ABSTRACT

The purpose of this study was to investigate the impact of transformational and transactional leadership styles on employees’ work engagement and the moderating effect of perceived organisational politics (POPS) among employees of some selected indigenous Banks in Ghana. The study employed the cross-sectional design and the quantitative method approach, where data was gathered with the use of standardised survey questionnaires. Structural equation modeling was used in analysing the survey data from 430 usable responses. The study found that transformational leadership influenced employees’ work engagement while transactional leadership did not have any significant impact on employee’s work engagement. Furthermore, POPS failed to moderate the relationship between both transformational and transactional leadership styles and employees’ work engagement. Finally, the study found no difference in employees’ perception of politics among the private and public banks sampled. The analysis revealed power-distance hypothesis, uncertainty avoidance, socio-economic realities and the general nature of politicking in the banking sector as some reasons why POPS failed to moderate the relationships. Again, factors such as the importance of coaching and mentoring in the organisation and the bureaucratic structure of the organisation were revealed to be reasons why varying results were found for the relationship between the two leadership styles and work engagement of employees of the sampled banks. It was thus recommended that the leaders be empowered and trained adequately to exhibit more transformational leadership attributes and behaviours in order to enhance employees’ level of engagement to their work as well as their perceptions of their organisation’s political environment.

CHAPTER ONE INTRODUCTION

1.0 Background to the Study

Over the past two decades, organisations globally have been witnessing a paradigm shift in their respective industries, where for instance, the emphasis of organisations has changed from spending resources on just bringing in new machinery and expanding facilities to investing massively in their workforce. Batista-Taran, Shuck, Guitierrez and Baralt (2013) maintain that due to globalisation, companies are changing their structure and competing in a bigger arena, where hitherto, most of these organisations used to think of capital simply as shares, cash, investments, or some sort of wealth. As a result, organisations are beginning to appreciate the importance of promoting employees’ adaptation to unanticipated external changes, thus constantly creating strategies for managing their workforce whiles boosting innovation (Ababneh, 2015). It therefore stands to reason that human resources professionals have come under immense pressure from management to develop consequential and effective approaches and techniques that guarantees that their organisations at all times identify, recruit and retain the most competent, adequate, and talented individuals (Purcell, 2014; Shuck and Wollard, 2010). According to  Abor (2017), the revolutionary changes in the global banking industry demanded that in 2004, the Ghana government introduced a new Banking Act. The Banking Act, which was ratified by Ghana’s parliament, mandated all banks to maintain a minimum capital requirement ratio of ten percent. The net effect, according to Abor (2017), has been a reduction in the number of banks as well as an increase in the level of competition in the banking industry.

It is however, note worthy that the level of competition instituted through the Banking Act (Act 930) in the Ghanaian banking sector has had a rippling effect on the level of efficiency and the level of service delivery of banks in the country and has thrown a huge challenge to leaders and managers of the operating banks. For instance, managers of locally owned banks are under immerse pressure to find innovative ways of keeping their employees engaged in order for them to help the banks meet their bottom-line and remain competitive in an industry.

According to Ababneh (2015) top organisations are constantly on the look-out for employees that are energetic, proactive, persistent and adaptive to changes during challenges and it is due to these qualities that the construct of work and employee engagement has become popular among 21^st century organisations and researchers. Engagement has received widespread attention from human resource practitioners and academics who have described the construct as an important behavioural element that plays a vital role in improving job and task performance, organisational citizenship behaviours, discretionary effort, productivity, employee commitment, psychological climate and customer satisfaction (see Schaufeli & Bakker, 2004; Popli & Rizvi, 2016; Kim, Farmer & Porter 2013; Bhattacharya, Doty & Garavan 2014; Kuntz and Roberts, 2014; Zhang 2016; Hewitt, 2014; Signgh and Krishnana, 2014, Christian, Garza & Slaughter, 2011; Rich, LePine & Crawford, 2010; inter alia).