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

Abstract

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