Paternalistic Leadership and Work Engagement in the Innovative Service Industry: The Mediating Role of Psychological Contract

Abstract

According to the common view, paternalistic leadership, which is accepted in traditional societies, is assumed to be an effective form of leadership and can be persuasive and impose its authority to the extent that it acts in the interests of its followers. It is argued that authority and control behaviours, which we know as paternalistic leadership behaviours, arouse feelings of respect, fear and obedience among followers, and this results in positive organizational behaviours such as loyalty, respect and harmony, especially in Eastern societies. Work engagement is a positive motivational state in which employees have positive feelings toward their work, find their work meaningful, think their professional responsibilities are manageable, and think positively about the future of their work. A psychological contract, on the other hand, is an informal and unwritten, mutually agreed-upon contract that expresses the sum of mutual expectations between an organization and its employees. Whereas there are many studies examining the relationship between paternalistic leadership and work engagement, none of them examine the mediating effect of the relational psychological contract on this relationship, particularly in the innovative service sector. This research was conducted to contribute to filling this gap in the field. This study had two objectives: (1) determining how paternalist leaders influence employee work engagement and (2) identifying whether the relational psychological contract mediates paternalistic leadership and work engagement. Data were collected from 223 gray-collar employees working in the innovative service sector in Turkey through an online survey. The data were analysed using partial least squares (PLS)-structural equation modelling. The results showed that paternalistic leadership significantly affects work engagement and relational psychological contracts. The results also showed that the relational psychological contract fully mediated the relationship between paternalistic leadership and work engagement. Our results are also original in that they show that the relational psychological contract plays a mediating role between paternalistic leadership and work engagement in innovative service industry businesses.