This chapter reviews the existing literature pertaining to the concepts of career plateau, organizational commitment and transactional and transformational leadership. The hypotheses are derived afterwards.
Context of Belize’s Economy Economy
In September 2016 the International Monetary Fund (IMF) described Belize’s economy as one facing many challenges. The challenges are characterized by the country’s reduced GDP, as its economic activity level in 2016 dwindled by 1.2% from 2015 (Statistical Institute of Belize, 2017a). Belize’s level of production decreased by 0.8% from the previous year. Despite this, production in the tertiary sector of the economy which produces more than half of the country’s economic activity, increased by 0.8% in the final quarter of 2016. The tourism industry had the highest increase of 7%, followed by government services with 1%
increase (Statistical Institute of Belize, 2017a).
The effects of globalization and the fact that Belize is a small country, ranks Belize’s public expenditures very highly in comparison to other Central American countries (LaFuente, 2013). According to LaFuente (2013), this has been a concern brought up by the International Monetary Fund (IMF) especially since personnel expenditure is one of the government’s biggest expenses. This includes considerable pay increases and the existence of the non-contributing pension scheme for public officers. In October 2016, the Statistics Institute of Belize released its latest statistics, highlighting an 11.1% unemployment rate, a marginal decline from 2015.
Economic Reform
Organizations such as the IMF and IMDB have recommended strategies to reduce the high public expenditure; these structural reforms are necessary to boost the country’s productivity and competitiveness in the region (IMF). However, these recommended structural reforms promise to bring along changes to the working environment of Belize, both public and private sectors. In the history of Belize, there have not been changes of such nature. Therefore, this will possibly bring along challenges to managers and supervisors when re-assuring employees that change is necessary and should be embraced.
8
So far, both sectors have sought reform with the ultimate goal of improving Belize’s economic competitiveness and performance (Metzgen, 2014). Belize’s economy was ranked 123 out of 142 countries in a 2011-2012 report, identifying it as one of the least competitive economies in the world (Ministry of Energy, Science and Technology, and Public Utilities, n.d.). Therefore, there is a wide gap in terms of competitiveness and performance that Belize has to fill. This is a task that can be achieved through a public-private sector coalition to build upon each other to improve the country’s economic status. Among the many suggested action plans is the preparation of adequate and competent labor skills to match the current demand of the economy or future demands of fast growing sectors (Metzgen, 2014).
In 2000, Belize committed itself to reform its public service by addressing problems of attitude, poor productivity, poor customer service and most importantly, leadership (Caribbean Forum, 2000). To achieve such reforms, managers in both the public and private sectors must focus in well-being of employees, including their awareness of career plateau amongst the employees.
Career Plateau History of Career Plateau
Career plateau was originally defined by Ference, Stoner, and Warren (1977) who stated that it is a natural consequence of the way organizations change in shape. Thereafter, many researchers studied career plateau, offering various empirical measurements and conceptual interpretations. For example, Bardwick (1986) classified career plateau into three dimensions: (1) structural plateau as a result of a lack of hierarchical advancement within the organization; (2) content plateau due to employees feeling bored at their job because they know it too well; (3) life plateau as a result of an unsuccessful career causing a feeling of being “trapped” in life. Also, Stoner, Ference, Warren, and Christensen (1980) distinguished between successful and unsuccessful plateaus. They identified successful plateau as employees with above-satisfactory performance. On the other hand, unsuccessful plateau means employees with satisfactory performance.
Chao (1990) stated that it is difficult to identify systematic differences between plateaued and non-plateaued employees. That is, the idea of career plateau is highly dependent on an individual’s perception of it. It then becomes a subjective evaluation as “it emphasizes how the individual perceives, assesses, and reacts to the present work situation”
(Chao, 1990, p.182). Nonetheless, there have been studies that conceptualized career plateau
9
using a more objective evaluation, specifically job tenure. Some of the many definitions include employees as being plateaued when their job tenure is 5 years or more (Slocum, Cron, Hansen, & Rawlings, 1985; Stout, Slocum, & Cron, 1988), 7 years (Gould & Penley, 1984; Veiga, 1981), or 10 years (Gerpott & Domsch, 1987). In other respects, there have been studies which used age as the fundamental concept for defining career plateau (Evans &
Gilbert, 1984) or self-assessments using ratings of the employee’s perception on the possibilities of future promotions (Carnazza, Korman, Ference, & Stoner, 1981; Near, 1985).
Many studies, however, focus on the subjective measurement of career plateau to better understand the related consequences. For example, Tremblay et al. (1995) established that an individual’s workplace attitudes and behaviors are associated to the feeling of being plateaued more than to the objective measurement of job tenure. As well, Stoner et al. (1980) suggested that career plateau may be perceived as permanent or temporary, and quite dependent on the context of the organization and culture. Therefore, each firm, country and culture has a different concept as to what is an acceptable period before an individual starts perceiving career plateau.
The Conceptualization of Career Plateau
Career plateau was first defined as the point in an individual’s career where there is a low possibility of additional upward mobility within the organization (Ference et al., 1977;
Ongori & Angolla, 2009; Veiga, 1981). It has also been described as the feeling of being in the same position for a long time, and not receiving additional learning opportunities, challenges or responsibilities (Ettington, 1998; Feldman & Weitz, 1988). However, Bardwick (1986) suggested the existence of two forms of career plateauing; namely, (a) structural (hierarchical) plateauing and (b) content (job content) plateauing. Hierarchical plateau refers to the low possibilities of further promotion within an organization (Ference et al., 1977). On the other hand, job content plateau occurs when individuals are experts in their work and are no longer challenged by it (Bardwick, 1986). The two constructs have been empirically confirmed as being different from each other (Allen, Russell, Poteet, & Dobbins, 1999;
Milliman, 1992; Tremblay & Wils, 2004).
10
Organizational Commitment The Conceptualization of Organizational Commitment
For over twenty five years now, researchers have provided substantial evidence that having a strongly committed workforce is beneficial to an organization. That is, committed employees have less turnover intention (Mathieu & Zajac, 1990; Tett & Meyer, 1993), are less absent (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002), are effective performers (Cooper-Hakim & Viswesvaran, 2005; Riketta, 2002) and display good organizational citizenship behavior (Meyer et al., 2002; Riketta, 2002). As well, several studies over the years have provided varying definitions of organizational commitment. Table 2.1 provides a summary of these conceptualizations.
Table 2.1.
Conceptualizations of Organizational Commitment over Years of Research
Conceptualization Reference
“…the relative strength of an individual’s identification with and involvement in a particular organization.”
Mowday et al., 1979, p.226
“…the totality of normative pressures to act in a way which meets organizational goals and interests.”
Weiner, 1982, p.421
“…the psychological attachment felt by the person for the organization; it will reflect the degree to which the individual internalizes or adopts characteristics or perspectives of the organization.”
O’Reilly & Chatman, 1986, p.493
“…a psychological state that binds the individual to the organization (i.e. makes turnover less likely).”
Allen & Meyer, 1990, p.14
“…a bond or linking of the individual to the organization.” Mathieu & Zajac, 1990, p.171
After review of several studies, Meyer and Herscovitch (2001) concluded that commitment can be defined as a strong force that influences employees’ behavior. For example, it can restrict freedom of choice, as well as tie a person to a course of action. It is important to understand that commitment is different from motivation or general attitudes
11
(Brickman, Sorrentino, & Wortman, 1987; Brown, 1996). Brooke, Russell, and Price (1988) proposed a validation study of not only organizational commitment, but also job satisfaction and job involvement. The results prove respondents are able to distinguish between job satisfaction, job involvement and organizational commitment. Yet Mowday et al. (1979) defined organizational commitment as a reflection of an employee’s identification and involvement with a particular organization, embracing three dimensions. That is, a committed employee embraces the organization’s goals and values as his own; has a strong willingness to go the extra mile; and has a strong desire to remain in the organization.
Nonetheless, further studies were conducted, specifically by Meyer and Allen (1987).
They developed a three-dimension model for organizational commitment-affective, continuance and normative commitment. What they identified is that, depending on the type of commitment an employee is experiencing, the individual will experience a different kind of link or tie to the organization. Generally, they stated that someone with affective commitment stays with the organization because of their emotional attachment to it; one with continuance commitment remains because they have a need to, and one with normative commitment remains because they feel obliged to do so.
Affective Commitment
Allen and Meyer (1990) defined affective commitment as an employee’s desire to stay in the organization because of their emotional attachment to it. Therefore, an employee who displays strong affective commitment identifies with the organizations and its objectives, gets quite involved in the attainment of these, and also relishes being a member of the organization. Meyer and Allen (1987) stated that an individual’s work experience is the strongest antecedent of all for developing affective commitment. This especially refers to experiences that fulfill an employee’s psychological needs to feel comfortable within the organization and competent in their work-role. Consequently, employees who are satisfied and feel competent in their work-role express greater affective attachment to the organization (Allen & Meyer, 1990).
Continuance Commitment
Continuance commitment is developed based on the amount of investments individuals make for an organization and the availability of alternatives should the employee leave the organization (Allen & Meyer, 1990). Basically, employees weight the costs and
12
benefits of leaving the organization. To expound on this, take for example, an employee who invests time, and possibly money, to learn a job-related competency. The goal is to improve one’s job performance with the hopes of receiving a salary increment. Such an investment may prevent the employee from performing poorly; here, the benefit outweighs the cost. The lack of employment alternatives also plays a role. For example, if the employee perceives that it will be difficult to find a new job if he quits, the perceived costs associated with leaving the organization increases (Farrell & Rusbult, 1981; Rusbult & Farrell, 1983). Therefore, the fewer viable alternatives employees believe are available, the stronger will be their continuance commitment to their current employer (Allen & Meyer, 1990). Basically, if the employee has more to lose, then the individual remains committed to the organization.
Normative Commitment
Normative commitment will be influenced by the individual’s experience both prior to and following entry into the organization, also known as familial/cultural socialization and organizational socialization, respectively (Weiner, 1982). For example, an employee expressing a strong normative commitment may have been influenced by significant others, like a relative, who are or have been former loyal employees of an organization. Sometimes, organizational practices or the organizational culture influence the organizational socialization of employees, leading them to believe that it depends on their loyalty;
consequently, the employee displays strong normative commitment (Allen & Meyer, 1990).
Relationship between Career Plateau and Organizational Commitment
Numerous researches on career plateau focus mainly on its consequences, highlighting the fact that career plateau affects both the employee and organization (Chay et al., 1995; Lemire, Saba, & Gagnon, 1999; Tremblay et al., 1995). Extensive research support the theory that the consequences of employees experiencing career plateau are poor work performance, loss of motivation and reduced or loss of commitment (Carnazza et al., 1981;
Evans & Gilbert, 1984; Near, 1985; Slocum et al., 1985; Stout et al., 1988). Furthermore, studies in career plateau include studying it as an antecedent to detrimental work outcomes including low job satisfaction, increased stress levels, bad performance, depression and increased turnover intention (Allen, Poteet, & Russell, 1998; Chay et al., 1995; Heilmann et al., 2008; Lemire et al., 1999; McCleese & Eby, 2006; McCleese et al., 2007; Nachbagauer &
13
Riedl, 2002; Tremblay et al., 1995). Without undermining the other undesirable work outcomes, some studies have focused on organizational commitment.
The recent organizational changes, such as restructuring and downsizing, have caused previously loyal workers to lose their commitment to the organization (Hunter & Thatcher, 2007). When individuals perceive a career plateau, they may feel that it will be difficult to achieve their career goals under the current circumstances (Wen & Liu, 2015). Consequently, employees no longer perform to their potential and may even express their dissatisfaction through counter-productive behaviors (Lemire et al., 1999). In a study conducted by Salami (2010), the empirical results show that career plateau was negatively related to organizational commitment.
Despite the fact that many empirical studies have studied the antecedents of organizational commitment, very few have studied the same but with focus on the three distinguished forms of commitment. Meyer et al. (2002) found that affective and normative commitments are highly correlated. According to their findings, these two dimensions displayed similar patterns of antecedents and consequence variables. Allen and Meyer (1990) outlined that affective and normative are not one and the same, but there is a tendency that employees develop these concurrently. With this in mind, and the literature presented above, the following hypotheses were drawn:
Hypothesis 1a: Career plateau has a negative relationship with affective commitment.
Hypothesis 1b: Career plateau has a negative relationship with normative commitment.
Continuance commitment, on the other hand, will display an opposite direction of relationship with its antecedents when compared to affective and normative commitment (Meyer et al., 2002). This is likely attributed to the element that continuance commitment is affected by the employee’s individual perception of lack of alternatives, and not by the employee’s general experience in the organization, like supervisor support or career plateau.
As a result, the following hypothesis was drawn:
Hypothesis 1c: Career plateau has a positive relationship with continuance commitment.
Transactional and Transformational Leaderships
Leadership is a process of leading followers by influencing them to accomplish a goal or objective; the leader then helps to steer the organization in achieving them (Acar, 2012).
14
Many leadership theories have been developed and debated as well. For the purpose of this study, the full range leadership theory developed by Bass and Avolio (Avolio, 1999; Bass &
Avolio, 1994) will be applied. This theory identifies the ranges of leadership styles from non-leadership, transactional and transformational styles. For this study, the theory reflects transactional and non-leadership as one style, and transformational as another. Leadership styles were first conceptualized by Burns (1978) using two terms: transactional and transformational. These two styles can be distinguished by the method each uses to encourage followers or to appeal to follower’s values and emotions (Nguni, Sleegers, & Denessen, 2006).
Transactional Leadership
In transactional leadership, the leader focuses on task completion and employee compliance, relying heavily on rewards and punishment to influence followers. This leadership style places emphasis on work standards, assignments and task-oriented goals (Burns, 1978). Transactional leadership was further conceptualized as having four behavioral dimensions addressing the leader’s activity and involvement within the range of passive to active (Avolio, Waldman, & McDaniel, 1990; Bass & Avolio, 1990). Contingency reward behavior focuses in clearly outlining expectations and performance targets. Reinforcement is provided in terms of rewards for meeting the goals. Active management-by-exception (MBEA) includes actively monitoring and keeping track of non-compliance and failure. In contrast, passive management-by-exception (MBEP) behavior is waiting to learn of non-compliance and mistakes, or waiting for problems to become chronic before taking corrective actions. Laissez-faire leadership behavior displays avoidance of responsibilities, and delaying making decisions.
Transformational Leadership
On the other hand, in transformational leadership, the leader motivates followers to perform beyond what is expected by transforming their attitudes, beliefs and values rather than relying on basic compliance (Bass, 1985; Burns, 1978; Yukl, 1999a, 1999b). They must be able to clearly articulate a mission and vision for their organizations and the followers must have confidence on the leader (Emery & Barker, 2007). As well, the transformational leader motivates followers to higher levels of potential by encouraging them to “think outside the box” and look at different alternatives to problem solving (Bass, 1985; Bass & Avolio,
15
1994). As a result, Bass et al. (2003) defined transformational leadership as a behavior process consisting of four factors: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration.
Idealized influence is observed when followers perceive a leader as charismatic and strive to imitate such leader. This can be either in the leader’s behavior or attributes (Bass &
Avolio, 1995). The followers support their leader’s mission, values and beliefs; they adopt the same, forming a strong emotional tie to their leader. Individualized consideration is observed when leaders demonstrate concern for the individual needs of followers, treating followers on a one-to-one basis. Through mentoring, for example, transformational leaders have an opportunity to identify individual needs, to modify them appropriately to the level of challenges the followers may face.
Intellectual stimulation is observed when leaders encourage followers to question the current way of doing things. Followers are allowed to question their own values, beliefs and expectations, as well as those of the leader and organization which may be perceived as outdated or inappropriate for addressing current problems. Lastly, inspirational motivation refers to motivating and energizing followers by communicating a compelling vision. By doing this, the leader often succeeds in elevating the expectations of followers, leading them to superior performance, more commonly by communicating a clear vision with confidence, leading by example, and motivating followers to strive for improvement.
Moderating Role of Transactional and Transformational Leaderships
Various studies have been conducted on identifying effective leadership styles that influence employee behavior, including transactional and transformational leadership styles.
However, most of them have contributed to the development of the transformational leadership theory and its influence on follower attitudes, behaviors and performance (Bass, 1985; Jung, Chow, & Wu, 2003; Keller, 2006; Liao & Chuang, 2007).
After studying the leadership of managers in Austrian banks, Geyer and Steyrer (1998) noted a stronger relationship between transformational leadership and employee long-term performance. They attributed this to the behaviors of inspiring and motivating from the transformational leader. In a similar study on Evangelist pastors, Rowold (2008) concluded that there is significance in the transactional and transformational leadership model as it relates to the leadership influence on subordinates. He further stated that, indeed, transformational leadership augments the effect of transactional leadership, and that church
16
followers’ satisfaction had higher correlation to the pastor’s transformational leadership style than to his transactional leadership style
Furthermore, Emery and Barker (2007) studied 292 bank tellers and 97 counter checkers on the influence of the perceived leadership style (transactional or transformational) used by their supervisors, and its influence on their organizational commitment. Similar to Rowold (2008), they concluded that transformational leadership has a strong, positive influence on the emotional aspects of commitment (affective and normative), eventually leading to a positive employee attitude. As well, their study also supported previous research positing the use of transactional leadership as a less effective leadership style compared to transformational (Bass & Avolio, 1990). Nguni et al. (2006) concluded that transformational leadership, as opposed to transactional leadership, has as its focal point, stimulating employee motivation and commitment leading to performance required for organizational changes (Yukl, 1989). These studies, all support the full range leadership model (Figure 2.1.) developed by Kirkbride (2006).
Figure 2.1. Full range leadership model. Adapted from “Developing transformational leaders:
The full range leadership model in action,” by P. Kirkbride, 2006, Industrial and Commercial Training, 38(1), p.24.
After reviewing the relevant literature, the following hypotheses were developed:
Hypothesis 2a: Transformational leadership will weaken the negative relationship between career plateau and affective commitment. Specifically, transformational leadership
17
has a stronger moderating effect on career plateau–affective commitment than transactional leadership.
Hypothesis 2b: Transformational leadership will weaken the negative relationship between career plateau and normative commitment. Specifically, transformational leadership has a stronger moderating effect on career plateau–normative commitment than transactional leadership.
Hypothesis 2c: Transformational leadership will strengthen the positive relationship between career plateau and continuance commitment. Specifically, transformational
Hypothesis 2c: Transformational leadership will strengthen the positive relationship between career plateau and continuance commitment. Specifically, transformational