why does transformational leadership matter for employee turnover? a multi-foci social exchange...

The Leadership Quarterly 24 (2013) 763–776

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Why does transformational leadership matter for employee turnover?A multi-foci social exchange perspective☆

Herman H.M. Tse a,⁎, Xu Huang b, Wing Lamb

a Griffith Business School, Griffith University, QLD 4111, Australiab Department of Management and Marketing, Hong Kong Polytechnic University, Kowloon, Hong Kong Special Administrative Region

a r t i c l e i n f o

☆ The earlier version of this article has been acceptedManagement conference, Anaheim, California, USA.⁎ Corresponding author.

E-mail addresses: [email protected] (H.H.M. Tse),

1048-9843/$ – see front matter © 2013 Elsevier Inc. Ahttp://dx.doi.org/10.1016/j.leaqua.2013.07.005

a b s t r a c t

Article history:Received 12 March 2012Received in revised form 16 July 2013Accepted 26 July 2013Available online 17 August 2013

Associate Editor: Shelley Dionne

Drawing on social exchange theory, the present study investigates the underlying mechanismsthrough which transformational leadership influences employee turnover. Leader–memberexchange (LMX) and affective commitment (AC) are proposed as supervisor-based andorganization-based social exchange mechanisms respectively, exemplifying how socialexchange processes occur between an employee and his/her supervisor, and between theemployee and his/her organization as a whole to underpin the effect of transformationalleadership on turnover outcomes. Results of structural equation modeling on a sampleof 490 full-time employees working in a large telecommunication company in the PRCprovided support for the notion that transformational leadership is related to both socialexchange mechanisms – LMX and AC – turnover intention and turnover behavior. Furthermore,the results revealed that AC rather than LMXmediated the link between transformational leadershipand turnover intention. Turnover intention also only mediated the relationship between AC andturnover behavior over time.

© 2013 Elsevier Inc. All rights reserved.

Keywords:Transformational leadershipLeader–member exchange (LMX)Affective commitment (AC)Turnover intentionTurnover behavior

1. Introduction

Over the last few decades, a great deal of research attention has been devoted to exploring factors that influence voluntaryemployee turnover in organizations (Allen, Shore, & Griffeth, 2003; Hancock, Allen, Bosco, McDaniel, & Pierce, 2013; Shaw, Duffy,Johnson, & Lockhart, 2005). This widespread interest stems from the fact that employee turnover is detrimental and expensive(Mueller & Price, 1989). Recruiting, selecting and training new employees to cover production deficiencies, human capitaldevelopment and employee well-being are very costly (Mossholder, Settoon, & Henagan, 2005; Shaw et al., 2005). Recent researchhas revealed that voluntary employee turnover is associated with a great variety of negative effects, including depressing financialperformance, declining employee work attitudes and undermining workforce productivity (see Park & Shaw, 2013). Anunderstanding of how tomanage employee turnoverwill therefore provide organizationswith valuable andunparalleled resources foroperational effectiveness and employee well-being (Griffeth, Hom, & Gaertner, 2000; Hancock et al., 2013).

Given the growing interest in utilizing work teams in organizations, effective leadership has become increasingly important(Tse & Chiu, in press). Work team supervisors are not only required to maximize individuals' contributions for organizationaleffectiveness, but must also retain their skills and capabilities for their organization's competitive advantage (Harris, Wheeler, &Kacmar, 2011;Waldman, Carter, & Hom, in press). Indeed, a review of research has indicated that social exchange theory has beenused to underpin the implication of transformational leadership for important work outcomes including job satisfaction, task

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[email protected] (X. Huang), [email protected] (W. Lam).

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764 H.H.M. Tse et al. / The Leadership Quarterly 24 (2013) 763–776

performance, helping behavior, creativity, job-related stress and burnout (see Judge & Piccolo, 2004; Lowe, Kroeck, &Sivasubramaniam, 1996;Wang, Oh, Courtright, & Colbert, 2011). This line of research has suggested that transformational leadershipis effective in engaging subordinates in social exchange processes based on interpersonal trust, mutual loyalty, strong identification,and ongoing reciprocity with their supervisors. Subordinates thus feel indebted and obliged to repay their supervisors andorganizations in kind over time (Walumbwa, Cropanzano, & Hartnell, 2009). Although this theoretical perspective oftransformational leadership has been made explicit in the literature, it has not yet been used to explain whether transformationalleadership can deter subordinates from forming intentions to leave and acting on those intentions (Martin & Epitropaki, 2001;Waldman et al., in press).

Research to date has focused on understanding the relationship between transformational leadership and employee turnoverrather than providing an integrated framework to better understand the underlying process of the relationship (e.g., Bycio, Hackett, &Allen, 1995; Hughes, Avey, & Nixon, 2010; Waldman et al., in press). It is therefore important to understand how and why socialexchange theory is useful for exploring the underlying mechanisms through which transformational leadership induces retention ofemployees. Employees engage in social exchange relationshipwith their immediate supervisor and/orwith the organization as awhole(Maertz, Griffeth, Campbell, & Allen, 2007). Strong identification, interpersonal trust, and mutual support between the employee andthese two social entities may increase employees' propensity to stay in their organization.

Building on the target-similarity framework (Lavelle, Rupp, & Brockner, 2007), we propose to test a multi-foci social exchangemodel of transformational leadership and employee turnover. Specifically, we propose two social exchange mechanisms that aresignificant to our inquiry: 1) leader–member exchange (LMX) (i.e., an individual's perception of the quality of the dyadic relationshiphe/she develops with his/her supervisor; see Dansereau, Graen, & Haga, 1975) is conceptualized as a supervisor-based socialexchange mechanism that exemplifies how an employee engages in a social exchange with his/her immediate supervisor; and 2)affective commitment (AC) (i.e., an individual's perception of his/her emotional attachment and affective identification withhis/her organization; see Meyer & Allen, 1991) is conceptualized as an organization-based social exchange mechanism that reflectshow an employee engages in a social exchange with his/her organization as a whole (for evidence supporting this framework, seeLavelle et al., 2007; Rupp & Cropanzano, 2002).

We contribute to the transformational leadership and turnover research by addressing the repeated calls for exploring the underlyingmechanisms throughwhich transformational leadership is effective inmanaging turnover processes (Griffeth et al., 2000; Hancock et al.,2013; Park & Shaw, 2013). This study is the first to adopt social exchange theory as an overarching framework to examine LMX andAC asthe supervisor-based and organization-based social exchange mechanisms linking transformational leadership to employee intentionand turnover, and turnover behavior over time (Colquitt et al., 2013; Waldman et al., in press).

Our study also provides insights into the relative importance of supervisor-based and organization-based social exchangemechanisms on the transformational leadership-turnover relationship. It remains largely unclear in the literature whethertransformational leaders reduce employee turnover through enhancing LMX or AC or both. On the one hand, transformational leadersare able to induce employee staying by expressing individualized consideration to develop a strong personalized exchange relationshipwith their employees (Hughes et al., 2010). On the other hand, transformational leaders can transcend employees' self interests toorganizational interests by inducing a social exchange between the organization and employees to mitigate their turnover intentionand behavior (see Martin & Epitropaki, 2001). We therefore attempt to empirically test the relative strengths of the mediating rolesof LMX and AC in order to advance a more nuanced understanding of the specific influencing processes of transformational leadership.

Moreover, little research on transformational leadership and employee turnover has been conducted in non-western contexts,such as China (Waldman et al., in press). This study thus intends to increase the external validity of the implications oftransformational leadership for turnover processes across cultures, according to the global management perspective. Anunderstanding of the applicability of transformational leadership in different cultural contexts could help develop universal practicefor global leadership training (Kirkman, Chen, Farh, Chen, & Lowe, 2009).

In the following section, we provide a rationale underlying our model development, and develop theoretical argumentssupporting each of the hypothesized relationships. We begin by discussing why and how social exchange theory can be used as anoverarching framework in this study, based on a review of turnover literature. We then explain how LMX and AC can beconceptualized as the supervisor-based and organization-based social exchange mechanisms which influence the relationshipbetween transformational leadership and employee turnover intention. Finally, we present arguments explaining the theoreticalbasis of the mediating role of turnover intention in the relationships between both social exchange variables and turnover behaviorover time.

2. Theoretical background and hypothesis development

2.1. Social exchange theory applied to transformationalleadership and turnover

The fundamental issue in the turnover literature is “Why do employees decide to leave their organization?” (see Lee & Mitchell,1994). Multiple models have been proposed to understand the complexity of employees' decision making processes (Hancock et al.,2013;Hom&Griffeth, 1995; Lee&Mitchell, 1994),manyofwhichwere developedbased onMarch andSimon's (1958) seminalwork—a decision making framework of perceived ease and desirability of movement. In this framework, March and Simon proposed thatemployees' decision to participate in, as well as withdraw from, their organization can be classified into two types of force —

“push-to-leave” and “pull-to-leave”. A large volume of research has focused on exploring “push-to-leave” factors such as

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job dissatisfaction, and “pull-to-leave” variables such as job alternative, to predict employees’ decisions regarding turnover(Griffeth et al., 2000; Shaw et al., 2005). One limitation of the decision making framework is that there is another force, called“pull-to-stay”, which can represent an alternate perspective inducing employees to stay (Mitchell, Holtom, Lee, Sablynski, &Erez, 2001). The “pull-to-stay” force is underpinned by the job embeddednessmodel, which focuses on exploring factors thatmakean employeemore likely to stay in his/her job. The factors can bework- and non-work related. Thework-related factors include positiverelationships with supervisors and co-workers, good health benefits and attractive employment packages (Mitchell & Lee, 2001;Mitchell et al., 2001).

Based on the premise of the job embeddedness model, we argue that social exchange theory can be used to explain why andhow transformational leadership should be recognized as an important “pull-to-stay” force deterring employees from formingintentions to leave and acting on those intentions. According to Blau (1964), social exchange theory stresses that individuals'voluntary actions are “motivated by the return they are expected to bring and typically do in fact bring from others” (p. 91). Thisexchange process is dynamic and reciprocal in nature, andwhen reciprocations do not occur as expected, the other partymaywithdrawhis or her services (Blau, 1964). Thus, social interactions based on these exchanges are guided by norms of reciprocity (Gouldner, 1960)that help create an obligation for an individual to return the favor when he/she receives a benefit. Blau (1964) also proposed that thequality of relationship between twoparties lies on a continuum ranging fromeconomic to social exchange. The former is characterized byshort-term relationships between two parties based on exchanges of tangiblematerials; the latter involves the long-term emotion-basedrelationship that is developed on the basis of mutual trust and commitment. In the context of this study, interpersonal trust, mutualloyalty and emotional identification, and ongoing reciprocal actions arisen from social exchange relationships become a strong“pull-to-stay” force in organizations. When employees experience these kinds of social exchanges, they are more likely to feel indebtedand obliged to repay in kind by remaining their organizational membership (Walumbwa et al., 2009). In this study, we focus only onsocial exchanges because economic exchanges refer to a “give-and-take” process where the parties involved are likely to exchangeresources, information and work-related benefits on a short-term contractual basis (Blau, 1964). The nature of economicexchange does not truly reflect the “pull-to-stay” force by which transformational leadership can induce employee stayingthrough facilitating social exchange processes.

Underpinned by the social exchange theory, Lavelle and colleagues (2007) developed a target-similarity model which suggeststhat social exchange relationships can be directed toward different social entities. It is expected that an employee is able to form asocial exchange relationship with his immediate supervisor and with the organization as a whole (Maertz et al., 2007). Thesupervisor or organization becomes a specific target that motivates an employee to engage in attitudes and behaviors that arefavorable for the target. Specifically, an employee can identify with his/her immediate supervisor and experience a stronger relationalobligation with the latter than with his/her organization, or vice versa. This reflects the multi-foci notion of social exchange,suggesting that both social exchange mechanisms may have differential effects on any proposed relationships (Lavelle et al., 2007).

Notably, the literature suggests two types of social exchange underlying the transformational leadership-turnover relationship:the supervisor-based exchange (LMX) and the organization-based exchange (AC). In other words, transformational leadership mayinduce high levels of subordinate–supervisor exchange (LMX) and/or subordinate–organization exchange (AC), making employeesmorewilling to stay in the organization tomaintain, reciprocate and contribute to both types of high-quality social exchange (Griffith,2004;Martin & Epitropaki, 2001;Wang, Law, Hackett,Wang, & Chen, 2005).We propose LMX and AC as the supervisor-based andorganization-based exchange mechanisms because both constructs have been conceptualized and labeled as thetarget-specific social exchanges for investigation in other research domains, such as organizational justice (Colquitt et al.,2013) and helping behavior (Lavelle et al., 2007). However, no study has systematically examined how LMX and AC can be thesupervisor-based and organization-based social exchange processes influencing the links between transformationalleadership and employee turnover intention and turnover behavior.

2.2. The mediating role of supervisor-based social exchange (LMX)

We contend that LMX captures the supervisor-based social exchange process. Rooted in social exchange theory, Graen andScandura (1987) posit that leaders tend to develop different exchange relationships with different members. In high-quality LMX,subordinates receive several advantages, such as a high level of trust and respect, continuous emotional support, more resources,more formal and informal rewards, and greater access to information. As a result, subordinates tend to reciprocate by showing moreloyalty to their supervisor, putting more effort into work, and exhibiting less turnover behavior (Gerstner & Day, 1997; Ballinger,Lehman, & Schoorman, 2010; Tse & Mitchell, 2010).

As suggested by Wang et al. (2005) and Deluga (1992), transformational leadership contributes to the formationof high-quality LMX relationships by exhibiting behaviors such as charismatic appeal and individualized consideration tofollowers. Specifically, Shamir, House, and Arthur (1993) suggest that charismatic behaviors tend to shape employee beliefs,feelings, and behaviors. Consequently, such leadership behavior may arouse the followers' emotional attachment toward theirleader, as well as their sense of obligation to further contribute to LMX relationships (Howell & Shamir, 2005).

Transformational leaders also increase followers' engagement in exchange relationships with their organization byencouraging them to challenge the status quo and by stimulating their creativity (Bass, 1985, 1998; Tse &Mitchell, 2010). In addition,transformational leaders can strengthen LMX relationships by providing individualized consideration to their followers (Deluga,1992). Since transformational leaders often act as mentors, coaching subordinates individually, and are willing to accommodate theneeds and wants of their subordinates, the latter are likely to develop a sense of obligation and indebtedness toward their leaders


(Avolio, 1999; Bass, 1985, 1998; Scandura &Williams, 2004). Deluga (1992) also noted that transformational leaders help foster thedevelopment and maintenance of high-quality relationships by providing individualized consideration to their followers.

Transformational leadership is therefore “personalized through LMX” (Wang et al., 2005, p. 423). Leaving the organization meansleaving the high-quality exchange relationships with their leaders, which would entail psychological loss and emotional suffering,making personal withdrawal from the organization costly for subordinates (Mossholder et al., 2005). Furthermore, research suggeststhat personal attachment to others, such as leaders in exchange relationships, contributes to retaining talented employees anddecreasing their turnover intention (Ballinger et al., 2010; Maertz & Griffeth, 2004). One meta-analytical study in the LMX literatureyielded a negative correlation of − .28 between LMX and turnover intention (Gerstner & Day, 1997). Harris, Kacmar, and Witt(2005) also revealed that high-quality LMX is negatively associated with turnover intention. More recently, Harris et al.(2011) further confirmed that LMX has a negative impact on intent to turnover and actual turnover. The foregoing theoreticalarguments and empirical evidence suggest that LMX may mediate the link between transformational leadership andemployee turnover intention. We thus propose:

Hypothesis 1. LMX mediates the negative relationship between transformational leadership and employee turnoverintention.

2.3. The mediating role of organization-based social exchange (AC)

In their reviews of the social exchange literature, Cropanzano andMitchell (2005) and Colquitt et al. (2013) pointed out that AC canserve as an important indicator of the organization-based exchange relationship because it reflects employees' emotional attachment to,affective identification with, and psychological engagement in their organization. In the organization-based exchange, employeesperceive their employer to be their exchange target and adjust their attitude and behaviors in turn to benefit their organization(Karriker & Williams, 2009; Lavelle et al., 2007; Rupp & Cropanzano, 2002). In line with this notion of organization-based exchange,we propose that AC plays amediating role in the relationship between transformational leadership and employee turnover intention.

Since leadership behaviors exhibited by their immediate supervisors (i.e., agents of the organization) are often perceived asembodying the organization's intention (Levinson, 1965), employees may reciprocate the good behaviors of their leaders byreturning favors to the organization. Specifically, a transformational leader's idealized influence not only induces subordinates'identification with, and trust in their leader, but can also help to transfer these feelings to identification with, and trust in theorganization (Avolio, 1999). Identification and trust therefore become conducive to a high-quality organization–subordinate socialexchange and a high level of affective commitment (Walumbwa et al., 2009). Likewise, when transformational leaders showindividualized consideration and offer subordinates inspiration and stimulation in how todealwithwork-related issues, subordinatesare likely to reciprocate this positive treatment from their immediate supervisor by making contributions to the organization andshowing greater affective commitment (Avolio, Zhu, Koh, & Bhatia, 2004; Piccolo & Colquitt, 2006). Furthermore, leaders are able tostimulate followers' AC through articulating an appealing vision of the organization's future. When the vision is salient and inspiring,followers accept and internalize it, feel pride in belonging to the organization, and see their membership in the organization asimportant (Bono & Judge, 2003; Shamir et al., 1993; Wang et al., 2005). This arouses their emotional attachment to and affectiveinvolvement in their organization, which creates a strong sense of obligation to remain in their job in order to give their best work tothe organization (Avolio, 1999; Bass & Riggio, 2006; Becker, Billings, Eveleth, &Gilbert, 1996;Meyer, Becker, & Vandenberghe, 2004). Thedefining characteristic of a transformational leader is his/her ability to transcend employees' individual interests, redirecting themtoward collective interests. This will ultimately help to generate positive exchanges between employees and the organization,in that employees tend to experience greater AC to the organization and exhibit lower levels of turnover intention (Avolio etal., 2004). The preceding discussion leads to the following hypothesis.

Hypothesis 2. AC mediates the negative relationship between transformational leadership and employee turnover intention.

2.4. The mediating role of turnover intention

Turnover intention is considered to encompass the decisionmaking process that leads to actual turnover (Crossley, Grauer, Lin, &Stanton, 2002; Iverson & Buttigieg, 1999) or the transitional link between cognition and behavioral action. Turnover intention is thesubjective evaluation of the estimated probability that an individual will leave the organization in the near future (Vandenberg &Nelson, 1999). Many turnover researchers, including Mobley (1977), Steers and Mowday (1981), and Hom, Griffith, and Sellaro(1984), have used turnover intention as the most immediate and most accurate predictor of actual turnover. However,meta-analytical study has revealed that self-reported turnover intention can only explain around 10–15% of the variance in actualturnover and the explained variance has rarely exceeded that range (Griffeth et al., 2000; Hom & Griffeth, 1995). These findingssuggest that employees who report the intention to leave their organization do not actually do so because there may be otherpotential factors influencing the extent to which employees are likely to exhibit consistency between turnover intention andbehavior. Thus, the intention–behavior relationship may vary, depending on circumstances and populations (Griffeth et al., 2000;Park & Shaw, 2013). On this basis, it is important to examine how turnover intention mediates the relationships between both socialexchange mechanisms and turnover behavior in this study.

The relationship between turnover intention and turnover behavior has been underpinned by the theory of planned behavior(TPB) (Ajzen, 1985, 1991). Essentially, TPB postulates that a person's behavior is determined by his/her intentions to perform that


behavior. Intentions are the cognitive representation of a person's readiness to perform a given behavior, and are considered to be theimmediate antecedent of behavior (Ajzen, 1991). Van Breukelen, Van der List, and Steensma (2004) were the first to apply TPB to thecontext of employee turnover. They advanced TPB by incorporating the argument of Eagly and Chaiken (1993, p. 205) to propose thatbehavioral intention plays amore causal role in decisionmaking and actual behaviors because “one's attitude toward the target probablydoes come to mind before attitudes toward the behaviors in which one might engage, in relation to the target.” Van Breukelen et al.(2004) therefore developed a model in which job satisfaction and organizational commitment were theorized as cognitive appraisal ofattitudes toward the “job” and the “organization”, respectively. These cognitive appraisals then determine behavioral intention to leavethe organization and the actual turnover behavior. Based on longitudinal data collected over 2 years, Van Breukelen et al. found thatturnover intentionwas the best predictor of turnover behavior, while the effects of all other variables were controlled for. On the basis ofVan Breukelen et al.'s (2004)model and findings, we argue that LMX and AC represent the employees' appraisal of, and attitudes towardsocial exchangeswith their supervisor and the organization. These cognitive appraisalswill then affect their behavioral intention, such asturnover intention,which in turn leads to actual turnover behavior. The abovediscussion andevidence support the followinghypotheses:

Hypothesis 3. Turnover intention mediates the negative relationship between LMX and turnover behavior.

Hypothesis 4. Turnover intention mediates the negative relationship between AC and turnover behavior.

3. Method

3.1. Sample and procedures

The sample in this study consists of 490 employees working in a large call center of a telecommunication company located inShijiazhuang, a city in northern China. Questionnaires were used to collect information from respondents in order to understand howthey think and perceive the study variables included in the hypothesized model at Time 1. We also collected demographicinformation in the questionnaire survey. The company's HR department provided us with the employees' actual turnover at Time 2(6 months after the survey) and Time 3 (1 year after the survey) — there were thus three data collection points in total, spaced atsix-month intervals. During the questionnaire survey, one of the authors and a research assistantmet all of the respondents in groups(in several sessions) in a large conference room, to brief them about the purpose of the study and to explain the procedures foradministering the survey. Each session lasted for one hour. The respondents received a cover letter explaining the study,a questionnaire, and a return envelope. Each questionnaire was coded with a pre-assigned identification number in order to matchthe employees' responses to the actual voluntary turnover rates provided by the human resource manager of the company. To ensureconfidentiality, each respondent was asked to seal his/her completed questionnaire in a pre-addressed envelope and return it to theresearch team directly. Of the 516 questionnaires distributed, 493 were returned. After deleting three incomplete questionnaires, theusable response rate was 95.5%. About 90% of the sample were female and 39% had a college education or higher. The average age andorganizational tenure of the sample were 23.9 and 2.9 years, respectively.

3.2. Measures

To assure equivalence of the following measures in both the Chinese and English versions of the survey instrument, we used thestandard translation and back-translation procedure (Brislin, 1980).

3.2.1. Transformational leadershipTransformational leadership was measured with 20 items from themultifactor leadership questionnaire (MLQ) (Bass & Avolio,

1990). This scale has been widely used to measure the individuals' perception of transformational leader behaviors. In line withMLQ, four items were used to measure inspirational motivation (e.g., “articulates a compelling vision of the future”); intellectualstimulation (e.g., “re-examines critical assumptions to question whether they are appropriate”) and individualized consideration (e.g.,“spends time teaching and coaching me”). Eight items were used to measure idealized influence (e.g., “talks to us about his/her mostimportant values”). Each respondent answered these items referring to his/her immediate leader using a seven-point scale rangingfrom 1 (never) to 7 (always), and items were averaged to create a mean score for each dimension.

3.2.2. Leader–member exchangeWe used the LMX-7 scale (Graen & Uhl-Bien, 1995) to measure individual perceptions of the quality of relationships between

supervisors and their employees. The scale consists of seven items that characterize various aspects of the working relationshipbetween a supervisor and a subordinate. LMX data were collected from subordinates' perspectives and measured using a five-pointscale which ranged from 1 (not at all) to 5 (extremely). A sample item includes: “To what extent do you think your supervisorrecognizes your potential?”

3.2.3. Affective commitmentA seven-item abbreviated form of the affective commitment scale (Allen & Meyer, 1990) was used to assess individuals' level of

commitment to an organization. The scale was measured using a seven-point scale which ranged from 1 (strongly disagree) to7 (strongly agree). A sample item is “I would be happy to spend the rest of my career with this organization.”


3.2.4. Turnover intentionThe three-item turnover intention scale developed by Ostroff and Kozlowski (1992) was used to measure the extent to which the

respondents were thinking of leaving the organization. The response format was a seven-point scale ranging from 1 (stronglydisagree) to 7 (strongly agree). A sample item is: “I often think about leaving this organization.”

3.2.5. Turnover behaviorOnly information relating to voluntary turnover behavior at Time 2 and Time 3 was collected from a database of personal data

provided by the human resource manager of the company. We created dummy variables (i.e., 0 = stay and 1 = resign) based onwhether or not employees had resigned from the company 6 months after the survey (Time 2) and during the followingsix-month period (up to Time 3). The employees' turnover rate for Time 2 – the first six-month collection period – was 6.1%, andfor Time 3 – the second – was 14%.

3.2.6. Control variablesA review of the research suggests that employees' demographic background, including factors such as gender, age, education,

and tenure, is related to turnover behavior (Maertz & Griffeth, 2004; Payne & Huffman, 2005; Shaw et al., 2005). To avoid thepotential effects on the observed relationships in this study, we created dummy variables to measure gender (0 = female, 1 =male) and education level (0 = high school or below, 1 = undergraduate degree or higher), and collected employees' exact ageand the length of their work tenure.1

Given that the employees were nested within workgroups, it was important to ensure that the within-group observationinterdependence would not affect testing of the model at the individual level. We calculated intraclass correlation (ICC) coefficientsbased on ANOVA results to examine the observation independence of our data. The ICC coefficients of transformational leadership, LMX,affective commitment, and turnover intention were .09, .12, .09, and .09, respectively. These ICC coefficients appeared to berelatively low (Glick, 1985). In addition, we also calculated the design effect to determine whether there was a supervisoryeffect on our nested data (Kaiser, Woodruff, Bilukha, Spiegel, & Salama, 2006; Ukoumunne, Guilford, Chinn, Sterne, & Burney,1999; Xu, Huang, Lam, & Miao, 2012). We found that the design effects of transformational leadership, LMX, affectivecommitment, and turnover intention were 1.62, 1.83, 1.59, and 1.57, respectively, which are below the conventional cutoffpoint: 2.0. To sum up, the above results provide support for our individual-level model development, andwe therefore proceededto test all the hypotheses using structural equation modeling.

3.3. Data analysis

We conducted confirmatory factor analyses (CFAs) to examine our measurement models and performed structural equationmodeling analyses to test the hypotheses using Mplus 5.1 (Muthén & Muthén, 2007). Since the dependent variables of our modelare categorical variables, Mplus is a particularly useful statistical package for analyzing our data. It allows us to estimate the modelusing robust weighted least squares (WLSMV), which have been shown to generate reliable fit indices for structural equationmodels with more than one categorical dependent variable (Muthén, 1984, 1993; Muthén, du Toit, & Spisic, 1997). We canevaluate the fit of the hypothesizedmodel by comparing it with other alternatemodels based on chi-square tests and the fit statisticsof CFI, TLI, and RMSEA (Browne & Cudeck, 1993; Joreskog & Sorbom, 1993; Tucker & Lewis, 1973). It should be noted thatMplus itselfcannot generate chi-square values for direct model comparisons, but its manual provides a specific procedure to produce a correctedchi-square difference test usingWLSMV (Muthén &Muthén, 2007, pp. 367–8).We followed this procedure to compare an alternativemodel, and also reported the results of this chi-square difference test along with CFI, TLI, and RMSEA in Table 3.

A conventional analytical approach to testing mediating hypotheses is to follow Baron and Kenny's (1986) three-stepregression analysis. Until recently, Edwards and Lambert (2007) have raised some concerns about the three-step regressionprocedure. For instance, Sobel's (1982) test is often recommended to examine the mediating effect by testing the product term ofthe regression coefficient for the link between the independent variable and themediator, and that for the link between themediatorand the dependent variable. This test is conducted on the assumption that the product term is normally distributed, yet thisassumption is often violated (Preacher & Hayes, 2004). A solution to this concern is to use bootstrapping, because its confidenceintervals are bias-corrected (Edwards & Lambert, 2007). These are derived from the adjustment for the differences between theproduct term obtained from the full sample and the median of the product term estimated from the bootstrap samples (Efron& Tibshirani, 1993; Mooney & Duval, 1993). When computing confidence intervals, a minimum of 1000 bootstrap samplesis recommended in order to accurately locate the upper and lower bounds of the 95% to 99% confidence interval within the sample(Efron & Tibshirani, 1993; Mooney & Duval, 1993). We therefore tested the four mediating hypotheses using bootstrapping, and anestimation tool available in the Mplus 5.1 statistical package.

1 We retested all hypotheses using the leader–subordinate dyad tenure as a control variable, and examined a possible interaction effect of affectivecommitment and LMX. The substantive study findings remained unchanged in these supplementary analyses, and the additional interaction coefficient was notstatistically significant. Although the results of these supplementary analyses are not significant in this study, future research should continue to explore thepotential effects of leader–subordinate dyad tenure and the interaction term in the transformational leadership-turnover relationship.


4. Results

4.1. Measurement model

We conducted a series of CFAs using Mplus 5.1 to verify our hypothesized five-factor structure of transformational leadership aswell as the distinctiveness of all four study variables; namely transformational leadership, LMX, AC, and turnover intention. Since nocategorical variables were involved in these CFAs, the measurement models were estimated using maximum likelihood. In the CFAsfor transformational leadership, we compared a one-factor model and a second-order five-factor model. In the one-factor model, all20 indicators of transformational leadership were loaded on a single latent variable; in the second-order five-factor model, the same20 indicators were loaded on the five first-order latent variables of five respective leadership dimensions, and these dimensionswerethen loaded on the second-order single latent variable of transformational leadership. As shown in Table 1, the hypothesizedsecond-order five-factor model (i.e., idealized influence, inspirational motivation, intellectual stimulation, and individualizedconsideration) (χ2 = 512.11; df = 165; CFI = .92; TLI = .91; and RMSEA = .066) fitted the data significantly better than theone-factor model of transformational leadership.

In addition to the measurement model of transformational leadership, we compared the fit of the hypothesized four-factormeasurement model in which the items concerning transformational leadership, LMX, AC, and turnover intention were expected toload on their respective variables with other underlying alternative measurement models. The chi-square and fit indices in Table 1show that the hypothesized four-factor measurementmodel (χ2 = 819.64; df = 318; CFI = .92; TLI = .91; RMSEA = .057) yielded abetter data fit than other plausible measurement models, which include three-factor model A (transformational leadership and LMXwere combined into one factor), three-factormodel B (AC and turnover intentionwere combined into one factor), three-factormodel C(LMX and AC were combined into one factor), and the overall one-factor model. The CFA results provide evidence supportingthe distinctiveness of the study variables and also suggest that common-method variance did not have a substantial effect on therelationships between the study variables (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003).

4.2. Descriptive statistics

Table 2 presents the descriptive statistics, reliabilities, and correlations for all study variables. Consistent with our prediction,all study variables were significantly related to each other. More importantly, transformational leadership was found to be related toLMX (r = .69, p b .01), AC (r = .43, p b .01), turnover intention (r = − .35, p b .01), turnover behavior at Time 2 (r = − .10,p b .05) and related to turnover behavior at Time 3 (r = − .08, p b .05). These correlation results also reveal that LMX and AC hadnegative relationships with turnover intention (r = − .33, p b .01) and turnover behavior (r = − .67, p b .01). Furthermore, ACwasfound to be negatively related to turnover behavior at Time 2 (r = − .12, p b .01) and turnover behavior at Time 3 (r = − .10,p b .05).

4.3. Test of hypotheses

To reduce the number of parameters in the structural equation modeling analysis, and to keep a reasonable degree of freedomfor model fit (Bandalos, 2002), the item parceling method recommended by Bagozzi and Edwards (1998) was used ontransformational leadership, because this variable consisted of 20 items thatwould significantly increase the number of parameters inthe analyses. Hence, transformational leadership was modeled using five parcels corresponding to its five dimensions.

We first examined themodel fit of our hypothesized model, performing structural equation modeling (SEM) analysis with robustweighted least squares estimation using Mplus 5.1. We also compared the hypothesized model (Model 1) with three nested models

Table 1Results of confirmatory factor analysis for the measures of study variables.

Measurement Models χ2 df CFI TLI RMSEA

Transformational leadershipFive-factor second-order model 512.11 165 .92 .91 .066One-factor model 601.42 170 .84 .83 .092

Overall measurement modelHypothesized four-factor model 819.64 318 .92 .91 .057Three-factor model A —

transformational leadership andLMX were combined intoone factor

1531.72 619 .89 .88 .055

Three-factor model B —

affective commitment andturnover intention werecombined into one factor

1411.05 619 .90 .89 .051

One-factor model 1717.74 624 .86 .85 .062

Note. CFI = Comparative Fit Index; TLI = Tucker –Lewis Index; RMSEA = Root Mean Square Error of Approximation.

Table 2Descriptive statistics, reliabilities, and inter-correlations among study variablesa.

Variables M SD 1 2 3 4 5 6 7 8 9 10

1. Gender .10 .30 –

2. Age 23.86 2.70 − .06 –

3. Education .43 .49 .13** .12** –

4. Tenure 2.89 2.12 − .12** .35** − .31** –

5. Transformational leadership T1 4.48 .82 .05 .02 .02 − .02 (.92)6. Leader–member exchange T1 2.95 .70 .08 .07 .09 − .06 .69** (.84)7. Affective commitment T1 4.77 .89 − .07 .08 − .02 .00 .43** .39** (.74)8. Turnover intention T1 4.27 1.34 − .06 .05 − .11* − .03 .35** − .33** − .67** (.86)9. Turnover behavior T2 .06 .24 .03 − .02 .04 − .09 − .10* − .05 − .12** .17** –

10. Turnover behavior T3 .13 .34 .04 .00 .05 − .10* − .08* − .08 − .10* .15** .67** –

Note. aN = 490. Internal consistency reliabilities are reported in parentheses along diagonal.*p b .05; **p b .01; ***p b .001.

Table 3Comparison of structural equation models.

Model and Structure Δχ2 CFI TLI RMSEA

Hypothesized Model 1TFL → LMX + AC → TI → TB2 + TB3

– .917 .967 .047

Nested modelsModel 2 vs. Model 1TFL → LMX + AC → TI → TB2 + TB3Direct pathsTFL → TB 1 + TB2

0.149(df = 1)

.910 .965 .048

Model 3 vs. Model 1TFL → LMX + AC → TI → TB2 + TB3Direct pathTFL → TI

4.416*(df = 1)

.918 .967 .046

Model 4 vs. Model 1TFL → LMX + AC → TI → TB2 + TB3Direct pathsTFL → TI + TB1 + TB2

1.434(df = 2)

.911 .965 .048

Model 5 vs. Model 3TFL → LMX + AC → TI → TB2 + TB3Additional pathLMX → AC

3.474(df = 1)

.92 .968 .046

Model 6 vs. Model 3TFL → LMX + AC → TI → TB2 + TB3Additional pathAC → LMX

3.474(df =1)

.92 .968 .046

Note. TFL = transformational leadership; LMX = Leader–member exchange; AC = affective commitment; TI = turnover intention; TB2 = turnover behaviorTime 2 and TB3 = turnover behavior Time 3.*p b .05; **p b .01; ***p b .001.


(see Table 3), which include: Model 2 with direct paths from transformational leadership to turnover behavior at Time 2 and Time 3;Model 3 with a direct path from transformational leadership to turnover intention; and Model 4 with direct paths fromtransformational leadership to turnover intentions, turnover behavior at Time 2, and turnover behavior at Time 3. In addition, wetested two alternative models, Model 5 and Model 6, which were compared with Model 3, the model with the best fit (see below).

The results of SEM analysis show that our data fit well with the hypothesized model (CFI = .917; TLI = .967; and RMSEA =.047). As shown in Table 3, although the fit indices of other alternate models are comparable to the hypothesized model, thechi-square differences test revealed that Model 3 had the best fit among all the models (CFI = .918; TLI = .967; RMSEA = .046,Δχ2 = 4.416, and p b .05). The standardized coefficients of all the paths are presented in Fig. 1. It is notable that, althoughtransformational leadershipwas strongly and positively related to both LMX (β = .82, p b .001) andAC (β = .57, p b .001), it wasACthatwas significantly related to turnover intention (β = − .83, p b .001). In addition, transformational leadership had a direct path toturnover intention (β = .20, p b .05), and turnover intention was positively associated with turnover behavior at both Time 2 (β =.36, p b .01) and Time 3 (β = .28, p b .01). We then compared Model 3 with two additional models (Model 5 and Model 6). Theresults reported in Table 3 show that Models 5 and 6 did not significantly improve the model fit, suggesting that among allthe alternative models, Model 3 fit the data best.

Finally, we tested the four mediating hypotheses using bootstrapping based on Model 3. We examined the indirect effects ofLMX, AC, and turnover intention. The results are presented in Table 4. We found that the indirect effect of LMX ontransformational leadership – the turnover intention link – was not significant. Hypothesis 1 was, therefore, not supported. The

Organization-Based Social Exchange:

AC T1

Transformational Leadership T1

Supervisor-Based Social Exchange:

LMX T1

Turnover Intention T1

Turnover Behavior T2

Turnover Behavior T3

.82***

.57***

-.17

-.83***

.36**

.28**

Control variables Age: β =.01 n.s. Sex: β =.04, n.s. Education β = .02, n.s. Tenure β = -.21, p. <.05

.20*

Fig. 1. Results of structural equation modeling using robust weighted least squares analysis.

Table 4Bootstrapping results for the indirect effects.

Mediating effects Boot indirect effect Boot SE Boot z Boot p LL 99% CI UL 99% CI

TFL → LMX → TI − .01 .07 − .08 .94 − .18 .17TFL → AC → TI − .74*** .08 −9.39 .001 − .94 − .54LMX → TI → TB2 − .00 .03 − .07 .94 − .09 .08LMX → TI → TB3 − .00 .02 − .07 .94 − .06 .06AC → TI → TB2 − .30*** .08 −3.52 .001 − .51 − .08AC → TI → TB3 − .22*** .07 −3.30 .001 − .39 − .05

Note. N = 490. Unstandardized regression coefficients are reported. Bootstrap sample size = 1000.TFL = transformational leadership; LMX = Leader–member exchange; AC = affective commitment; TI = turnover intention; TB2 = turnover behavior Time 2and TB3 = turnover behavior Time 3.*p b .05; **p b .01; ***p b .001.


indirect effect of AC (β = − .74, p b .001) on the link between transformational leadership and turnover intention wassignificant. Bootstrapping results reveal that a 99% bias-corrected confidence interval did not contain zero (− .94 b − N − .54),lending support to Hypothesis 2. Our findings did not provide support for Hypothesis 3, because the indirect effect of turnoverintention on the relationships between LMX and turnover behavior at Time 2 and Time 3 was not significant. The results show,however, that the indirect effect of turnover intention on the links between AC and turnover behavior at Time 2 (β = − .30,p b .001), and between AC and turnover behavior at Time 3 (β = − .22, p b .001), was significant. Bootstrapping results alsoindicate that a 99% bias-corrected confidence interval did not contain zero (− .51 b − N − .08) for turnover behavior at Time2 (− .39 b − N − .05), or for turnover behavior at Time 3, thus supporting Hypothesis 4.

5. Discussion

Previous studies have suggested that transformational leadership has a negative impact on employee turnover intention andbehavior. However, we do not know how transformational leaders actually retain employees and reduce their turnover rate. This studyadvances our understanding of the underlying mechanisms of transformational leadership by testing whether transformational leadersretain employees through triggering a high level of supervisor-based social exchange, organization-based social exchange with theirsubordinates, or both. We found that the negative relationship between transformational leadership and employee turnover intentionwas mediated by AC, which captures organization-based social exchange, rather than by LMX, which represents supervisor-based socialexchange. Consistent with the results of past studies, we also found that turnover intention mediates the link between AC and turnoverbehavior at both Time 2 and Time 3 (Griffeth et al., 2000; Martin & Epitropaki, 2001).

Although we did not hypothesize the differential effects of LMX and AC on the relationship between transformationalleadership and turnover intention, our findings showed that AC is a stronger social exchange mechanism, translatingthe leadership effect into turnover intention. Our findings lend support to a key feature of transformational leadership, in that

;


such leaders are likely to induce employees to stay, not because they build high-quality personalized exchange relationships withsubordinates, but because they are able to inspire employees to transcend their individual interests and orient themselves to thecollective interests of the organization and tomake a high level commitment to their organization. One possible explanation for thesefindings is that employees who do not experience high-quality LMX relationships with their leader may seek to transfer to anotherwork team instead of leaving the organization outright. The leader in another work team may develop and maintain strongsupervisor-based and organization-based social exchange relationships with employees whomay in turn be more likely to maintaintheir organizational membership.

5.1. Theoretical contributions

The findings of the current study have several implications for theory. First, although only a few studies have been conductedinto the link between transformational leadership and turnover intention in organizational settings (see Bycio et al., 1995;Hughes et al., 2010; Martin & Epitropaki, 2001), little attention has been directed toward the role of transformational leadership inthe actual turnover process (Griffith, 2004; Waldman et al., in press). We attempt to address this issue by including both turnoverintention and turnover behavior in our model. While we did not hypothesize the main effect of transformational leadership onturnover outcomes, our findings do show that transformational leadership has a negative impact on turnover intention at Time 1 andon turnover behavior at Time 2 and Time 3 over a period of a year and a half. These findings are consistent with past research (e.g.,Griffith, 2004;Waldman et al., in press), supporting the notion that transformational leadership is effective in accounting for variance inactual turnover over time after controlling for turnover intention.

Second, our study shed new light on why and how exercising transformational leadership can help deter followers from formingintentions to leave and then acting on those intentions. Underpinned by the multi-foci social exchange model, our findings suggestthat, although transformational leadership can facilitate both supervisor-based and organization-based social exchanges, it is theorganization-based social exchange (AC) that translates the leadership effect into turnover intention. This lends support to key features oftransformational leadership, in that such leaders are likely to induce employees to stay, not because they can build a high-quality ofpersonalized relationshipwith subordinates (LMX), but because they are able to inspire employees to transcend their individual interestsand to orient themselves to collective interests, arousing a high level of affective commitment to their organization (Avolio, 1999; Bass,1985). Subordinates are thus more likely to respond to transformational leaders by taking the organization's collective interests intoaccount, instead of simply their leaders' interests and goals. This echoes the notion of whether supervisors are perceived to represent orpersonify the organization (Levinson, 1965). The findings here imply that subordinates tend to direct their reciprocating attitudes andbehaviors toward the target fromwhich benefits originate, even though their supervisors are likely to be seen as agents representing theorganization translating its benefits, resources and support by displaying transformational leadership (Lavelle et al., 2007; Maertz et al.,2007). Subordinatesmay thus continue their reciprocal transactionswith the organization by seeking to transfer to anotherwork team inorder to withdraw from a low-quality exchange relationship with their leader.

Third, the current study informs the existing cross-cultural leadership research about the universal impact of transformationalleadership in organizational context worldwide (Kirkman et al., 2009). Although we did not collect data for any cultural variables totest whether power distance and collectivism potentially influence the hypothesized relationships using the Chinese sample in thisstudy, our findings reveal that the mediating effect of AC was stronger than LMX on the transformational leadership-turnoverrelationship. This should not be the case because (guanxi:LMX)—personal relationship plays a dominant role in the Chinese culture(see Xin & Pearce, 1996). Our findings may provide support for other studies confirming that transformational leadership influencesimportant work outcomes similarly in culturally distinct countries such as PRC and US (see Avolio et al., 2004; Kirkman et al., 2009;Wang et al., 2005).

Finally, our findings also extend Van Breukelen et al.'s (2004) study and research on the intention–behavior relationship bytheorizing that organization-based exchange and supervisor-based exchangewere exemplified by AC and LMX as the external factorsthat predict turnover behavior through turnover intention. This in turn determines turnover behavior between two points in time1 year apart. Although our results reveal that only the organization-based exchange (AC) was significant in determining turnoverbehavior via turnover intention, these results are still important because Van Breukelen and colleagues failed to provide support for therole of AC in their model. The current study further increases our understanding of TPB to confirm its applicability in the context ofturnover by showing that turnover intention is mediated by the AC-turnover behavior relationship. In addition, our results furtherindicate the unexpectedly weak and inconsistent relationship between turnover intention and turnover behavior (Griffeth et al., 2000;Hom & Griffeth, 1995; Park & Shaw, 2013).

5.2. Practical implications

This study has several practical implications. First, it builds upon social exchange theory by determining that subordinate–supervisor social exchange and subordinate–organization exchange are the underlying bases for explaining why and howtransformational leadership reduces employee turnover. Our findings reveal that the effect of transformational leadership onturnover intention is indirect, mediated through organization-based exchange (AC) rather than supervisor-based exchange (LMX).The findings suggest that transformational leadership is effective inmanaging employee turnover, enabling subordinates to internalizethane organization's values and mission, and thus encouraging them to be proud of their organizational membership (Bass & Riggio,2006; Shamir et al., 1993). Effective leadership training programs should be developed tomake sure that transformational leaders areable to facilitate organization-based social exchanges at work. This leadership behavior helps build employees' emotional attachment


to their organization, which in turn creates the desire to retain membership of that organization (Bass, 1985). Supervisors thus needto pay attention to their subordinates' perceptions of their organizational mission, vision, goals, and objectives. Effectivetransformational leaders should be aware of the need to adopt different practices in order to facilitate a sense of affectivecommitment among their subordinates.

Second, this study was conducted in a large call center of a telecommunication company in a Chinese setting. Our findings mayinform western practitioners or managers about the practical implications of transformational leadership in the PRC, which isconsidered to be one of the world's fastest developing countries (Waldman et al., in press). Based on our findings, the variablesincluded in this study appear not to be culturally specific: our results relating to the hypothesized relationships are similar to thefindings reported in western studies (e.g., Bycio et al., 1995; Hughes et al., 2010). This implies that transformational leadership playsan important role in employee turnover processes across cultures (Waldman et al., in press;Wang et al., 2011). Universal practice canthus be formulated to promote global leadership development for expatriates working in leadership positions in China (Kirkman etal., 2009).

5.3. Limitations and future research directions

The findings of the present study should be considered in light of several limitations, each of which should be addressed by futureresearch. First, our study sample consisted of employees working in one call center of a single telecommunication company, and themajority of the employment population in the call center industry is young and female, with a relatively low tenure. This could haveintroduced gender, age and tenure biases into our findings. For example, if older longer tenured male employees had a high turnoverrate, failing to include an equal number of older longer tenured male employees may have affected the hypothesized relationships.Thus, the findings may have been different if there had been more older, male and longer tenured employees included in our sample.Although failing to include a sufficient number of older, male and longer tenured employees in this study may have led to higher orlower means within the study variables, it is arguable that this may have affected only the mean values. However, the associationsbetween the variables would have been of similar magnitude, regardless of means. To clarify this sampling issue, we include gender,age, and tenure as control variables to test their effects on turnover behavior, and the results show that gender, age, and tenurewere notfound to be related to turnover intention (Time 1) or turnover behavior (Time 2), and only tenure was somewhat associated withturnover behavior (Time 3). The results suggest that imbalanced data for gender, age, and tenure did not have a strong negative impacton the findings of this study. Nevertheless, further research should be conducted to replicate this study using a samplemore balanced interms of gender, age, and tenure in different organizational settings in order to improve confidence in the findings and theirgeneralizability.

A second problem associated with the sample may be the potential lack of a strong generalizability of our findings to other,western countries. The sample in our study was obtained from the PRC, which is collectivistic and scores high on power distance(Hofstede, 2001). These cultural characteristics may have an effect on the extent to which supervisor-based and organization-basedsocial exchanges are perceived in work teams. We believe, however, that the current findings could still help inform the socialexchange literature and target-specificity model about the implication of transformational leadership for turnover in westerncontexts because the Chinese sample rendered our analyses more conservative. Specifically, Chinese culture values personalizedexchanges (i.e., LMX and guanxi) over other forms of social exchanges, such as AC (see Xin & Pearce, 1996). This suggests thatsupervisor-based social exchange (LMX) should have played a strongermediating role than organization-based social exchange (AC)in the transformational leadership-turnover relationship. However, in this cultural context, we did not find LMX to have a significantmediating effect in the relationship. This implies that the effect of cultural variation may not have been as salient as it should havebeen in our study. Future research can continue to explore cultural variables (such as traditionality, collectivism, and power distance)as important contingent boundaries that would potentially influence the relationships between transformational leadership andturnover.

A third limitation is related to the sample, and might also affect the generalizability of our findings to other call centers andorganizational settings in different industries. Our sample was drawn from employees in a large telecommunication company andtheir supervisors. Research undertaken using a single organization always limits the findings' representativeness. However, theresults presented in our study are similar to those obtained in other organizational settings, including hospitals (Waldman et al., inpress), schools (Griffith, 2004), and aerospace design and manufacturing (Hughes et al., 2010). This suggests that our findings maystill be generalizable to other organizational settings. Nevertheless, future research should replicate and extend our study using amore representative sample drawn from companies in different industries.

A fourth limitation concerns the common-method bias that might potentially inflate the observed relationships in this study(Podsakoff et al., 2003). Although common-method bias was not identified as a major problem in the prediction of turnoverbehavior, which was provided independently by the company, the method bias might still apply because a common survey methodwas employed for data collection (Liao & Chuang, 2007). We thus attempted to address this concern by conducting CFAs to test thedistinctiveness of the variables and by undertaking correlation analysis to examine their discriminant validity. In addition, although ourdata came from different sources (i.e., subjective data from employees and objective data from the organization's human resourcesdepartment), we continued to adopt several procedural and statistical remedies suggested by Antonakis, Bendahan, Jacquart, and Lalive(2010), Podsakoff et al. (2003), and Richardson, Simmering, and Sturman (2009) to minimize potential bias. First, the anonymity andconfidentiality of responses were guaranteed to reduce respondents' evaluation apprehension. Second, a psychological separation wasconstructed in the survey through the use of different instructions and by interspersing the variables throughout the survey, mixedwithmultiple filler items. This procedure helped lower respondents' perceptions of any direct connection between the variables. Third, we


calculated the variance explained by the method factor (13.6%), and the result was much lower than the 25% suggested byWilliams, Cote, and Buckley (1989, pp. 29–30). Nonetheless, future research should consider validating the findings of thisstudy by collecting data from different sources and employing different types of research design (Podsakoff et al., 2003).

A fifth limitation relates to the research design of this study. Turnover behavior was collected over two six-month intervalsafter we had administered the survey to obtain information on transformational leadership, LMX, AC, and turnover intention.Consistent with turnover research, our study had a less than ideal increase in turnover rate over 12 months (Griffeth et al., 2000;Shaw et al., 2005). As a result, the turnover behavior at Time 2 and Time 3 (i.e., 6% at 6 months and 14% at 12 months) did notshow substantial changes leading to a restriction of range in the outcome variables. This could have caused the observedrelationships among the study variables to be weaker than when they are tested with a higher percentage of current turnoverrates in Time 3. Future research should attempt to obtain information on the actual turnover rate over a longer period (e.g.,2 years or more) in order to increase the effect size for relationship testing.

Another promising avenue for future research attention is to examine a more comprehensive social exchange-based modelthat incorporates other potential mediating variables, such as perceived organizational support (POS) and perceivedorganizational supervisor support (PSS), to influence the hypothesized relationship between transformational leadershipand turnover behavior. Researchers such as Maertz and colleagues (2007) found support for the mediating effects of PSS and POS onturnover cognitions, and their interactive effects on turnover behavior. This study reflects the need for future research to look at thesesocial exchange-based mediators of the leadership-turnover relationship.

In conclusion, the present study represents a first attempt to explore the underlying process by which transformational leadershiprelates to turnover. We tested a social exchange model in which LMX and AC were theorized as supervisor-based andorganization-based social exchange mechanisms, respectively, exerting their effect linking transformational leadership and turnoveroutcomes. Overall, SEM results show that transformational leaders can reduce turnover intention and actual turnover throughenhancing subordinates' emotional attachment to, and affective identification with their organization, rather than by developinghigh-quality personalized exchange relationships with them. We hope that our findings inspire researchers to look at other possiblemediating andmoderating variables underpinning the social exchangemodel of transformational leadership and turnover in the nearfuture.

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