NAME : ONELE

SURNAME : TSHAKA

STUDENT NO : 213042541

LECTURER : DR JOWAH

COURSE : B-TECH IN PROJECT MANAGEMENT

SUBJECT : RESEARCH METHODOLOGY PROPOSAL

TOPIC : Evaluating the impact of transformational leadership on

employee performance at a construction site

DECLARATION:

“I hereby declare that the attached essay/assignment/project is my own work that I have
not copied the whole or any part from any source whatsoever, and where I have copied,
verbatim or otherwise, I have acknowledged the source so utilized. I further understand
that if I’m suspected of plagiarism or any other form of cheating, disciplinary
proceedings will be instituted against me. This in turn may result in me being expelled
from this institution.

……………………………………………………………..
Title: Evaluating the impact of transformational leadership on employee performance at
a construction site

Hypothesis: Transformational leadership promotes employee performance in the

construction industry.

Question: What elements of transformational leadership promote employee

performance?

Keywords: Transformational leadership, leadership, employee performance,

construction sites

INTRODUCTION
According to Low (2010:20-27) the application of transformational leadership to
organizational settings over two decades ago, numerous studies have shown that
followers of transformational leaders display above average performance.
Transformational leadership is an inspiring leader beyond their personal interest and
able to bring the deep impact to their follower (Walumbwa, Avolio & Zhu 2008:793-825)
but Ben (2016:1119-1133) opines that transformational leader is often use legitimate
tactics and results on higher identification level and internalization, having better
performance of work and develop their follower. According to Ampofo & Dartey-Baah,
(2016:328-345) the impact of leadership on employee performance is not mediated by
OCB banks. Wong, Cheung, Yiu & Pang, (2008: 821–829) confirmed in an empirical
study that the follower performance is improved by transformational leadership by
stimulating organizational citizenship behavior. More empirical research is needed to
test the mediating role of organizational behavior in relationship between
transformational leadership and employee performance. Similar studies pertaining the
construction industry are rare. Therefore this research would improve the understanding
of functions of transformational leadership in construction sites by evaluating the impact
of transformational leadership on employee through empirical study. Employee
engagement has been separately linked to both transformational leadership, and job
performance (Han, Seo &Yoon 2016:130-149). However, despite these findings that
engaged employees perform well and that transformational leaders bring engaged
employees, no research has considered the possibility that employee engagement
mediates the relationship between transformational leadership and employee
performance, thus offering an explanation for how transformational leaders elicit
performance.

Background Study

Leadership is an essential factor that has a considerable influence on the performance

of organizations, managers and employees (Lee, Chen and Lee, 2015:71). In the
absence of strategic and effective leadership, it is laborious for members of
organizations to maintain profitability, productivity, and a competitive advantage (Tabish
and Jha 2012:1131–1138). It comes as no surprise that, there has been such a vast
focus by researchers because leadership issues are crucial for organizational success
(Haniffa and Hudaib, 2009:1034-1062). Abidin & Powmya (2014: 929-935) defined
leadership as the ability to inspire confidence and support among the people who are
needed to achieve organizational goals. Bass and Steidlmeier (2010: 181-217) state
that leadership is a process whereby an individual influences a group of individuals to
achieve a common goal. Although there are various definitions from literature describing
leadership, it is clear that most agree that a leader must be able to create growth and
learning, and must be a great motivator as stated in the work of Leadership can be
found at all levels of an organization, and not just in a person assigned a formal
leadership role. However, the ability to lead effectively can also be rare quality,
especially at the highest level in an organization, which requires a lot of leadership skills
due to the complexity of such positions.

Most of these theories seek to reveal the good traits and qualities for effective
leadership, there is no doubt that over the last decades there are many variations in
these theories (Khan, Bukhari and Channar, 2016:25-35). According to Afshan, Sobia,
Kamran and Nasir (2012: 646-661) to classify effective leadership styles (i.e. socially
oriented, target oriented, democratic or autocratic, etc.) and related them with different
conditions of organizational outcomes. Later, researchers4 however, shifted to focus on
the subordinates’ view, which proposed three main kinds of leadership.
Although Burns developed the idea or concept that a leader has a transactional or
transformational leadership profile (Palrecha, Spangler and Yammarino, 2012:5) later
Bass suggested that leaders possess both transformational and transactional

Leadership identities and conceptualized this taxonomy as the full range of the
leadership model (Ampofo and Dartey-Baah 2016:328-345). Ben (2016:1119-1133)
distinguishes between leaders as transformational and transactional based on their
superior profile disputed that transformational leadership augments the effect of
transactional leadership, hence leaders with transformational leadership characteristics
are more efficient as compared to leaders with just transactional leadership profiles.
Current theory of leadership focuses on transformational leadership and transactional
leadership as core concepts in the field. Transformational leadership is one of the most
widely researched forms of leadership (Kelloway 2012: 55). Furthermore, recent
researches consistently validate the advantages of transformational leadership style
over the more traditional ones, such as transactional leadership style, in terms of
achieving organizational goals (Wang 2011:28-32). The next sub-section will present
detailed review about transformational leadership and current empirical findings, and
how transformational leadership is measured, since it forms the main focus of this study.

In the background of promoting project sustainability, this research presents employees’

performance based on the concept of job performance. The purpose of this research is
to explore the influence of transformational leadership on project employees’
sustainable performance. The researchers also examine the mediating role of
organizational citizenship behavior. Most previous research has focused on the direct
impact of transformational leadership on outcomes, such as follower performance [9],
organizational effectiveness team performance, and turnover intention. A few studies
have also focused on the mediation role of organizational citizenship behavior (OCB) in
the relationship between transformational leadership and different outcomes However,
the results of some former studies contradict each other. Found that the influence of
transformational leadership on employee performance is not mediated by OCB in banks
confirmed in an empirical study that follower performance is improved.
Buniamin, Johari, Rahman, and Rauf (2012:8496-8503) Asserts that transformational
leadership by stimulating organizational citizenship behavior. More empirical research is
needed to test the mediating role of organizational citizenship behavior in the
relationship between transformational leadership and employee performance. Moreover,
similar studies pertaining to the construction industry are extremely rare. Therefore, this
research would improve the understanding of the function of transformational leadership
in construction projects by examining the influence of transformational leadership on
employee sustainable performance through empirical study. Based on a sample of
project managers and their subordinates in China, our findings suggest that
transformational leadership has a significant influence on employee sustainable
performance, mainly through the mediation of organizational citizenship behavior. These
findings add to the growing body of literature that suggests transformational leadership
may be a predictor of employee performance in two aspects. First, this research
provides empirical support for the view that OCB mediates the influence of
transformational leadership on employee performance. Second, it also reminds
researchers and practitioners of paying close attention to transformational leadership
and stimulating OCB to improve employee sustainable performance.

According to Abdullah, (2014 :1137-1159) the influence of transformational leadership on

employee performance has recently become a hot research topic. Many findings reveal
that transformational leadership has a positive and important effect on employee job
performance due to the openness, complexity, and challenges presented by many
projects, transformational leadership is advocated. This kind of leadership is believed to
be particularly suitable for project organization Project managers are advised to use
more transformational leadership as a means to motivate employees. Bass believed
that transformational leadership inspires followers to find new ways to face challenges
and solve problems. Owing to the unique outcomes that often accompany many
projects, novel and uncertain means are often required to achieve project goals. The
leader must encourage these traits and allow participants to act with a certain degree of
independence, rather than the leader merely giving instruction. Transformational leaders
play the roles of both coach and advisor. A one-to-one relationship improves the
commitment of team members to take on the tasks arranged by the leader. First, a
transformational project manager is concerned with each employee with different needs
Sustainability under different professional backgrounds. The transformational leader
would supply opportunity for employees to sustainably develop. Second, the project
manager as the head of the project consciously cultivates the spirit of collectivism
culture and conducts individuals to participate in collective activities and interact with
each other nicely. All these behaviors are beneficial to the employees’ relation
sustainable performance. Moreover, charisma as an important element of
transformational leadership seems to be particularly important to projects. This is
because project leaders have relatively less authority and influence on their followers
than do line managers

Transformational leadership

Northouse (2013:50) describes transformational leadership as the process whereby a

person engages with others and creates a connection that raises the level of motivation
and morality in both the leader and the follower. The theory as reported by Bailey,
Albassami & Al-Meshal,(2016: 821-840), which pushed for transformational leadership
theory appeals to follower development and intrinsic motivation. Bass and Avolio
described transformational leadership theory as influence of leaders to motivate
followers with a goal to exceed expectations. Transformational leaders bid to a good
moral values of followers and show two personal attributes, i.e., inspirational motivation,
idealized influence, individualized consideration and intellectual stimulation Yukl &
Zineldin, (2017-120:125).

A brief presentation about the types of the transformational leadership style is as

follows: ƒCharisma or idealized influence: This kind of leaders stress on high levels for
ethical and moral behaviour. They place emphasis on dissemination of vision and sense
of mission and inculcate pride. Here, leaders behave as optimal role models for their
followers. Thus, they avoid using power for personal gain. In view of this, they tend to
be highly admired and gain respect and trust. They display consistent rather than
arbitrary behavior Zineldin, (2017-230) .The leaders listen carefully, share information
and show trust in their followers, respect their ideas and consider their feelings,
encourage intelligence, rationality, and careful problem solving. Additionally, in their
decision making they stay calm, relaxed, and hopeful. Followers under this kind of
leadership tend to arrive at more creative and innovative solutions when they are led by
transformational leaders cited by Veiss, (2016:110-115). ƒInspirational motivation: This
kind of leaders detail and structure their and followers’ roles aligned to organizational
goal attainment. They convey high expectations, use symbols to focus efforts, and show
important purposes in simple ways. They also tend to be optimistic and encourage
others to understand and to be devoted to the visions and missions (Zineldin, 2017:5-7).
Individualized consideration: Under this, a leader gives personal attention and treats
followers individually to develop their abilities. They serve as coaches, advisors and
ensure existence of supportive environments in which they assist group members to
attained their goals (Zineldin, 2017:15-22). It is believed that individualized
consideration leads to increase in self and team efficacy (McColl-Kennedy and) cited by
Veiss, 2016:69-74). In the next sub-section, current researches from transformational
leadership will be reviewed. This will bring to light which areas have been receiving
intensive research and areas such as the in Construction industry, which presently has
limited research information.

Empirical findings on Transformational leadership

In a recent study by Zineldin (2017:227-228) in Sweden, this evaluated the

transformational leadership styles, emotions, and organizational outcomes among
various professionals in different sectors. The transformational leadership and emotion
theories were applied and tested in a sample of 128 leaders. Among the aims of the
study was to determine which of the transformational leadership styles are best at
forecasting effective outcomes of extra effort by employees, leader effectiveness and
job satisfaction. Results work showed that, transformational leadership styles and most
of the outcome scales (i.e. job satisfaction, extra effort by employees) positively and
significantly correlated. Rowold (2009:10:13) also showed in his work that,
transformational leadership was positively linked with followers’ satisfaction with their
pastor, their extra effort, their effectiveness, and their job satisfaction.
Kovjanic, Schuh & Jonas (2013:42:47) demonstrated in their work that transformational
leadership is one concrete way to foster employees needs satisfaction and,
consequently, work engagement and performance. Hence, integrating the frameworks
of transformational leadership and followers’ psychological needs can provide beneficial
awareness for leadership development. The results of their research also suggest that
organizations can gain from putting in place measures to increase employees’ work
engagement, since this can enhance employees’ performance (ibid, 2013:10-16).
Skakon, (2010:30-33) also reported that, transformational leadership is correlated with
increased employee well-being, high of quality sleep. Furthermore, Nielsen & Daniels
(2017:101-105) presented a positive relationship between presenteeism and
transformational leadership. All these indicates that, transformational leaders may play a
role in followers’ well-being and not just good performance of employees.

Wang et al. (2011:99:110) showed in their work that transformational leadership is

positively related to performance across benchmark types and levels of analysis. In their
work transformational leadership indicated a stronger relationship with individual level
contextual performance than with individual-level task performance. Furthermore, it is
also positively related to team and organization level performance and has an
augmentation effect over contingent reward leadership in predicting follower individual-
level contextual and team-level performance. In general, Wang et al. (2011:115:120)
results backs the idea that transformational leaders lead not just their individual
followers but also their teams and organizations to attain higher levels of performance.
Other researches regarding transformations leadership, revealed that transformational
leadership was significant correlation to both employees’ innovative behaviour and
knowledge sharing (Choi et al., 2016:259-261). Furthermore, transformational
leadership contributes to the creation of an organisational context that favours learning
processes (Méndez, Valle & Alegre, 2017:10-12).

Rowold and Rohmann (2009:79-82) studied the effects of transformational leadership

on performance in German construction industries. In this research, they investigated
project leadership behaviors and compared those behaviors to performance. Their
results revealed that positive emotions were associated with both transactional and
transformational leadership. On the other hand, negative emotions partially mediated
the influence of transformational leadership on performance.

From the above review it can be seen that transformational leadership has been tested
and proven to be useful in various sectors and fields globally. There seem to be
however little research specifically for transformational leadership and employee
performance in Construction industry, more specifically in Germany and Sweden. Since
Construction industry are the backbone in almost all economies Schiemann 2009, cited
by Franco & Matos, 2015(52-57), this then calls for further research in this area (i.e.
Construction industry) to fill in the knowledge gab or answer questions such as: what is
the impact of transformational leadership on employees in Construction industry? Or
what is the impact of transformations leadership on employees’ job satisfaction in
Construction industry especially in organizations? These questions are yet to be
answered, as there still remains missing knowledge in regard to the above-mentioned
countries,

There are research works from other parts of the world which came a little bit closer in
some answering the above questions. For example, Manaf and Latif 2014:300:305
investigated the impact of transformational leadership and job performance of
Construction industry technical personnel in Malaysia. Their results indicated that
adaptability of cultural trait mediates between the leadership style and employees’ job
performance in the Construction industry. Furthermore, Asiimwe, Kavoo-Linge, &
Sikalieh (2016-111) studied the relationship between transformational leadership style
and Construction industry growth in the top 100 Construction industry in Kenya. Their
findings revealed that transformational leadership style had a positive and significant
relationship with Construction industry growth. The correlation results also showed a
positive correlation between transformational leadership and Construction industry
growth. Based on the study findings, it was recommended that construction industry
Leaders should adopt a transformational leadership style in order to facilitate consensus
and growth of employees and the organisation at large.

Arham (2014:55:57) also examined leadership and performance in Construction

industry in the services sector in Malaysia. His results illustrated that there were
significant connections between different leadership behaviours and organisational
performance of service Construction industry; and transformational leadership
contributed more significantly to the performance of Construction industry than
transactional leadership behaviour. The findings implicate that leadership behaviour of
leaders of Construction industry is one of the essential factors that influences
Construction industry performance in the services sector. Asah, Fatoki & Rungani
(2015), researched on the impact of motivations, personal values and management
skills on the performance of Construction industry in South Africa. Their result showed
significant positive relationships between motivations, personal values and managerial
skills of Construction Industry owners on performance. With all these known facts, there
still remains a knowledge gab on the impact of transformation leadership on employees’
performance in Construction industry especially in Germany and Sweden, which this
master thesis seeks to investigate.

Measuring Transformational Leadership

Transformational leadership can be measured by different scales developed during the

years. Here, three methods are described (Multifactor Leadership Questionnaire,
Katou’s combined method and Leadership Practices Inventory) and in the end of this
chapter an explanation is made to which method is chosen for this study. Multifactor
Leadership Questionnaire A search on Multifactor Leadership Questionnaire (MLQ)
shows that it is currently widely used in leadership research (Felix et al., 2016:41-57);
Powell et al., 2016:41-57). It is claimed to be the “only tool that measures the rates of
laissez-faire, transactional, and transformational leadership styles used by a leader”
(Martin, 2016:40-45).

Katou’s Combined Method Katou (2015:369-370) has used a measure for

transformational leadership and organizational performance that combines different
scales; responsive leadership by Purcell & Hutchinson (2009:50:52) and Supportive and
Developmental Leadership. These could, according to the authors of this paper, be
coupled with the two qualities for transformational leadership mentioned in Chapter 2
(Idealized Influence, Inspirational Motivation, Intellectual Stimulation, Individualized
Consideration). Items for responsive leadership regard for example loyalty, values and
problem solving, but also how supportive a leader is toward changes. These items tune
in well to the explanations of idealized influence and inspirational motivation in Chapter.
The items regarding supportive leadership regards how a manager considers the
employee’s personal feelings, needs and interests, which are seen as compliant with
the description for individualized consideration. Developmental leadership has items
regarding encouraging improvement, training and coaching, which coincide well with the
explanation for both intellectual stimulation and individualized consideration. Therefore,
it is considered that these items in these three scales cover all aspects of
transformational leadership

Leadership Practices Inventory Further, another well used measure for transformational
leadership is the Leadership Practices Inventory (LPI); a questionnaire of 30 items
along Likert type scales. It measures the Five practices of exemplary leadership (Model
the Way, Inspire a Shared Vision, Challenge the Process, Enable Others to Act and
Encourage the Heart) and is seen as a robust method with high validity and reliability
due to its large respondent database (Posner, 2016:117-120). Chosen Measuring
Approach The method chosen for this study is the Multifactor Leadership Questionnaire,
because it seems to be the most commonly used from literature.

Also, it is used across the world, which shows its robustness regarding differences in
cultures (Powell Posner, 2016:500:515). Further, the items are divided into the same
characteristics that transformational leadership is divided into in its definition, which
makes a clear connection between questions and measured characteristics.

Employees Performance

Employee performance on an organizational is level seen as different measures of profit

suitable for each specific organisation, for example number of items sold, value added
per employee, profit margin and so on (Sindelar, 2016; Kramer et al., 2016). It can be
seen through a three factor model of task, adaptive and contextual performance
(Pradhan & Jena, 2017:97:110). It is shown to be affected highly by relational factors,
organizational culture and commitment, with vigour and self-efficacy as mediators.
Further, organisational justice is also researched as a factor affecting performance
positively (Diehl, 2016:10). In Construction industry, employee performance is seen as a
strong factor to research since it can affect organizational performance so directly
(Wang et al, 2016:25-27).

From a journal search it is seen that research is currently done on how employee
performance appraisal should be done to increase employee performance and heighten
organizational performance (Rusu, 2016:667:669), and how pay-for-performance (an
important HR-practice) affects employee performance (Wang et al., 2016:670-672).
Here, pay-for-performance is suggested to increase employee performance, but only to
a certain degree, where after a certain point secondary negative effects are seen (ibid,
2016:210-219).

As shown above, research regarding performance mainly focuses on measurable

performance that is, seen from the employer’s side. There is little research, for
Construction industry or otherwise, that could be found regarding how employees
perceive their own performance. Lufarelli (2016:45:50) has studied how self-perceived
competence may vary depending on the amount of performance appraisal that is given
from managers, and discusses that there is not a positive relationship between
appraisal and self-perceived competence. Some studies of self-perceived performance
versus actual performance is made by the medical field in order to assess whether
students understand their performance levels (Hall et al., 2016:89:93), however nothing
similar has been found recently in the business sector. It is therefore considered
important to study self-perceived performance in order to understand how employees
see themselves depending on manager behavior, to understand what causes
performance, and hopefully fill a gap in the research.

Leadership in Construction industry

Construction industry are organisations with more than 250 employees and a turnover
of maximum 50 million euros (refer to Figure below). Construction industry are very
essential as they are particularly important for countries' economic development (Javalgi
& Todd, 2011:100-105).
According to Schiemann (2009, cited by Franco & Matos, 2015:45-49), Construction
industry are the backbone of the private sector worldwide. Moreover, they play an ever
increasingly important role within the extensive trend of internationalization (Kraus,
Ambos, Eggers, & Cesinger, 2015:300).

It is estimated that Construction industry make up 99% of all firms in the EU (European
Commission, (2017:19) and also for the whole of Europe, where it offers 67% of the
total employment. According to reports Statistisches Bundesam (2017:33-37)
Germany's economy is driven by the many Construction industry which generate a
sizable revenue and employs a high number of people in the country (i.e. around 61%
of the persons employed worked in Construction industry. The same can be said about
Sweden, where Construction industry are wide spread. Ekonomifakta (2017: 330)
indicated that 99.9% of the organisations in Sweden are made up of Construction
industry, however mid-sized organisations only make up for 0.5% which implies that
small organisations make up the largest part in this sector.
Mihai (2016:15-20) reported in their work that in Construction industry, as compared to
larger enterprises, workers feel the influence of the leadership style of the managers
much more direct and personally. This is as a result of the small number of hierarchical
levels and the constant interaction between the manager and the employees (ibid,
2016:89-95). Although there are many research in the field of leadership, very little work
has been done on Construction industry and especially in Germany and Sweden.
Franco & Matos (2015:36:39) findings in their work attested to the central role of
leadership in Construction Industry management. They demonstrated that different
levels of leadership results are identified in the Construction industry selected, i.e. their
results gave additional support to the argument that leadership plays an important role
in management in Construction industry. Further, other few research works found
(Lindgren, 2012:200-210) also focus on studies to identify leadership styles in
Construction industry, which deviates or does not answer the question on how these
leadership styles impacts employee performances in Construction industry.

It must be also noted that leadership in Construction industry are linked to family
businesses. For these reason, Construction industry owner-managers play an essential
role in encouraging and supporting the initiatives of individual employees and in
enhancing work procedures for the advantage of the organization (Moriano et al. 2011).
Further, there is a lot of research about entrepreneurship and innovation Construction
industry. Most entrepreneurial initiatives start as Construction industry instead as big
firms and entrepreneurial small companies are known to be the backbone of the
economic system, which guarantees an important part of employment and innovation
cited by Popescu ( 2014:5-7). As pointed out by GEDI8, without enterprises and
entrepreneurs, there would be little innovation, little productivity growth, and few new
jobs. GEDI is known among the leaders in this fields of research and offers an online
databank to compare information among various countries. Since this thesis is more
focused on transformational leadership and employee performance, it will not dive in to
the area of entrepreneurs and innovation in Construction industry.
Problem Statement
Leader behavior is shown to affect employee behavior (Kehoe & Wright, 2013:700-707).
This study aims to evaluate how transformational leadership in Construction industry
affect employee perceived performance, that is, how employees perceive their own
performance or capability of it. It is the hope of the researcher that this research will
succeed in evaluating the researchable knowledge regarding the topic in focus.

From the literature search it can be said that the existing research worldwide, regarding
Construction industry, concern how profitability and market position can be increased
(Rigas & Nawar, 2016:15-22). Existing research regarding leadership and performance,
from the literature search, mainly regards leadership, organizational performance,
innovation and ethical culture, and mainly focuses on large organizations. There is no
clear research found regarding how organizational leadership correlates with employee
self-perceived performance. Also, the literature search revealed little research in regard
to the relationship between leadership and employee performance in Construction
industry. This thesis aims to evaluate impact regarding transformation leadership style
and employee performance, since there is a clear gap in the field.

In view of the above, the problem for this thesis work is to establish the transformational
leadership characteristics which are commonly shown in Construction industry, and to
determine to which extent it impacts on performance as a whole.

Objectives of the Study and Research Questions

The main objective of this thesis is to determine the role of transformational leadership
behavior on employees’ performance in Construction industry. For this reason, the
thesis work seeks to answer the following research questions:

 What elements of transformational leadership promote employee performance?

 What transformational leadership styles are commonly exhibited by leaders in
Construction industry?
 To what extend does transformational leadership impact employee’s
performance in Construction industry?
This research questions will be answered using quantitative survey of selected
Construction industry around the world. Collected survey data will examine using
multivariate analysis

Research Methodology
This part of the thesis work presents the research methodology applied in this work, i.e.
the conceptual model, the respective positive hypotheses, research design, etc. which
are used. Further, the approach used for the population and sample size, survey design
and data collection will be described in detail.

Research Conceptual Model

Based on the literature review presented in part two above, this thesis research will use
the conceptual model as depicted below. In this work, transformational leadership in
Construction industry, job satisfaction and work engagement represent the independent
variable of the research. Furthermore, it is assumed that job satisfaction and
employee’s engagement have influence (i.e. directly and indirectly) on employee’s
performance. The dependent variable on the other hand is employee performance.
Hypotheses of Research
This thesis work seeks to evaluate the link between transformational leadership, job
satisfaction, work engagement and employees’ performance. The hypotheses for this
work which is developed based on the review of the relevant literature

Transformational Leadership and Employee Performance

There are some researches which have shown positive relation between
transformational leadership and performance. For example, Cailliers (2014:41-50)
research revealed that transformational leadership had a direct positive effect on
employee evaluations and also positive relationship between transformational
leadership and performance. In another research by Bacha (2013:77:79), the results of
the study showed that there is a partial relationship between transformational leadership
and follower task performance. Over the years, many researches have also proved that
transformational leadership has a positive impact on performance. For this reason, this
work will evaluate the hypothesis:

Hypothesis 1: Transformational leadership promotes employee performance in the

construction industry

Hypothesis 2: Transformational leadership in Construction industry is positively related

to employees’ Performance

Principal Component Analysis

This analysis describes the dependency between inter-correlated and dependent
variables (Abdi1 & Williams, 2010:89-93). It extracts information from the whole data set
and describes it as a set of new orthogonal variables called principal components (ibid,
2010:639-643) with the aim of describing the dataset in a smaller set of variants with a
minimal loss of information (Hair et al., 2010:17). These principal components are
derived as linear combinations from the dataset (Abdil & Williams, 2010:4). It is
important to note that each factor lies under the restriction of including as much
variance as possible, while being put under several more stepwise constraints, the first
one collecting as much variance as possible, while the second factor does this while
being under the second constraint of orthogonally to the first factor (Abdil & Williams,
2010:56). Further, the analysis can show similar patterns that appear in the dataset
(Abdi1 & Williams, 2010:39:40) and aid in grouping questions that measure similar
objects (Hair et al.,2010:20).

Research Population and Sample Size

Applying a correct survey sample size11 is very important for every research, since the
acquirement of a large sample size requires valuable resources (e.g. money and time).
On the other hand, a small sample also will not allow reliable insights in a research
work. Having this in mind, and also knowing the limitation associated with getting people
to answer survey questions, the authors adopted a plan of reaching out to as many
Construction industry and participants from social media networks as possible through
emails and phone calls.

A total population size12 of 5,000 was set as a target. This was derived based on the
Construction industry and people contacted through social media as can be seen in
Table 5 below. In must be noted that the Construction industry contacted were assumed
having each a total of 50 workforce. Also, the assumption was made that each
organization contacted, only 25% survey response rate can be expected

Targeted research population

Country Nr. of Constructio Population of People Total

construc n Contacted Through Social Population
tions Population Media size
Contacte
d
German 55 2 750 100 2 850
y
Sweden 40 2 000 150 2 150
5 000
In view of the defined population size (i.e. 5000) as shown in Table above, I determined
the actual sample size (i.e. respondents) expected using a 25% estimated response
rate.

Data Collection

Due to limited time at the disposal of the authors, an online survey was deemed
appropriate although it is reported to have low response rate and considered sometimes
as spam Hoonakker & Carayon, (2009:226). In spite of these negative attributes, online
survey is known to have fast response time and it is easy to distribute to respondents as
compared with paper based survey (Saunders, 2011:450). The authors administered the
surveys personally through making contacts (i.e. through emails and phone calls) with
managers and human resources departments of selected construction Companies
around the world, and requesting for permission for their employees to take part in the
online survey. The contacted companies for this study were known companies in
Western Cape and all other companies with each having a workforce of less than 250
people, which is the standard definition of the total employees of a construction.

The survey questions were hosted online using Google forms, which presents a state of
the art platform to perform and administer an online survey. The survey was made
available in three languages (i.e. English, Afrikaans and German), to make it easier for
participants to answer the questions in their preferred language. Furthermore, this
research took advantage of the revolution of the social media and distributed our survey
link on social media networks for professionals (e.g. Linkedin), so as to reach out to
many participants. In all, participants were given nearly a week to answer the listed
questions online, which last between 5 - 10 minutes.

Data Analysis
This part of the work presents the results and analysis of the survey data. It starts with
the participant demographics which shows the background of respondents. This will
then be followed by analysis of data using principal component analysis, a check for
Cronbach’s alpha, multiple linear regression and correlation analysis. Finally, the
hypotheses defined derived from the multiple linear regression will be checked once
again through z-test

Demographics of Survey Participants- In all, 50 people participated in the survey

which lasted approximately for a week. Out of this number, six results were rejected as
participants did not fall within the classification of Construction industry. This error might
have occurred, since invited participants through social media were workers in large
organizations. From the remaining 44 participants (i.e. the sample size), 13% were from
Germany and 10% from Sweden. Further, 59% were male and 41% females, and the
industries participants work in were fairly distributed as can be seen in Table 7 below.

Table below: Demographics information of participants

Gender
Female 41%
Male 59%
Country
South Africa 60%
Germany 13%
Sweden 10%
Other 13%
Industry
Production and 23%
Manufacturing
Construction 12%
Education/Research 3
Consulting services 17%
Engineering 13%
IT/Technology 10%

Principle Component Analysis- A principal components analysis was done in order to

understand how the measuring effects would group together. First, a general factor
analysis was done to understand what a reasonable number of factors could be. The
results show that two factors seem relevant for the next step. Since the setup of the
survey is based on two variables, two factors were chosen to see if the measures would
correspond to the survey set up. Direct Obleman was used for rotation to obtain a
correlation matrix for two factors. It was observed that all items correlated with at least
0.3 in the resulting correlation matrix with at least another item. The Bartlett test shows
statistical significance in the measures. Also, the Kaiser-Meyer-Olkin value showed
0.712 which is above the recommended values. The communalities have a lowest value
of 0.569, meaning that there is common variance between each factor and another.

Multiple Linear Regression Analysis- In order to check the hypotheses stated in this
work, which based on the conceptual model, multiple linear regression and correlation
analysis were carried out on our data set. This was then followed by the hypotheses
testing and its validation using another method.

Dominant Transformational Leadership Observed

Table below shows the mean and standard deviation calculated for each component in
transformational leadership. It can be seen that inspirational motivation is graded with
the highest points by the respondents, suggesting that this is the component that their
managers exhibit the most.

Table: Observed mean and standard deviation values for the for types of TL

Component of
Mean SD
TL

Charisma 3.01 0.65

Inspirational
3.14 0.86
motivation

Intellectual
2.95 0.80
stimulation

Individualized 2.92 0.70

consideration

Conclusion
In this work, the impact of transformational leadership on employee performance in
Construction industry was studied. The final results of most of the tested hypotheses
were confirmed and comparable to literature and other research results. However, the
study failed to establish a link in two of the defined hypotheses. Furthermore, the survey
results showed inspirational motivation type of leadership style as being dominant in the
researched Construction industry.

These results are very important to fill knowledge in the leadership in Construction
industry research area and open the door for further research on these topics. There
authors of this work were limited in numerous ways during this research. In the first
place, there were a limited number of respondents to the online survey, although great
effort was put in place in contacting several Construction industries. The low turnout can
be attributed to the short duration to collect data, which lead to sample size with a large
margin of error based on our defined population size.

In order to keep the survey short to maximize response, a selection of items from scales
had to be done. If all complete scales would have been used, the survey would have
included 50 questions, which could impact response rate. For employee performance,
Cronbach’s alpha dropped to under 0.7 which would have been a good thumb rule to
pass? However, item numbers are also low, which in turn can give lower values of
Cronbach’s alpha.
Further, this inability to measure the desired variables is also shown in the factor
analysis, where the correlation table groups items into two factors which do not
correspond to the two variables chosen for the measurements. This could have been
affected by the choice to pick out only a few questions per scale.
The hypothesis for this study was set up with a positive correlation in mind. Therefore, it
must be assumed that some type of confirmation may have crept in to the results, since
the studies were specifically looking for these. Possibly, this could explain why the
regression confirmed hypothesis H4 and the z-test rejected it.
It must be state also that this study only looked at separate relations between the
variables, and how the two independent variables together affected each other.

In summary, it could be said that this study acts as a pilot study regarding variables
affecting performance in small and medium sized organizations. The results show a
tendency towards similar results as research for larger organizations and can in this
way be considered gap-filling, however more in-depth study is needed.

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