Founded in the year of 2012, ABC Company has gained much recognition in the Australian telecom industry. The company has been able to attract the consumer attention by delivering digital services, cloud based customer relationship management, Web solution, Mobile and digital marketing across Australia. However, since the year of 2014, the company has been witnessing a dramatic decline in its revenue earning capacity.
With high rates of employee turnover, the company has been unable to retain its talented workforce and further it has been encountering problems with retaining the existent workforce, who are reluctant to work owing to the lack of positive ambience at their workplaces. The inability of the management authority in building a culture of employee engagement at workplace has been cited as the major reason behind the decline in the profitability of ABC Company. Considering the fact that the nature of leadership style followed in the organization plays an important role in engaging as well as retaining the employees, the following research project is carried out to fulfill three purposes stated as follows:
Although previously many research studies have been conducted trying to examine the important employee engagement strategies adopted by different companies across the world, little or no research has been done to show the role leadership style plays in effectively motivating the employees. While the previous research studies have always encouraged the leaders of an organization to create customer engagement, they have overlooked that in order to create active customer engagement, the leaders would first need to create the conditions for employee engagement. The bottom line has always been to engage one’s employees, who if well-motivated, will automatically attract the attention of the consumers.
Hence, the purpose of this research is to examine the leadership style followed at ABC Company, and to analyze the extent to which the leadership style is able to engage and motivate its employees effectively. On the basis of the research conducted, it has been observed that the ABC Company follows an autocratic leadership style that not only de-motivates the employees, but also prevents them from sharing their own feedback regarding the policies being implemented, or the managerial decisions are being made. The absence of employee appraisal and performance review system within the organization, the mechanical way in which most of the works get done here and the indifference of the company towards the issue of employee retention have largely contributed to the problem. Hence, at the end, the research project provides a few recommended strategies that can help the company ensure its long-term sustainability, through effective engagement strategies.
Research reports have always stated that when employees have been asked as to which factors do they believe to have a positive impact on them, some claimed salary and career growth, and others stated the importance of having a positive workplace. However each of the respondents claimed that the most important factor that motivates them the most is the ideal leadership skill as present in the managers of the organization. The effectiveness of the leadership style of the managers determines employee motivation and leads to employee retention. According to the respondents, in presence of effective leaders, the employees feel more involved in the decision-making process, feel more appreciated, enjoy better communication, while also benefitting from better autonomy at workplace. This does help in retaining them, and as they feel more valued in an organization, they decline the idea of switching to other organizations. However, despite the indispensible importance of effective leadership in an organization, most of the organizations fail to list leadership development as a top priority in their employee retention programs. The fact is similarly true in case of ABC Company, where most of the managers adopt an Autocratic style of leadership. The employees are not being asked to participate actively in the decision-making process, and every day, a new managerial policy is being thrust on the employees.
The problem lies here that most of the organizations are now busy in inscribing the right talent, and yet in the process they are neglecting the importance of holding back the existing talent. According to the Harvard Business Essentials, leadership is one of the focal and yet most overlooked points in employee retention. The very reason why organizations should focus on strong and highly effective leadership skills of its employees is that there exists a causal link between employee tenure and consumer satisfaction. There is no point in stating the simple fact that the employees will not work productively unless they are being well-motivated, or feel valued while working in an organization. Usually most of the organizations, while hiring their managers, look for the commanding and controlling skills of a leader, and yet the skill of the applicant in encouraging the employees or harmonizing the team as a single integrated whole, are usually compromised with. The expected role of a leader is multiple, as stated below in the form of a diagram:
Figure 1: Role of a Leader in Retention
Source: (McCall )
While most of the research studies have suggested that ineffective leadership skills lead to employee retention problems, owing to the lack of proper motivation, according to critics like Haimann, poor leadership skills of an employee also lead to other problems as well. An ideal leader is not merely one who controls and dominates his employees, but also someone who is entrusted with the duty of guiding and influencing the works of others. Hence, he is entrusted with the role of providing a sense of direction to the employees. However, in absence of proper leadership style within an organization, the employees are unable to choose or attain specified goals within the specified period of time. In order to keep an employee motivated, it is not enough to ensure employee appraisal and employee performance review at regular intervals, but it is also equally important to ensure employee satisfaction. The employees will soon switch his workplace, if they are unable to comprehend the duty or the job role assigned to them, the nature of the work, or the target they are expected to achieve within a stipulated period of time. It should be noted here that leadership has always been defined as the relationship with the help of which an individual influences the actions and the behavior of other people. It is important for a leader to not only offer direction to the employee setting proper targets, but also to align the targets with desired outcome. A leader should not merely be appointed because he possesses the dictatorial skills, but he should also possess the skills of encouraging his subordinates to work enthusiastically towards the accomplishment of his objectives. In case a leader thrusts too much workload on the employee, chances are high that the employee will feel exhausted and consider the option of quitting a job. Again, in case an employee is being offered too much liberty in planning and implementing goals within the organization, chances are higher that the employee will find himself de-motivated and directionless, and will quit his job. Hence, research reports suggest that employee retention is possible in an organization which employs the use of effective leadership style that is balanced between an Autocratic style and a Laissez Fare style.
It is a well-known fact that with different managers depending different styles of leadership in an organization, have different impacts on staff motivation, employee performance and organizational commitment. The importance of employee retention cannot be overstated as the skills and expertise accumulated by an employee, while working in an organization, cannot be easily substituted by freshly recruited employees. Besides, in case of high employee turnover the organization also requires to incur a huge expense and effort of recruiting, inducting and training new employees. Hence, the role of the leadership style in an organization in motivating employees to stay within an organization should be discussed in this context. According to the Achievement Theory as put forward by McCelland, need for achievement, need for power and need for affiliation are the three basic human needs each individual has, and hence in order to keep people motivated, the leader will have to pay attention to the most dominating need of the individual. Those employees who have a stronger need of achievement, will like to accomplish the most challenging goals, and will prefer to receive regular feedback regarding their performance. In case the managers of these employees fail to communicate the effective strategies to them, or do not acknowledge their share of contribution at workplace, they soon feel de-motivated. On the other hand, McClelland sates that those employees whose dominant motivator is power, will enjoy competition at workplace and will look forward to recognition and appraisal. It is the role of a leader to understand which motivational factor will best motivate a set of employees, and accordingly introduce strategies to incorporate in employee retention policies. While some employees would seek status and recognition, others would expect a hike in salary, and hence it is the role of the leader to understand employee demands, their motivational factors and accordingly revise employee retention policies.
The managers assuming the leadership role needs to increase the employee engagement in a more active way, and for the same, he must keep on introducing training programs, career development programs as well as employee recognition and appraisal systems within the company. Companies that especially operate in a service based industry such as telecom companies, hospitality companies or aircraft business will need to keep its employees engaged, as de-motivated employee will treat its employees in a poor way. Hence, poor employee retention skills of the manager will directly affect the customer retention ability of the specific organization as well. Usually, most of the leaders are not able to retain its talented workforce, as they have a traditional outlook regarding the concept of leadership. Unlike the traditional theory of leadership that claims that a desired leader is more of an authoritative figure, who known how to control his work environment and direct his employees to achieve objectives, recent researchers such as Caldwell and Dixon, have claimed that leadership attributes such as trust, support and forgiveness are equally important for a leader. Research studies have suggested over the years, that the employees working in an organization are going to stay for a longer time, if their team leaders, managers or supervisors, assuming leadership roles within the organization, show a sense of concern towards the well-being of the employees. This is the reason as to why most of the employees like working with managers who follow a Transformational Leadership style, that allows the leaders work in collaboration with the employees, while acknowledging their support via rewards and recognition and allowing them to freely ventilate their opinions freely.
Founded in the year of 2012, the ABC Company has achieved much recognition among the Australian consumers, as the organization As far as ABC Company is concerned, it has been observed that the company has been encountering issues with long-term sustainability, owing to the problem of employee retention. The major problem the company is being confronted with, is that more than half of its employees are unwilling to stay with the organization, owing to what the employees have termed as “leadership inefficiency”. Most of the employees have complained of biased workplace policies that discriminate among workers in respect of ethnicity and sex. Most of the employees have stated that they are unwilling to work in a highly autocratic environment, where the workers are being continually directed and commanded to complete their tasks. The managers barely communicate with them, and the co-operation is absolutely missing here. As a result, the employees started feeling de-motivated, as most of the employees have accused the leaders that they have terribly failed to ensure a climate of employee retention within the organization. In a country which enjoys the presence of various telecom companies, the employees of ABC Company has found it indeed quite easy to move out of the company in no time. Most of the employees have moved out of ABC Company and have left their jobs for better prospects and higher salary in some of the greatest competitors of ABC Company, such as Agile Communications, Alphawest, Oasis Systems and Optus. Most of the employees leaving the organization have cited two common factors behind their leaving the company- lack of belongingness in a company that does not properly value its employees and the unpleasant organizational culture of the company arising out of the autocratic leadership style.
However, while it has become clearly evident that the employees working in the organization are unable to derive a sense of motivation while working under less efficient leaders, it has become important to comprehend the ways poor leadership style at ABC Company has led to the higher rate of employee turnover at workplace. The manager related behavior has been cited as the major reason why most of the employees working in ABC Company has claimed that they are willing to quit their jobs. However, low rate of employee retention has emerged to be a major problem in the present decade, and hence it is highly important to trace the reason behind the same. At ABC Company, high rate of employee turnover has not only led to the problem of increased expenditure for fresh induction and recruitment within the organization, but has also affected the productivity of the employees in a negative way. The major reason behind is that the existent employees working at ABC Company are feeling more and more de-motivated with larger number of colleagues leaving for better prospects, and consequently the quality of consumer service they have been providing lately, has undergone deterioration. Since the managers and the team leaders of ABC Company have failed to stimulate the employees of the company, and increase their engagement, it is important to critically assess and examine the common factors in the telecom industry that are leading to employee retention problems in ABC Company as well as other companies, and provide recommendations for the same.
The research questions that the research study intends to investigate and analyze are stated as follows:
Why should telecom start-up industries try to improve strategy for employee retention?
What will be the probable benefits of the implementation of a new employee retention policy?
What is exactly the perspective of the employees regarding the retention policy, so far adopted by telecom start-up?
How can the company benefit from implementing suggested improvements in leadership style to improve retention and employee motivation across the organization?
While conducting a research, the data to be collected can be collected in either or both of the two ways:
In case of Qualitative Research Method, the data is being collected by reviewing literary articles, or by conducting structured interviews with concerned respondents, and the conclusion is being drawn on the basis of the written data. On the other hand, in case of Quantitative Research Method the statistical observation of facts helps in arriving at the conclusion, and hence the information collected is more valid and reliable. As far as the present research is concerned, both qualitative as well as quantitative data have been collected and analyzed. First of all, the literary articles and recently published research reports dealing with the topics of employee motivation and leadership skills were being critically analyzed. These articles had largely helped in extracting information regarding important leadership theories that in turn had helped in comprehending the connection between employee motivation and effective leadership quality of the senior managers and team leaders of the organization. On the other hand, an interview session was also being organized with the managers of ABC Company assuming the role of a leader in the organization. While the qualitative data derived from the first source had helped in getting a general overview regarding the situation, the qualitative data derived from the interview had helped in gaining an insight into the relevant situation, as seen in ABC Company. At the same time, it should be noted that the research has also been conducted by employing the use of quantitative research data as well. A survey was conducted on the existent employees of the organization, to understand the employee viewpoint regarding the organizational culture and the leadership style followed at ABC Company. With the help of the numerical data derived via the survey, it has been possible to make the research more reliable.
The research employs the use of both Primary Data as well as Secondary Data. The Primary, first-hand data has been collected via the survey and the interview while the review of the literary articles and research reports published earlier, had provided with the secondary data. The secondary data has helped in enhancing the knowledge regarding the elation exiting between leadership style and employee motivation, while the primary data has helped in addressing specific research issues. The survey has been conducted on 50 employees of ABC Company, who had been asked close-ended questions regarding the nature of the leadership style adopted by the managers of the company, and based on their responses, the organizational culture has been analyzed. The survey questions On the other hand, in case of the interview, telephonic interview was being conducted with 2 Senior Managers and 5 Team Leaders of ABC Company, and they were being asked open-ended questions regarding the motivational strategies adopted by the company, the existent retention policies of the company and the rate of employee turnover ay workplace. Since it was a telephonic interview, seven chosen managers of the organization were being approached for interview individually over the phone. Last but not the least, the secondary data has been collected by reviewing literary articles and journals accessed via online libraries as well relevant websites of the company.
In order to conduct the survey, a Stratified Sampling Method has been chosen, as a result of which the subjects of the research have been chosen on the basis on certain pre-determined criteria. The employees working at ABC Company has been chosen only when they fulfilled two important criteria:
Again, similarly, the senior managers chosen for the interview were being chosen only on fulfilling the below mentioned conditions:
The Descriptive Research Design had been chosen for the research study, as the research intended to analyze what is the nature of relationship that exists between the leadership style followed in telecom companies like ABC Company, and in what way do they affect the retention of employees. With the help of the interview, the study intended to describe the flaws of the leadership style as chosen by the senior managers of ABC Company, while with the help of the survey, the research study described the perspectives of the employees regarding which needs do they wish to be fulfilled by their respective managers.
The Positivist Research Philosophy had been chosen for conducting the following research, and accordingly the research intended to investigate the underlying relation between leadership style and employee retention in the telecom sectors of Australia. For this reason, survey with the help of structured questionnaire had been chosen. However, at the same time, Interpretivism Research Philosophy has also been incorporated in the study as with the help of interviews with the senior managers and team leaders of the organization, the research study intended to critically analyze the leadership style followed in the organization, and the way it influenced employee motivation and turnover rates.
The respondents were being informed about the nature and purpose of the survey, and they voluntarily participated in the same. None of the respondents was being forced to participate in the survey against their wishes. Under no situation, did the research cause any harm to any of the living creatures, and anonymity of the respondents was being ensured. Since high employee turnover rate is affecting the profitability of the telecom sector of Australia, the research intends to examine the possible changes that can be made in the leadership style, to ensure employee retention. Hence, the research study has been conducted for the welfare of the constituents. Above all, the research has been conducted on the basis of the independent research, and no part of the research can be claimed to be plagiarized. Hence, the originality of the research is unquestionable.
While analyzing the survey responses, the response of the employees have been recorded and have been statistically measured, after which the recorded data has been transferred to a spreadsheet, whereby the people selecting the same response over multiple times have been considered. Accordingly, all the 50 employees participating in the survey had claimed that they strongly agree that employee motivation is integral to organizational success, and they believe in a system that evaluates and recognizes their performance on a regular basis. However, 30 employees out of 50 respondents strongly disagreed to the survey question that the reward system of ABC Company is skill based and transparent. Again, 35 of the respondents stated that they do not enjoy any job security and fear random termination, while 40 employees claimed that they do not enjoy the benefit of monetary incentive for working overtime. According to 45 respondents, they feel unheard and that the managers do not consider their opinions while taking managerial decisions. The survey response has clearly shown that the employees of ABC Company are not content with the leadership style that completely overlooks the importance of employees and the lack of proper incentive scheme or transparent recognition scheme is at the center of high employee turnover issue.
While analyzing the interview, the pattern of the responses were being checked, so as to explore a common relation that exists between what the employees have responded in the survey, and what the leaders of ABC Company claim about their leadership style. Since the managers participating in the interview were required to respond to open-ended questions, the response of the managers explaining the leadership style and employee policies of the organization have been studied critically analyzed and evaluated to understand the underlying problem. According to the 3 managers and 2 team leaders, the organization follows a strictly autocratic style of leadership as the same helps in exercising a strict control on the employees. It has been observed that over the last 5 years, approximately 5000 employees have left the company, and besides, over the last year, each month at least 5 employees leave the company. The managers have stated that they have not yet introduced incentive schemes, as employees are being made aware of the fact that they would need to work overtime, since the time of joining. The managers have claimed that they believe that they offer a high pay package to its employees, and consequently they do not feel the need of introduce other lucrative policies. From the interview response further, it got clear that the autocratic leadership style followed at ABC Company, along with lack of motivational factors have contributed to the employee retention problems.
As far as analyzing the literary journals and online articles are concerned, important information of the article has been analyzed and accordingly the relevant information extracted has been synthesized to explore the underlying relation existing between the leadership style followed in a organization and the high rate of employee turnover rates. The careful analysis of the literary articles clearly stated that any telecom organization that intends to strengthen its bond with the employees, must invest in different employee development programs. However, most of the telecom sectors of Australia like to hire employees on a random basis, especially those who work at the grassroots level, and hence they do not offer career development opportunities to the employees. Consequently the employees do not feel enough valued and hence tend to leave as soon as they get better opportunities.
After analyzing the data, in response to the first research question, stating why telecom start-up industries should try to improve strategy for employee retention, it can be stated that managing turnover has emerged to be a challenging issue for telecom startup companies like ABC. With approximately, 5 employees taking an exit from the company each month, the company may soon fail to sustain itself considering the huge expensive involved in new employee recruitment and induction. Consumer satisfaction is directly linked with employee motivation, and hence the companies should try to retain its talented workforce, rather than showing a complacent attitude towards them. Research reports as well as survey responses showed that when employees are well-motivated, they stay in a company for longer time, serving the company in the best possible way that in turn contributes to organizational profitability.
As far as the benefits of the implementation of the new employee retention policies are concerned, it would help in reducing recruitment and induction expenditure, and will enhance the productivity, loyalty and enthusiasm of the existent workforce. The ABC Company will not lose out its potential workers to the rival organizations, and would be able to retain the unique set of skill and expertise of its employees.
As far as the perspective of the employees is concerned regarding the employee retention policies, the employees of ABC Company have claimed that the company fails to motivate them sufficiently. The organization does not revise the salary of the employees, nor does it offer career development opportunities to the employees. At the same time, it does not acknowledge the contribution of the employee, nor does it accept employee feedback on managerial decisions.
Last but not the least, the ABC Company can largely benefit from the implementation of the of the suggested improvements, as the same will help in making the employees feel valued. An organization that can replace the autocratic style of leadership by participative or transformative leadership style can easily create an environment that encourages and supports to remain employed for a longer period of time. Instead of thrusting managerial decisions on the employees, if the company chooses to consider the feedback of the employees, it will be able to create a positive workplace as well. The top organizations are on the top because they care for their employees and they know how to keep them glued to the organization. Hence, creating an employee-friendly ambience at workplace, facilitating employee well-being by introducing recognition and training course facilities is highly necessary.
Usually, retention has been considered to be an important issue as it helps in reducing the employee turnover costs. However, more importantly employee retention is important as it helps in retaining the talented workforce from getting poached. Considering the situation at ABC Company, it has become clearly evident that the company does not follow a strict retention policy. Hence, first of all, it is suggested that the company introduced a monthly appraisal program, whereby each employee working overtime and contributing to the well-being of the organization, is being recognized. Since the organization is a start-up company, it may encounter financial constraints in offering financial incentives to its employees. Hence, the company may at least offer certificates to the best performers. This will help the deserving employees feel valued by the organization and hence they will work more efficiently for the company. Next, the organization needs to arrange interactive sessions and meetings on a regular basis with the employees, so as to ensure that the employees feel valued. The organization should introduce different career development programs, and in case it encounters problems in managing cost-intensive courses, it may also introduce internal training initiatives. The selected employees of the organization should be sent for enrolling in training programs, and once they complete their training courses, they can be offered incentives for training the other employees. This will not only help in promoting a sense of unity among the workers that will assist in employee retention but will also help in offering learning opportunities to the employees. The leaders of ABC Company are also being advised to change their leadership style from the autocratic style to transformative style. It is important to take into consideration the perspectives of the employees, before thrusting managerial decisions on them. In fact, sometimes the most innovative decisions come from the employees only, and actively involving their participation in managerial decision making process does help in employee motivation. Hence, the senior managers and the team leaders should continually admire the employees for their little share of contribution, reminding each one of them their special achievement, and letting them relish in those efforts for a longer period of time, so that they feel inspired to repeat those efforts in future. Introducing a fun environment, allowing flexible work schedule at least twice a month, offering one work from home facility once in two weeks are some of the feasible solutions recommended for ABC Company, that can help in motivating the employees, without causing a loss of productivity of the organization. In a nutshell, there is a variety of retention policies that the ABC Company or any telecom organization can adopt, but some of these are provided as follows:
Figure 2: Employee Retention Policies
Source : (Created by the Author)
Conclusion:
The employee retention problem has emerged to be a crucial and highly challenging issue in the telecom companies like ABC Company, and although it is less acknowledged, leadership style of an organization does affect the employee retention of a company. The employees are the ones who help a company generate revenue and are considered the assets of an organization. Hence, treating them well is simply an important responsibility of the Human Resource Department of an organization. In case of ABC Company, it is recommended that the HR managers arrange leadership training courses for the managers and the team leads, so that they can perform their roles in a more responsible way that ensures employee motivation. From the above research conducted, it has become clearly evident that the employees of an organization assuming leadership role at ABC Company need to introduce more employee-friendly policies. With the high rate of employee attrition, the company is not only encountering trouble in reducing its employee turnover expense, but is experiencing a decline in profitability owing to the loss of talented workforce. It should be noted that the employees of an organization do not leave a company for no reason, and there are always concrete reasons behind the same. Stress from overload, work life imbalance as well as compensation strategies are important factors that lead to the high rates of employee turnover at ABC Company. It should be noted that an employee will never leave an organization as long as the motivation exists in him. However, in case of the employees of ABC Company, most of the employees feel de-motivated, owing to the striking absence of employee friendly policies. If the organization intends to retain its employees, it must offer cash prizes, incentives and perks to the deserving employees. Until and unless there are proper performance appraisal programs, the employees will never feel stimulated to work harder. Some of the most remarkable critics like Maslow have emphasized the role motivation plays in enhancing employee engagement in an organization. The problem of employee de-motivation not only leads to high rates of employee turnover but also employee absenteeism. Companies like the concerned company often think that merely paying the employee is sufficient in keeping him motivated. However, it should be remembered that unless the employees feel assured about their job security, and are able to enhance their knowledge through several technical certificates, it is almost impossible to control the employee retention problem. Hence, it is suggested that the ABC Company trains its leaders, introduces open communication at workplace, offers recreation opportunity to the employees and revises the pay structure to the employees. Further, to help the employees stay motivated, the leaders of the organization should verbally communicate the employees on the success of the immediate projects, and praise their accomplishment. It is expected that by following the aforementioned strategies, the ABC Company would be able to solve its employee retention issues.
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Completing the order and download