The Effects of Empowerment and Transformational Leadership on Employee Intentions to Quit: A Study of Restaurant Workers in India

Article excerpt

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 houseman's 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 houseman's position 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 1 980s (Collins, 1 999). By the mid- 1 980s, it had become a commonplace expression used in both management texts and in the vocabulary of organizations. By the time Block's 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 andLevesque (1999), Lam, et al. (2001), have been able to transfer the concept of empowerment to the service industry by conducting research studies. …