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Mediating Role of Creative Self-Efficacy: Full Length Research Paper

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African Journal of Business Management Vol. 5(27), pp.

11093-11103, 9 November, 2011


Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM11.876
ISSN 1993-8233 ©2011 Academic Journals

Full Length Research Paper

Mediating role of creative self-efficacy


Azka Ghafoor*, Tahir Masood Qureshi*, Hassan Rasool Azeemi and Syed Tahir Hijazi
University of Central Punjab, 1-Khayaban-e-Jinnah, M. A. Johar Town, Lahore, Pakistan.
Accepted 18 July, 2011

In this study, we examined the relationship between transformational leadership, learning orientation
and employee creativity. Furthermore, the mediating effect of creative self efficacy is studied in the
relationship of these two variables with creativity. The data obtained from a sample of 176 employees
and managers of banking sector indicated the significant relationship between transformational
leadership, performance orientation and employee creativity. However, results showed that
performance orientation relationship with employee creativity is accepted in mediation while
transformational leadership relation with employee creativity in mediation is not supported. Managerial
implications and future research are discussed.

Key words: Transformational leadership, performance orientation, creative self efficacy, employee creativity.

INTRODUCTION

Creativity and innovation has been studied with other study the relation of performance orientation and
important organizational sources and outcomes. It is transformational leadership style and other leadership
shown that creativity and building novel and operationally styles to creativity and the mediating effect of creative
useful ideas and practices ultimately delivers self efficacy. Gong et al. (2009) recommended their study
organizations with strengths. Creativity is defined as the to be conducted in different cultural setting with samples
thinking and re-thinking process to generate new ideas of higher educational level.
(Amabile, 1988). Literature supports the positive impact Previous studies show that employee psychological
of creativity on the organizational outcome. Creativity is development is based on the culture, environment and
necessary for development and advancement (George support he has from the work setting where he performs
and Zhou, 2002); it is the source of strength in (Wright and Cropanzano, 2004). Self efficacy is the
performance (Amabile, 1996) and gives competitive development of individuals psychology (Bandura, 1997);
advantages (Zhou, 1998). leadership style develops the culture of the organization
The importance of creativity is highlighted in the past and provide support to the employees (Ismail et al.,
research. Because it is generated from the mind and 2009); transformational leadership is the exercise of
psychology of an individual, its greater effects are studied practices that identifies follower’s goals and development
on the performance of the individual. Employee creativity to enrich the confidence that increases their performance
shows positive effects on employee performance (Gilson, up to the expected level of the organization (Dvir et al.,
2008). The question is, how is creative mindset 2002). Transformational leadership develops the
developed at work? This study is based on the confidence of employees in their abilities that helps them
antecedents that develop the psychological state of move further. The confidence of an individual to move
employees bringing his creativity to the surface. forward on the bases of abilities is self efficacy (Bandura,
Goal orientation is studied with performance in previous 1997). Performance orientation is discussed in previous
literature. This study addresses the future research literature as the concern of individuals to show good
directions of performance orientation which is the performance for the sake of reward and recognition from
dimension of goal theory. Previous literature studies this a higher level (Dweck and Legget, 1988). Goal theory
relationship with learning orientation. There is need to explains performance orientation as the need of
individual to be effective and god performer among all
others (Bell and Kozlowski, 2002).
The relationship of these variables is studied previously.
*Corresponding author. E-mail: tahir@ucp.edu.pk. Tel: +92-42- Transformational leadership and creativity to improve
35880007, +923455090550. performance were also studied previously (Shin and
11094 Afr. J. Bus. Manage.

Zhou, 2003). The relationship of performance orientation leadership style encourages followers to be open to
and performance are studied both in negative and changes and express their ideas; also, the organization
positive results. Performance orientation shows positive enables its employees to match their personal interests
results on employee performance (Kohli et al., 1998). with organizational goals. Previous literature supports
Performance orientation is negatively related to that transformational leadership style has two most
performance and other organizational outcomes like self prominent characteristics that are intellectual stimulation
efficacy and knowledge development (Bell and and individualized consideration (Bass and Avolio, 1994).
Kozlowski, 2002). Intellectual stimulation is an effort from the leaders to
The purpose of this study is to address the effect of enable followers to be expressive and open to both
transformational leadership style and performance internal and external environments. Intellectual
orientation with creative self efficacy on employee’s stimulation encourages followers to be logical, rational
creativity. Previous literature does not provide full support and intelligent to take steps (Dionne et al., 2003). The
to the variable of performance orientation to cause justice intelligence and logical understanding of the
to the positive consequences in the organization. This environments brings new ideas and innovation in the
research studies this relation in specific industry sample organization. Stimulating employees to think on their
other than previously studied sample of an organization own, encourages them to be creative and try new and
(Gong et al., 2009). improved ways of performance (Yammarino and
These variables are studied as predictor of employee Dubinsky, 1994) employee intellectual stimulation
creativity because both transformational leadership style promotes employees to think over process for
(Benjamin and Flynn, 2006) and performance orientation improvements (Bass and Avolio, 1994); employees
(Bell and Kozlowski, 2002) lead to creativity. Other supported from organization show more involvement in
variables are also studied in the impact of creativity, their work and express new ideas to solve issues (Kahn,
performance and leadership style like creativity goals 1992). Intellectual stimulation is developed by leaders
(Shalley, 1995); complex work tasks and creativity and it has positive impacts of the individual development
(Oldham and Cummings, 1996) age, level of of employee.
understanding and creativity (Binniwies et al., 2008), Individualized consideration is the approach of
creativity and problem solving abilities (Mumford et al., considering follower’s individuality. This approach
1997). This study examines the relationship of focuses on the development and betterment of
performance orientation, transformational leadership and employees by linking employees’ priorities to
creative self efficacy as the bridging variable between organizational development (Bass and Avolio, 1994). It
theses antecedents and consequences of creativity focuses on employee development, training and
leading to performance. Self efficacy is the drive to promotion (Avolio et al., 2004). It is the ability of leaders
performance in work setting (Bandura, 1986); creative to properly stimulate, direct and develop employees
self efficacy is the psychological development that within the framework of transformational leadership style
causes creativity (Gong et al., 2009); also, there is (Bass, 1994; Bass and Avolio, 1994; Avolio et al., 2004).
support from literature about the positive relationship of This includes the social support from the organization
creativity, creative self efficacy and performance (Gong et that also effects the performance of individual. Social
al., 2009; Tierney and Farmer, 2002). This study focuses support of organization has positive impact on follower’s
on the level of performance orientation, transformational performance (Maslach, 2003) and employees supported
leadership and effects on development of creative self in the work setting become more involved and innovative
efficacy. in ideas and share it with other organizational members
(Gilson, 2008).
In the context of leadership style exercised in
LITERATURE REVIEW organizations intellectual stimulation, individualized
consideration, performance and development of
Transformational leadership style employees are studied as highly interrelated constructs
(Bartram and Casimir, 2007; Kildas et al., 2007).
Transformational leadership style supports practices in Development and performance of employees is based
organizational culture that focuses on the development of on culture of organization, leadership style, managerial
employees. Leadership style encourages followers to be practices and consideration of follower’s needs
more productive, expressive and open to changes in the (Lockwood, 2007). The culture developed under
environment (Ismail et al., 2009). Transformational transformational leadership style concludes employee
leadership develops the relationship between leaders and consideration and focus on the factors that help develop
followers to focus on followers’ interest, their values and employees and their enhancement of abilities (Evans,
the level of motivation (Bass, 1994). Transformational 2001). Employee’s development and involvement helps
leadership builds ways for the achievement of goals of organizations create a stock of creative individuals
employees (Bycio et al., 1995). Transformational (Amabile, 1988). Leadership style and support determines
Ghafoor et al. 11095

the level of creativity in organization. orientation among individuals (Weitz et al., 1986). This
Transformational leadership effects the quality of shows that employee’s perception about achievement of
performance of employees (Humphreys, 2002). end results goal makes them performance oriented; the
Transformational leadership practices help determine emphasis of supervisor on end results drives employees
outcome of employee output (Pounder, 2002); it develops to achieve end results (Kohli et al., 1998). In his study,
the ability of employees to raise questions regarding Gong et al. (2009) explained that performance orientation
performance on their own, this development of thinking is an important factor of creativity; it depends on the
stimulates the need of betterment, ultimately giving high assessment criteria to determine whether it affects the
performance (Bass and Avolio, 1993). Leaders practicing creative self efficacy.
individualized consideration help followers develop There is a mix response to the study of performance
positive thinking towards creativity (Gong et al., 2009). All orientation with performance and confidence
the dimensions of the leadership style together, impact development of individuals. Some studies show that
the creativity of employees (Shin and Zhou, 2003). performance orientation is positively related to the
Support of transformational leadership style determines development and performance of individuals. Kohli et al.
the creative thinking level of employees at work; newness (1998) in their study of salespersons performance
and achievement of goals with effectiveness bases on orientation studied that salespersons with high
the leadership style carried out in the organization (Bass performance orientation were more concerned about their
and Avolio, 1994). Leadership practices promote performance, thus delivered high performance. The
creativity in organization that improves the performance concern of employees to be supervised by managers on
and quality output level of employees. the basis of performance to be perceived as high
competent and good performer makes employees more
inclined towards improving performance (Lawler and
Performance orientation Rhode, 1976). Close supervision motivated individuals to
perform up to mark on the criteria of departmental
Goal orientation is a theory with two prominent performance (Kohli et al., 1998). Previous studies support
dimensions of learning and performance orientation. the positive relationship of performance orientation and
Previous literature has studied learning and performance performance. Empirical evidences show that performance
orientation of individual towards tasks (Dweck, 1986, orientation causes improved performance of employees
1989). Learning oriented individuals have greater desire (Sujan et al., 1994). Performance oriented employees
to enhance their knowledge and competence to learn compare their performance with management
new ways and thing while performance orientation is the expectations which encourages them to put more effort to
inclination of the individual towards showing his abilities their work thus leading to high performance; the level of
to others by performing well (Farr et al., 1993). acceptable performance develops confidence in
Learning goal orientation and performance orientation employees about their work and abilities (Kohli et al.,
are not opposite. Both of these dimensions direct towards 1998). Employees with performance orientation look for
success, confidence and better performance of individual; innovative designs and ways to amend their performance
increase in both of these orientations develops in the work (Cravens et al., 1993); exploring new ideas,
confidence and improves performance (Kohli et al., successfully develops confidence in abilities and motivate
1998). A study on students with high learning orientation employees to innovate. This suggests that positive
focused on the development of skills, preferred relationship between performance orientation and
challenging tasks with positive attitude towards new ideas performance exist.
development, while students with high performance Previous literature has also discussed negative
orientation were more concerned on how they perform relationship between performance orientation, self
and show their abilities in front of the class and teacher efficacy and performance (Bell and Kozlowski, 2002). In
(Ames and Archer, 1988). the research, performance orientation is associated with
Employees more concerned about their performance maladaptive response system (Button et al., 1996).
following performance orientation. They perceive that Maladaptive response system is defined as the
performing good enables one get rewards (Kohli et al., withdrawal of individuals from task when faced with
1998). Individuals with performance goal orientation failure (Duda and Nicholls, 1992). Performance oriented
withdraw themselves from the task; they do not show individuals show less interest in tasks that require much
much interest in the task but only focus on how they concentration and where success is not clear (Elliot and
perform it (Yi and Hwang, 2003). Performance orientation Harackiewicz, 1994). In previous research, it is generally
is not conceptually related to the enhancement or drawn that employee learning orientation is much positive
acquisition of new competencies or knowledge (Gong et to performance and efficacy development while
al., 2009). It is the focus of employee on his existing performance orientation is negatively related to the
competencies (Dweck, 2000). The importance of end outcomes like performance and self efficacy and
results brings about the development of performance innovation (Elliot and Dweck, 1988; Harackiewicz and
11096 Afr. J. Bus. Manage.

Elliot, 1993; Greene and Miller, 1996; Phillips and Gully, Transformational leaders are more inclined towards
1997; Fisher and Ford, 1998). Employees with high thinking and research processes in the organization for
performance orientation are less likely to develop their the sake of development of new ideas (Bass, 1985).
confidence about their abilities; self efficacy (VandeWalle Practices of transformational leaders cause the
et al., 1999). This suggests that performance orientation development of self efficacy among employees and
is in negative relationship with performance, creativity support the psychological arousal (Bass, 1988).
and self efficacy. Transformational leaders are more empathetic,
Previous literature supports the relationship between concerned and supportive of their employees; with this
performance and confidence of individuals. Duda and level of encouragement, respect and consideration,
Nicholls (1992) studied the positive impact of efficacious employees do not develop negative psychological
runners on the achievement of performance and outcome arousals that ultimately develops creative self efficacy
goals. Individuals are more motivated to learning when (Gong et al., 2009). The development of self efficacy
goal orientation is higher and they want to achieve certain includes confidence level of employees. Higher level of
goals (Colquitt and Simmering, 1998). To achieve goals confidence brings higher self efficacy among employees
that is related to organizational needs, employees go for (Yi and Hwang, 2003). Under transformational
methods and practices that are unique. In order to leadership, employees become confident in their work to
improve performance, employees are motivated to take develop new processes and practices by learning and
risks; taking risks in work setting increases the level of development (Bass and Avolio, 1990) through
confidence and innovation (Greene and Miller, 1996). encouragement of novelty, supportive leader behaviors
The need to perform better leads to creative goal setting. and individual consideration; leaders can enable
Working environment requires employees to come up employees to think that they can also be creative
with innovative ideas; innovation is an important part of (Amabile, 1985). Supervisor’s support to workers brought
competition in the working environment; employee’s capability of creative outcomes among employees
performance evaluation is based on innovative ideas and (Tierney and Farmer, 2002). Transformational leadership
creative contribution (Bell and Kozlowski, 2002). helps employee develop themselves in order to improve
Employee performance evaluation criteria and need to their abilities (Burns, 1978). The need for development
perform better generates creative ideas among directs employees towards martyring certain
employees. competencies that increases creative self efficacy over
time (Gong et al., 2009). Leaders often give
responsibilities to employees that build their independent
Creative self efficacy capacity and ability to logically think about processes at
work (Bass, 1985; Bass and Avolio, 1990). The
Previous literature has discussed the relationship independent capacity and ability to analyze certain
between leadership styles, effectiveness, high phenomena develops creativity in employees. Also, the
performance and creativity. The basic question is what development of independent thinking and ability to
links these variables together? Previous literature studied critically evaluate things is developed by transformational
the creative self efficacy as mediator between leadership leaders (Dvir et al., 2002) when employees are able to
style and creativity that helps improve performance. overcome needs of situations by critically evaluating and
Creativity and creative self efficacy show positive thinking; in re thinking processes, they find new ways and
relationship (Colquitt and Simmering, 1998). Whereas ideas (Gong et al., 2009). Transformational leadership
self efficacy is defined as the confidence of an individual develop employees confidence in their abilities, enhances
in his own abilities that he can perform certain tasks self efficacy and creativity in work setting.
better (Bandura, 1997), it is a dimension of individual’s
psychological development that requires support like
transformational leadership practices. Transformational Employee creativity
leadership style encourages novelty and newness from
employees side (Lockwood, 2007). Employee is more Previous literature defines creativity from two points of
creative when he has developed higher level of creative view. Devising new procedures and processes to perform
self efficacy (Tierney and Farmer, 2002; Tierney et al., a task (Zhou, 1998) or redeveloping the previously used
1999). Creative self efficacy is the psychological processes to perform a task, or to look for new processes
development that leads to positive results. that bring more effective results. Both of these ways
Transformational leadership style provides sources of improve the performance of employee (Gong et al.,
self efficacy. Previous studies show that psychological 2009). These definitions of creativity show that it is the
development of employees take place when employees improvement process of current processes and
are given much priority, respect and space to grow; these procedures in order to bring more productive outcomes.
needs of employees are identified in the practices of Creativity of employee also influences others in the work
transformational leadership style (Kahn, 1992). place, it becomes an opportunity to learn and adapt for
Ghafoor et al. 11097

Transformational
leadership style Creative self Employee
efficacy
Performance creativity
orientation

Figure 1. Conceptual model.

others (Shalley et al., 2004) thus encouraging creativity when leadership develops self efficacy in terms of
becomes an overall improvement process for whole creativity among employees.
organization. Developments of new ideas in the work H2b: employees who believe in performance orientation
place develop new strategies and ways of conducting or are more creative in their work activities when they
executing a task. It directs towards the saving of time and develop confidence in their creative ideas and actions,
resources. Employee creativity has positive relationship creative self efficacy. Creative self efficacy mediates the
with desirable factors that improve performance of the relationship between performance orientation and
employee. When employees are involved in more employee creativity.
creative tasks, their performance increases (Oldham and
Cummings, 1996); creativity and performance are linked.
METHODS
Employee creativity opens new ways of competitive
advantage (Mumford, 2003). Whenever individuals come This study is applied and co relational. This study focuses on the
up with something new, their performance increases. banking sector of Pakistan to study the impact of creative self
When employees are encouraged to show creativity at efficacy, its determinants and outcomes. Correlation between
work, they are motivated to come up with new ideas to variables is measured to collect quantitative data to explain the
phenomena in context of creativity. Regression analysis is
deal with certain situations (Amabile, 1985). Creativity conducted to measure the impact of creative self efficacy on above
blends needs and ability to think together that helps form explained relationship.The population for data collection is the
new ideas in the setting; to search and research over banking sector of Pakistan in order to study the impact of creative
practices improves performance (Mumford, 2003). This self efficacy. All banks, including national and private banks are
shows that employee creativity, and encouragement of included in the sample. Elements of study are employees and
managers working together in one unit or area of the bank. The
creativity in organization improves performance.
data was collected from a sample of 176 employees and managers.
Previous studies have shown relationship between The reason for selecting banking sector of Pakistan is that in
leadership style and organizational outcomes. today’s environment, every field prefers innovation and creativity.
Transformational leadership with learning orientation is As discussed in previous literature, creativity is not bounded to any
studied in literature with outcomes of creativity (Gong et field or a group of fields (Mumford et al., 1997). Because of the
al., 2009). importance of innovation in the field of banking, creativity is a
prominent subject in work settings.
This study explains the relationship between
transformational leadership and performance orientation
with employee creativity and the mediating effect of Measures
creative self efficacy in this relationship of
transformational leadership, performance orientation and Transformational leadership
employee creativity. Hypotheses are developed to study Measures used to collect data from sample of different banking
the relationship of transformational leadership style with sector organization is based on Likert-style questionnaire items (1,
employee creativity and performance orientation with “strongly disagree”; 2, “disagree”; 3, “somewhat disagree”; 4,
employee creativity (Figure 1). Impact of creative self “neutral”; 5, “somewhat agree”; 6, “agree”; 7, “strongly agree”). A
efficacy as mediator is discussed between variables of total of 5 items were used to collect data for this variable. These
included (1) “my supervisor acts in ways that build my respect” (2)
transformational leadership, performance orientation and
“my supervisor talks to us about his/her most important values and
employee creativity. Based on this model, succeeding beliefs” (3) “my supervisor expresses his/her confidence that we will
hypothesis are built to conduct the empirical test: achieve our goals”. The Cronbach alpha for these 5 items was
satisfactory (0.753), indicating that these items together can form a
H1a: Exercising transformational leadership style reliable measure to collect and test data.
improves employee creative skills.
H1b: Employees inclined towards performance orientation Performance orientation
are more creative in their work related activities.
H2a: managers exercising transformational leadership In order to study the independent variable of performance
style are able to encourage employee’s creative activities orientation from the sample, 5 items scale was used based on
11098 Afr. J. Bus. Manage.

Table 1. Mean, standard deviation and correlations. a

Variable Mean SD Age Gender Education EC TL PO CSE EP


Age 42.81 10.68 1
Gender 1.02 0.13 -0.113 1
Education 15.21 3.20 0.057 0.060 1
Employee creativity (EC) 5.59 0.60 0.002 0.003 0.011 1
Transformational leadership (TL) 5.35 0.69 0.013 -0.093 0.041 0.150* 1
* *
Performance orientation (PO) 5.76 0.68 0.046 -0.005 0.017 0.176 0.162 1
Creative self-efficacy (CSE) 5.30 0.48 0.242** -0.129 0.066 0.180* 0.071 0.362** 1
Employee performance(EP) 5.58 0.60 -0.034 0.042 0.066 0.044 -0.099 0.012 0.133 1
a
n = 176; **Correlation is significant at the 0.01 level (2-tailed); *Correlation is significant at the 0.05 level (2-tailed).

Table 2. Regression analysis.

Employee creativity
Variable
β R2 S.E.
Performance orientation 0.176* 0.031 0.067
Transformational leadership 0.150* 0.023 0.066

Likert-style questionnaire (1, “strongly disagree”; 2, “disagree”; 3, variables. Transformational leadership is significantly,
“somewhat disagree”; 4, “neutral”; 5, “somewhat agree”; 6, “agree”; positively related to transformational leadership (r =
7, “strongly agree”). The items included (1) “I feel smart when I do
something without making any mistakes” (2) “others opinion
0.150, p < 0.05), performance orientation (r = 0.176, p <
regarding my performance are important to me” (3) “I feel that 0.05) and creative self efficacy (r = 0.180, p < 0.05)
performing as expected by supervisor/ manager is important”. The employee performance is positive but not significantly
Cronbach alpha (0.560) was satisfactory, indicating that together, related to employee creativity. Transformational
these 5 items can form a reliable measure of this variable. leadership is significantly, positively related to
performance orientation (r = 0.162, p < 0.05).
Employee creativity Performance orientation is positively, significantly related
to creative self efficacy (r = 0.362, p < 0.01).
Employee creativity is a dependent variable. Employee creativity Table 2 shows results of regression analysis. H1a and
was measured using 5 items scale with same Likert-style questions H1b are calculated through regression analysis on sample
as used for independent variables (1, “strongly disagree”; 2, size of 176. The data we collected for variables show that
“disagree”; 3, “somewhat disagree”; 4, “neutral”; 5, “somewhat
agree”; 6, “agree”; 7, “strongly agree”). These items include (1)
both independent variables are accepted. H1a is accepted
“employee often develops creative ways of better performance.” (2) as analysis results show significant relationship between
2
“Employee’s work is original and practical.”Cronbach alpha (0.769) transformational leadership and employee creativity (R =
drawn for this questionnaire showed satisfactory results. 0.023, β = 0.150, p < 0.05). Thus, empirical findings
support H1a, that is, “transformational leadership style is
positively related to employee creativity.”
Creative self efficacy This analysis shows that H1b indicates the relationship
between performance orientation and employee creativity
Mediating variable in this study is measured using questionnaire of
8 items with Likert-style questions (1, “strongly disagree”; 2, (R2 = 0.031, β = 0.176, p < 0.05). Thus, hypothesis is
“disagree”; 3, “somewhat disagree”; 4, “neutral”; 5, “somewhat supported as per data analysis, that is, “performance
agree”; 6, “agree”; 7, “strongly agree”). Items used for this variable orientation is positively related to employee creativity.”
are (1) “you come up with many alternative solutions to a problem”, The empirical findings are supported as in previous
(2) “you talk to your co-workers about wild ideas, and make them literature study which has been conducted between
sound reasonable” .Cronbach alpha (0.510) shows satisfactory
results.
transformational leadership and employee creativity with
positive results (Gong et al., 2009).
Multiple regression analysis is conducted using each
RESULTS independent variable separately with mediator and
dependent variable. As illustrated by Baron and Kenny
Table 1 presents means, standard deviation and (1986), all three assumptions of the model must show
correlation while Table 2 presents coefficients of significant result in order to run mediation regression
Ghafoor et al. 11099

Table 3. Multiple regression analysis.

Employee creativity
Variables 2 2 change
β R R
Performance orientation
Step 1: Creative self efficacy 0.133 0.032
Step 2: Performance orientation 0.128 0.046 0.014

Performance Creative self Employee


orientation efficacy creativity

Figure 2. Mediation model for performance orientation.

Table 4. Multiple regression analysis.

Employee creativity
Variables 2 2 change
β R R
Transformational leadership
Step 1: Creative self efficacy 0.032
Step 2: Transformational leadership 0.138* 0.051 0.019*

analysis. The relationship between performance of mediation, there is no change in the significance level.
orientation and creative self efficacy is significant at Hence, the mediation between transformational
0.001. Whereas, creative self efficacy and employee leadership and employee creativity is not justified,
creativity, are also significant at 0.01. The relationship concluding that our hypothesis “Creative self efficacy
between performance orientation and employee creativity mediates the relationship between transformational
is also significant at 0.02 (Table 3 and Figure 2). leadership style and employee creativity.” is rejected.
Performance orientation (β = 0.128, p = 0.111) indicates
that the mentioned relationship is not significant, which
shows that the mediation relationship of creative self DISCUSSION
efficacy between performance orientation and employee
creativity is satisfied. Thus, our hypothesis of “creative This research is based on the motivation to study the
self efficacy mediates the relationship between relationship of transformational leadership and
performance orientation and employee creativity” is performance orientation with employee creativity; study
accepted. the mediation effect of creative self efficacy between
The relationship between independent, mediation and `transformational leadership and employee performance;
dependent is studied in this model. There is no mediation between performance orientation and
significance between the relationship of transformational employee performance and relationship of employee
leadership and creative self efficacy. The relationship creativity and performance. This study, which was
between creative self efficacy and employee creativity is conducted in Pakistan, collected data using scales of
significant at 0.01. Whereas, the relationship between variables used and tested empirically in past. The results
transformational leadership and employee creativity is of this study extend the findings of past research.
also significant at 0.05 (Table 4 and Figure 3). In previous literature, transformational leadership style
Transformational leadership (β = 0.138) with the change is positively concluded with high performance (Ismail et
in r shows that the significance level has not changed. al., 2009). Also, transformational leadership style is
The direct relationship of transformational leadership and positively related to creativity that improves performance.
employee creativity is significant at 0.05 while with effects In the cross sectional study conducted in Taiwan (Shin
11100 Afr. J. Bus. Manage.

Transformational Creative self Employee


leadership efficacy
creativity

Figure 3. Mediation model for transformational leadership.

and Zhou, 2003), this shows that transformational creativity.Self efficacy is studied in literature from different
leadership style causes positive outcomes to the aspects. Current study extends the work of pervious
organization in terms of greater creativity development study that took creative self efficacy as mediator in
and high performance. Ferguson (2009) discussed that relation (Redmond et al., 1993). This relationship with
transformational leadership style practices reduce the mediation effect of creative self efficacy has not been
negative effects of work stress that improves the discussed before. This study is also the extension of the
performance. Transformational leadership style study of transformational leadership and creativity (Jaussi
concludes creativity and innovation (Gong et al., 2009). and Dionne, 2003; Shin and Zhou, 2003) as the
Also, the study of transformational leadership style with relationship is studied with creative self efficacy. Such
other outcomes and managerial practices concludes that relationship is studied previously with positive outcomes
it has positive effect on performance (Avolio et al., 2004); (Gong et al., 2009). The mediating role of creative self
negative relationship of transformational leadership with efficacy with goal orientation is not explored much in the
desired outcomes is also studied. Transformational literature. Previously, Shin and Zhou (2003) have
leadership has no effect on the creativity of the explored the mediating effect of motivation in the
employees (Jaussi and Dionne, 2003). This discussion leadership and creativity relationship while Gong et al.
shows both positive and negative effects of this (2009) studied creative self efficacy as mediator and
leadership style. Correlation analysis concludes that predicted positive results. In that study performance
transformational leadership style is significantly related to orientation was not considered. The mediation variable is
employee creativity, approving the hypothesis of selected because of the factor of confidence
transformational leadership positive relation with development from leadership style and forced to perform
employee creativity.In previous literature, there is no well from performance orientation side satisfy the creative
available full support regarding its positive outcomes. self efficacy occurrence. As discussed by Gong et
Studies have discussed performance orientation in al.,(2009) in their study, the mediating variable of creative
contrast to learning orientation. The significance of self efficacy satisfies the elements of creativity-skills
learning orientation is highlighted above performance encouragement and motivation as mentioned by Amabile
orientation in different settings. Learning orientation is (1988). Previous literature studies the impact of
studied on the basis of knowledge acquisition that motivation on creativity with positive outcomes.
improves performance and creativity (Gong et al., 2009) Motivation of employees creates enjoyment and pleasure
some researches not only promoted learning orientation of work that develops high interest level (Shin and Zhou,
effectiveness, they also discussed the ineffectiveness of 2003). Employee setting his goals develops dimensions
performance orientation (Bell and Kozlowski, of creativity (Shalley, 1991) this discussion concludes
2002).Performance orientation is supported to conclude that creative self efficacy is a source of positive
positive outcomes in some literature. Performance of organizational and individual outcomes. Gong et al.
employees is better when they are performance oriented (2009) explains creative self efficacy as the prominent
and concerned about their image in front of managers factor that develops creativity. Our findings show that
and higher levels (Kohli et al., 1998). Employee mediation of creative self efficacy exist between
perception of being assessed on the basis of high performance orientation and employee creativity while
performance improves their performance and quality of the hypothesis, mediation of creative self efficacy
outcomes (Lawler and Rhode, 1976). Such positive between transformational leadership and employee
outcomes are also discussed empirically; performance creativity is rejected as per empirical findings.
orientation is the cause of improvement of performance
(Sujan et al., 1994). This discussion also indicates the
positive and negative effects of performance orientation. Managerial implications
The current study’s analysis shows positive, significant
relationship between performance orientation and Earlier discussion shows that creativity is an important
employee creativity, approving the hypothesis of positive determinant of performance betterment and
relation between performance orientation and employee improvement. Organizations must encourage creativity of
Ghafoor et al. 11101

employees by greater involvement and encouraging their Conclusion


input towards their own work and tasks.
Employees should be developed to pace with the On the basis of foregoing discussion and support of
organizational needs and development. Leadership style literature, it can be concluded that creativity plays an
should adopt ways that help improve employee creative important role in the performance improvement and
self efficacy. organizational development. Creativity supports
Management must enable employees to think of new performance and helps employees think bigger.
ideas and practices that promotes and improves Performance orientation, as discussed earlier, shows
performance. both positive and negative response to the performance
Leadership and management must encourage and development of employees. As per the findings of
creativity and manage the outcomes of these practices this study, performance orientation shows positive
properly to draw out positive results. Management should relationship with creative self efficacy and creativity,
deal with performance oriented employees according to satisfying the mediating relation of creative self efficacy.
their requirements. Dealing with employees according to Transformational leadership shows weak relation with
their ground needs and abilities will help improve creative self efficacy thus dissatisfying the mediation of
creativity. Our findings show the lack of managerial and creative self efficacy between transformational leadership
leadership skills in the banking sector which is causing and employee creativity. Creative self efficacy is vital to
low level of creative self efficacy while performance trigger the creativity in employees and make them
oriented employees are motivated towards creativity. confident in their abilities to create and innovate. Analysis
Giving sources of improvement will fill the gap between conducted on the sample of banking sector shows
expected and actual performance of employees. positive, significant relationship between performance
Employee selected to be motivated towards better orientation, creative self efficacy and employee creativity.
performance will also impact the organizational Thus, banking sector’s employees’ creative self efficacy
outcomes. Performance orientation is a psychological development is based on performance orientation.
phenomenon. In order to facilitate employees with Transformational leadership in the banking sector does
creative abilities and innovative thinking to improve self not influence the creative self efficacy of employees
efficacy, management must facilitate employees so that though it showed positive results in relation with
they can grow well in working environment. creativity.
As discussed here, creative self efficacy development
takes a prominent part in the development of creative LIMITATIONS AND FUTURE DIRECTIONS
mindset. It basically gives allowance to the employees
that they can come up with any new idea or source with The study is conducted at one point time. In order to
confidence. study creativity effectively, data should have been
This confidence development should be supported by collected at multiple time points.
organizational leadership. Managerial support and proper Also, transformational leadership effectiveness on self
guidance can work as the source of development of self efficacy should have been studied at different points of
efficacy and employees feeling towards his organization time. The study at different times with factor of
is based on the environment he is given. Managers can improvement may have drawn different results. The
develop the culture that helps employees understand the effects of creative behavior and mind set of the
need of performance matching and creativity. employees to determine creative self efficacy is not
Management can improve the creativity in the work studied. Both goal orientation domains: learning
place by becoming role models of creativity themselves. orientation and performance orientation are not studied
By improving the supportive culture, clarity of together in this model.
consequences will ease employees to go for risky steps The effects of age, gender and experience were
in creativity. Mangers should demonstrate verbally or controlled due to insignificance. Previous studies support
practically by setting examples in front of workers and that age and experience both affect the level of creativity
employees on performance importance and creativity. in individuals (Binniwies et al., 2008). This study is
This approach will not only motivate employees, but conducted in the banking sector of Pakistan only. Future
also make them a source of better and greater research may conduct studies in specific industries and
understanding. The effect of performance orientation other cultures and countries.
alone on self efficacy is not enough; leadership should This study did not consider the transactional leadership
also support the phenomena in order to get better and style that encourages rewards systems in the
improved results. Managerial force towards creative organization (Bass, 1990). Conceptually, transactional
goals should be supportive and easy for employees. With leadership effects the development of employee mind set
much understanding of leadership style needs and where (Gong et al., 2009). The study should be conducted with
to develop them, employees can help managers set the transactional leadership style and performance
grounds for creative mind set of individuals. orientation with creativity.
11102 Afr. J. Bus. Manage.

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