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Working-from-home: How's it working?
How transformational leaders sustain organizational commitment during high-stress periods
March 2020: The Month That Changed Forever How Leaders Manage
The start of our world, changing forever. The beginning of the reckoning: COVID-19. It has impacted every aspect of our lives. Words that you've likely read over, and over again. By April 3rd, 2020, “half of humanity” was required to stay at home in some form of confinement or shelter-in-place (Sandford, 2020). Employees worldwide were forced to shift rapidly from the physical workplace to virtual work. What began as a “2 week measure” or “15 days to flatten the curve” has gradually evolved into a societal change “for the indefinite future.
Management in a virtual environment, particularly filled with uncertainty and stress, is not a transferable skill, nor one that comes naturally. In fact, studies show that 40% of managers experienced low-self confidence in their abilities to manage employees remotely (Parker, Knight, Keller, 2020). Although organizations worldwide have made this rapid shift, there has been little research into how this change has affected employee-manager relationships– more specifically, the effect of different leadership styles on employees during this unprecedented transformation.
In a sudden shift from working-in-office to working-from-home, my research displays that transformational leaders were able to sustain organizational commitment, although distinct transactional leadership traits do have a positive impact on organizational commitment.
Popular Leadership Styles & Organizational Commitment During COVID-19
James Macgregor Burns defined the term "transformational leadership" in 1978 to describe political leaders (Cameron & Green, 2012). This term was later further developed by renowned organizational researchers, B.M Bass and J.B Avalio, to describe leaders focused on raising their subordinates’ sense of mission, self-esteem, and aspirations (Salma et al., 2015). On the other end of the spectrum, transactional leadership is often characterized as leadership through the exchange of rewards, penalties, and monitoring/correcting employee actions.
Key Differences Between Transformational & Transactional Leadership:
Transformational Leadership Traits (Judge & Bono, 2000):
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Inspirational motivation: how the leader raises a sense of purpose for his or her followers, articulates a clear future vision, and demonstrates a commitment to goals
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Idealized influence: the degree to which a leader builds trust, is charismatic, follows a core set of values, and is seen as a positive role model
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Individualized consideration: a leader’s ability to recognize his or her employees’ different needs and desires, provide customized opportunities and support
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Intellectual stimulation: how much a leader challenges his or her employees to think creatively, encourages new ideas, and aids in framing problems
Transactional Leadership (Judge & Bono, 2000):
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Contingent rewards: the amount of rewards (promotions, gifts, recognition, appreciation, or bonuses) a leader gives to followers based on task completion or performance
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Management-by-exception: the degree to which a leader monitors the activities and tasks of employees, and steps in or intervenes upon signs of mistakes or failures
One key area often considered to be a foundational concern for managers is employee organizational commitment, the degree to which an employee feels involved, attached, and identifies to the organization for which he/she works (Yavirach & Prof, 2015). Today, organizational commitment has been found to be one of the most crucial antecedents to desirable employee outcomes like job satisfaction, productivity, motivation, and more (Steers, 1977).
Overall, the majority of recent literature concerning these leadership styles portrays that both leadership styles are positively associated with organizational commitment, with a stronger, positive association between transformational leadership and organizational commitment (Dai et al., 2013, Lombardo & Mierzwa, 2012, Gulluce et al., 2016; Porter, 2015). However, recent research displays that transformational leaders are more comfortable communicating face-to-face which could raise a problem in a working-from-home context (Iriqat & Khalaf, 2017).
Relationships are inevitably strained when employees go through a change in working environment, especially when the change is combined with higher levels of stress and uncertainty. It is crucial for managers to understand which leadership styles and traits can positively affect their employees.
How Commitment Decreased in Shift to Working-from-Home
As expected, my results displayed a statistically significant decrease in organizational commitment after the start of the pandemic (t=(150)=5.319, p=<.001).
It was a massive change in the working environment at a very fast pace, undoubtedly leading to negative employee outcomes (Bick et al., 2020; Prochazka et al., 2020; Wang et al., 2020).
Transformational vs. Transactional Leadership on Organizational Commitment
Transformational leadership was found to be positively related to the change in organizational commitment (β=.440, 𝚫R²= 0.187, P<0.001, SE= 0.089), showing that transformational leaders were able to sustain their employees’ organizational commitment during the shift from working in-office to working-from-home.
There were no significant findings regarding transactional leadership and the difference in organizational commitment (β=0.104, 𝚫R²= 0.010, P<0.235, SE= 0.119) overall, indicating that if a leader is not considered to be transformational, organizational commitment decreases in a shift from working in-office to working-from-home.
Leadership Traits & Their Effects on Organizational Commitment
Among the four transformational leadership leadership traits, inspirational motivation was found to be the most positive significant predictor of the change in organizational commitment (β=.204, 𝚫R²= 0.195, P<0.1, SE= 0.108) followed by idealized influence, individualized consideration, and intellectual stimulation. Inspirational motivation, known as the ability to inspire confidence and articulate a vision, is a crucial component in maintaining team spirit during periods of high stress, therefore translating to a positive effect during stress. Leaders that focus on maintaining an appealing vision for the future and who inspire a sense of purpose are able to provide the positive energy needed to sustain organizational commitment.
Transformational Leadership Traits on Organizational Commitment Ranked by Effectiveness:
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Inspirational Motivation
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Idealized Influence
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Individualized Consideration
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Intellectual Stimulation
On the other hand, contingent rewards, a transactional leadership trait, was also found to be a significant positive predictor (β= .334, 𝚫R²= 0.144, P<0.001, SE= 0.075). However management-by-exception was seen to have an even further negative effect on the change in organizational commitment.
Transactional Leadership Traits on Organizational Commitment Ranked by Effectiveness:
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Contingent Rewards
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Management-by-exception
Main Takeaways
This study was designed to gather foundational empirical evidence into how organizational commitment changed in a temporary shift from working in-office to working-from-home.The study also was to define what type of leader is able to impact employee organizational commitment in a time of change and uncertainty. This study presents a new finding that transformational leadership can positively influence employees in environments filled with high uncertainty. Transformational leaders were able to positively transform their employees' attitudes, Transformational leaders were able to devise creative ways to provide emotional connection, a clear vision, and to inspire their employees, thus serving as an enabler to combat any stress, loneliness, or fatigue.
Among the traits of transformational leadership, inspirational motivation and idealized influence had the strongest positive impact on employees' organizational commitment. Inspirational motivation has been found to help fatigued employees re-commit and sustain their strive towards a shared company or team vision (Bick et al., 2020). Leaders who utilize inspirational motivation can create a strong sense of team spirit, enabling followers to “identify more closely with the organization's goals'' (Chebon et al., 2019). The promotion of a shared vision, continued optimism, and the encouragement for unity within a difficult transition is a strong and reliable way to sustain organizational commitment.
Contrary to the expectations that individualized consideration would be more impactful than idealized influence, this conclusion is in agreement with several similar studies who have found that idealized influence is positively correlated with the ability to reduce negative stress and to increase employee performance. (Chebon et al., 2019, Sosik et al., 2004). Leaders that hold a strong position of idealized influence are often regarded as charismatic and integrous, for communicating an effective vision, and for the ability to better engage employees. These factors combined, empower leaders to maintain their employees' organizational commitment.
Employees are craving now more than ever, particularly in a time of change—leadership, emotional connection, motivation, and understanding. Employees are looking upon their managers as role models who can ease stress and uncertainty. The more one can serve as a role model with honest principles and a clear vision, especially in a high-stress environment, the easier a manager can increase his or her idealized influence trait.
Contrarily, transactional leadership as a whole has no significant effect on influencing others in this context. This therefore suggests that the transactional leadership construct revolving around order and transactional-based interactions is not effective in positively influencing employees in times of high uncertainty and change. However, the transactional leadership traits were statistically significant. The management-by-exception trait has a further negative impact on the change in organizational commitment. If a manager is interacting with the subordinate only to enforce corrective actions during a period of high uncertainty, this fortifies the physical and emotional distance in the employee-manager relationship, also leading to an inevitable decrease in organizational commitment.
The contingent rewards trait was found to make a positive change on organizational commitment. Rewards in any fashion serve as positive reinforcements and encourage positive employee performance, therefore altogether leading to a positive effect on organizational commitment (O.S et al., 2013). Rewards, at its core, demonstrate respect and appreciation for an employee’s hard work. This respect and appreciation becomes more important during a time of high stress and helps to bring the employee closer to the organization and manager.
What can leaders do with this information?
In a time of high uncertainty, managers’ interactions with their subordinates become more pressing. Leadership styles can have a direct impact on employee organizational commitment, an antecedent for dozens of other positive employee factors like performance, motivation, and engagement.
Managers must not only hone in on transformational leadership practices but also utilize contingent rewards to help sustain employee organizational commitment. Here are three ways managers can begin this effort.
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Define and articulate a clear vision for your employees. Leaders act as the source of motivation for their subordinates; a discouraged, disorganized leader has a tenfold impact on employees. This is not to imply disingenuous optimism or to discourage practicality, but to encourage leaders to reflect on what this vision can look like.
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Be the role model your employees need. Loyalty is built through remaining ethical in everyday actions. Managers must "walk the talk" of the qualities they are searching for in their own employees. Most employees subconsciously imitate their role models' actions and qualities and develop higher levels of idealized influence for managers with integrity.
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Incorporate contingent rewards into management practices. Managers should begin by asking their employees what types of rewards could be good incentives, involving the employees in the reward creation process.