What Is The Relationship Between Transformational Leadership, Employee Turnover Intentions, And Voluntary Turnover?

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Practical Implications Although, small businesses are key sources of innovation, employment, and growth—generating billions of dollars annually to the global economy; there is still little research on the relationship between transformational leadership (TFL), employee turnover intentions, and voluntary turnover in small companies (Barrett & Mayson, 2005). Consequently, this section highlights three main practical implications for small businesses willing to utilize TFL as a means of mitigating employee turnover intentions. Implications for Social Relationships Contrary to general views, compensation is not the main antecedent of employee turnover intentions in small businesses. Instead, the similarities among coworkers’ social characteristics (particularly age and tenure) as well as employee perceptions of management are more important than monetary incentives (Chang, Wang, & Huang, (2013). This is normally the case in small companies with horizontal structures that are more likely to have direct (often face-to-face) interactions among organizational members. Additionally, employees typically congregate, forming bonds and networks, with others who share similar demographics or…show more content…
Moreover, they try to understand employee needs by creating open dialogues, encouraging originality and creativity, and by developing a supportive environment. Transformational leaders also engage in confidence-building practices that likely contribute to greater feelings of psychological empowerment. Essentially, small business managers should recognize that both transactional and transformational leadership can be useful in mitigating employee turnover intentions. Thus, to truly be effective, these managers should balance both leadership styles. This should not be an unusual concept for small businesses where members frequently adopt multiple roles and
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