How Does Mentoring and Strategic Leadership Contribute to Gen Y Employees Intention to Stay: A Sequential Mediation Approach?
Abstract
In today’s vibrant business environment, retaining a talented employee is a big challenge faced by organizations. Organizations are in search to find ways how to retain their skilled workers. To minimize the tension of organizations, we explore certain factors that may help organizations to retain their best employees. In the current research, we empirically examine the direct and indirect relationship of mentoring and strategic leadership to stay of Gen Y employees in the pharma industry in Pakistan. Perceived organizational support and affective commitment were used as possible mediators. Through a cross-sectional research design, using the survey method, we received 248 responses from employees working in the pharma industry. Results revealed that both mentoring and strategic leadership have significant influence over Gen Y employees’ retention. Through sequential mediation, we found that perceived organizational support and affective commitment sequentially mediate the relationship of strategic leadership and mentoring with Gen Y employees’ intention to stay. Based on the findings, we suggested that managers should integrate mentoring in their talent management strategy. We also recommended that instead of autocratic style, managers practice a role of strategic leaders and implement a policy that is not only used to retain the existing employees but also to attract the best talent from the marketplace. Managerial implications and theoretical contributions are also discussed.
Key Word: Mentoring, Strategic Leadership, Intent to Stay of Gen Y Employees, POS, Affective Commitment
- Background
A mounting body of research extols the benefits of employee retention. In today’s turbulent business environment, characterized by a diverse workforce and high talent mobility, employee retention is a serious challenge for organizations; thus, received the attention of both researchers and practitioners. In today’s’ organizations, employees belong to three different generations, i.e. Baby boomers’ employees (1946-1960), generation X employees (1961-1980) and generation Y employees (1981-2000) (Naim and Lenka, 2017; Cennamo and Gardner, 2008), having different characteristics, work preferences, values, and norms (Twenge et al., 2012), particularly Gen Y employees have high expectations from the employers. As rightly noted by De Hauw and De Vos (2010) that Generational cohort as a group of individuals belongs to the similar age group, similar work preferences, values, expectations and attitudes distinguish them from a member of another age group. Martin, (2005) pointed out that Gen Y employees have certain dominant characteristics like encourage innovation, search for creativity, participate in decision-making and like challenging tasks. They demand immediate performance feedback and desire for quick promotion (Lowe et al., 2008). Thus, the entry of Gen Y employees to the workforce make organizations more dynamic as compared to the traditional ones. Understanding the needs, work preferences, and expectations of multi-generations employees have become vital for organizations. Gen Y is the fastest growing workforce (Dulin, 2008), and is also known as Echo Boomers and digital generation. Employees who belong to this group are self-reliant, independent, passionate and prefer teamwork (Shin and Allen, 2007). In comparison with other generations, Gen Y employees are more technologically sound as they are grown in a technology-intensive environment.
As noted earlier, Gen Y employees have their attitudes and job expectations, such as choosing employers, job characteristics, quick promotion, innovative abilities and more sensitive about a future career. They seek career opportunities and have higher career development expectations. They are also in search to learn new skills and acquire new knowledge to remain in the talent market (Younas and Bari, 2020). Such employees have appreciated potentials to hunt for career opportunities, career development, mentoring and work-life balance. They preferred challenging tasks, through this polish their skills and abilities, and quit the organization where career growth is low (Naim and Lenka, 2018). Besides, organizations want to attract, develop and retain Gen Y employees through providing quick feedback on performance and offering career development opportunities.
Although Gen Y employees are new to the workplace and have minimum work experience, they have certain inbuild competencies like accepting challenging tasks, innovative ability, learning-oriented, show high growth need, and a desire to learn job-related knowledge and competencies (Holt et al., 2012). Therefore, these workers preferred those organizations which provide them with a nurturing environment where they seek new skills and work-related knowledge (Terjesen et al., 2007). In today’s volatile talent market, skills acquisition is critical to stay employable and to excel professional career (Lub et al., 2012). Thus, it is critical for organizations to effectively recognize their development needs (Hutchinson et al., 2012). Though, organizations have various developmental interventions like job rotations, workshops, training sessions, tuition reimbursements, webinars and mentoring. Researchers postulated that the mentoring program is cost-effective and more appropriate interventions for Gen Y employees.
Mentoring as a developmental intervention is appropriate to this generation employees, as Gen Y employees demand emotional and informational support, prompt desire feedback and continuously seek learning. To facilitate professional as well as personal development of Gen Y, mentoring is the best holistic HR approach (Rhodes, 2009). Furthermore, a plethora of research also highlighted that mentoring is effective for Gen Y employees, as such employees have a higher need for achievement and developmental orientation (Younas and Bari, 2020; Naim and Lenka, 2018).
In the organization setting, the focus of strategic leadership to create a strong link between leader and supervisor (Vera and Crossan, 2004). While the introduction of Gen Y in the workplace need clear directions from their leaders as they have high potential, expectations and come up with new ideas. To develop and retain Gen Y employees, a strategic leader should concentrate on effective leadership strategies, if not so, the turnover of Gen Y employees will increase (Graybill, 2014). Leadership development is essential for organizations to gain competitive advantages. Such development strategies help to align Gen Y employees with organizational strategies and also augment Gen Y workers abilities and career development. Azbari er al., (2015) suggests that immediate feedback, coaching and international assignment are important leadership strategies.
With these objectives, the current research empirically investigates the direct, indirect and sequential relationship of mentoring and strategic leadership with Gen Y intention to stay. In the view of social exchange theory and psychological contract theory, our study incorporated mentoring and strategic leadership to enhance the levels of Gen Y workers perceived organizational support, leading to affective commitment and eventually increase the chances of intent to stay. Notably, our research addresses the calls for empirical research to test the relevance of strategic leadership and mentoring as the best tool to develop Gen Y employees (Younas and Bari, 2020; Naim and Lenka, 2018).
- Hypotheses Development
2.1. Strategic Leadership and Gen Y Employees Intention to Stay
Strategic leadership is defined as a leader ability to think strategically, express a strategic vision and motivate their followers, leading to creating a viable future for the organization (Ireland and Hitt, 1999). Strategic leadership concept is generated from Upper Echelon Theory (Hambrick and Mason, 1984), postulated that executives experiences, preferences, cognitive styles and traits influence strategic decisions and give directions to the organizations. To remain strategically competitive, organizations should adopt and practice some productive activities. Ireland and Hitt, (1999) argued that strategic leaders practice the following effective activities: (1) establish strategic control, (2) development of human resources, (3) communicate a vision, (4) establish strategic control, (5) develop core competencies, (6) emphasizing ethical practices, and (7) create effective corporate culture.
The satisfaction of an individual with leadership is equal to perceiving the leader as being successful in his / her position and implies that the individual has had positive experiences working under the leader. As stated earlier, leadership satisfaction is strongly correlated with the amount of respect and consideration provided by the leader, as well as how effectively the leader defines and organizes the roles of his / her followers (Judge et al., 2004). The theory of social identity (Ashforth and Mael, 1989) supports the idea that favourable encounters with one’s leader are likely to contribute to a greater willingness to follow the organization’s ideals, thus leading employees to report a higher level of commitment. At the same time, positive relationships were expected between leaders at all levels and affective commitment.
Also, we sought out to confirm that leadership plays a significant role in promoting organizational engagement, as seen in previous research. For example, a meta-analysis by Meyer and colleagues (2002) has shown the relationship between transformational leadership (a particular type of inspirational and innovative leadership) and organizational engagement. Besides, a Gerstner and Day (1997) meta-analysis found a reciprocal association between a leader-member interaction (LMX; i.e., a positive and trusting relationship between a leader and a follower) and an organizational commitment. While the path of causality is uncertain, these findings indicate that fostering safe and satisfying relationships between leader and follower is an effective means of ensuring that workers remain committed to the organization.
Leadership plays a key role in recognizing perceived organizational support (POS) because followers tend to associate leaders with the organization they serve. Thus, endorsing treatment earned from leaders would make a huge difference to the expectations of workers that their work organization cares about their well-being and respects their efforts. Although significant strides have been made in the last decade in recognizing the role of leadership as it relates to POS, there are still many concerns that need to be addressed (Shanock et al., 2014).
Strategic leaders display positive activities that include sharing roles, embracing improvement, collaborating with staff, reflecting on the internal needs of high-level workers, and helping to generate greater job satisfaction, motivation, and employee understanding (Younas and Bari, 2020). Exchange members, on the other hand, are passive and try only to preserve the status quo, concentrating emphasis on the lowest level of employee needs, looking at jobs, discovering job mistakes and failures, and practising discipline to improve positive attitudes and achieve higher performance rates. This form of leader uses extrinsic motivators and tangible incentives to motivate their partners and use punishment by chance to make them obey orders (Eskandari, 2015). Such qualities of leadership can contribute to multiple outcomes, including work satisfaction and POS (Salimi, 2015). Thus, we proposed that:
H1: Strategic leadership is positively related to the intention to stay of Gen Y employees
H2: Affective commitment mediates the significant relationship of strategic leadership and intention to stay of Gen Y employees
H3: Perceived organizational support (POS) mediates the significant relationship of strategic leadership and intention to stay of Gen Y employees
H4: POS and affective commitment sequentially mediate the relationship between strategic leadership and intention to stay of Gen Y employees
2.2. Mentoring and Intention to Stay of Gen Y Employees
Mentoring is the process of learning where an experienced mentor facilitates and guide the novice mentee. The mentor paly an important role in mentees professional and personal development through building their knowledge, competencies, skills, abilities and attitudes (Eller et al., 2014). This is accomplished by providing developmental feedback, expending mentee networks, assisting them in goal setting and sharing organizational insights (Johnson and Ridley, 2015). Moreover, mentors provide exposure, friendship, coaching, sponsorship, protection and appraisal to mentees competency development (Naim and Lenka, 2017). As rightly noted by Behrens, (2014) and TJinsite, (2012), that Gen Y employees need prompt growth in their career, therefore, to polish their professional development through mentoring at the workplace is the good strategy.
Past researches highlighted that organizations offered facilities like talent and leadership development positively impact the intention to stay, and this relationship is mediated by affective commitment (Chami-Malaeb and Garavan, 2013). Surely, mentoring intervention is perfect for career and professional development of Gen Y employees, as it enhances personal development and cares psychological needs of mentees, thus building a positive work experience (Fishman, 2016). This is in line with affective events theory, stated that affective job events lead to affective reactions which eventually leads to shape workers attitudes and behaviours. In this direction, employees received development through mentoring is also as an affective event, leading to create affective reactions in the shape of affective commitment and finally affect intention to stay in the existing organization (Palmer and Rathert, 2015). A mounting body of research related to mentoring highlighted a positive link exists between mentoring and employee retention (Kim et al., 2015; Pop et al., 2013; Lankau and Scandura, 2002).
Based on the notion of Social Exchange Theory (SET), POS is the right direction that conjures positive outcomes such as an intention to stay. The term POS refers to a general perception about the organization, and that organization can care and concern about their well-being and development (Rhoades and Eisenberger, 2002). As per SET, based on perceived cost and benefit analysis, social relationships are developed, retained and ended. In this direction, socialization and developmental support lead to higher-order need satisfaction which in turn positively affect POS. As mentoring events including career, role-modelling, and psychological functions facilitates personal and professional development as well as fuels socialization and relationship building (Park et al., 2016). This eventually leads to fulfilling self-actualization needs of Gen Y employees and provokes a sense that organization concerned for their development and values them, which eventually contributes to POS (Cao et al., 2014; Liu et al., 2015).
The literature highlighted that organizational development inventiveness indicates the organization’s commitment that also positively impact employee commitment, satisfaction and retention (Joarder et al., 2011). An action like developmental interventions taken by organizations and mentoring facilities improve employees’ skills and competencies that will develop a sense of emotional attachment demonstrated as affective commitment (Samuel and Chipunza, 2009). Hay, (2002) found that employees skill development is significantly related to affective commitment. This particular factor is more suitable for Gen Y workers as they are ambitious to learn new knowledge (Godshalk and Sosik, 2003). Past findings also highlighted a positive association of mentoring and job outcomes (i.e., OCB, job satisfaction, affective commitment and job involvement) (Reid et al., 2008; Payne and Huffman, 2005). Thus, we proposed as follow:
H5: Mentoring is positively related to the intention to stay of Gen Y employees
H6: Affective commitment mediates the significant relationship of mentoring and intention to stay of Gen Y employees
H7: POS mediates the significant relationship of mentoring and intention to stay of Gen Y employees
H 4
H2
H3, H4 and H6
H 3 and H6 H 2 and H7
H 1 and H5
Figure 1: Proposed Framework of the current research
- Procedures and Methods
To collect the primary data, we adopt a cross-sectional research design. Employees belong to Gen Y category working in Pharma companies were selected to participate in the study. Only those employees were contacted whose age falls between 1980-2000. HR Directors of 54 organizations were contacted and give a short presentation about the purpose of the research and also give assurance about the confidentiality of data. Finally, 35 HR Directors are agreed that their employees will participate in this survey. The Gen Y respondents were confirmed from HR Directors through their date of birth. We distributed 470 questionnaires and received 248 responses with a response rate of 52.76%. The respondent’s demographic shows that major portion of Gen Y employees was male 87% and only 13% were female participants. The average age of the respondents was 31.23 years. The major portion of the respondents has a master level qualification (67%), following by bachelor (18%) and intermediate (5%).
3.1. Measures
Mentoring was assessed through a 9-item scale originally developed by Castro and Scandura (2004). All items of the scale were measured through a Likert type scale measuring on 1 = strongly disagree to 5 = strongly agree. The sample item is “My mentor takes a personal interest in my career”. A 4-item scale developed by Duursema (2013) was used to assessed strategic leadership. The sample item is “My leader plans in detail how to accomplish an important part”. POS was assessed through a scale having 8-item developed by Eisenberger et al., (1997). The sample item is “My organization cares about my opinions”. To measure affective commitment, Mayer and Allen (1997) scale was used. This scale has 6-item and measured on a five-point Likert scale. A sample item is “I feel as if this organization’s problems are my own”. Intention to stay of Gen Y employees are assessed through a 7-item scale developed by Mayfield and Mayfield (2007). The sample item is “I expect to be working for my current employer one year from now”.
- Results
4.1. Scale Validity and Reliability
As mentioned earlier, we used adopted scales for all variables. The reliability was confirmed through a Cronbach’s alpha method. The values reported in Table 1 confirm that all scales have a good alpha value of above 0.7. Validity was confirmed through confirmatory factor analysis (CFA). The values of CMIN, GFI, AGFI, CFI and RMSEA reported in table 1 shows the good model fit as per Hair et al., (2010) criteria. Thus, we assured the scales reliability and validity.
Table 1: CFA and Alpha Statistics
Var Alpha CMIN df χ2/df RMR GFI AGFI CFI RMSEA
Ment .834 46.43 25 1.86 .040 .934 .843 .932 .042
SL .812 88.32 46 1.92 .042 .971 .854 .938 .031
AF .745 108.34 63 1.72 .045 .917 .823 .923 .042
POS .787 111.54 68 1.64 .041 .956 .841 .913 .038
ITS .911 116.43 65 1.79 .048 .906 .816 .947 .046
Ment = Mentoring, SL = Strategic Leadership, AF = Affective Commitment, ITS = Intention to Stay, POS = Perceived organizational Support
To was collected once from the same respondents, this may lead to common method bias/variance (CMV). To know whether CMV exists, we find intercorrelation among variables, average variance extraction (AVE) and composite construct reliability (CCR). The values (based on Harman’s one factor) of both CCR and AVE falls in the range suggested by past statisticians and experts (Lee et al., 2013; Hair et al., 2010), and the values of intercorrelation among variables did not exceed the limit of 0.7, indicating that CMV is not the issue in the present research and did not affect the results. Table 2 provides the statistical details of AVE, CCR and intercorrelation.
Table 2: Intercorrelation, AVE and CCR
ITS Ment. SL AC POS
ITS 1
Ment. .712** 1
SL .634** .538** 1
AC .455** .445** .365** 1
POS .503** .476** .410** .378** 1
Mean 3.36 3.28 3.46 3.75 3.64
SD .854 .826 .762 .723 .812
AVE .728 .787 .737 .695 .673
CCR .615 .603 .598 .637 .574
4.2. Test of Hypotheses
For testing the proposed hypotheses, we follow a Hayes (2013) bootstrapping method by using PROCESS Macro. For such sequential mediation model, Hayes (2013) suggested to choose model 6; thus, we applied model 6 in the PROCESS macro. The results show that SL has a significant and positive impact on the ITS of Gen Y employees (B = 0.374, p = 0.000); thus, hypothesis 1 of the current research. SL is significantly related with both POS and AC, (B = 0.289, p = 0.001; B = 0.402, p = 0.000) respectively, thus, we gained support for hypothesis 2 and 3. Further, we found that mentoring has positive relation with ITS of Gen Y workers (B = 0.267, p = 0.000), and also has a significant relation with POS and AC (B = 0.321, p = 0.000; B = 0.348, p = 0.000) respectively with 95% confident, leading to stated that hypotheses 5, 6 and 7 of our study are achieved.
To perform sequential mediation, as stated earlier model 6 was applied using PROCESS Macro. Results highlighted in table 3 shows that both POS and AC have an intervening role on ST, mentoring and ITS of Gen Y employee’s relationships. Both mediators partially mediate the relationship between explained and criteria variables. The results of sequential mediation path confirm that POS and AC sequentially have the intervening capacity to explain the relationship of independent variables and dependent variable. Thus, our hypothesis 4 is accepted. All results were generated with 95% upper-level confident interval with 5000 bootstraps.
Table 3: Coefficients and Indirect Effect for Mediation Model
Coeff. Boot se t LLCI ULCI
SL POS ITS .43 .05 8.6 .34 .64
SL AC ITS .34 .03 11.3 .29 .47
Ment POS ITS .49 .07 7.0 .31 .44
Ment AC ITS .31 .04 7.7 .26 .49
SL POS AC ITS .56 .11 5.1 .23 .45
Ment POS AC ITS .63 .16 3.9 .35 .63
- Discussion
This research is particularly designed to address the recent calls of Younas and Bari (2020) and Naim and Lenka, (2017), by empirically investigating the impact of talent management practices (e.g. Strategic leadership and mentoring) on Gen Y employees’ intent to stay in pharma industry of Pakistan. Further, we explore the intervening mechanism that affects the relationship of TM practices and intent to stay of Gen Y by using POS and AC as the possible intervening variables. Surfeit research examined the impact of TM factors like mentoring and SL on job outcomes like job satisfaction (Craig et al., 2013), turnover (Kim et al., 2015), organization commitment (Zhang et al., 2018) and intention to stay (Naim and Lenka, 2017; Younas and Bari, 2020). However, our study focus was to particularly target Gen Y employees as they are different in attributes from other generations. The literature on TM factors (i.e., Mentoring and SL) influence employee intent to continue with the current employer is very scared. Thus, in the view of social exchange theory, our focus was to bridge the gap by empirically examining the direct, indirect and sequential relationship between TM factors and intent to stay.
To remain successful in today’s vibrant business environment, organizations must seek factors that motivate and retains a talented workforce. Employees who belong to Gen Y are inherent to switch the jobs quickly. One major reason behind this is breaching and changing nature of psychological contract where permanent employment and job security are replaced by employability, flexibility and multitasking. Thus, organizations should promise to Gen Y to fulfil the psychological contract by using TM factors like mentoring and SL (Festing and Schafer, 2014). We prolonged the past literature on SL and mentoring and Gen Y retention by providing theoretical and empirical support in the context of Pakistan. Based on social learning theory (Bandura, 1978), organization support theory (Rhoades and Eisenberger, 2002) and social exchange theory (Emerson, 1976), we provide theoretical support for our model. The direct relationship between SL and mentoring with employee’s retention pursued us to conclude that such factors have a strong effect on the retention of Gen Y workers. This is possibly due to consistent counselling, protection, guidance, opportunities for personal and professional growth and emotional support offered by mentors leading to rouse an intention to stay. Hence, we rumoured that employees having mentoring opportunities at the workplace have a higher probability of staying (Chami-Malaeb and Garavan, 2013).
Additionally, we address the calls for further research by Younas and Bari, (2020) and Naim and Lenka (2017) on exploring the intervening ways of SL and mentoring with intent to stay. In this vein, our research extends the past literature and provide an underlying mechanism (e.g., AC and POS) that influence SL and mentoring relationship with the intent to stay.
5.1. Theoretical Contributions
Our study adds important theoretical contributions to the existing research. In this research, we empirically established a link between SL and mentoring with Gen Y retention. Our research is the expansion of social exchange theory, whereby Gen Y responds by showing emotional bond and intent to continue with the organization in retort to the positive work experience of SL and mentoring that contributes to POS and AC. Notably, empirical studies related to Gen Y retention in literature is very rare; thus, our study fills the gap through empirically examined the relationship.
To the best of the author’s knowledge, exploring the factors that affect Gen Y retention particularly in the Pakistani pharma industry is missing; however, Younas and Bari, (2020) studied TM factors and its impact on Gen Y retention in IT sector. Our research is different from Younas and Bari (2020) in a sense that we tested sequential mediation in SL, mentoring and intent to leave the relationship. We found that POS and AC simultaneously intervene in the relationship between SL and mentoring with the intention to stay. This is the major contribution of this research as past studies explored the link of these variables, but studying the combined effect of on employee retention is missing except Naim and Lenka, (2017).
5.3. Managerial Implications
Based on the cited literature and findings of the current research, we suggest a few implications for managers to retain their valuable and talented employees. The findings of our study help managers and practitioners to gain insights about how strategic leadership and mentoring affects retention of Gen Y employees. In the Pakistani pharma industry, retaining talented employees, especially Gen Y (younger employees) is essential as they are the future of organizations. We suggested managers that they should consider and integrate mentoring into their talent management strategy; by doing so, they can enhance employee’s commitment. It is also suggested that instead of authoritative styles, managers play a role of strategic leaders, i.e., Provide protection, support, encouragement, future vision, collaboration, teamwork and fulfil the desire needs of the workforce, that may evoke POS and commitment. As we noted earlier, Gen Y workers are seeking feedback, need quick promotions, learning-oriented and want to excel professional and personal development, all these and other expectations of Gen Y workers will be fulfilled through a proper mentoring program. We also suggested that managers should conjure effective commitment by offering intrinsic motives factors as it has a significant influence on employee retention (Naim and Lenka, 2016). In the last, from an economic point of view, organizations pay handsome costs due to turnover; thus, it is a suggestion that to save financial costs as well as non-financial costs (i.e., losing skilled employees), managers should adopt a policy through which organization not only retain their existing employees but also to attract talent from the marketplace.
5.4. Limitations and Future Avenues of Research
Although our study is not free of limitations, first, based on cross-sectional research design limit us to check the cause and effect relationship among the variables. Only a longitudinal study can best suit to the existing model. Second, we target only one sector, i.e., Pharma industry and go with relatively a small sample size that limits us to generalize our findings. It is suggested to replicate the same model in different sectors and with large sample size. Third, we only select two talent management factors, i.e. strategic leadership and mentoring and fail to explore the effect of other TM factors like knowledge sharing, social media, competency development. Future researchers may extend our model by adding these variables. Forth, our model has two mediators, i.e. POS and AC. At the same time, there are other factors in the organizational environment that may also intervene in the relationship like self-esteem and organization culture. Future research may test the mediating role of organizational culture or self-esteem or both simultaneously in TM factors and intent to stay relationship.