*Assistant
Professor, Faculty of Business Administration, Preston University, Islamabad.
Email: haji616@yahoo.com
**Assistant
Professor, International Islamic University Islamabad. Email: hafiz.ghufran@iiu.edu.pk
Abstract. The quantity of research work on employee engagement
and leader-member exchange signifies the importance of these organizational
aspects from both the employee and employer point of view. The results of these
researches vary from culture to culture and organization to organization. The
purpose of this paper is to understand the role of leader member exchange
between trust and employee engagement. For this purpose a sample of 133
respondents has been selected and their perceptions have been sought through a
questionnaire. The results somewhat weekly supported the existing leader-member
exchange theory in the relationship between trust and employee engagement.
These results have practical as well as academic implications. Future research
may look into the detailed causes of these results.
Key words: Leader-member
exchange (LXM), trust, employee engagement
Introduction
Employee’s inputs are vital to
any business organization. In fact, organizations have no ways other than to
produce more from employing their respective expertise and competences (Ulrich,
2013). Therefore, firms acquire those individuals who keep interest in firm’s
values and goals, and who produce more from less inputs (Cauldron, 1996). To
enable the employees to fully utilize their competencies an atmosphere of trust
is highly critical. And within this atmosphere they are required to be engaged
properly and adequately. Leader member exchange (LXM) is a dyadic relationship between the leader and the members in an
organization. The essence of this relationship is that leader of an
organization develops an exchange with her/his subordinates, and that the quality
of this relationship influences employees’ attitude and behaviour in the
organization. Trust and respect and considered the two building blocks of this
relationship. This relationship often becomes emotional relationship that
extends beyond the scope of employment.
Trust is observable by
individuals activities – eventually reflecting center principles, norms
(Schein, 2004), and the profundity of individual promise (Senge, 2006). In this
sense trust is essentially characterized as the shared comprehension between
two persons that vulnerabilities would not be abused and that the connection is
protected and polite. According to Doney, Can.non, and Mul.len (1998), trust is
"an eagerness to depend on another gathering and to make a move in
situations where such activity crafts one powerless in contradiction of the
other gathering”.
The relationship between trust
and work engagement is reciprocal and could positive organizational
consequences (Chughtai & Buckley, 2008). Research witnesses that an
atmosphere of trust prompts wide-ranging advantages for people. Research has
also proved that rise in trust effect in a straight line or roundabout means in
further affirmative environment practices and dispositions like authoritative
responsibility and representatives work engagement (Dirks & Ferrin, 2002).
Gupta and Kumar (2015) examined trust as an arbitrator between justice and
worker engagement. Keeping in view the importance this reciprocal relationship
in organization, this paper attempts to explore the mediating role of LXM
between trust and employee engagement.
Research
Question
·
What the level of the existing relationship between trust and employees
engagement in the target population?
·
Does LMX mediate trust and employees engagement in the target
population?
Problem
Statement
Studies on LXM from various
dimensions and in various populations abound (Chughtai
& Buckley, 2008; Gupta & Kumar, 2015; Harris, Harris & Brouer,
2009; Ilies, Nahrgang & Morgeson, 2007; Law, Wang & Hui, 2010; Roberts
& Davenport, 2002). However, the mediating role of LXM between trust and
employee engagement has scarcely been touched upon. This paper addresses this
gap. Secondly, the subject population has not been researched in terms of any
of the variables in the study.
Employee
Trust
Trust has
widely been researched wherein the researchers have pointed out
that trust is essential for understanding a culture (Doney, et al., 1998), leadership (Dirks & Ferrin, 2002), justice and
employee engagement (Gupta, & Kumar, 2015), for managerial
innovation (Gabris, Grenell, Ihrke & Kaatz, 2000) and organizational
productivity, and organizational commitment (Nyhan, 2000). There appears a wide
range of definitions by different scholars and practitioners that lacks
consensus that is why it termed elusive and difficult to comprehend. However,
there appears that for majority of the scholars the concept of trust
encompasses faith, fairness, uncertainty, vulnerability, and risky situations.
On the whole employee trust is an employee willingness to rely on a trustee’s
behavior in an uncertain, risky situation.
Leader
member exchange (LMX)
Leader-member exchange is also a
very common process related to employee engagement and trust. By definition, it
is the quality of the relationship dyad between a supervisor and the
subordinate. Leader-member exchange and trust have a complex relationship
(Dirks & Ferrin, 2002). According to Graen and Uhl-Bien (1995) LMX consists
of three dimensions—trust, respect and obligation. The theory of LMX expostulates
that for the development of quality relationship there should be balanced
efforts from both the subordinate and the supervisors. This means that trust is
an integral part of the LMX theory with the caution that trust need not be
completely reciprocal and mutual (Mayer, Davis, & Schoorman, 1995).
Liden and Maslyn’s (1998) look at
this relationship from a more multidimensional aspect. According to them LMX
includes dimensions of loyalty, affect, contribution and professional respect.
These bases of trust have been widely studied. As work trust and its role in
LMX has both cognitive and practical aspects, one can hardly, it is quite
natural that some may be highly effective in nature whereas some may be highly
cognitively loaded. In the latter case the LMX dimensions of professionalism
and contributions are more likely to enhance cognitive trust as opposed to
affective trust. On the other hand, dimensions like loyalty and liking may
increase affective trust. On the whole, whether it is affective or cognitive
the quality of trust is central to a powerful base of LMX relationship.
Leader-member Exchange
relationship is generally presumed to get developed in three stages—the
organizational stage, the role development stage and the establishment of a leader-led relationship where a
person rises from a group for various reasons. There usually is a task that
needs to be performed and the approaches of doing it range from anarchy to a
single person directing everything. A number of factors like cultural, social,
economic, charismatic, etc. can solidify leader-led relationship and maintain
them over time.
Employee
engagement
The centrality of HR has since been firmly established,
researchers are busy in exploring physiological and psychological bases for
making this asset more effective and efficient. Employee engagement is one of
the factors that have attracted the attention of the researchers. In simple
terms it is an employee’s attachment in business (Roberts & Davenport,
2002). The more employees are involved in their occupations the more they find
themselves highly motivated in work itself. Engaged employees have been found
inclined more to put efforts tougher, more effectively and efficiently as
compared to those not engaged. Employees through engagement—physical, mental,
and emotional—drive to better presentations (Kahn, 1990). Employees’ engagement
has been found a very fruitful tool for achieving organizational goals.
Employee
engagement is not completely an independent construct. There is a deep
relationship between engagement and trust. This
relationship is reciprocal in attaining the desired results for organization (Chughtai & Buckley, 2008). Research has
empirically proved that an environment of trust leads toward extensive plus
varied assistances in lieu of people performing within organization.
Researchers have proved that rise in trust effect in a straight line or
roundabout means in further affirmative environment practices and dispositions
like authoritative responsibility and representatives work engagement (Dirks & Ferrin, 2002). Organizations
prefer engaged and productive workers as they are the main pillar for keeping
service quality.
Theoretical
Framework
For a good research a good theoretical framework that structures a theory
is very essential. A number of research works (Chughtai & Buckley, 2008; Gupta & Kumar, 2015; Harris, Harris
& Brouer, 2009; Wang & Hui, 2010; Sanders & Frenkel, 2011; Wat
& Shaffer, 2005) have addressed the relationship of trust, LMX and employee
engagement in different situations and from different angle. In the light of
these and many others, the following theoretical framework has been set for
this study.
Leader member
exchange (LMX) Employee
Engagement Employee Trust
Research
Methodology
Survey research technique has been employed. The survey has been
undertaken with the help of a self-administered questionnaire. The question for
all the three constructs has 27 items in total. Trust
variable is measured through Krot and Lewicka (2012) with reliability
coefficient Cronbach alphas more than 0.80. LMX has been measured through
five-item scale produced & validated by Bernerth,
Arminakis, Feild, Giles and Walker (2007) with reliability coefficient
Cronbach alphas 0.82. Employee engagement has been measured scale developed by
Crabtree (2005). For measurement of these constructs a five point Likert scale
from strongly disagree to strongly agree has been employed. For interpretation
of the data SPSS has been used.
Sample and
the target population
The population of the present
study is concentrated on Punjab small industrial estate Taxila with its 13
recognized companies. The total number of workers and managerial staff in these
13 operational companies are 203, while the estate is in constructive stage.
Sample size is calculated through finite formula of (Krejcie & Morgan, 1970). Through multistage random sampling
133 respondents randomly selected out of 203 employees of small scale
industries of 5 unsystematically nominated companies, which remains almost 65%
of aimed inhabitants.
Results
Reliability of the scale has been
checked through Cronbach Alpha for internal consistency which is 0.604 for the
complete scale. Though the value is not that much good, it is within the
acceptable level. Other descriptive statistics are given in table 1.
Table 1: Descriptive sample statistics
|
|
N |
Minimum |
Maximum |
Mean |
Std. Deviation |
|
Employee Trust |
133 |
3.00 |
4.89 |
3.8477 |
0.46858 |
|
Leader member exchange |
133 |
3.29 |
4.86 |
4.1402 |
0.37796 |
|
Employee engagement |
133 |
3.18 |
4.73 |
3.9983 |
0.35954 |
To measure the strength of the
association between the variables in the model Pearson correlation was run.
Table 2 provides the results of the correlation analysis.
Table 2 Correlation Analysis
|
Variable |
Trust |
Leader-member exchange |
Employee engagement |
|
Trust |
1.00 |
|
|
|
Leader-member
exchange |
0.491 |
1.00 |
|
|
Employee
engagement |
0.123 |
0.101 |
1.00 |
The values in the table 2
demonstrate positive correlation among the variables. However, the values for
employee engagement with employee trust and LXM are small i.e. 0.123 and 0.101
respectively while the value for LMX with trust is medium i.e., 0.491. The
reason behind the low values could be the nature of the work in the sample
companies. As each employee works in such a setting that almost free and there
are very little chances wherein such relationship could get mature.
To know the strength, direction
and the validity of the relationship between the variables of the study,
regression analysis was applied to the above model. The results of the model
estimation are produced in table 3.
Table 3a: Model Summary
|
Model |
R |
R Square |
Adjusted R Square |
Std. Error
of the Estimate |
|
1. |
0.296a |
0.187 |
0.152 |
0.0512 |
a. Predictors: (Constant), Leader member exchange,
Trust
Table 3b ANOVAa
|
Model |
Sum of
Squares |
Df |
Mean
Square |
F |
Sig. |
|
|
Model 1. |
Regression |
0.599 |
2 |
0.300 |
2.445 |
.097b |
|
Residual |
6.252 |
51 |
0.123 |
|
|
|
|
Total |
6.851 |
53 |
|
|
|
|
a. Dependent
Variable: Employee engagement
b.
Predictors: (Constant), Leader-member exchange, trust
By looking into values in the
table, the value for R2 (0.187) is quite low which denotes that the
model seems “weekly fit” to explain the relationship between independent and
the dependent variables. Possible explanation for this could be the small
number of the sample and the level of understanding of the respondents
regarding the questionnaire. Other explanation could be the omission of some
other variables like justice, etc. Besides this, the regression model is
significantly week to predict the dependent variable. The value for p is 0.097, which is more than 0.05.
Conclusion
Human resource in an organization
has empirically been proved indispensable. Researchers have continuously been
researching various factors that keep this asset happy and health. To cultivate
and encourage a working atmosphere where employees feel at home leader-member
exchange is considered crucial. This research endeavour looked into that aspect
from the extant literature and then empirically looked for the support of the
existing theory. The results supported the centrality of the existence of this
feeling. However, the values did not happen very strong. From it is easy to
conclude that further research is required by including other variables like
justice, OCB, etc. to have more holistic picture of the LMX and employee
engagement.
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