Examining the Influence of Transformational and Transactional

Examining the Influence of Transformational and Transactional

Leadership Styles on Perceived Job Stress among Ghanaian Banking

Employees

Kwasi Dartey-Baah1 & Emmanuel Yaw Ampofo1

1 Department of Organisation & Human Resource Management, University of Ghana Business School, Ghana

Correspondence: Kwasi Dartey-Baah, Department of Organisation & Human Resource Management, University

of Ghana Business School, Ghana. E-mail: kdartey-baah@ug.edu.gh

Received: February 25, 2015 Accepted: April 15, 2015 Online Published: July 22, 2015

doi:10.5539/ijbm.v10n8p161 URL: http://dx.doi.org/10.5539/ijbm.v10n8p161

Abstract

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.

Keywords: transformational leadership, transactional leadership, job stress, banking sector, Ghana

1. 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

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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