The Impact of Management and Leadership Style
Once hired, most of the responsibility for talent engagement and retention shifts to the line manager. Although the HR department and the senior management team may feel it is their responsibility to manage talent retention, it is crucial to include the direct managers to direct, guide and evaluate employees. Buckingham and Coffman’s (1999) seminal analysis of the Gallup studies on workplace engagement, which includes interviews with 1 million employees and 80,000 managers across 142 countries, reveals that people leave managers not companies. Thus academic research has focused on understanding and improving management and leadership styles (Anthony et al., 2005; Duffield, Roche, Blay & Stasa, 2011; Taunton, Boyle, Woods, Hansen & Bott, 1997; Waldman, Carter & Hom, 2012; Wallis & Kennedy, 2013).
We focus our discussion on the healthcare sector, which provides an ideal research setting for investigating the role of leadership and retention. It has been proposed that nurse managers form a bridge between the senior executive team and frontline bedside nurses, and that nurse retention is one of the many responsibilities that characterize nurse managers’ work (Andrews & Dziegielewski, 2005). Nursing staff turnover is high, with about 17.5% of newly licensed registered nurses leaving their first job within a year and 33.5% leaving within two years (Hayes et al., 2012). However, nurses do not leave the hospital; rather, they leave their managers (Ribelin, 2003) and thus they can provide further information regarding their reasons for leaving. This has also been observed across professions, with a survey reporting that 42% of employees leave because they dislike their manager (People Management CIPD, 2015). A study of leadership styles of nurse managers revealed that transformational style, in which the leader motivates followers to move beyond self-interest and work for the collective good, was significantly associated with lower staff turnover (Blake, Leach, Robbins, Pike & Needleman, 2013; Cowden, Cummings & Profetto-McGrath, 2011; Raup, 2008), whereas transactional leadership, in which the leader clarifies expectations and rewards followers for fulfilling these, was found to be a deterrent to retention (Kleinman, 2010). Similarly, research on leadership and retention in other sectors, such as the information technology, business process outsourcing (Resmi, Gemini, Silvian & Kannan, 2014; Thirulogasundaram & Kumar, 2012) and hospitality industries (Baytok, Kurt & Zorlu, 2014; Dai, Dai, Chen & Wu, 2013; Whitelaw, 2013), showed that transformational leadership positively affects organizational commitment through distributive justice and trust, leading to lower turnover.
If employees are viewed as drones working simply to fulfil work expectations, motivation and intention to stay can be low. However, if employees are treated as valuable members and motivated to perform, they are more likely to stay and work beyond expectations (Wang, Oh, Courtright & Colbert, 2011). The transformational leader will usually act as a mentor, coaching subordinates individually on their career path and providing the right work environment to draw on their talents and strengths, such as setting challenging job assignments and opportunities to contribute and make a difference, and allocating appropriate salary increases based on job performance (Tse, Huang & Lam, 2013).
In addition to appropriate leadership style, Kaye and Jordan-Evans (2000) suggested that a good manager should be able and empowered to choose the right talent to join the team, as this greatly increases the chances for strong group dynamics and reduces the risk of turnover. Thus research shows that a poor team climate is associated with a greater turnover rate in healthcare (Goh, Eccles & Steen, 2009; Kivimaki et al., 2007) and the hospitality industry (Tews, Michel & Allen, 2014b). When managers develop and utilize these key behaviours with high-potential individuals, they increase the overall likelihood for that high potential to remain with the organization.