The relationship between transformational leadership and effort-reward imbalance

The purpose of this paper is to investigate the relationship between transformational leadership and effort-reward imbalance as well as the moderating role of overcommitment and subjective well-being. In particular, the study focuses on the transformational leadership component individualized consideration and its relationship with effort-reward imbalance.

Using linear hierarchical regression analyses, the authors tested four hypotheses on a broad sample of 229 German employees.

The results confirm the expected relationship between transformational leadership and effort-reward imbalance and that the strongest relationship exists with individualized consideration. However, there is no support for the hypothesized moderating effects.

First, the recruitment of the sample via fora and periodicals may bias the results. Second, the dependent and the independent variables were assessed with the same method, thus facilitating a common method bias. Third, the study underlies a cross-sectional design which does not allow drawing conclusions on causality.

The findings provide implications for leaders by showing that the most effective leadership behaviours are those encompassed by the transformational leadership component individualized consideration when it comes to reducing negative health effects of adverse working conditions. Furthermore, the results suggest that overcommitment plays a major role for employees’ effort-reward imbalance and should thus be addressed by specific training measures.

Researchers have devoted little attention to revealing how effort-reward imbalance can be avoided or reduced by leaders. The study attempts to fill this gap by exploring the relationship between effort-reward imbalance and transformational leadership.