Employees' psychological capital, job satisfaction, insecurity, and intentions to quit: The direct and indirect effects of authentic leadership

To reiterate, the present study seeks to investigate not only the direct relationship between authentic leadership and intentions to quit the job, job satisfaction and -insecurity, but also the indirect relationship through PsyCap. Below, we briefly present and discuss our organisational outcome variables.

According to Arnold, Randall, and Patterson (2010) , the concept of job satisfaction has been viewed to be important for two reasons. The first is that it is perceived to be an indicator of an employee's psychological well-being or mental health. Added to this, there are reasons to believe that an unhappy worker is more often than not an unhappy person. Secondly, the view that attitudes affect behaviour instigates the assumption that job satisfaction often motivates employees and, as a result, influences performance positively ( Matthiesen, 2005; Pratkanis & Turner, 1996; Spector, 1997 ).

Job insecurity is closely related to job satisfaction, in as much that the two are consistently found to co-occur (e.g., Ashford, Lee, & Bobko, 1989; Sverke & Hellgren, 2002 ). Modern day working life brings with it a high dose of strain and intricacies. Changes as a result of incessant rise in the level of dependency between ries, rapidly fluctuating consumer markets, and the heightened demands for flexibility has impelled organisations into either (1) employing strategies for accumulating more gains or (2) reducing cost, for example, through cutbacks and downsizing ( Dekker & Schaufeli, 1995; Sverke, 2004; Sverke & Hellgren, 2000; Sverke, Hellgren, & Naswall, 2002 ). While the literature on job insecurity started with lots of focus on its influence on employees’ well-being (e.g., Greenhalgh & Rosenblatt, 1984; Sverke et al., 2002 ), it appears that scholars are also extending the area of research to safety of employees ( Probst, Brubaker, & Barsotti, 2008 ). Probst (2011) , for instance, have suggested that job insecurity could affect employees’ safety in three ways; (1) through negative influence on employees’ cognitive resources and thus deterioration in their attentional capacity towards safety, (2) through propelling employees to focus their attention on production, believing that increased production rate might secure their jobs, and (3) through perceptions of a reduced organisational emphasis on safety, which in turn results in a reduced levels of safety compliance.

Finally, turnover intentions have received considerable attention in the literature, perhaps because it has often been regarded as a probable antecedent to actual turnover (e.g., Crossley, Bennett, Jex, & Burnfield, 2007; Griffeth, Hom, & Gaertner, 2000; Oluwafemi, 2013; Steel & Ovalle, 1984; Tett & Meyer, 1993 ). Apart from the relationship with actual turnover, intentions to quit/turnover intentions have also been found to be related to several other work environment variables. For instance, turnover intentions have been found to be negatively related to organisational citizenship behaviour ( Coyne & Ong, 2007 ), organisational identification and job satisfaction ( Van Dick et al., 2004), person-organisation fit (Liu, Liu, & Hu, 2010 ), public service motivation ( Bright, 2008 ), and organisational commitment ( Beecroft et al., 2008; Cole & Bruch, 2006 ).

Based on the discussion presented so far, this study will focus on the following hypotheses:

H 1. There will be a direct effect of authentic leadership on job satisfaction, intentions to quit, and job insecurity.

H 2. There will be an indirect effect of authentic leadership on job satisfaction, intentions to quit, and job insecurity through psychological capital.

The company in the present study operates with several distinct work departments, as do many organisations. Although the captain is the supreme leader on the ship, employees on the ships are grouped under section leaders and not all the crew work in close proximity to the captain. Instead, many crewmembers work in closer contact with their immediate supervisor (for example first officer, chief engineer, or steward) than they do with the captain. Since the captain works more closely with some staff members than others, it is plausible to argue that the captains’ leadership style will rub off to a larger degree on those who works in close proximity to the captain. This line of thought has led to the two hypotheses below:

H 3. The direct effect of the captain‘s leadership is expected to be stronger for those who have the captain as their immediate supervisor.

H 4. The indirect effect of the captain's leadership through PsyCap is expected to be stronger for those who have the captain as their immediate supervisor.

Figure 1 summarises our hypotheses and shows the presumed relations between authentic leadership, PsyCap, and organisational outcomes.

Figure 1

Summary of Hypotheses and Proposed Relations between Authentic Leadership, Psychological Capital, and Organisational Outcomes (the indirect effects of authentic leadership on the organisational outcomes are indicated by dashed lines.).

Deive characteristics of the participants d in this study are presented in Table 1 below, while correlations, means, and standard deviations of the variables d in this study are presented in Table 2.

The aim of this paper was to investigate the direct relationships between an authentic leadership style and job satisfaction, job insecurity, and intentions to quit (Hypothesis 1). A second aim was to examine any indirect relationship between authentic leadership and the three outcome variables through PsyCap (Hypothesis 2). We also assumed that those employees working directly under the captain would be more influenced by his authenticity. In effect, we expected stronger direct (Hypothesis 3) and indirect effects (Hypothesis 4) of authentic leadership style among those employees working closely with the captain.

Our results are mostly in line with Hypothesis 1. Authentic leadership predicted intentions to quit and job satisfaction, but not job insecurity. As a whole, our results point towards the importance of having a leader that is regarded as authentic. As previously mentioned, intentions to quit are often related to actual turnover (e.g., Crossley et al., 2007; Tett & Meyer, 1993 ). Turnover is recognised to be costly for the organisation. When an employee leaves an organisation (whether voluntarily or involuntarily), the organisation will have to go through the process of looking for a ment of this employee. This process entails designing deive job characteristics for the position, advertising, recruiting/hiring, as well as training and development in some cases. All of these steps can cause cutbacks in performance, and might even have a negative impact on the safety procedures and regulations at work ( Ready, 2007 ). In fact, a recent meta-analysis of turnover and organisational performance showed that the relation between employee turnover and organisational performance was strongest when performance was operationalised in terms of safety metrics ( Hancock, Allen, Bosco, McDaniel, & Pierce, 2013 ). Turnover is recognised as real problem in the maritime industry ( North Sea Offshore Authorities Forum, 2009 ), the setting in which the current study took place, and our finding that authentic leadership is related to less turnover intentions could therefore be of real value.

Our finding that authentic leadership influences employee job satisfaction is interesting on multiple grounds. First, an unhappy worker is more often than not an unhappy person. The ability of authentic leaders to increase workers’ job satisfaction is therefore important from the perspective of the wellbeing of the employees. Second, employee job satisfaction could be essential for safety. A safe workplace is obviously a prerequisite for employees to be happy and satisfied (e.g., Nielsen, Mearns, Matthiesen, & Eid, 2011 ). There is, however, also evidence that employee job satisfaction is related to accident involvement and perceptions of a positive safety climate ( Ayim Gyekye, 2005; Barling, Kelloway, & Iverson, 2003 ), as well as the tendencies to violate company's safety procedures (Gyekye, 2006). A likely explanation is that job satisfaction acts like a motivational force that affects behaviour ( Matthiesen, 2005; Pratkanis & Turner, 1996 ).

Although authentic leadership did not have direct relation with job insecurity, it did have an influence via PsyCap. This is important because job insecurity has been linked to employee behaviour in several ways. Constantly worrying about their jobs may negatively influence the cognitive capacity of employees and limit the amount of attention available for safety issues. Job insecurity may further drive employees to focus on production at the cost of safety, believing that an increased production rate might secure their jobs ( Probst, 2011 ). As is the case with job satisfaction, job insecurity probably also works like a motivational force, except in the opposite direction. Probst and Brubaker (2001) , for instance, found that employees who reported high perceptions of job insecurity also reported lower safety motivation and compliance with safety regulations, which in turn were related to higher frequencies of workplace injuries and accidents. Similar results were reported in a meta-analysis conducted by Sverke et al. (2002) . Among other things, they found that the experience of job insecurity was associated with negative organisational attitudes and negative job attitudes.

In addition to job insecurity, authentic leadership also had indirect effects via PsyCap on job satisfaction and intentions to quit. Our Hypothesis 2 was therefore supported. As such, our findings are in line with past studies on authentic leadership and employees’ PsyCap ( Hystad et al., 2014; Jensen & Luthans, 2006 ). This does not come as a surprise judging by for instance Cloninger's (1996) definition of authenticity. According to Cloninger (1996) , an authentic leader is someone with the ability to perceive both emotional cues and different facets of the social environment she finds herself without any form of distortion. Cloninger (1996, p. 258) maintains that an authentic leader is able to incorporate all of the aspects “of experience and comes to an inner sense of what is right for him or her. This sense is trustworthy, it is not necessary to depend on outside authorities to say what is right”. Given these qualities of an authentic leader and the positive influence on PsyCap demonstrated in the present study and else (e.g., Youssef & Luthans, 2007 ), the impact and contribution of an authentic leader cannot be overemphasised.

PsyCap has emerged as an important construct and has been linked to a number of organisational outcomes. A recent meta-analysis has for instance revealed positive associations between PsyCap and employee well-being, as well as negative associations between PsyCap and job stress and anxiety ( Avey, Reichard et al., 2011 ). Importantly, PsyCap is usually considered a malleable and open-to-development personal characteristic ( Luthans et al., 2007 ). While there still is limited knowledge about how PsyCap is formed and relatively few studies address this issue, emerging research suggest that leadership perhaps plays an important role ( Avey, Avolio, Luthans, 2011 ). As such, this study s previous empirical research (e.g., Hystad et al., 2014 ) in demonstrating that authentic leaders possess the positive qualities needed to boost follower PsyCap.

Although the third and fourth hypotheses of the present study were not supported, our findings nevertheless paint a picture of a leader whose influence is not restricted to those working closely with her, but transcends to everyone at the workplace. Since the organisation is regarded as one entity, the leader's influence ought to be perceived likewise by every employee for that influence to be meaningful, productive, and effective. Having a leader that is perceived by some as more authentic and the rest as less authentic could a sort of disparity in the degree of the leader's influence of the employees. Since more and more studies are supporting the notion that the authentic leader possesses the necessary qualities that could abate the effect of negative organisational variables like job insecurity and intentions to quit the organisation, it is therefore encouraging to find that such leaders’ influence (as discovered from the present study) is invariably perceived by the employees in the organisation as a whole.

Findings from the present study support the model of authentic leadership ( Avolio & Gardner, 2005; Avolio et al., 2004 ), and as purported by previous research, the notion that a leadership style like the authentic leadership is able to inspire positive behaviour among the employees ( Hystad et al., 2014; Moriano, Molero, Lévy-Mangin, 2011; Walumbwa et al., 2008 ). This realisation calls for action on the part of consultants and drivers of change in organisations. Specifically, organisations should invest adequate mechanisms in ensuring that leaders internalised moral perspectives, relational transparency, as well as the other essential components of the authentic leadership construct. Furthermore, the characteristics of an authentic leader ought to be thoroughly considered during ion, training, and promotion. Scholars maintain that this will stimulate efficacy and a healthy and efficient work environment ( Avolio & Gardner, 2005).

It is no longer new within social research that respondents are influenced by social desirability while responding to questions from a questionnaire ( Donaldson & Grant-Vallone, 2002 ). Although participants in the present study were informed about their anonymity, it is still possible that some of the participants answered the questions with some amount of skepticism. Additionally, as it is endemic in social research, it is difficult to steer clear of self-serving bias, given the fact that our findings are based on employees’ assessment of their leader. Including other data collection methods (e.g., observation) would have provided us with more windows of opportunities to investigate the relationship between the authentic leader and the employees. But then again, the whole idea of the study was to probe employees’ perceptions of their leader.

Finally, the current study was conducted in a male dominated working environment, so this could have influenced the findings in the present paper. Additionally, the R -squared values for the variables are low but satisfactory, especially for the ‘job insecurity’ variable. Moreover, the fact that the present study was based on cross-sectional data makes it a difficult venture to draw causal claims. Since the data for this study was only collected at one time point, the associations between authentic leadership, job satisfaction, job insecurity, and intentions to quit (as well as the indirect relationship through PsyCap) might all be the results of the current situation at that particular time. The causal chain could for example be reversed, that is, employees who are already happy with their work might rate the captain higher. In relation to this, Antonakis and Day (2012) maintain that most leadership instruments suffer the problem of endogeneity. When employees are aware of leader outcome (an example is ‘how well the organisation has performed’, a question often associated with leadership effectiveness), asking these employees to rate their leader will often lead to them being biased in their ratings.

Future studies should endeavor to differentiate the specific role of an authentic leader from that of other positive leadership styles like transformational leadership, charismatic, transactional, and ethical leadership styles. This differentiation should also be extended to other types of leadership like the destructive and the laissez-faire leadership styles. This is important so as to differentiate an authentic leader from the rest of the existing leadership styles. More so, efforts could be centered on defining those leadership qualities found in other leadership styles that could easily coexist (or be incompatible) with authentic leadership style in the same leader.

Leadership as a construct has had its fair share of focus and attention by scholars/researchers in recent years. Our results show–in line with previous research–that having a leader that is perceived as authentic is essential. Authentic leadership is not only important for the employees’ well-being, but also in developing employees’ PsyCap. Put together, these findings support Maxwell's (2007) assertion that how employees perceive their leader is pivotal for an organisation.

The authors of this article declare no conflict of interest.

This research was supported by the Norwegian Research Council's PETROMAKS (Grant No. 189521) and TRANSIKK (Grant No. 210494) programs.