This chapter provides an overview of this research. To gain a better understanding, the areas outlined are as follows: background of study, the problem statement, the purposes of the study, the research questions, the significance of the study and finally, the definitions of key terms in the framework.
Background of the Study
The nature of the working environment has been changing since the introduction of globalization. Fukuda-Parr (2003) identified job insecurity as a new threat to human security due to pressure on labor markets to be more flexible and competitive in the new globalization era. To remain competitive, organization structures are no longer vertical, but more horizontal, and the hierarchical structure is narrower. This makes the hierarchical upward or horizontal mobility among employees more competitive (Burke, 2002; Chao, 1990; Chay, Aryee, & Chew, 1995; Evans, Gunz, & Jalland, 1997; McCleese, Eby, Scharlau, & Hoffman, 2007; Trembley & Roger, 1993). Career advancement in terms of hierarchical promotion has become competitive and difficult (Jung & Tak, 2008). Nachbagauer and Riedl (2002) described today’s workplace as a “patchwork” of jobs rather than a pyramid-shaped organization. Consequently, many employees reach a point where they may perceive some level of career plateau (Bardwick, 1986; Feldman & Weitz, 1988). Plateaued employees usually remain in the same job position, routinely doing the same tasks that no longer offer them any opportunities or challenges just to remain employed (Bardwick, 1986; McCleese &
Eby, 2006). Career plateau is rapidly attracting concern as it is becoming a critical managerial and organizational issue that needs to be managed properly to avoid employees’ discontent (Burke & Mikkelson, 2006; Tremblay, Roger, & Toulouse, 1995).
Taking Belize as an example, the country is currently facing economic challenges that affect both its public and private sectors. One of the biggest challenges is the country’s high public expenditure. This prevents appropriate direct and indirect investments into the economy that can stimulate its development. Organizations such as the International Monetary Fund (IMF) and International Development Bank (IDB) have recommended that the government cut down on spending, specifically on its wages for the public sector. So far, the government has halted a salary increase for some of its public servants, like government teachers, for the same reason. To improve the country’s economy, the Government of Belize (GOB) may rely on pay cuts or reduction on public servants’ pension contribution.
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Consequently, there may be less promotions or salary increments, which may influence the public servants’ perception of career plateau. At the same time, the private sector lacks the necessary labor skills to compete with other vibrant, agile markets within the Central American and Caribbean region. Management of both sectors will be challenged with the ability to maintain their employees committed even in face of organizational changes.
Managers now have to strategize methods to retain their plateaued employees in face of organizational changes and to keep them motivated when there is a lack of career advancement. Structural changes in organizations put a halt in career progression, causing feelings of unhappiness and dissatisfaction in some employees. A plateaued employee will undoubtedly have an effect on an organization’s success. Career plateau has been empirically proven to have a link to detrimental work outcomes like job dissatisfaction, poor work performance, low organizational commitment and increased turnover intention (Heilmann, Holt, & Rilovick, 2008; Salami, 2010). As it relates to organizational commitment, organizations do realize that it is a challenge maintaining employee commitment.
Nachabagauer and Riedl (2002) concluded that career plateau is the ultimate reason why emotional devotion to the organization would reach a low level. Alternatively, having committed employees may reduce turnover and more than likely keep an organization’s competitiveness (Katz & Kahn, 1978). For example, Mathieu and Zajac (1990) indicated that the prestige associated with moving to higher job levels can likely increase attitudinal commitment. However, in the same study, they also indicated that other variables may influence an employee’s organizational commitment, some of which are likely to develop, interact and change over time.
The literature on perceived career plateau has been of diverse focus. These range from the types of career plateau, its measurements (Chao, 1990), as well as the antecedents and consequences of it (Tremblay et al., 1995). Few studies have been reported on the roles of moderators on the relationship between perceived career plateau and its outcomes (Ettington, 1998), much less as it relates to leadership. The moderating role of effective leadership on the relationship between career plateau and organizational commitment is crucial in influencing followers to become creative rather than becoming dependent on a promotion or job rotation to feel accomplished. An employee’s perception of their immediate supervisor affects his/her attitudes and behavior (Yammarino & Dubinsky, 1992). Therefore, it seems reasonable to think that some styles of leadership may be more effective than others at influencing an employee’s organizational commitment (Emery & Barker, 2007). Bass (1985) categorized leadership as transactional and transformational. Transactional leaders ensure followers meet
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minimum expectations. On the other hand, the transformational leader motivates his followers to look beyond their self-interests, to be creative and think “outside the box”, and to perform beyond minimum expectations. As a result, transformational leaders are considered effective leaders who are responsive to their followers’ needs and concerns (Bass & Riggio, 2006). For years now, transformational leadership has been studied, with the results supporting a positive link to multiple organizational work outcomes. As well, the context of these studies has been on many different types of organizations and situations (Avolio, Bass, Walumbwa, & Zhu, 2004; Dumdum, Lowe, & Avolio, 2002; Lowe, Kroeck, &
Sivasubramaniam, 1996).
Statement of Problem
There is quite an amount of research addressing the relationship between career plateau and organizational commitment. Albeit researchers have conducted many studies on moderators and their effects on the relationship between career plateau and its workplace outcomes (Jung & Tak, 2008; Lapalme, Tremblay, & Simard, 2009; Wen & Liu, 2015), there are scarce studies focusing on the possible effects that transactional and transformational leadership may have on plateaued employees and their level of commitment to the organization. Therefore, this study sought to fill the existing research gap in the empirical studies on the moderating effect that leadership style may have on the perception of career plateau and its association to reduced organizational commitment.
Furthermore, most of these studies have been conducted in developed countries, and in a wide range of organizations. For example, McCleese and Eby (2006) examined a diverse population sample which included employees from the United States, United Kingdom and Canada, all of which are developed countries. The organizations were of varying sizes, industries, and employment sectors. The study supported existing research that the perception of career plateau does influence employees’ commitment to the organization. On the other hand, studies conducted by Jung and Tak (2008) and Wen and Liu (2015) focused in the private sector in Korea and China, respectively, which are considered developed countries . Once more, their results supported the above-mentioned relationship.
Not as many studies focused in developing countries. Salami (2010), for example, conducted an empirical study on government employees in Nigeria, with the results confirming the relationship between career plateau and organizational commitment. Similar to other developing countries, in Belize, the study of career plateau is scarce or non-existent.
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With that in mind, this study also sought to add insight on the relationship between career plateau and organizational commitment, specifically in the context of Belize.
Purpose of the Study
The relationship between career plateau and organizational commitment amongst employees within the work environment of Belize has not been studied. As well, there have been contradicting results as to the consequences of career plateau. It is assumed that plateaued employees remain committed to their employer due to the intrinsic rewards they receive from their organizations. Such intrinsic reward may come from the leader support they have at the workplace. Therefore, the purpose of this study intended to examine the relationship between career plateau and organizational commitment, as well as to explore the moderating effect of transactional and transformational leaderships on career plateau and organizational commitment in the work environment in Belize.
Research Questions
Based on the purpose of study, the research developed the following questions:
1. Does career plateau have an effect on employees’ affective commitment?
2. Does career plateau have an effect on employees’ normative commitment?
3. Does career plateau have an effect on employees’ continuance commitment?
4. Does transformational leadership have a moderating effect on employees’ affective commitment, more than transactional leadership?
5. Does transformational leadership have a moderating effect on employees’ normative commitment, more than transactional leadership?
6. Does transformational leadership have a moderating effect on employees’ continuance commitment, more than transactional leadership?
Significance of the Study
Although this study made contribution to the existing research on career plateau by examining the relationship between career plateau and organizational commitment, it also provided important practical implications for the workplace. As workforce in both developed and developing countries are becoming more dynamic and diverse, managers need to know how to retain their plateaued employees especially when these employees hold a wealth of valuable knowledge. Organizations are now realizing the value of human resources; hence
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their attempt in understanding their employee’s commitment to the organization (Hafeez &
Abdelmeguid, 2003; Lumley, 2008). This study also examined the influence that transactional and transformational leadership have on the relationship between career plateau and organizational commitment. Investigating a variable that can possibly moderate an employee’s reaction to their perceived career plateau provided insight for solutions to managing employees in a more effective way. Therefore, it added to the limited literature on moderators and their effects on the career plateau-organizational commitment relationship.
Definition of Key Terms
The following definitions and terms were used in this study:
Career Plateau
Career Plateau is characterized as a perception. It is the feeling of remaining in the same job position, routinely doing the same tasks that no longer offer further opportunities or challenges, and the perception that there is a low likelihood of receiving advanced assignments or responsibilities (Feldman & Weitz, 1988).
Organizational Commitment
Organizational commitment is defined as an employee’s reflection of his/her identification and involvement with a particular organization, and their desire to contribute to the accomplishment of organizational goals (Meyer & Allen, 1997; Mowday, Steers, &
Porter, 1979).
Transactional Leadership
Transactional Leadership style provides its followers with clear instructions on what are the expectations, and outlines who is responsible for achieving the targets. As a result, the leader provides followers with rewards for meeting the minimum expectations in the form of assistance and support. At the same time, non-compliance and mistakes are punished in an effort to motivate followers to avoid such behaviors (Bass, Avolio, Jung, & Berson, 2003).
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Transformational Leadership
Transformational leadership in this study is defined as a leadership style that encourages and inspires followers to achieve extraordinary outcomes, developing their potential and capacity through mentoring, coaching and support. It also inspires followers to commit to a shared mission and vision, encouraging them to be innovative problem solvers (Bass, 1991; Bass & Riggio, 2006).
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