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The Effects of Empowerment and Transformational Leadership on Employee Intentions to Quit: A Study of Restaurant Workers in India
Amarjit Gill TUI University Neil Mathur Simon Fraser University, Canada Suraj P. Sharma GTB National College, India Smita Bhutani Panjab University, India The importance of retaining staff cannot be ignored. High staff turnover is one of the organizational problems that managers need to put an end to before it gets out of control because it has a negative impact on the bottom line of service organizations. The purpose of this paper is to examine the relations of empowerment and transformational leadership with employee intentions to quit. Restaurant industry employees from the Punjab area of India were surveyed to assess their perceptions of empowerment and transformational leadership at their places of work, and their perceived intentions to quit. A negative relationship between i) employee perceived empowerment and employee perceived intention to quit, and ii) employee perceived transformational leadership used by managers and employee perceived intention to quit were found. The paper makes recommendations to managers and owners/operators of the hospitality organizations for improving employee retention and for reducing intentions to quit.

Introduction
This paper examines the relations of empowerment and transformational leadership with employee intentions to quit in the Indian hospitality industry. India is known worldwide as ancient and mysterious civilization and the second most populated country of the world after China, with a population of over one billion (Anonymous, 2010). With increasing worldwide tourism and travel for leisure, business in the Indian hospitality industry is on the rise. However, the owners/operators of the hospitality organizations in India are facing the challenges of high employee turnover. Umashankar and Kulkarni (2002) found the highest employee turnover among Indian food and beverage employees. One of the factors leading to employee intention to quit in India is the lack of dignity of employees. Should one look into Indian cultural history, it is not surprising to see why one is still caught up/entangled in giving respect to the position rather than the person who is performing a certain task. This is evident in the Indian hospitality industry. For example, people working at the housemans level in India are looked upon as individuals who exist in those positions, as they could not do or deserve much else. Umashankar and Kulkarni (2002) explain that it is unfortunate though that the same housemans position

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in the Western cultures is looked upon as a job and sometimes even a career. Thus the houseman in the Western cultures is awarded the right degree of respect as a job and sometimes even as a profession. Studies have shown that low degree of employee empowerment and low levels of employee retention lead to organizational performance problems such as poor quality of customer service, low productivity, and high labor costs. The retention of customers depends on the quality of service, which in return, depends on service employees who might provide poor services because of their intention to leave the organization. Employee empowerment and transformational leadership are among the best strategies to handle organizational issues. The term empowerment in management literature appears to have come into general usage in the early 1980s (Collins, 1999). By the mid-1980s, it had become a commonplace expression used in both management texts and in the vocabulary of organizations. By the time Blocks book The Empowered Manager (Block, 1986) was published, the term was already in use in large-scale organizations committed to cultural change and was actively promoted by evangelical management advisors as a sine qua non of change (Collins, 1999). Although the term empowerment has been central to management thought and has been practiced for a little over two decades now, not much research has been conducted in the customer service management areas. However, authors such as Hartline and Ferrell (1996), Lashley (1999, 2000), McDougall and Levesque (1999), Lam, et al. (2001), have been able to transfer the concept of empowerment to the service industry by conducting research studies. The concept and definition of transformational leadership and the embodiment of that leadership in transformation leaders were first coined by Burns (1978), and then extended and operationalized by Bass (1985) as: leadership and performance beyond expectations. For the purpose and use in this study, transformational leadership is defined as the process of influencing major changes in the attitudes and assumptions of organization members and building commitment for the organizations mission or objectives (Tracey & Hinkin, 1994). This definition emphasizes the importance of leadership characteristics as they pertain to: i) the leaders ability to define and articulate a vision, a mission, and a set of goals and objectives for the organization and ii) the importance of the followers acceptance of the mission and objectives. The concept of employee intention to quit was developed by Jackofsky and Slocum (1987). Since that time, there has been a very little research conducted in the hospitality management area. However, Avey, et al. (2008) and Moynihan and Landuyt (2008) have conducted some research to test the relationships between empowerment and employee intention to quit. Russell (1996) and Oluokun (2003) have tested relationship between transformational leadership and employee intention to quit.

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Firth, et al. (2004) and Shields and Price (2002) indicate that employee intention to quit causes actual quitting, which in turn, lead to high employee turnover. High employee turnover is not in the favor of service organizations because it causes high hiring and training costs. The productivity of the new employees is also lower than the experienced employees. Consequently, higher turnover has a negative impact of the bottom line of the service organizations. Therefore, it important to find strategies that can reduce the service employees intentions to leave the organization. Since employee empowerment and transformational leadership hold a great promise for reducing the employee intention to leave the organization, the purpose of this study is to explore these affects and relationships on customer contact service employees (CCSEs) within the Indian hospitality industry. There has been a very little research conducted on Indian hospitality organizations to find the strategies that reduce employee intention to quit. Therefore, Indian hospitality industry was chosen. The results can be generalized to the hospitality industry.

The Impact of Empowerment on Employee Intention to Quit


There are many different factors such as low self-esteem (Bowen, 1982), job insecurity (Ashford, et al., 1989), job dissatisfaction (Li, 1995; Firth, et al., 2004), lack of advancement opportunities, and job stress (Firth et al., 2004) that lead employees to quit their present jobs. Research on Indian work culture indicates that high power distance, collectivism and affective reciprocity are major cultural values of Indian employees (Kumar & Sankaran, 2007). It is well established over several decades that India ranks relatively high on power distance (e.g., Hofstede, 1984; Christie, et al., 2003). Indias historical caste system contributed to high cultural power distance. For example, people born into the lower castes did not have the right to have meals with those born into in the upper castes, and were despised by them. Brahmins considered themselves superior to all other classes. Although this is still the case to some extent, the gap has decreased over time.Indias former status as a colony of the United Kingdom for approximately 100 years may have also played a role (Gill, et al., 2010, p. 2). This shows that there is a high power distance, which may increase employee intention to quit in the Indian hospitality industry. Empowerment offers a great promise to improve employee self-esteem and to lower power distance, which in turn, lower the employee intention to quit. Conger and Kanungo (1988) indicates that empowerment enhances feelings of self-efficacy among employees through the identification of conditions that foster powerlessness. The feelings of selfefficacy in turn reduce employee intention to quit. Avey, et al. (2008) and Moynihan and Landuyt (2008) found negative relationship between empowerment and employee intention to quit; that is, employee empowerment reduces the employee intention to leave the organization. Hospitality industry employees are subjected to face different organizational and personal factors such as locus of control, self-esteem, perceptions of supervisor support, etc., (Firth, et al., 2004), which in turn, causes frustration among service employees.

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Empowerment minimizes locus of control and other minor work related problems by increasing employee discretion and flexibility (Wynne, 1993). The increased discretion and flexibility experienced by empowered CCSEs are likely to make them feel better about their jobs, which in turn, reduce their intention to quit. Therefore, it is theorized that empowerment reduces employee intention to leave the hospitality organizations. Accordingly, the following hypothesis is formulated: H1: The higher the level of employee empowerment, the lower the level of CCSE intention to quit in the hospitality industry.

The Relationship between Transformational Leadership and Employee Intention to Quit


Employee intention to quit is defined as an individuals mental consideration or behavioral intention to quit the current job within the next year (Jackofsky & Slocum, 1987). Russell (1996) found significant negative relationship between transformational leadership and employee intention to quit. Oluokun (2003) also indicates that higher transformational leadership lowers the employee turnover intent. Hospitality industry workers, like other workers, are subjected to a dynamic, multinational, multi-lingual, and many times to unplanned or unforeseen peaks in their working environments, all contributing to higher levels of work related frustration, which in turn, leads to employee intention to quit. Transformational leadership clarifies mission, goals, and objectives to followers. Clarification of mission, goals, and objectives of the organization reduces the tension of CCSEs related to their daily tasks and thus reduces employee intention to quit. Therefore, it is theorized that transformational leadership reduces employee intention to quit in the hospitality industry. Accordingly, the following hypothesis is formulated: H2: The higher the level of transformational leadership used by managers, the lower the level of CCSE intention to quit in the hospitality industry.

Methods
Research Design This study utilized survey research, a descriptive field study design. To test the hypotheses, p < .05 significance level was used to accept or reject a null hypothesis. Measurement In order to remain (for comparison and reference reasons) consistent with previous research, the measures were taken from three referent studies, which in turn are based on previous studies in marketing, management, and psychology. All measures pertaining to: i) Employee empowerment were taken from Hartline and Ferrells (1996) study, ii) Transformational leadership were taken from Dubinsky, et al.s (1995) study, and iii) Employee intentions to quit were taken from Firth, et al.s (2004) study.

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All the scale items were reworded and the reliability of these re-worded items was retested for construct validity. Respondents were asked to indicate their agreement with each item, using a five-point Likert scale ranging from Not At All to A Lot, related to i) empowerment and ii) transformational leadership variables. Respondents were asked to indicate their agreement with each item, using a five-point Likert scale ranging from Rarely or Never to Very Often and Very Unlikely to Very Likely related to employee intention to quit variable. Employee empowerment is operationalized as the extent to which CCSEs feel that their managers allow them to use their own initiative and judgment in performing their jobs. Hartline and Ferrell (1996) used the eight-item tolerance-of-freedom scale (Cook, et al., 1981), which measures the degree to which managers encourage initiative, give employees freedom, and trust employees to use their own judgment. Based on confirmatory factor analysis (CFA) loading scores, four items were selected to measure the empowerment variable. Scale items were reworded to apply to CCSEs in the hospitality industry and the reliability of these re-worded items was re-tested. Hartline and Ferrell (1996) reported a Cronbach alpha of .71 for the above four items. We calculated a Cronbach alpha of .89 on the responses of the thirty employees who participated in the pre-test of the above scale items. All four items were included in the final questionnaire. Transformational Leadership is operationally defined as the extent to which managers motivate and encourage employees to use their own judgment and intelligence to solve problems while performing their jobs, transfer missions to employees, and express appreciation for good work. Dubinsky, et al. (1995) used the twelve-item tolerance-offreedom scale (Bass & Avaolio, 1989), which measures a sales persons relationship with their managers. Based on Dubinsky, et al.s (1995) CFA, seven items were selected to measure transformational leadership variable. Scale items were reworded to apply to CCSEs in the hospitality industry and the reliability of these re-worded items was re-tested. Cronbach alpha was not reported by Dubinsky, et al. (1995) for the above 7 items. We calculated a Cronbach alpha of .89 on the responses of the thirty employees who participated in the pre-test of the above scale items. All seven items were included in the final questionnaire. Employee intention to quit is operationalized as the extent to which CCSEs thinking of leaving their present job and look for a new job within the next year. Firth, et al. (2004) used two employee intention to quit scales. Based on their CFA loading scores, all two items were selected to measure the employee intention to quit variable. The reliability of these items was re-tested. Cronbach alpha was not reported by Firth, et al. (2004) for the above 2 items. We calculated a Cronbach alpha of .88 on the responses of the thirty employees who participated in the pre-test of the above scale items. All two items were included in the final questionnaire.

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Sample Punjab area (Chandigarh, Ludhiana, and Banga) of India was chosen as the research site to collect data. Given that the population is abstract (i.e., it was not possible to obtain a list of all members of the focal population) (Huck, 2008, p. 101), a non-probability (purposive) sample was obtained. In a purposive sample, participants are screened for inclusion based on criteria associated with members of the focal population. The focal population was comprised of restaurant (fast food and full service) service workers in the Punjab area of India. The survey did not need to be translated into Punjabi for the Indian participants since restaurants in the region hire CCSEs who can read, write, and speak English. The instruction sheet indicated that participants could contact the researchers by telephone and/or email regarding any questions or concerns they might have about the research. An exhaustive list of restaurant employees names and phone numbers in the Punjab area of India was created to enable trained volunteers to contact, screen, and invite qualified service workers to participate. Survey questionnaire bundles coupled with an instruction sheet were provided to participating volunteers for distribution. Approximately 700 surveys were distributed and 188 surveys were returned, 3 of which were not usable, for an overall response rate of roughly 27%.

Study Procedures
Confidentiality Participants were assured that their names would not be disclosed and that confidentiality would be strictly maintained. In addition, participants were explicitly asked not to disclose their names on the questionnaire, and were free to decline responding to any survey question that they felt might reveal their identity.

Analysis and Results


Data Analysis Methods Measures of central tendency, variance, skewness, and kurtosis were calculated on responses to all of the items. Skewness measures for all of the items were within the range of: +0.107 to +0.984, which is considered to be an excellent range for most research that requires using statistics appropriate to normal distributions. Therefore, we used statistics that assume scalar values and symmetric distributions to test our hypothesis. Using a principle component rotation and a varimax rotation, we ran a Confirmatory Factor Analysis (CFA) on the thirteen items. Three factors explained 66.98% of the variance in the thirteen items (see Table 1), and all of the items did not load on the expected factors (see Table 2). Therefore, the scale items 3 and 4 of empowerment and the scale items 4, 5, 6, and 7 of transformational leadership were deleted. After the deletion of scale items that did not load on the expected factors, the factor analysis was rerun and all of the items loaded on the expected factors (see Table 3). Cronbach Alpha on the indicated clusters of items: Empowerment 0.7734;

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Transformational Leadership 0.8314; and Employee Intention to Quit 0.8192. The question subsets were analyzed in order to enable the calculation of the weighted factor scores. In terms of these weighted factor score items: two empowerment, three transformational leadership, and two employees intention to quit, loaded approximately equally.

Table 1: Total Variance Explained Rotation Sums of Square Loadings


Total Variance Explained Rotation Sums of Squared Loadings Component 1 2 3 Total 3.709 3.234 1.765 % of Variance 28.528 24.877 13.578 Cumulative % 28.528 53.406 66.983

Extraction Method: Principal Component Analysis

Table 2: Rotated Component Matrix


1 To what extent does your immediate manager/supervisor..? EM1) ..permit you to use your own judgment? EM2) ..encourage you to handle problems? EM3) ..trust your judgment? EM4) ..allow you freedom in your work? To what extent does your immediate manager/supervisor..? TL1) ..encourage you to be team player? TL2) ..get the group to work together towards the same goal? TL3) ..show respect for your personal feelings? TL4) ..inspire others with his/her plans for the future? TL5) ..transmit a sense of mission to you? TL6) ..enable you to think about old problems in new ways? TL7) .let you use your intelligence to overcome obstacles? How..? EITQ1) ..often do you think of leaving your present job? EITQ2) ..likely are you to look for a new job within the next year? Component 2 3 0.680 -0.157 0.529 -0.036 0.434 -0.011 0.214 -0.014

0.361 0.542 0.566 0.718

0.247 0.196 0.432 0.723 0.607 0.808 0.786

0.835 0.863 0.638 0.384 0.414 0.157 0.197

0.016 -0.004 -0.220 -0.029 -0.124 0.070 -0.039

-0.013 -0.158 -0.012 0.018

0.903 0.924

Notes: Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a. Rotation converged in 5 iterations

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Testing of Hypotheses
It was hypothesized that: i) The higher the level of employee empowerment, the lower the level of CCSE intention to quit in the hospitality industry, and ii) The higher the level of transformational leadership used by managers, the lower the level of CCSE intention to quit in the hospitality industry. A negative relationship between empowerment and employee intention to quit (see Table 4) was found; that is, the reduction in the degree of perceived intention to quit of CCSEs is related to the improvement in the degree of perceived empowerment in the Indian hospitality industry. Note that around 2.2% (R2 = 0.022) of the variance in the degree of employee intention to quit can be explained by the degree of empowerment in Indian hospitality industry. A negative relationship between transformational leadership and employee intention to quit (see Table 5) was found; that is, the reduction in the degree of perceived intention to quit of CCSEs is related to the improvement in the degree of perceived transformational leadership used by hospitality managers in the Indian hospitality industry. Note that around 2.3% (R2 = 0.023) of the variance in the degree of employee intention to quit can be explained by the degree of transformational leadership used by hospitality managers in the Indian hospitality industry.

Table 3: Rotated Component Matrix


1 Component 2 3

To what extent does your immediate manager/supervisor..? EM1) ..permit you to use your own judgment? 0.423 -0.133 0.750 EM2) ..encourage you to handle problems? 0.242 0.011 0.904 To what extent does your immediate manager/supervisor..? TL1) ..encourage you to be team player? 0.884 -0.002 0.229 TL2) ..get the group to work together towards the same goal? 0.861 -0.019 0.275 TL3) ..show respect for your personal feelings? 0.630 -0.203 0.467 How..? EITQ1) ..often do you think of leaving your present job? -0.121 0.904 -0.087 EITQ2) ..likely are you to look for a new job within the next year? 0.022 0.927 -0.025 Notes: Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a. Rotation converged in 4 iterations

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Discussion and Implications


The main purpose of this study was to determine whether the improvement in the degree of empowerment and transformational leadership reduce the degree of perceived intention of CCSEs to leave the hospitality organizations. This was done by surveying a sample of restaurant services employees from India. These employee perceptions and judgments are the basis of our findings that the degree of reduction in employee intention to quit is associated with the improvement in the degree of empowerment and transformational leadership in the Indian hospitality industry. The findings of this paper support the findings of Avey, et al. (2008) and Moynihan and Landuyt (2008) in which they indicate that empowerment reduces employee intention to quit. In addition, the findings of this paper support the findings of Russell (1996) and Oluokun (2003) in which they indicate that transformational leadership reduces employee intention to quit.

Table 4: Regression Coefficients a, b, c


R = 0.022; SEE = 0.992; F = 4.075; ANOVAs Test = 0.045
2

Regression Equation: EITQ = -1.628 0.148 EE


Unstandardized Coefficients Standardized Coefficients c t B Std. Error Beta (Constant) -1.628 0.073 0.000 EE -0.148 0.073 -0.148 -2.019 Sig. 1.000 0.045

Dependent Variable: EITQ Independent Variable: EE c Linear Regression through the Origin EE = Employee Empowerment EITQ = Employee Intention to Quit SEE = Standard Error of the Estimate
a b

Table 5: Regression Coefficients a, b, c


R2 = 0.023; SEE = 0.991; F = 4.234; ANOVAs Test = 0.041 Regression Equation: EITQ = -1.919 0.150 TL
Unstandardized Coefficients Standardized Coefficients c t B Std. Error Beta (Constant) -1.919 0.073 0.000 TL -0.150 0.073 -0.150 -2.058 Sig. 1.000 0.041

Dependent Variable: EITQ Independent Variable: TL c Linear Regression through the Origin TL = Transformational Leadership
a b

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CCSEs play a boundary-spanning role in the hospitality services industry where they interact with many individuals from inside (fellow employees and managers) and outside (guests) their organization. This large role set requires CCSEs to satisfy frequently variegated needs and expectations of multiple parties, and only one of those parties is their manager/supervisor (Gill & Mathur, 2007, P. 332). This requires the employee to perform pro-social behavior and often times, demonstrate dedication to the hospitality organization. Therefore, it is important for the Indian hospitality managers/supervisors to empower employees and use transformational leadership, since empowerment and transformational leadership reduce employee intention to quit. In order to empower employees successfully to reduce their intention to quit, Indian hospitality managers should: i) Explain to employees what empowerment is and how it could have an impact personally.Managers should provide examples of what kind of authority the employee now has in making decisions.For example, will empowerment include the ability to resolve customer complaints such as poor quality food items, cash refund, change shifts without notifying shift manager, etc.? ii) Change their behavior to create an empowered work environment. iii) Select right employees (e.g., employees who possess initiative and the ability to get along with other people) for empowerment. iv) Train employees to make good decisions and work closely with others. v) Communicate expectations clearly. vi) Align reward and recognition programs. vii) Have patience and expect problems such as wrong decisions made by empowered employees. There are many organizational barriers (e.g., lack of employees understanding of the mission, goals, and objectives, communication barriers, lack of time, cultural barriers, shortage of staff, employee de-motivation, high employee turnover, managers understanding the degree to which transformational leadership needs to be implemented, etc.) that make it difficult to implement transformational leadership approaches (Gill & Mathur, 2007, P. 332). To overcome these challenges, hospitality managers/supervisors need to communicate the organizations mission, goals, and objectives to CCSEs by breaking-them-down for each individual employee based on the hospitality function performed. Managers/supervisors should: i) foster upward, not just downward, communication; ii) provide regular on-floor training and coaching for every service employee; iii) practice effective listening skills; iv) demonstrate respect and concern for employees personal feelings; and v) work to recognize and overcome communication and cultural barriers. Ultimately, this shifts the managers role to that of a CCSE mentor, one who internalizes and demonstrates individualized consideration for employees, which is one of the components of transformational leadership (Gill, et al., 2010, P. 267).

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All of the above require managers to internalize the importance of showing genuine concern and respect for employees and their work. If employees perceive that their managers are empowering them at higher level, their intention to quit is perceived as lower level than if it is perceived as being empowered at lower level; and if employees perceive that their managers are using higher level of transformational leadership, their intention to quit is perceived as lower level than if it is perceived as being used at lower level. Although this study clearly shows that empowerment and transformational leadership reduce employee intention to quit, additional research issues and questions must be addressed. The additional variables that should be researched include: the degree to which managers understand the consequences of empowerment; the degree to which managers understand the desire of their employee to be empowered, and the degree to which managers understand the consequences of using transformational leadership and their desire to use it.

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