Examining the Influence of Transformational and Transactional Leadership Styles on Perceived Job Stress among Ghanaian Banking Employees

This study examined the influence transformational and transactional leadership styles have on job stress among employees in Ghana’s banking industry. The study made use of structured questionnaires to collect quantitative data. 196 questionnaires were returned by respondents out of 250 administered. The findings revealed a significant negative relationship between transformational leadership and job stress (β = -.193, p< .05) and a significant positive relationship between transactional leadership and job stress (β = .165, p< .05). From these findings, it is recommended that managers adopt transformational leadership behaviours in order to reduce job stress among employees in Ghana’s banking industry. This is a pioneering work in the Ghanaian context where participants have been drawn from 19 different banks; making it possible to get general views of employees concerning the subject.


Introduction
In a significant number of nations, it is not unusual for the banking sector to be noted as critical to the survival of those economies because that sector contributes immensely to the economic growth and development of a number of countries.In Ghana, for the past decade, the banking industry has expanded and increased in numbers.Some reasons accounting for this, is the peaceful political climate, good investment opportunities and the open market system that exists in Ghana.Although, many people perceive that the banking job is very stressful, a good number of Ghanaians particularly fresh graduates are desperately eager to work in the banking sector because broadly the banks conditions of service (e.g.allowances, salaries) are comparatively better than in other industries.It is however believed that banks are potential source of stress because of the amount of time banking employees spend at work (Jamshed, Khan, Haq, Arif, & Minhas, 2011).Job stress is "the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker (National Institute for Occupational Safety and Health, 1999).
Research indicates that stress has become one of the most serious health issues (Lu, 1999) costing organisations huge amount of monies around the world.Sauter, Murphy and Hurrell (1990) reported that the cost of job stress to businesses in America is estimated at $50 -$150 billion annually.According to Health and Safety Executive (2005), more than half a million people are affected by job-related stress which cost industries an estimated £9.6 billion each year.Also, the cost of insurance claims for stress-related industrial accidents is twice that of non-stress-related industrial accidents (Perkins, 1994).This calls for management to pay close attention to employee stress in organisations.
According to Offermann and Hellmann (1996), the behaviours of leaders in organisations are related to employee stress.Similarly, van Dierendonck, Jehn and Cummings (2004) posited that the behaviours of managers are likely to impact on the presence or absence of psychosocial hazards in employees' working environment.This means that managers through their behaviours play significant role in employee job-related stress.Literature affirms that (Tepper, 2000) managers can either stimulate or prevent stress by the behaviours they display towards employees.Recent literatures abound on two main types of leadership styles (transformational and transactional leadership styles) because they are believed to be more relevant in today's organisations (Bass & Steidlemeier, 1998).Whilst transformational leaders inspire, coach, teach, encourage and support employees to achieve organisational goals, transactional leaders reward employees for task completion and punish them for poor performance.Some studies have been conducted on the relationship between these leadership styles and employee job stress (Sosik & Godshalk, 2000;Rowold & Schlotz, 2009;Gill, Flaschner, & Bhutani, 2010).For example, Seltzer and Numerof (1988) found leader support, which is an attribute of transformational leadership, to have an inverse relationship with subordinate job stress.However, most of these studies were conducted in western countries, making it important to replicate it in the Ghanaian context because culture plays an important role in leadership behaviours (Jing & Avery, 2008).Particularly, this study focuses on employees in the Ghanaian banking sector to determine how the leadership behaviours exhibited by managers contribute to employees perceived job stress.Burns (1978) was the first author to introduce the concept of transformational and transactional leaderships.Later, Bass (1985) developed and extended Burns' theory of transformational and transactional leaderships.Burns (1978) defined transformational leadership as a process where, "one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality".In transformational leadership, followers identify themselves with the leader, share the leader's vision of the future, and altruistically work hard to achieve determined goals.Transformational leadership believes in collective effort, thereby emphasizing group work as the best way to achieving organisational goals.Transformational leaders create and emphasize a unified and supportive workplace that leads to shared objectives.According to Bass, Avolio and Goldheim (1987), transformational leaders increase the confidence, motivation and satisfaction of group members by fostering unity among the members.In addition, transformational leaders help followers to identify and develop their potentials as they encourage, support and inspire followers particularly through challenges.According to Bass and Avolio (1997), transformational leaders inspire and encourage their followers to the extent that the followers see challenges as opportunities and the leaders cooperate and work with them to overcome these challenges at the workplace.These leaders recognize employees as knowledgeable who can intellectually contribute to solving some of organisations' problem.Hence, transformational leaders share a significant degree of decision-making power with their employees.Ahmed and Sadiq (2008) asserted that trust plays a substantial role in transformational leadership because of the mutual co-operation and reliance found between leaders and subordinates.Bass (1990) acknowledged four types of transformational leadership behaviours to include idealized influence, inspirational motivation, intellectual stimulation, and individual consideration.Leaders with idealized influence are admired and respected by followers.Such leaders are believed to have referent power or charisma that pulls followers along.Transformational leaders have vision and a sense of mission, instill pride in and among the group, gain respect and trust from followers, sacrifice their personal gains for the benefits of the group, set personal example for followers, and demonstrate high ethical standards (Bass, 1985;Humphreys & Einstein, 2003).Through inspirational motivation, transformational leaders create and present an attractive vision of the future, use symbols and emotional influences, and demonstrate confidence and eagerness (Kark, Shamir, & Chen, 2003).Thus, transformational leaders talk optimistically about the future, talk enthusiastically about what needs to be accomplished, articulate a compelling vision for the future and expresses confidence that goals will be achieved (Bass & Avolio, 2004).According to Bass (1985), transformational leadership through intellectual stimulation provides followers with challenging new ideas and encourages them to view and handle problems from a fresh perspective.Such leaders do not accept things as they are; rather they challenge the status quo, beliefs and values, and encourage followers' to do same.With the individualized consideration such leaders coach, support and encourage subordinates.Bass and Avolio (1994) stated that transformational leaders teach and help followers to develop their strengths, and listen attentively to the concerns of followers.

Transactional Leadership
Transactional leaders reward or discipline followers with regards to their performance.Yukl (1981) viewed transactional leadership as an exchange process in which both the leader and the follower influence each other reciprocally so that they both derive something of value.Bass (1985, p. 14) indicated that transactional leaders "pursue a cost-benefit, economic exchange to meet subordinates' current material and psychic needs in return for contracted services".Also, he argued that leaders' promise of rewards and benefits to followers influence the followers to perform tasks and achieve predetermined goals (Bass, 1990).Transactional leaders believe that task completion is premised on exchange of desirable reward to followers.Kellerman (1984) described the exchange relationship between the leader and followers as mutual dependence in which both parties are acknowledged and rewarded.He further argued that effective transactional leadership is dependent on the leaders' capacity to meet and respond to the feedbacks and varying expectations of the followers.
According to Bass (1990), transactional leadership dimensions can be categorized into contingent rewards, management by exception (active) and management by exception (passive).With contingent reward leadership, the leaders clarify the tasks that followers are required to accomplish and use rewards to induce and stimulate followers to get the task completed.Bass (1985) contended that the goals and objectives that leaders clarify and the rewards they offer to followers when tasks are completed enable individuals and groups to achieve expected levels of performance.Management by exception (active) is where leaders actively monitor the performance of followers to anticipate deviations or mistakes from predetermined standards before they become problems.However, in management by exception (passive) leadership, leaders intervene only when problem arise, standards are not met, and/or noncompliance occurs.Bass and Avolio (1993) posited negative feedback, punishment, and discipline to be the possible outcome of either management by exception (passive) or management by exception (active).

Job Stress
Stress cannot be completely eradicated from our individual lives, in general, and routine activities at work, in particular.Experiencing stressful situations is part of daily life and work.Stress is defined as the physical, mental and emotional wear and tear due to tough demands of jobs (Akinboye, Akinboye, & Adeyemo, 2002).It is most often connoted as a negative event in a person's life because of the deleterious effect it may have on the psychosocial and physical state of the person.Levi (1972) contrasted this assertion when he contended that stress can be linked to pleasant as well as unpleasant events.Selye (1976) referred to pleasant or challenging stress as "eustress" and unpleasant or undesirable stress as "distress".Hence, stress can occasionally be a source of motivation to get a task completed, or perform well.Erkutlu and Chafra (2006) argued that stress only becomes a problem when it remains unresolved because of lapses in the individual's adaptive capacity which makes the individual disorganized, disoriented and susceptible to job-related stress health problems.Employees spend most of their daily time at the workplace; making the workplace a potential source of stress (Erkutlu & Chafra, 2006).Job stress occurs when employees are unable to meet work requirement because they do not have the requisite skills and available resources, leaving them with physical and emotional harm.Topper (2007) defined job stress as the perception of a discrepancy between environmental demands and employee capacities to accomplish these demands.It is believed that stress does not exist in either the individual or the environment, but it is a dynamic cognitive state where the interaction between the individual and his or her environment is described as a continuing transaction (Dewe, Cox, & Ferguson, 1993) or the relationship between the leader and the environment (Cooper, Dewe, & O'Driscoll, 2001).
Theories like interactional and transactional models have been used extensively by previous authors to explain stress at work.Interactional models comprise person-environment fit model (French & Caplan, 1972) and demand-control models (Karasek, 1979).The former theory explains that there is occurrence of stress when there is a mismatch in the interaction between an individual and his or her work environment due to intimidating job demands.The latter theory is premised on the work environment and not the person.It explains that strain is the product of the joint effects of high job demand and low job control.Thus, control-demand theorizes that when a person has low control over his or her work and at the same time the work imposes high psychological demands on the person it may lead to negative results, for example fatigue and depression.Transactional theories include effort-reward imbalance (ERI) (Siegrist, 1996), and cognitive-phenomenological models.The ERI model is grounded on the belief that as employees expend effort at work, they also expect adequate rewards (including money, esteem etc.) as part of a socially negotiated process.Thus, when an imbalance occur, strains are likely to take place.Strains are the consequences of the job stress process.The cognitive-phenomenological model explains that individuals perceive a situation as stressful when they feel that they have inadequate capability to handle the situation.
Research indicates that because of the volume of time that banking employees spend at work, the banking sector hypothetically serves as an important source in understanding the effect stress have on employees at the workplace (Jamshed et al., 2011).Employees report to work early and work for long hours.However, time is just one of the perceived variables that cause stress among banking employees.Rajeshwari (1992) identified structural rigidity, poor physical working conditions and extra organisational factors as potent stressors among banking employees.Also, literature points to other factors such as work environment, work overload, non-achievement work target, inadequate salary, risky job, technological problems at work, job security and poor co-worker relations (Obikoya, 2008;Babak, Hussain, & Niaz, 2010;Khattak, Khan, Haq, Arif, & Minhas, 2011;Muhammad, Khalid, Nadeem, & Muhammad, 2011;Shukla & Garg, 2013).
Presently, job stress is described as one of the most causes of occupational health issues around the world.The effect of stress can be deleterious, damaging and suicidal to one's health because job-related stress can result in blood pressure and pulse rate, ulcer, cardiovascular diseases, depression, and emotional exhaustion (Landsbergis, 2003;Vokić & Bogdanić, 2007), and even death (ILO, 2005).Hence, job stress does not only result in employees taking time off, questing for compensation, and taking early retirement on medical grounds (Kinman & Jones, 2001), but also leading to decreased employee organisational commitment (Schaufeli & Bakker, 2004), job dissatisfaction (Jayashree, 2010), low employee performance (Elovainio, Kivimaki, & Vahtera, 2002) which accordingly affect productivity.

Studies on Transformational and Transactional Leadership and Job Stress
Research abounds on the relationship between transformational and transactional leadership behaviours and employee job stress.Gill et al. (2010) found that the large role that customer contact service employees (CCSEs) undertake to satisfy regularly variegated needs and expectations of multiple parties, thus causing job stress, can be reduced if managers use transformational leadership style.Hence, the researchers found a negative relationship between transformational leadership and job stress of CCSEs in the Indian hospitality industry.Sosik and Godshalk (2000) studied the relationships between the leadership behaviours exhibited by mentors, and their protégés' experiences of job related stress.They found that mentor's transformational behaviours was connected with lower levels of protégé stress.But, no significant relationship was found between transactional or laissez faire mentor behaviours and protégés' job stress.The researchers went on to suggest that organisations could potentially reduce job stress by linking mentoring initiatives with transformational leadership training programs.
Furthermore, Rowold and Schlotz (2009) investigated the relationship between transformational and transactional leadership and followers' chronic stress.The findings indicated that individualized consideration was negatively related to chronic stress because of the protective effects of individualized consideration on dissatisfaction with work and social recognition.However, the study revealed no significant relationship of transactional leadership behaviours with chronic stress.Rabindarang, Bing and Yin (2014) studied the relationship between distributed leadership and job stress.Distributed leadership is grounded on the interaction between managers and employees as well as circumstances in the organisation (Spillane, 2005).When leaders interact or communicate with employees, it clears certain doubts among employees and makes employees develop trust in the leaders which may reduce uncertainty and job stress.Bass (1998) assert that lack of communication between a leader and his employees tends to undermine employees trust in the leader.Distributed leaders like transformational leaders support and cooperate meaningfully with employees, thus enhancing employees' organisational commitment (Hulpia, Devos, & Keer, 2010).Rabindarang et al. (2014) found that distributed leadership has negative and significant relationship with job stress.Also, Offermann and Hellmann's (1996) study found that leaders who delegate and encourage participation should not think that such actions are stressing employees by adding extra responsibility.Instead, the opposite is experienced because employees perceive that delegation and participation are associated with reduced stress.In contrast, the authors found leaders who display high controlling behaviours to be associated with more stress.According to Yukl (1999), management by exception, an aspect of transactional leadership, could be stressful to employees because it comprises cautious attention to the mistakes of employee as well as failure to attend to situations or problems until they become worse.Employees may find this behaviour of mangers to be intrusive, excessive controlling method, and sheer unrecognition of their positive contribution to the organisation.From the perspective of Sims and Lorenzi (1992), contingent reward behaviours may decrease uncertainty, raise efficacy prospects, and get agreement on what needs to be done by clarifying performance expectation.
Additionally, every leader possesses power in one way or the other.The source of power and its usage can define the leadership style that a manager uses in a particular organisation.Transformational leaders believe that employees should be encouraged, supported and inspired to achieve organisational goals, thus they tend to use personal power.Personal power is derived from one's distinct characteristics and also bestowed by employees.In contrast, because transactional leaders emphasise the completion of tasks by offering rewards or disciplining followers for poor performance, they tend to use positional powers (power rooted in position rather than the individual).Erkutlu and Chafra's (2006) study on leadership power bases and job stress found personal power to reduce employee job stress, and positional power to stimulate job stress in the hospitality industry.
They argued that employees' job stress can be lessened if they perceive their managers as change agents who are good role models, who can make and articulate a clear vision for an organisation, who empower employees to achieve at greater standards, who act in ways that make others to trust them, and who give meaning to organisational life.More so, leaders frequent reliance on positional power bases may increase employee job stress in the organisation because such power bases may provide undependable performance appraisal systems, personally administered rewards, and poor managerial skills in showing workers the pay-for-performance connection.

Hypotheses Development
Based on the above arguments, we believe that managers who offer encouragement, advice, support and understand employees' needs and concerns will help reduce job stress at the workplace an approach which is in tune with transformational leadership behaviour.Hence, it is assumed that: H1: Transformational leadership behaviours will significantly and negatively influence employee job stress.
However, because transactional leaders believe so much in getting work done for reward or otherwise, such leadership behavior put pressure on employees to complete tasks which could result in job stress.In this light, we assume that: H2: Transactional leadership behaviours will significantly and negatively influence employee job stress.

Sample and Sampling Procedure
Out of 250 questionnaires administered to employees, 196 valid questionnaires (representing 57.7% male and 42.3% female) were returned and used for the analysis.Convenience sampling was used to select the respondents for the study.This procedure was used to ensure that only employees who were available and willing to participate in the study were consulted.In furtherance of this, this approach was used to ensure that the voluntary nature of participation would lead to the answering of questionnaires in a truthful and less stressful manner.Table A in the Appendix section provides information on the distribution of respondents among the various banks studied.

Measures
Transformational leadership (α= .942).The 19-item in Multifactor Leadership Questionnaire (MLQ 5X-Short) was used to measure transformational leadership (Bass & Avolio, 2004).The MLQ 5X-Short instrument measured transformational leadership according to the factors of idealized influence, inspirational motivation, intellectual stimulation and individual consideration.The rating scale was ranging from 1= "not at all" 2= "once in a while", 3= "sometimes", 4= "fairly often", and 5= "frequently, if not always".A representative item is "My manager instills pride in me for being associated with him/her".
Transactional leadership (α= .764).The 12-item in Multifactor Leadership Questionnaire (MLQ 5X-Short) was used to measure managers' transactional leadership (Bass & Avolio, 2004).The MLQ 5X-Short instrument measured transactional leadership according to the factors of contingent reward, management by exception (active) and management by exception (passive).The rating scale was ranging from 1= "not at all" 2= "once in a while", 3= "sometimes", 4= "fairly often", and 5="frequently, if not always"."Example of the items is "My manager makes clear what I can expect to receive when performance goals are achieved".
Occupational stress (α= .858).A 9-item scale developed by Jamal and Baba (1992) was used to measure job stress.A 5 point Likert-scale ranging from 1= strongly disagree, 2= disagree, 3= neutral, 4= agree, and 5= strongly agree was used.A representative item is "I have too much work and too little time to do it".

Control Variables
The demographic variables were controlled in the model because they are hypothesized as having influence on employee job stress.Research indicates that demographic variables such as age, gender and educational level significantly predict job stress (Aminabhavi & Triveni, 2000;Agagiotou, 2011;Bano & Jha, 2012).

Analysis
The descriptive statistics and correlations of the demographic variables were calculated.Also, hierarchical multiple regression analysis was used to test the hypotheses to ensure that the unique contributions that transactional and transformational leadership behaviours make in predicting job stress are beyond the effect of the demographic variables.A two-step approach was used, where the controlled variables were entered in step 1 and the independent variables were entered in step 2. Initial tests to check for the assumptions of multiple regression analysis were also conducted.

Results
Table 1 shows descriptive statistics and correlations for the variables in the model.Hypothesis 1, which states that transformational leadership behaviours will significantly and negatively influence employee job stress, was supported (β = -.193,p< .05).Also, Hypothesis 2, which states that transactional leadership behaviours will significantly and negatively influence employee job stress, was not supported because there was rather a positive relationship between the constructs (β = .165,p< .05).

Discussion
This study focused on the relationship between leadership behaviours and employee job stress.Primarily, the purpose of the study was to determine the influence of transactional and transformational leadership behaviours on job stress among banking employees in Ghana.It was found that transformational leadership style was significantly and negatively related to employee job stress.This suggests that leadership behaviours that inspires confidence in subordinates, emphasize a collective sense of mission, supportive, open to new ideas and perspectives when solving problems and express confidence that goals will be achieved will potentially lead to a reduction in employee job stress.The findings are consistent with prior studies (Sosik & Godshalk, 2000;Offermann & Hellmann, 1996;Gill, Flaschner, & Bhutani, 2010).However, the present findings defeat the cognitive-phenomenological theory that individuals perceive a situation as stressful when they feel that they have inadequate capability to handle the situation.This is because transformational leaders, in the first place, do not demoralize employees, and secondly do not see them as incapable to tackle difficult situations; rather such leaders inspire followers to see challenges as opportunities and enthusiastically overcome them (Bass, 1985;Bass & Avolio, 2004).
Furthermore, the findings of this study indicated a positive and significant relationship between transactional leadership and employee job stress.This means that an increase in managers' transactional leadership behaviours in Ghanaian banks increases the rate of stress employees experience at the workplace.Thus, transactional leadership behaviours tend to focus more on job outcomes tied to rewards with often minimal emphasizes on the personal non-financial needs of the person providing the expected outcomes.This form of leadership which provides followers with assistance in exchange for their efforts, make it clear what rewards will be received when performance goals are achieved.Much as this type of leadership approach has a place in organisations today, Kellerman (1984) advance that the effectiveness of such an approach is dependent on the leaders' capacity to meet and respond to the feedbacks and varying expectations of the followers.It can then be conjectured that the positive relationship between transactional leadership and stress noted in this study could be due to the fact that the expectations of employees in exchange of their commitment to work are not being met contributing to stress in the banking industry.As such, an effective integration between personal and organisational needs of employees is critical to managing stress in the banking industry.Furthermore, it is not unreasonable to suggest that in view of the fact that working in the banking industry can be demanding any leadership behaviour that is not supportive fully of employees welfare could lead to stress.The findings are consistent with prior research that transactional leaders stimulate job stress (Erkutlu & Chafra, 2006), but contrast previous research (Sosik & Godshalk, 2000) that there is no significant relationship between transactional leadership and job stress.This study finding could also be associated with the reason that employees in the banking sector receive insufficient and unattractive rewards for all the contributions they make in achieving high annual profits which is a recent characteristic of banks in Ghana.It is not surprising that employees in Ghana's banking sector also complain about their salaries and incentives.The volume and value of the reward should be adequate to employees and inspire them to work more forgetting about the stressful nature of the job.This is in line with the ERI model that as employees expend effort at work, they also expect adequate rewards as part of a socially negotiated process.Also, the positive relationship between transactional leadership behaviours and job stress could be that some employees, do not have defined and clarified tasks at work perhaps as a result of lack of structure and orderliness in manpower planning and work allocation.For example, on a particular day an employee may work as a teller and the next day at the back office.According to Sims and Lorenzi, (1992), the clarification of tasks by managers helps to reduce employee job-related stress.Additionally, behaviours of managers that involve either paying keen attention to employees' mistakes or failing to attend to problems until they become worse stimulate job stress (Yukl, 1999).Banks do not countenance either common or complex mistakes on the part of employees, making employees extra meticulous and vigilant in their transactions.As human, employees (particularly tellers) cannot avoid mistakes and therefore do complain about situations where they are forced to pay losses incurred when the books do not balance.Such lack of support to managing employees broadly typifies transactional leadership orientation and could potential lead to stress in the work environment.

Study Limitations and Recommendations for Future Research
Firstly, the present study examined the relationship between transformational and transactional leadership behaviours and job stress among employees in Ghana's banking sector and convenience sampling technique was used to select respondents for the study.This was done with the intent to get employees from different banks to respond to the questionnaires.Future researches can use samples from specific organisations.
Secondly, today's banking sector in Ghana is shifting from the customer searching for banks to banks rather searching for customers.This may largely be as a result of the intense competition in the banking sector.Consequently, most banks have introduced field cashiers who search for and do transactions with customers out of the banking hall.The field cashiers go through stress in the course of their work.However, this study did not include field cashiers.So future research can replicate this study by concentrating on field cashiers.Also, in Ghana mergers and acquisitions in the banking sector has become a new phenomenon.As such, the behaviours of leaders could change overtime.In view of this, a longitudinal study is suggested to gauge the potential changes that may occur overtime between leadership behaviours and job stress.

Table 1 .
Descriptive statistics and correlation matrix

Table 2
shows the results of the hierarchical regression analysis.The R² of .011 in step 1 means 1% of the observed variability in job stress is explained by age, gender and educational level.Furthermore from Table2, the R² result of .061(Step 2) also indicates that 6% of the observed variability in job stress is explained by age, gender, educational level, transactional and transformational leadership styles.But, the ∆R² result of .051(Step 2) means that 5% of the variability in job stress is explained by transactional and transformational leadership when the effect of age, sex and education were controlled.

Table 2 .
Hierarchical multiple regression for transactional, transformational on job stress