LEADERSHIP STYLES, REFERENT POWER, AND EMPLOYEE MOTIVATION: EVIDENCE FROM THE LIFE INSURANCE INDUSTRY IN GAUTENG, SOUTH AFRICA
Main Article Content
Abstract
Life insurance Industry (LII) is characterised by competitive, complexity, and a commissiondriven workforce. Despite the importance of leadership in shaping such organizational outcomes, attention has not been given to how leadership style interact with referent power to influence employee motivation in the industry. The study addresses this gap by examining transformational, transactional, and laissez-faire leadership styles alongside referent power as determinants of motivation in LII in Gauteng, South Africa. Anchored in a combination of Transformational Leadership Theory, Path-Goal Theory, Situational Leadership Theory, and Leader–Member Exchange (LMX) theory, the research adopted a mixed-methods approach to capture measurable relationships and lived experiences of employees. Quantitative data were collected through structured questionnaires administered to employees in firms, while qualitative insights were obtained through interviews to provide indepth contextual meaning. Data analysis incorporated descriptive statistics, reliability and validity testing, correlation and regression analysis, and thematic analysis for qualitative data. The findings show that transformational leadership has a strong positive relationship with employee motivation, particularly when complemented by high referent power characterised by trust, admiration, and interpersonal influence. Transactional leadership demonstrates moderate effectiveness through contingent rewards, while laissez-faire leadership is associated with lower motivation due to limited guidance and support. Importantly, referent power emerges as a mediating and amplifying factor, strengthening the impact of leadership styles on motivation. Organisational culture further moderates these relationships by shaping how leadership behaviours are perceived and internalised by employees. The study concludes that leadership effectiveness in the LII sector depends not only on formal authority or style but also on the leader’s ability to cultivate referent power and build relational exchanges. Practically, the research provides actionable insights for organisations to enhance leadership development and design motivation-enhancing strategies tailored to high-pressure sales environments.
Downloads
Article Details
Issue
Section
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
How to Cite
Share
References
Abbas, W. & Asgar, I. 2010. The role of leadership in organisational change: Relating the successful organisational change to visionary and innovative leadership. Master’s Thesis. University of Gavle.
Al-Khaled, A., & Chung, J. (2020). The impact of leadership styles on organisational performance. Berjaya Journal of Services & Management, 13(1), 55–62. https://www.researchgate.net/publication/340917366_The_Impact_of_Leadership_Styl
es_on_Organizational_Performance
Ashkanasy, N. M., & O’Connor, C. (1997). Value congruence in leader–member exchange. Journal of Social Psychology, 137(5), 647–662
Bass, B. M. (1985). Leadership and performance beyond expectations. Free Press.
Bass, B. M., & Avolio, B. J. (1995). Multifactor leadership questionnaire (Form 5X). Mind Garden.
Boyce, P. (2020). What is the Pygmalion effect? Boyce Wire. https://boycewire.com/pygmalion-effect-definition/
Breevaart, K., & Bakker, A. B. (2018). Followership and work engagement: The role of leader–member exchange and the moderating role of followers’ leadership motives. The Leadership Quarterly, 29(4), 497–510.
Bruk-Lee, V., & Spector, P. E. (2006). The social stressors–counterproductive work behaviours link: Are conflicts with supervisors and coworkers the same? Journal of Occupational Health Psychology, 11(2), 145–156
Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874–900.
Faeth, M.A. (2010). Power, authority and influence: A comparative study of the behavioural influence tactics used by lay and ordained in the Episcopal Church (Doctoral dissertation). Virginia.
Graen, G. B., Uhl-Bien, M., & Scandura, T. A. (2006). The role of LMX in the new team-based environment. Leadership Quarterly, 17(6), 563–574.
Grix, J. (2004). The Foundations of Research. New York, NY: Palgrave Macmillan.
Hersey, P., & Blanchard, K. H. (1969). Life cycle theory of leadership. Training and Development Journal, 23(5), 26–34.
House, R. J. (1971). A path-goal theory of leader effectiveness. Administrative Science Quarterly, 16(3), 321–339. https://doi.org/10.2307/2391905.
Igbaekemen, G. O., & Odivwri, J. E. (2015). Impact of leadership style on organisation performance: A critical literature review. Arabian Journal of Business and Management Review, 5, 2. https://doi.org/10.4172/2223-5833.1000129
Iqbal, N., Anwar, S., & Haider, N. (2015). Effect of leadership style on employee performance. Arabian Journal of Business and Management Review, 5(5), 3. https://doi.org/10.4172/2223-5833.1000134
Kim, W. G., & Brymer, R. A. (2011). The effects of ethical leadership on manager job satisfaction, commitment, behavioural outcomes, and firm performance. International Journal of Hospitality Management, 30(4), 1020–1026
Knies, E., Jacobsen, C., & Tummers, L. G. (2016). Leadership and organisational performance: State of the art and research agenda. In J. Storey, J. L. Denis, J. Hartley, & P. ‘t Hart (Eds.), Research handbook on leadership and public management (pp. 13–33). Edward Elgar Publishing. https://doi.org/10.4337/9781783477993.00007
Lee, D. (2020). 8 ways to prepare for the uncertain future of change. CMC Partnership. https://www.cmcpartnership.com/thought-leadership/8-ways-to-prepare-for-theuncertain-future-of-change
Liden, R. C., & Maslyn, J. M. (1998). Multidimensionality of leader-member exchange: An empirical assessment through scale development. Journal of Management, 24(1), 43–72.
Lippitt, R., Watson, J., & Westley, B. (1958). The dynamics of planned change. Harcourt, Brace and World.
Majid, U. (2018). Research fundamentals: Study design, population, and sample size. Undergraduate Research in Natural and Clinical Science and Technology (URNCST) Journal, 2(1), 1–7. https://doi.org/10.26685/urncst.16
McCombes, S. (2021). Sampling methods. Scribbr. https://www.scribbr.com/methodology/sampling-methods/ [Accessed 15 April 2025]
Muller, M., & Turner, R. (2010). Leadership competencies of project managers in the life insurance industry. International Journal of Project Management, 28(6), 507–515.
Naile, I., & Selesho, J.M (2014). The Role Leadership in Employee Motivation? Mediterranean Journal of Social Sciences 5(3), 1
Nel, P., & Werner, A. (2017). Human resource management (10th ed.). Oxford University Press.
Northouse, P. G. (2018). Leadership: Theory and practice (8th ed.). Sage Publications
Ntoakane, C, M. (2021). Investigating the Role of Leadership and its Impact on Employee Performance at Company X (South Africa). (Master's thesis, Regent Business School). Regent Business School.
Oakes, R., 2018. An exploration of leadership styles and its impact on organisational performance at African Bank (South Africa). (Master's thesis, Regent Business School). Regent Business School.
Prochaska, J. O., & DiClemente, C. C. (1983). Stages and processes of self-change of smoking: Toward an integrative model of change. Journal of Consulting and Clinical Psychology, 51(3), 390–395. https://doi.org/10.1037/0022-006X.51.3.390
Raosoft. (2004). Sample size calculator. http://www.raosoft.com/samplesize.html
Rehman, A. A., & Alharthi, K. (2016). An introduction to research paradigms. International Journal of Educational Investigations, 3(8), 51–59.
Robbins, S. P. (2003). Organisational behaviour (10th ed.). London: Prentice Hall.
Rosenthal, R. (1994). Interpersonal expectancy effects: A 30-year perspective. Current Directions in Psychological Science, 3(6), 176–179. https://doi.org/10.1111/1467-8721.ep10770698
Rosenthal, R. (1994). Interpersonal expectancy effects: A 30-year perspective. Current Directions in Psychological Science, 3(6), 176–179. https://doi.org/10.1111/1467-8721.ep10770698
Rothwell, W. J. (2010). Effective succession planning: Ensuring leadership continuity and building talent from within (4th ed.). AMACOM.
Sanchis, P., Amonarriz, C., & Landart, C. (2020). How the Pygmalion effect operates in intrafamily succession: Shared expectations in family SMEs. European Management Journal, 36(6), 914–926. https://doi.org/10.1016/j.emj.2018.11.005
Saunders, M., Lewis, P., & Thornhill, A. (2016). Research methods for business students (7th ed.). Pearson Education Limited
Sekaran, U., & Bougie, R. (2016). Research methods for business (7th ed.). John Wiley & Sons Shamir, B., Zakay, E., Breinin E. B., &
Popper, M. (1998). Correlates of charismatic leader behaviour in military units: Subordinates’ attitudes, unit characteristics, and superiors’ appraisals of leader performance. Academy of Management Journal, 41: 387–409.
Skinner, B. F. (1953). Science and human behaviour. Macmillan.
Smith, J., & Johnson, L. (2019). Trends in South African insurance: A review of the literature and future research directions. Journal of South African Insurance Studies, 14(3), 67–82. https://doi.org/10.1016/j.jsais.2019.01.004
Smith, W. K., & Lewis, M. W. (2017). Toward a theory of paradox: A dynamic equilibrium model of organizing. Academy of Management Review, 38(2), 381–403. https://doi.org/10.5465/amr.2011.0431
Sparrowe, R. T., Soetjipto, B. W., & Kraimer, M. L. (2006). Do leaders’ influence tactics relate to members’ helping behaviour? It depends on the quality of the relationship. Academy of Management Journal 49(6), 1194–1208.
Sriharan, A., West, M., Zhao, Y., & Moxham, L. (2021). Public health and health sector crisis leadership during pandemics: A review of the medical and business literature. Medical Care & Research Review, 1(12), 1–12.
Statistics South Africa. (2025). Gauteng provincial profile: Mid-year population estimates 2025. Parliament of the Republic of South Africa. https://www.parliament.gov.za/storage/app/media/Pages/2025/07-11-
2025_NCOP_Provincial_week/background/Gauteng_Profile.pdf
Tierney, P. (1999). Work relations as a precursor to a psychological climate for change: The role of work group supervisors and peers. Journal of Organisational Change Management, 12(2), 120–133
Tremblay, M. A., Blanchard, C. M., Taylor, S., Pelletier, L. G., & Villeneuve, M. (2009). Work Extrinsic and Intrinsic Motivation Scale: Its value for organisational psychology research. Canadian Journal of Behavioural Science, 41(4), 213–226. https://doi.org/10.1037/a0015167
Western Governors University. (2021). Leadership theories and styles. https://www.wgu.edu/blog/leadership-theories-styles2004.html#close