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CDI
17,3 Linking LMX, innovative work
behaviour and turnover intentions
The mediating role of work engagement
208
Upasna A. Agarwal
Department of People and Performance,
Received 16 July 2011
Revised 22 December 2011 S.P. Jain Institute of Management and Research, Mumbai, India
17 February 2012
6 April 2012
Sumita Datta
Accepted 6 April 2012 Department of Family Managed Business,
S.P. Jain Institute of Management and Research, Mumbai, India
Stacy Blake-Beard
School of Management, Simmons College, Boston, Massachusetts, USA, and
Shivganesh Bhargava
Department of Human Resources Management and Organization Behaviour,
Indian Institute of Technology Bombay, Mumbai, India
Abstract
Purpose – This study aims to examine the relationships among leader-member exchange (LMX),
innovative work behaviour (IWB), and intention to quit. The mediating role of work engagement is
tested within the relationship of LMX, IWB, and intention to quit.
Design/methodology/approach – Respondents to a survey were 979 Indian managerial employees
working in six service sector organisations in India. Structural equation modelling was used to test
hypothesised relationships.
Findings – Results suggest quality of exchanges between employees and their immediate
supervisors influences engagement. Work engagement correlates positively with innovative work
behaviour and negatively with intention to quit. Work engagement mediates the relationship between
LMX and innovative work behaviour, and partially mediates intention to quit.
Research limitations/implications – A cross-sectional design and use of self-reported
questionnaire data is a limitation of this study. Since the study focuses only on service-sector
organisations, the results of this study should be interpreted with caution.
Originality/value – This study makes important theoretical contributions in three ways. In the
domain of work engagement, it addresses factors that influence employee engagement and its outcomes.
It expands knowledge about organisational resources that foster work engagement. For LMX, this study
complements existing research by investigating work engagement as an outcome. Identifying LMX and
work engagement as antecedents of innovative work behaviour, it also extends research in that domain.
An important contribution is positioning work engagement as a means through which job resources are
linked to employee outcomes. The study is also a rare examination of the Indian context.
Keywords Work engagement, Innovative work behaviour, LMX, Intention to quit, Employees,
Managers, Workplace, Employees turnover, India
Paper type Research paper
Career Development International
Vol. 17 No. 3, 2012
pp. 208-230 Introduction
q Emerald Group Publishing Limited
1362-0436
Organisations increasingly realise that no company, small or large, achieves
DOI 10.1108/13620431211241063 sustainable success without engaging employees who bring high energy and passion
to their work (Macey et al., 2009). Work engagement is cognitive-affective motivation at LMX, IWB and
work, characterised by vigour, dedication, and absorption (Schaufeli and Bakker, turnover
2004). Work engagement has far-reaching implications for quality of employees’ core
work responsibilities, and supports extra-role performance (Leiter and Bakker, 2010). intentions
Since engaged employees are vital for survival, sustainability, and growth,
organisational leaders increasingly cultivate this state among employees.
Encouraging individuals to invest more psychic energy in work is the most 209
powerful lever corporations possess to improve productivity (Erickson, 2005). Despite
important consequences of work engagement, scholarly research on the construct is
inadequate (Wefald and Downey, 2009a); little is known about factors that foster work
engagement, and there is insufficient information about its outcomes (Karatepe and
Olugbade, 2009).
Increasing employee engagement is a challenging and complex undertaking; some
researchers suggest that the relationship quality an employee shares with immediate
supervisors, known as leader-member exchange (LMX), plays a pivotal role in
fostering engagement (Macey and Schneider, 2008). The principle of LMX theory is
that leaders develop different types of exchange relationships with direct reports, a
phenomenon labelled LMX differentiation (Liden et al., 2006). The quality of these
relationships influences important leader and member attitudes and behaviours
(Bhal et al., 2009; Gerstner and Day, 1997; Sparrowe and Liden, 1997). This study
examines the influences of LMX on work engagement.
Organisational leaders recognise they must continuously innovate on products and
internal processes (Dorenbosch et al., 2005). Given the importance of employee
innovative work behaviours to organisational sustainability and effectiveness, greater
efforts to uncover factors that encourage innovative work behaviours emerged in the
literature (Yuan and Woodman, 2010). Employee attrition remains a critical issue for
organisations and managers (Cascio, 2006). Retaining the best professional talent and
controlling the costs associated with recruiting, selecting, and hiring new employees
continue to be a challenge (Tymon et al., 2011). Given the significant impact of work
engagement on employee attitudes and discretionary work behaviours (Bakker, 2011),
studies are conducted to examine the relationship between work engagement and both
turnover intentions (Halbesleben, 2010) and innovative work behaviour (Bakker et al.,
2007; Bakker and Demerouti, 2007). This paper examines the influences of work
engagement on both innovative work behaviour and intention to quit in an Indian
context. Work engagement emerged recently as an important mediating variable (Rich
et al., 2010), with Job-Demand Resource ( JD-R) theory (Bakker and Demerouti, 2007;
Demerouti, Bakker, Nachreiner, and Schaufeli, 2001a) providing a basis for much of
this work. According to JD-R theory, job resources such as organisational and
supervisor support have motivational potential; their availability increases
engagement of employees, which in turn fosters positive employee outcomes. This
paper examines the role of engagement as a means through which the
leader-subordinate relationship influences critical employee outcomes such as
innovative work behaviour and intention to quit.
This study makes a significant contribution by proposing and testing a research
model of work engagement (Figure 1), examining its antecedent, outcomes and
mediating effects. Examining the influence of supervisor-subordinate relationships on
employee work engagement, this study addresses the growing need to explore the
CDI
17,3
210
Figure 1.
Research model
Job resources may be located at the organisational level (e.g. salary, career
opportunities, job security), among interpersonal and social relations (e.g. supervisor
and co-worker support, team climate), within the organisation of work (e.g. role clarity,
participation in decision making), and at the task level (e.g. performance feedback, skill
variety, task significance, task identity, autonomy). Various job resources examined as
predictors in the literature include autonomy, feedback, skill utilisation, job control
(Bakker and Geurts, 2004; Hakanen et al., 2006; Salanova et al., 2005; Schaufeli et al.,
2009; Xanthopoulou et al., 2007), and co-worker and supervisory support (May et al.,
2004; Saks, 2006).
A subordinate’s immediate manager is a representative of the organisation, a
purveyor of job resources that facilitate employees’ achievement of job demands.
Organisational leaders create a context in which direct reports operate. Since
immediate managers are agents of the organisation, their behaviours play critical roles
in shaping employee attitudes and behaviours (Bhatnagar, 2007; Joo, 2010; Rousseau
and Greller, 1994; Tymon et al., 2011; Whitener, 2001). Manager support exists when
CDI employees perceive their immediate manager as someone who leads by example, offers
17,3 support needed to do a job well, is personally effective, and is good at developing
people.
The quality of relationships between supervisors and subordinates is often studied
via LMX theory. These relationships are characterised as high quality, reflecting trust,
respect, and loyalty, or low quality, reflecting mistrust, low respect, and a lack of
212 loyalty (Morrow et al., 2005). Sparrowe and Liden (1997) found individuals in
high-quality LMX relationships receive more of a leader’s time, more direction
information, and more emotional support than those in low-quality relationships. Such
subordinates have an advantage since their supervisors introduce them to key people
in the social network, leading to additional information and political and social
resources (Sparrowe and Liden, 1997). Subordinates with a strong, high-quality
relationship with immediate managers experience psychological safety, the belief that
the environment is safe to take interpersonal risks (Spreitzer et al., 2010). Psychological
safety is important for fostering work engagement because it reduces the depletion of
vigour, a core dimension of engagement. In high-quality exchange relationships,
leaders mentor subordinates (Scandura and Schriesheim, 1994). Bhatnagar (2007)
argues that mentors enhance employee engagement; leaders of high-quality exchange
relationships represent resources that facilitate accomplishment of work goals,
stimulate personal development, and increase work engagement among employees.
Although the quality of exchange relationship between employees and supervisors is
posited to be a critical job resource that influences employee engagement (Macey et al.,
2009), this association is not often tested empirically.
The positive relationship between LMX and work engagement can also be
explained using the Social Exchange Theory (SET). SET suggests that obligations are
generated through a series of interactions between parties (e.g. between a leader and
subordinate) in a state of reciprocal interdependence (Gouldner, 1960). When an
immediate supervisor provides opportunities for development, fair supervision,
meaningful work, and autonomy, subordinates feel obliged to repay leaders with
higher levels of organisational commitment, citizenship behaviours (Bhal, 2006),
innovation (Basu and Green, 1997; Scott and Bruce, 1998), competency (Epitropaki and
Martin, 2005; Lee, 2007), and trust (Bauer and Green, 1996). Another way for
individuals to reciprocate is through engagement. Engagement is payback or
reciprocation for what an employee receives. People reciprocate because they
“fundamentally believe in reciprocation” (Macey et al., 2009, p. 15).
Reciprocity between subordinate and immediate supervisor can be explained by
psychological contract theory. The psychological contract encapsulates perceived
promises employees believe are made to them in exchange for effort (e.g. skill, loyalty,
discretionary work behaviour) (Rousseau, 2000). To the extent value propositions meet
needs, employees perform at levels consistent with their interpretations of an implicit
contract (Macey et al., 2009). When supervisors fulfil the psychological contracts of
their employees by taking care of personal and professional needs and treating them
with respect, that fulfilment creates a sense of obligation for the subordinates to
reciprocate in equally positive ways. Employees feel obligated to reciprocate by
approaching their work with greater vigour, dedication, and absorption (Saks, 2006).
Drawing from a strong foundation of JD-R and SET, we posit:
H1. LMX correlates positively with work engagement.
Work engagement, turnover intentions and innovative work behaviour LMX, IWB and
Work engagement and turnover intentions turnover
A review of the literature suggests work engagement correlates negatively with
turnover intention (Saks, 2006). Halbesleben’s (2010) recent meta-analysis intentions
demonstrates there was a strong negative relationship between work engagement
and turnover intention with corrected population correlations ranging
from 2 0.25 (vigour) to 20.45 (dedication). The negative relationship between 213
work engagement and turnover intention is explained by SET (Robinsons and
Morrison, 1995; Rousseau, 1995), suggesting that when one party provides something
to another, the provider expects reciprocation. Organisations are the prime purveyors
of job resources that facilitate employees achieving a fulfilling, positive work-related
state of mind (work engagement). Procuring these benefits necessitates that
individuals turn a portion of their energy, time, and effort over to employers. Based
on this reasoning, continuing organisational membership is analogous with making an
investment that increases employee perceived entitlement and decreases perceived
debt (Cropanzano et al., 1997; Robinsons and Morrison, 1995). Replicating past
literature, we posit:
H2a. Work engagement correlates negatively with turnover intention.
Thus, we hypothesise:
H2b. Work engagement correlates positively with innovative work behaviour.
Analysis approach
Table I shows descriptive statistics and correlations for each variable. The constructs
used in the study were reliable, with coefficients ranging from 0.88 to 0.92, exceeding
the minimum of 0.70 (Nunnally, 1978). A significant relationship was observed
between demographic variables and several of the primary variables in this study. Age
and tenure were related to work engagement, turnover intentions, and innovative work
behaviours. Gender was related to work engagement and innovative work behaviours.
Job Turnover
Mean SD Age Gender Education Tenure level LMX intention WE IWB
Age 30.4 7 1
Gender 1.20 0.40 20.19 * * 1
Education 3.9 1.7 20.09 * 20.01 1
Tenure 4 1.7 0.71 * 20.09 * 20.17 * 1
Job level 1.3 0.8 0.31 * 20.11 * 0.08 * 0.19 * 1
LMX 4.9 0.9 0.03 20.02 20.01 0.03 0.07 * 1 (0.92)
Turnover intention 3.3 0.9 20.14 * 0.01 20.02 2 0.09 * 2 0.08 * 2 0.34 * 1 (0.90)
Work engagement (WE) 4.5 0.8 0.20 * 20.05 * 20.03 0.16 * 0.12 * 0.41 * 20.40 * 1 (0.88)
Innovative work behaviour
(IWB) 3.7 0.7 0.16 * 20.16 * 0.08 0.12 * 0.17 * 0.20 * 20.09 * 0.38 * 1 (0.92)
Solitary work preference 5.8 0.85 0.03 0.02 20.02 2 0.04 2 0.01 0.15 0.23 0.32 1 (0.82)
Note: n ¼ 979; alpha reliabilities are given in the parentheses; *p , 0.01; * * p , 0.001
intentions
correlations
Means, standard
turnover
deviations, and
LMX, IWB and
217
Table I.
CDI Job level was related to LMX, turnover intentions, work engagement, and innovative
17,3 work behaviours. Therefore, we controlled for these effects in further analysis by
adding only significant paths in the structural model.
There were also sample differences observed among the variables (e.g. LMX, work
engagement, and innovative work behaviours). Sample differences were expected since
organisations naturally have varying business processes and challenges. To maintain
218 diversity in our sample and capitalise on statistical power, we combined the samples to
analyze hypothesised relationships. This methodology is followed by researchers in
recent literature (Behery, 2009; Restubog et al., 2009). We tested hypotheses with
structural equation modelling (SEM). The sample size of 979 managerial employees
was sufficient for statistical analysis (Nunnally, 1967). The chi-square statistic, root
mean square error of approximation (RMSEA), standardised root mean square residual
(SRMR), comparative fit index (CFI), normed fit index (NFI), and the goodness of fit
index (GFI) were assessed model fit. Hu and Bentler (1999) suggest that for CFI, NFI,
and GFI, values 0.95 and above suggest good fit. SRMR values below 0.08 suggest an
acceptable model fit. For RMSEA, researchers recommend values less than 0.05
indicate good fit, while values between 0.05 and 0.08 suggest acceptable fit (Kline,
2005).
Preliminary analyses
Common method variance
To detect common method variance (CMV), we used the post-hoc CFA marker
technique (Williams et al., 2010) recommended by Richardson et al. (2009). In this
technique, common method variance is represented by the shared variance between a
marker variable and substantive constructs. Application of the marker variable
technique requires inclusion of a variable that is unrelated to at least one focal variable.
The correlation observed between the marker variable and the unrelated variable is
interpreted as an estimate of CMV (Lindell and Whitney, 2001). As suggested by
Richardson et al. (2009), four models were estimated for each simulated
independent-dependent construct pair:
(1) a baseline model;
(2) method-C model;
(3) method-U model; and
(4) method-R model.
The baseline model forces correlations between the marker construct and both the
independent and dependent constructs in the set to zero, and fixed marker
construct-marker item loadings to the unstandardised values obtained from a basic
CFA model of the substantive and marker constructs. The method-C model is identical
to the baseline model but with the addition of factor loadings from the marker
construct to each independent/dependent indicator. These loadings were constrained to
be equal (i.e. non-congeneric). The method-U model is identical to the method-C model,
but the marker construct independent/dependent item loadings are estimated freely
(i.e. congeneric). Finally, the method-R model is identical to either the method-C/U
model, though the independent-dependent construct correlation is constrained to its
unstandardised value from the baseline model.
We chose the three-item solitary work preferences subscale of individualism and LMX, IWB and
collectivism (Ramamoorthy and Flood, 2004) as a marker variable because solitary turnover
work preferences unrelated to the antecedent and outcomes of work engagement. Fit
statistics for the Method-C model, Method-U model and Method-R model were not intentions
better than those for the baseline model. Chi-square difference tests comparing the
baseline with the other models were not significant. Thus, it is unlikely CMV was a
concern in subsequent analyses. 219
Results
Prior to testing the hypotheses, we conducted a confirmatory factor analysis (CFA) to
examine the dimensionality and convergent and discriminant validity of measures. The
model fit of a four-factor measurement model (LMX, work engagement, innovative work
behaviour, and intention to quit) was compared to a one-factor model in which
all constructs loaded on a single factor. The results for the four-factor model were
x 2 ¼ 10228:2; df ¼ 4187; p , 0.01, while the single factor model was x 2 ¼ 44711:6;
df ¼ 4280; p , 0.01. The chi-square of the four-factor model was significantly lower
ðDx 2 ¼ 34483:6; Ddf ¼ 93; p , 0.01). The four-factor model also demonstrated better fit
ðCFI ¼ 0:99; SRMR ¼ 0:05; GFI ¼ 0:82; RMSEA ¼ 0:04; NFI ¼ 0:96Þ; while the
results of the one-factor model showed worse fit ðCFI ¼ 0:36; SRMR ¼ 0:08; GFI ¼
0:83; RMSEA ¼ 0:05; NFI ¼ 0:42Þ: Thus, the four-factor model was retained for further
analysis.
We assessed hypotheses by adding predicted paths to the measurement model.
The structural model provided adequate fit to the data ðx 2 ¼ 14990:6; df ¼ 2849;
x 2 =df ¼ 5:2Þ; and the path coefficient in Figure 1 support all hypotheses. LMX
correlated positively with work engagement ðb ¼ 0:23; p , 0.01). Work engagement
correlated positively with innovative work behaviours ðb ¼ 0:33; p , 0.01), and
negatively with turnover intention ðb ¼ 20:23; p , 0.01). These results support H1,
H2a and H2b, respectively.
Following guidelines offered by Baron and Kenny (1986) and consistent with extant
research (Salanova and Schaufeli, 2008), we compared the fit of two models (M1 and
M2) to assess the mediating role of work engagement. The first model (Figure 2), which
we refer to as the fully mediated model, is equivalent to the hypothesised model. This
model predicts mediation of work engagement, with no direct paths between LMX and
outcomes. This model demonstrated good fit ðx 2 ¼ 14001:4; df ¼ 3500; x 2 =df ¼ 5:2;
CFI ¼ 0:93; GFI ¼ 0:90; RMSEA ¼ 0:05; SRMR ¼ 0:05; NFI ¼ 0:91Þ: The second
model (M2, Figure 3), the partially mediated model, adds two paths from LMX to
innovative work behaviours and intention to quit. The fit of this model was better than
the first ðx 2 ¼ 10000; df ¼ 2849; x 2 =df ¼ 3:5; CFI ¼ 0:93; GFI ¼ 0:95; RMSEA ¼
0:04; SRMR ¼ 0:05; NFI ¼ 0:95Þ: However, the direct relationship between LMX and
innovative work behaviours moved from significant ðb ¼ 0:23; p , 0.01) to
non-significant ðb ¼ 0:13; n:sÞ; suggesting mediation; the direct relationship
between LMX and turnover intention dropped ðb ¼ 20:23; p , 0.01, to b ¼ 20:13;
p , 0.05), suggesting partial mediation. Thus, H3 was supported partially.
To rule out innovative work behaviour as a mediator between LMX and
engagement, an alternative model, M3, was fitted to the data (Figure 4). The fit of this
model was inferior ðCFI ¼ 0:93; GFI ¼ 0:90; SRMR ¼ 0:06; RMSEA ¼ 0:05; NFI ¼
0:90Þ to that of M1 (Figure 2) and M2 (Figure 3). Hence, innovative work behaviour
CDI does not play a mediating role. For accuracy, we used the Sobel (1982) test to confirm
17,3 the mediator or indirect relationships among constructs. The p-value of less than 0.05
confirmed that work engagement plays a mediating role for both innovative work
behaviour ðz ¼ 5:60; p , 0.01) and turnover intention ðz ¼ 5:00; p , 0.01) of
employees. The Sobel test results affirm that work engagement mediates
relationships between LMX and outcomes.
220
Figure 2.
M1 – mediated model
Figure 3.
M2 – partially mediated
model
Figure 4.
M3 – alternative model
Discussion and implications LMX, IWB and
The reason executives are attracted to discretionary effort is that they recognise all turnover
activity is not subject to management design and control. Organisations increasingly
need employees who do not need prodding and who not only sense the need for getting intentions
things done, but actually do it. They need energetic employees who go beyond job
descriptions, employees who are engaged (Macey et al., 2009). Given its critical role, a
need continues among executives and scholars for better understanding of the factors 221
that stimulate engagement. This study investigates links between LMX and work
engagement, testing relationships between work engagement, innovative work
behaviours, and turnover intentions. Finally, it conceptualises work engagement as a
mediator. The results we obtained lead to three conclusions. First, quality of exchanges
between employees and immediate supervisors influence engagement levels. Second,
work engagement relates positively to innovative work behaviour and negatively to
turnover intentions. Third, work engagement mediates the relationship between LMX
and innovative work behaviour.
Findings from this study suggest a crucial role that an immediate leader plays in
fostering engagement. Leaders who support subordinates (professionally and
emotionally) give them direction and information, and unleash hidden potential and
foster willingness among subordinates to dedicate efforts and abilities to accomplish
work tasks (Meijman and Mulder, 1998). This critical role of the immediate leader on
subordinate behaviour is significant contextually. Culturally, employees in collectivist
cultures attach greater importance to organisation hierarchy (Varma et al., 2005).
People in such societies possess greater associative and nurturing needs (Restubog
et al., 2010), and look up to supervisors for support, protection, and guidance much
more than employees in western cultures (Anand et al., 2010; Tripathi, 1990). When
employees receive support and care from immediate supervisors, they reciprocate by
dedicating efforts to accomplish tasks.
This study highlights the attitudinal and behavioural contributions that engaged
employees make to organisations. Since engaged employees experience positive
emotions, including happiness, joy, interest, and enthusiasm in their work (Schaufeli
et al., 2006), they possess a lower tendency to quit. Engaged employees promote
organisational effectiveness by demonstrating discretionary innovative work
behaviours (Borman and Motowidlo, 1997). The positive effects of work engagement
on innovative behaviour are consistent with the Broaden-and-Build theory of positive
emotions (Fredrickson, 2001), positing experiencing positive emotions broadens
thought-action repertoires, thus increasing likelihood of innovative work behaviour.
An important contribution made by this study lies in the relationship between LMX
and outcomes via engagement. LMX does not influence innovative work behaviour
directly; it impacts this variable indirectly through increased work engagement. Even
if organisations demonstrate supportive practices, innovative behaviour depends on
how engaged the employees are at work. Work engagement is pivotal for organisations
that desire achieving competitive advantages through strategic objectives of
innovative work behaviours and retaining talented employees.
Theoretical contributions
This study makes important theoretical contributions to three bodies of knowledge. In
the domain of work engagement, the study joins a small but growing body of research
that addresses factors that influence employee engagement and its outcomes. LMX, IWB and
Examining the role of LMX on work engagement, this study expands knowledge about turnover
organisational resources that foster willingness to dedicate efforts and abilities to a
work task. For LMX, this study complements existing research by investigating work intentions
engagement as an outcome. Identifying LMX and work engagement as antecedents of
innovative work behaviour, this study also extends research in that domain, still in its
early stages. An important theoretical contribution of this study is positioning work 223
engagement as a means through which job resources are linked to employee outcomes.
Examining the mediating role of work engagement in the LMX-outcome relationship,
this study addresses a call to examine the mechanisms that operate between LMX and
attitudes and behaviours. Finally, the study contributes in terms of context. With
multinational corporations increasingly opening businesses in India, an understanding
of employee motivation is an important concern. This research is a rare examination of
Indian manager engagement.
Future research should replicate the findings of this study on outcomes measured
through methods other than self-report. Since data were collected from service
organisations in western India, we cannot be sure of the generalisabilty of results to
firms in other sectors or locations. However, these six service organisations differed in
terms of size, structure, and business goals, which dilute concerns of generalisability.
Future studies should evaluate the model in diverse geographic and occupational
settings to enhance the external validity.
Conclusion
The motivational basis of employee work attitudes and behaviours is an important
component of the research agenda relating to management practices, especially in
CDI employment relationships. This study contributes to the ongoing debate about the
17,3 motivational potential of job resources on work engagement. Results suggest employee
work engagement benefits organisations by motivating employees intrinsically to
adopt an innovative work approach. These results reinforce the practical value of
research examining factors that foster affective reactions (work engagement) and their
consequences.
224
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CDI Further reading
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Institute for Employment Studies, Brighton.
230
Corresponding author
Upasna A. Agarwal can be contacted at: upasnaaaggarwal@gmail.com