Open AccessTHE IMPACT OF LEADERSHIP ON TURNOVER INTENTION: THE MEDIATING ROLE OF ORGANIZATIONAL COMMITMENT AND JOB SATISFACTION
Author(s) -
Alicia Jia Ping Lim,
Joshua Teck Khun Loo,
Pey Huey Lee
Publication year - 2017
Publication title -
journal of applied structural equation modelling
Language(s) - English
Resource type - Journals
ISSN - 2590-4221
DOI - 10.47263/jasem.1(1)04
Subject(s) - transformational leadership , structural equation modeling , job satisfaction , psychology , turnover , organizational commitment , population , business administration , business , social psychology , marketing , management , economics , sociology , mathematics , statistics , demography
High undesirable employee turnover is a prevalent issue in today’s contemporary business organisations which has resulted in both direct and indirect costs for organisations. This research was carried out in the Finance Shared Service Center (SSC) of a company where the employee turnover rate is increasing at an alarming rate over the past three years. This study was conducted to investigate the relationship between transformational leadership, job satisfaction, organisational commitment and turnover intention. In particular, this study focuses on the mediating effect of job satisfaction and organisational commitment on the relationship between transformational leadership and turnover intention. A total of 100 useable responses were collected from the total population in the Finance SSC of a company using survey method. The data collected were analysed by using SPSS version 22 and SMART PLS 3.0. Partial Least Squares Structural Equation Modelling (PLS-SEM) approach was deployed to validate theresearch model and the research hypotheses. Result reveals an insignificant negativerelationship between transformational leadership and turnover intention. However, jobsatisfaction is demonstrated to fully mediate the relationship between transformationalleadership and turnover intention. Transformational leadership indirectly influences turnover intention through mediating role of job satisfaction. This study provides both theoretical contribution and managerial recommendations. Limitation of this study relates to cross sectional design and small sample size. Hence, it is recommended that future research should consider longitudinal study and to conduct similar research for the entire industry or in other organisational contexts.