier & Uysal, 2013). Previous research studies
and literature pertaining to the same have indicated efforts of researchers to illustrate the
relation between specific leadership style and employee satisfaction or between employee
satisfaction and turnover intentions separately. Therefore a lack of empirical research studies
discussing on the three aspects concurrently could be assumed as a pitfall in identifying the
extent to which leadership styles influence employee satisfaction (Bouckenooghe,Zafar &
Raja, 2015).The observation of the implications of leadership styles in a complex
organization could be realized effectively through application of leadership theories in order
to examine diverse range of leadership styles. The following report aims to draw inferences
from secondary data and analysis in order to address the research aims and present viable
recommendations for future research (Carter & Greer, 2013).
Project context:
The rapid progress in the contemporary working environment suggests indications for
formal evidence that direct towards the impact of leadership styles on employee satisfaction
and organizational outcomes such as turnover intention. On the contrary, research studies in
this context have suggested major pitfalls through implementation of research on analysis of
specific relationships such as leadership style and employee satisfaction (Choudhary, Akhtar
& Zaheer, 2013). However, the research studies fail to present a coherent impression of the
extent to which the impact of leadership styles on employee satisfaction is observed. As per
Clarke, the consideration of the variable of employee turnover for this research activity could
help in illustrating the extent to which leadership styles impact employee satisfaction which
could be observed from the turnover rates of an organization (Clarke, 2013).The examples of
gaps identified in research literature in context of Australian Higher Education Sector which
is intended to expound the interrelations between employee satisfaction, leadership styles and
employee turnover (Dul & Ceylan, 2014).Therefore, the following report has the aim of
describing the way in which different leadership styles have an effect on employee

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satisfaction as well as employee turnover. The following proposed research intends to reflect
coherently on the different leadership styles and the varying impacts that are rendered by
them for organizational outcomes and levels of employee satisfaction through references to
the use of Full Range of Leadership Theory (Hinojosa et al., 2014).
Project proposal:
Background:
The focus of the research activity would be primarily based on three variables i.e.
leadership style, employee satisfaction and employee turnover. The following research is
vested in the background of multiple factors that influence employee satisfaction which
comprise of references to supervisors or leaders (Kara et al., 2013). The variable of
leadership styles that is utilized for the research activity comprises of references to the full
range leadership theory comprising of transactional, transformational and laissez faire
leadership styles. Employee satisfaction variable utilized in the research reflects on the three
distinct factors which include job evaluation, emotional experience and job belief (Kroll &
Vogel, 2014). The extensive range of definitions available for job satisfaction indicates the
need for emphasizing on the effective components pertaining to employee satisfaction such as
salary, benefits and job security.
Employee turnover can be defined as an organizational outcome which is indicated by
the level of employee satisfaction (Liden et al., 2014). The dynamic nature of the
contemporary workplace environment has created substantial challenges for organizations in
terms of restructuring. Therefore Men & Stackssaid that employee satisfaction is subject to
dilemma in such cases due to the lack of competence among leaders to address the concerns
such as work turbulence. It has to be imperatively noted that the opportunities for growth and
support from peers are favourable factors for promoting employee satisfaction while
considering the higher significance of leadership influence on job satisfaction(Men & Stacks,
2013). The understanding of the interrelationship between leadership style, employee
satisfaction and organizational outcomes such as employee turnover could be applicable in
organizational contexts in order to anticipate the drivers for employee satisfaction and the
precedents of human capital management and leadership (Mittal & Dhar, 2015).

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Aims and objectives:
The primary aim of the research is to identify the impact of leadership styles on the
satisfaction of employees and its relationship with organizational outcomes such as employee
turnover. The impact of leadership styles on organizational outcomes would be determined
on the variable of employee turnover since it is a generic descriptor of the satisfaction of
employees with an organization (McDermott et al., 2013).
Research questions:
Which leadership styles affect employee satisfaction positively?
How do different leadership styles affect employee turnover positively?
Literature review:
Leadership is assumed as a significant contributor to the implementation of an
effective environment that would be accountable for provision of services as well as
accomplishing strategic objectives within an organization. The volatility and complicacies
associated with the modern business environment have invoked the implications for
discussions and investigations among researchers in the field of effective leadership. The
changing roles of leaders in context of business management have become difficult for
analysis due to the wide range of political, social, economic and technological changes
(Northouse, 2015).
As per Sahin, Çubuk & Uslu, the observation of existing climate of business
environment in Australian Higher education sector by researchers suggest that the use of
‘command and control’ leadership styles are profoundly observed in educational institutions.
The primary rationale for the leadership approach is identified in the objective for seeking
profits that are corporate as well as commercial in nature (Sahin, Çubuk & Uslu, 2014). Large
business organizations are increasingly feeling the requirement to develop strategic objectives
and align their efforts in accomplishing the strategic as well as financial objectives of the
enterprise.
The complexity and competitiveness of the work environment observed in the domain
of business has created the necessity for appropriate leadership to accomplish the strategic
objectives of the enterprise. The understanding of leadership in an organizational setting
could be a significant issue albeit being associated with complicacies due to other relevant

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factors that may impact the organization (Strom, Sears & Kelly, 2014). The factors comprise
of references to organizational structure, leadership culture, demographic characteristics of
employees and depicting the differences between management, administration and
leadership. The prominent evolution noticed in the leadership approaches adopted in context
of business management suggests the relationship between common characteristics of new
leadership approaches and leadership theories such as FLRT (Tost, Gino & Larrick, 2013).
The full range of leadership theory reflects on the three classifications of leadership
behaviour and provides a comprehensive theoretical impression of three distinct leadership
styles referring to transformational, transactional and laissez-faire leadership style.
Leadership styles:
The survey conducted on Australian Business Leadership accounted as a major source
for obtaining information regarding the effectiveness of individual leadership styles. As per
Wong & Laschinger, transformational approach in leadership could be defined as the
empowering of employees to induce transformation or address the concerns of change in an
organization (Wong & Laschinger, 2013).
The origin of transformational leadership style is vested in the traditional attributes of
a charismatic leader and is directed towards the basic objective of acquiring feasible
completion of tasks from employeeswhich are not included in their competences. It is also
interesting to observe the illustration of distinct approaches through which transformational
leadership could be implemented for motivating employees to accomplish organizational
objectives. From a critical perspective, the approaches utilized by leaders in transformational
leadership can be associated with the improvement of one of the aspects of employee
satisfaction i.e. emotional experience associated with the job.
The individual approaches noted in context of realizing transformational leadership in
a workplace environment are idealization of attributes and behaviours, inspirational
motivation, intellectual stimulation and individualized consideration (Wang et al., 2014). The
idealization of attributes is applicable by leaders through leading the employees with
charisma and enabling the employees to trust in the leader thereby perceiving job security.
Idealization of behaviours could be implemented by the leaders in the form of establishing
new precedents for encouraging employees to share common goals and vision of the
enterprise. The example set by the leaders in idealized behaviour can be assumed as a source
for employees to derive emotional experience (Zhang et al., 2015).

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The inspirational motivation aspects create the need for developing the expectations
of workers through aligning the mission and objectives through appealing to the emotions of
the workers. One of the limitations that can be perceived in context of inspirational
motivation is to ensure that the employee expectations are restricted to attainable limits which
would alternatively contribute to improvement of employee satisfaction. Intellectual
stimulation is accountable for improving the engagement of employees in decision making
and problem solving initiatives of an organization thereby contributing to the sense of
satisfaction acquired by employees from the improvement in their intellectual competences.
As per Wong & Laschinger, the individualised consideration approach in
transformational leadership could be accounted as a viable approach for addressing employee
satisfaction alongside the organizational objectives since it implies the emphasis on a single
individual for provision of growth opportunities in the professional domain such as mentoring
and coaching facilities for employees (Wong & Laschinger, 2013). The interaction between
the leaders and employees in an individualized consideration approach can be accounted as a
major prerequisite for employee satisfaction.
Transactional leadership style is reflective of the use of conventional business
framework to address the requirements of employees and business. The implications of the
transactions could be observed in communication, agreements and interaction between
leaders and staff. Transactional leadership is primarily classified into three dimensions which
include contingent rewards and active as well as passive management by exception (Sahin,
Çubuk & Uslu, 2014). The contingent reward aspect refers to the provision of rewards upon
recognition of successful completion of tasks and on the other hand, it also specifies the
particular disciplining approaches required in case of non-compliance with the task
objectives.
Critical reflection on research study literature in context of leadership styles suggests
that transactional leadership is inclined towards the rationale that changes would not be
incurred in the future (Men & Stacks, 2013). Therefore, transactional leaders are more likely
to depend on the anticipation of employee needs in order to fulfil the needs for positive
organizational performance alongside addressing the concerns of employee satisfaction.
However, it is imperative to note the limitation referring largely to the privileges of leaders to
act in transactional leadership (Hinojosa et al., 2014). The capability of leaders to decision
making and problem solving are limited to a large extent by the perception of leaders by their

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followers. The dimension of active management by exception could be anticipated in the
corrective measures taken by leaders to address the deviations made by employees from
precedents of organizational performance. The passive management by exception approach is
dependent on the timing of action taken by the leader and is reflective of the implementation
of remedial action by leaders when strategic objectives are not met.
According to Dul & Ceylan, the laissez faire leadership style is also accounted as a
major leadership style that could provide the basis for contemporary leadership approaches.
However, the laissez faire leadership style is generally referred to as self-destructing
leadership style from the findings from research study literature pertaining to leadership (Dul
& Ceylan, 2014). Leaders that adopt a laissez faire leadership style are more inclined towards
a laid back approach wherein they are dependent on the flow of things rather than taking
action. The leadership style does not involve communication with employees or ensure any
sort of action to improve employee involvement in accomplishing strategic objectives of the
organization. Therefore, the characteristic features of laissez faire leadership style suggest
that it will not be applicable for improving the levels of employee satisfaction (Choudhary,
Akhtar & Zaheer, 2013).
Consequence of different leadership styles:
The impact of leadership in the outcomes in context of employee satisfaction and
employee turnover has been documented profoundly in major research study literature. One
of the examples could be identified in the research carried out through meta-analysis of
leadership styles adopted by school principals in Turkey as well as the impact of the
leadership style on the overall satisfaction of employees with the job (McDermott et al.,
2013).
The study reflected explicitly on the efficiency of transformational leadership on the
satisfaction of employees while critically emphasizing on the role of employee commitment
that is derived as an organizational outcome from the implementation of transformational
leadership style. The outcomes obtained from the Management Research Series Publication
of survey on Australian Business leadership provide an impression of the contemporary
trends of leadership in the Australian business environment (Strom, Sears & Kelly, 2014).
The mean score evaluation of the different leadership factors associated with transactional,
transformational and laissez faire leadership styles reflects explicitly to the prominence of
individualized consideration and inspirational motivation with mean scores between 3 and

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3.5. The approaches for leadership followed in transformational leadership have a mean score
of 3 and above while in case of transactional leadership the survey outcomes suggest that
leaders prefer contingent rewards as the most flexible approach (Tost, Gino & Larrick, 2013).
Therefore, the survey primarily suggested that leadership in the Australian business
environment is largely directed towards developing individual competences through training,
mentoring and coaching alongside eliciting effective performance with the objectives of
rewards. Earlier research activities such as those implemented by Podsakoff refer to the study
among 1200 managers and 1539 employees suggest the positive impacts of transformational
leadership style on the satisfaction of employees (Wong & Laschinger, 2013). The research
findings from a study conducted among employees of a call centre in China also reflect on
the impact rendered by leadership styles on employee turnover. The findings reflected on the
fact that transformational leadership facilitates the platform for initiating social exchanges
within the workplace environment that are induced either by the organization or by
supervisors.
Project Plan:
The project plan would comprise of specific references to the selection sample and
data collection methods in order to realize the research findings and analysis section of this
research activity. The project plan would also outline the timeline for completion of the
research process. The sample selected for this research activity is vested in a group of
employees and managers in the business management sector of Australia (Wang et al., 2014).
Methodology:
The methodology of the research activity could be ascertained through outlining
the methods implemented for data collection, sampling approach and data analysis
approaches utilized for the research. The implications of a methodology are identified
for every research activity distinctly in order to facilitate guidance for the researcher to
conduct individual processes of the research. The sampling approach would involve
random sampling method that implies the selection of secondary information in the
form of academic journals and research studies. The data collection would be based on
secondary data collection prominently for ascertaining the interplay between leadership
styles and employee satisfaction and employee turnover. The review of the research
study literature facilitates the opportunity for reflecting on the theoretical aspects

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pertaining to individual research variables identified in context of this research activity.
The particular methods implemented for data analysis would involve references to the
comparison of the outcomes observed in different research studies to determine the
effectiveness of individual leadership styles in promotion of employee satisfaction. The
data analysis framework would refer to the use of analytical statistics in order to obtain
findings.
Data collection:
The data collection would be conducted with the help of access to different
published sources of research studies and theoretical principles pertaining to leadership
styles, employee satisfaction and employee turnover. The secondary information
facilitated insights into the research outcomes which are derived using primary data
collection pertaining to leadership style effectiveness in promoting employee
satisfaction. The inclusion criteria established in the case of data collection process
could be observed in the research journals which refer to the distinct impacts of
leadership styles on employee turnover and employee satisfaction.
The data collection comprised of acquiring different research papers within the
time frame from 2000 to 2015 and primary data could be obtained from the integration
of secondary research in the report. The prominent references to the use of
questionnaire surveys as major data collection approaches in the individual research
papers facilitate the impression of notable leadership styles which have proved
successful in the existing scenarios. The list of three prominent leadership styles such as
transformational, transactional and laissez faire leadership was considered in this case
and their impact on distinct organizational dimensions such as employee commitment
and employee motivation was included in the scope of the report. It is also imperative to
observe the annual reports of large scale organizations in different industries such as
Apple Inc, McDonald’s etc. could facilitate adequate insights for data collection.
Sampling:
The sampling for the research activity could be identified as random sampling
which implies the probability of including research study literature that can reflect on
the variables assumed in context of this research report. The sampling size is not

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specifically estimated in this report owing to the availability of secondary sources of
information.
Data analysis and research findings:
The use of combined methods of qualitative and quantitative analysis in the case of
information acquired from critical reflection on literature pertaining to effectiveness of
different leadership styles as well as the information obtained through primary data collection
approaches followed in the form of questionnaire survey findings. The survey of leaders in
the research activity was directed towards estimating the personal perception of leaders
regarding their leadership style (Zhang et al., 2015).
The outcomes of the leadership survey suggested that the preference for leadership
style could not be considered mutually exclusive and therefore leaders are more likely to
depict different types of leadership styles or an assortment of the same. However, the survey
findings reflected on the prominence of transformational and charismatic leadership style
preferences with a major emphasis on combination of the above two styles with situational
leadership (Wong & Laschinger, 2013).
Combined leadership preferences could enable leaders to have diverse
alternatives and perspectives for addressing a particular scenario especially pertaining
to the strategic direction of an organization. Furthermore, the findings from secondary
information in terms of the Australian business leadership survey suggest that outcome
measures which could be observed in context of different leadership styles reflected on
the three prominent outcomes of extra effort, satisfaction and effectiveness. The means
scores of outcomes obtained from the implementation of leadership styles were high for
employee satisfaction and effectiveness i.e. above a score of 3 (Strom, Sears & Kelly,
2014).
The ratings provided by executives in surveys to the different factors is reflective
of the fact that the personal satisfaction of employees as well as satisfaction in an
employment context is a formidable outcome of leadership as communicated by leaders
and workers. The critical reflection on the outcomes rendered by different leadership
styles in context of other influential factors such as size of the company, gender

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differences, seniority, age and tenure in the organization are also considered as major
attributes for tailoring the effect of leadership styles.
The application of the structural equation model for analysis of research data
pertaining to the implications of leadership style on job satisfaction could be derived
after estimating a model for measurement and confirmatory factor analysis. The
analysis of structural model findings as observed in the secondary source
(http://www.diva-portal.se/smash/get/diva2:895840/FULLTEXT01.pdf 5.1.3) reflects on
the coefficient and t-value of individual relationship between leadership styles and job
satisfaction. The empirical findings suggested that transformational leadership had the
highest regression coefficient at 0.83 as compared to 0.57 of transactional leadership
and 0.21 noticed in relationship-oriented leadership. The finding in context of
transformational leadership also emphasizes on the greater value i.e. 3.83 than critical
value of the t-statistic at 95% level of confidence i.e. 1.96. (findings using statistic tests)
The empirical findings also reflect on the observation of comparatively lower
regression coefficients in the case of transactional and relationship oriented leadership (Sahin,
Çubuk & Uslu, 2014). This leads to the impression that while transactional and relationship
oriented or situational leadership could be considered effective contributors to the
improvement of employee satisfaction, their capabilities are limited as compared to that of
transformational leadership. Therefore it can be aptly concluded from the data analysis that
transformational leadership and combinational preferences in leadership styles have the
potential to invoke and improve employee satisfaction alongside reducing the concerns of
employee turnover.
Research gap:
The primary gap in the research could be derived from a comprehensive overview of
the literature review. The research gap is vested in the lack of references to other
organizational outcomes caused due to different leadership styles that are also responsible for
influencing employee satisfaction. Some of the factors include the role of colleagues or peers,
impact of organizational restructuring on leadership and employee performance and the
significance of organizational culture in context of leadership and job satisfaction of
employees.

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Future recommendations:
The outcomes of the research reflect clearly on the effectiveness of leadership styles
in improving employee satisfaction and considered the cases of three distinct leadership
styles i.e. transformational, transactional and relationship based leadership. The future
recommendations that could be included in this report would be to ensure the execution of
primary data collection process in order to have a practical involvement in the research
activity rather than relying on secondary sources of information (McDermott et al., 2013).
The limitations for research in terms of physical and financial resources should be
addressed in future research activities. Furthermore, future research activities should also
emphasize on inclusion of more variables and case instances from research study literature in
order to widen the scope of the outcomes and their relevance for the research issue
(McDermott et al., 2013).
Milestones and schedule:
The project schedule and milestones could be illustrated in the form of a Gantt chart as
follows:
Activity Week 1 Week 2 Week 3 Week 4 Week 5
Selection of
research topic
Establish
research aims
and objectives
Secondary data
collection
Primary Data
collection
Data analysis
Findings and
recommendations
Final formatting
and submission

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Conclusion:
The outcomes of data analysis in the research report illustrated above were indicative
of the prolific impact rendered by transformational leadership style on satisfaction of
employees. The concurrent trends in the domain of business management in Australia
alongside the changing perceptions of leadership behaviour could be addressed effectively
through the adoption of transformational leadership that is helpful for addressing employee
satisfaction and employee turnover issues.
References
Aydin, A., Sarier, Y., & Uysal, S. (2013). The Effect of School Principals' Leadership Styles
on Teachers' Organizational Commitment and Job Satisfaction. Educational sciences:
Theory and practice, 13(2), 806-811.
Bouckenooghe, D., Zafar, A., & Raja, U. (2015). How ethical leadership shapes employees’
job performance: The mediating roles of goal congruence and psychological capital.
Journal of Business Ethics, 129(2), 251-264.
Carter, S. M., & Greer, C. R. (2013). Strategic leadership: Values, styles, and organizational
performance. Journal of Leadership & Organizational Studies, 20(4), 375-393.
Choudhary, A. I., Akhtar, S. A., & Zaheer, A. (2013). Impact of transformational and servant
leadership on organizational performance: A comparative analysis. Journal of Business
Ethics, 116(2), 433-440.
Clarke, S. (2013). Safety leadership: A meta‐analytic review of transformational and
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Dul, J., & Ceylan, C. (2014). The Impact of a Creativity‐supporting Work Environment on a
Firm's Product Innovation Performance. Journal of Product Innovation Management,
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