The Effects of Leadership Behaviors on Employee Satisfaction and Loyalty in the Hospitality Industry

The Effects of Leadership Behaviors on Employee Satisfaction and Loyalty
in the Hospitality Industry
Mai Ngoc Khuong
La Boi San
Luu Kim Khanh
International University, Vietnam National University HCMC, Vietnam
Abstract
This study was designed to investigate the effects of leadership behaviors on employee loyalty through the
mediation of employee satisfaction in the hospitality industry. Quantitative methodogy was applied with
questionnaires directly distributed and answered by 352 targeted respondents working in hospitality industry
in Ho Chi Minh City, specifically those who are employees of luxury hotels and restaurants. Despite the fact
that all variables showed positive correlation with employee loyalty, only five factors, namely task oriented
leadership, relations oriented leadership, change oriented leadership, charismatic leadership and autocratic
leadership had significant influences on employee satisfaction and loyalty. Recommendations were provided
for hospitality companies accordingly, with an emphasis on how to improve the five significant factors,
including task oriented leadership, relation oriented leadership, change oriented leadership, and charismatic
leadership behaviors in order to maintain high employee loyalty.
Keywords: hospitality industry, leadership behaviors, leadership styles, employee loyalty, employee
satisfaction
1. Introduction
Human resources are considered the most important factor affecting organizational efficiency and
effectiveness. A good plan without a handful team of personnels to execute is no different from useless. Hence,
companies nowadays need effective leaders and employees to achieve operational and strategic objectives as
well as foster high-performing teams. As Schwandt and Marquardt (2000) declared, ‘no other role in
organizations has received more interest than that of the leader’. Leadership, according to Kumar and
Meenakshi (2009), is ‘a complex, multifaceted capability, with myriad nuances and substleties’. However, just
excellent leader alone is not enough to build substainable success. Companies nowadays are in greater need
than ever for a strong skillful workforce that can help companies determine their future achievement.
Turkyilmaz and colleagues (2011) expressed that it is important for organizations to achieve employee job
satisfaction, physical and emotional engagement with their work (Bakker and Leiter, 2010; Agarwal, 2014),
loyalty and commitment (Ibrahim and Al Falasi, 2014).

Although there have been a lot of researches devoting to leadership behaviors and job satisfaction,
employee loyalty, few of them concentrate in the hospitality industry. Hospitality is one of the fastest growing
sectors within service industry. It consists of different functions, most notably is hotels, lodging,
accommodation and restaurants, etc. Hospitality is characterized by its intangibility, inseparability,
perishability and variability. In this field, firms compete through intangible products, such as service quality
and unique concepts. When one new play enters the game, they stir up the whole market with their creative
strategy, therefore, this industry is becoming fiercer than ever. The total revenue of hospitality and tourism

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altogether was 8.630 billion VND in June 2017, which yielded 14.7% increase compared to the same period last
year. Numbers of tourists visiting Ho Chi Minh City during the first 6 months of 2017 was 16% higher than
that of last year as well (Department of Tourism, Ho Chi Minh City). Tourism is one of the five industries with
the highest foreign currency income in Vietnam, and accommodation sector contributes 70% to the total
revenue of tourism sector. Plus, this industry alone directly and indirectly attracts approximately 3 billion
personnels annually (Vietnam Hotel Association), thus, contributing greatly to the economic development of
the country. However, hospitality is well-known for its high turnover rate, with tthe estimated employee
turnover rate as much as 300% annually (Milman, 2001). Therefore, retaining key performers is becoming one
of the primary concerns of firms in this industry. This research aims to provide an empirical answer to the
problem by measuring the impact of different leadership styles on employee job satisfaction and loyalty, based
on which researcher will discuss and give relevant recommendation to improve loyalty of personnels working
in hospitality industry in Ho Chi Minh City.
2. Literature review
2.1. Employee loyalty
As defined by many researchers, the concept of loyalty can be expressed as a ‘feeling’ such as identification
with identification with (Boroff and Lewin, 1997), attachment (Leck and Saunders, 1992) or commitment to
(Johnson et al., 2009; Yee et al., 2009) the organization. It represents a strong desire to stay with an organization
(Turkyilmaz et al., 2011).
Employee loyalty is a subject that has been receiving considerable interest from researchers recently. In

such ever-changing and competitive environment, companies, more than ever, need to achieve employee
loyalty towards the company (Ibrahim and Al Falasi, 2014). Loyalty is an extremely important factor affecting
organizational success, as it has been empirically confirmed by different studies that high employee loyalty
can maintain high customer loyalty as well as corporate profitability (Reichheld, 1996). The more loyal the
employees are, the more willing they are to provide higher efforts and contribution to the company, increasing
profits and loweing turnover rates and costs (Guillon and Cezanne, 2014). According to Cheng and Chew
(2004), leadership behaviors is one of the nine factors whose positive influence on employee loyalty is
confirmed through their studies. Kleinmann (2004) stated that loyalty can be directly improved through
leadership styles. Chen (2004) concluded that employees will be more loyal to the organization if they are
satisfied with their jobs and their leader, vice versa, if they are dissatisfied, they are less committed and look
for other opportunities to quit (Pepe, 2010).
2.2. Employee satisfaction
Employee job satisfaction refers to an employee’s attitude or feelings about his or her job or different
aspects of the job (Pool, 1997). It is the extend to which people like or dislike their job (Allen and Spector, 2002).
Higher job satisfaction is acknowledged to increase employee morale, job performance, productivity and
lower absenteenism (Turkyilmaz et al., 2011). Employee loyalty can be positively influced by satisfaction
(Abraham, 2012). In fact, empirical evidences from previous studies have demonstrated a strong positive
correlation between these two factors (Silvestro, 2002), some even claimed that job satisfaction is actually the
antecedent of employee loyalty (Jun et al., 2006; Chang et al., 2010). In this research, employee satisfaction both
acts as independent variable influencing loyalty and mediating factor affecting to loyalty.
Wu (2009) stated that job satisfaction can be affected by the relationship between subordinates and
managers, working environment, or degree of fulfillment in their work. Among determinants of employee job
satisfaction, leadership behaviors can be viewed as one of the important key drivers of employee job

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satisfaction, and their positive correlation has been confirmed by via different studies (Seo et al., 2004; Vance
and Larson, 2002).
2.3. Task oriented leadership

Task oriented leadership refers to someone whose emphasis is to complete a task perfectly. Task-oriented
leadership is primarily concerned with achieving organizational goals through behaviors such as assigning
tasks, setting rules and instruction, controlling and providing feedback. Task oriented leaders are more
adaptive to difficult situations (Higgins and Endler, 1995), therefore, they can adjust better and yield higher
productivity (Causey and Dubow, 1993). Patchen (1963), Larson, Hunt and Osborn (1974) confirmed the
effectiveness of task oriented leadership on performance. Brown and Dodd (1999) claimed that contingent
reward leadership behaviors can lead to higher satisfaction with supervisors and greater productivity.
2.4. Relations oriented leadership
Conversely, relations oriented leadership emphasizes on maintaining harmonious relationship with
followers, creating a friendly and supportive working environment. Since the concentration of relations
oriented leadership is followers’ welfare and interests, leaders of this style mainly use informal
communication methods (Yukl, 1989), which in turn facilitates subordinates’ participation in decision making
process, misunderstanding avoidance and faster mistake recognition (Shamir, 1995). Such leaders also put a
lot of efforts into encouraging and giving praises to their subordinates (Lewin and Lippitt, 1938), hence,
significantly improve job satisfaction (House et al., 1971).
2.5. Change oriented leadership
Change oriented leadership style was identified by Ekvall (1988) in late 20 th century. This behavior mainly
concerns with the aptitude to adapt to changes. Change oriented leader, according to Ekvall and Arvonen
(1994), displays four characteristics, including ‘being a promoter of change and growth, having a creative
attitude, being a risktaker, and having visionary qualities’. Another primary theoriest of this behavior, Yulk,
in his research with Gordon and Taber (2002), confirmed four components in this theory: ‘visioning,
intellectual stimulation, risk-taking, and external monitoring’, aligning with the behaviors identified by Yulk
(2012). Change oriented leaders demonstrate great persuasive ability to influence people during change
process. They focus on understanding the environment, seeking solutions, strategies, products or processes to
adapt to such surroundings and centering innovation and creativity for better performance. They build and
develop a vision for change, encourage innovative thinking, and are willing to take risk (Derue et al., 2011).
2.6. Participative leadership
Leaders of participative style tend to encourage and motivate their subordinates to take part in the decision
making process or discussion. Their final decision is based on group members’ ideas instead of their own
(Koopman and Wierdsma, 1998). This style of leadership allows greater autonomy by creating interactive and

interdepent environment where followers are free to share their opinions with the leader. According to Boisot
and McKelvey (2010), this adaptive management practices take advantage of opportunities and avoid
negativity of changes. Participative leadership also improves performance through intrinsic motivation and
psychological empowerment, making employees feel needed and valued, thereby putting more efforts into
completing the job (Huang, 2012; Huang et al., 2010).
2.7. Charismatic leadership

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Charismatic leaders are those who have high charismatic effects on followers, and followers are spiritually
inspired enough to offer their commitment, loyalty and obedience to leaders. According to Shamir and
colleagues (House and Shamir, 1993; Shamir et al., 1993) charismatic leadership affects followers’ motivation
at self-concept level. Subordinates under charismatic leadership are more confident in themselves and willing
to accept new challenges. House claimed that charismatic leaders display certain traits, such as ‘role modeling,
goal articulation, high expectations, confident in followers and motive arousal leader behaviors’. Howell and
Costley reported that employees under charismatic leadership have higher satisfaction and commitment
towards their job, leaders and organization.
2.8. Ethical leadership
Brown and his colleagues defined ethical leadership as ‘the demonstration of normatively appropriate
conduct through personal actions and interpersonal relationships, and the promotion of such conduct to
followers through two ways communication, reinforcement, and decision making’. Dalla Costa (1999) believed
that ethical leadership style prevents legal and moral impropriety and contributes to the organizational
success. Ethical leaders are responsible for the consequences of their actions and demonstrate empathy as well
as possessing higher tolerance for stress and ambiguity. Ethical leadership is important for the sole reason that
employees will take the leader and leader’s actions as role model to follow. Hence, if the leaders are unethical,
such wrong behavior is assumed to be sanctioned as well (Calabrese & Roberts, 2001). Ethical leadership has
been proven to have direct positive improvement on work outcome, job involvement and commitment of
leaders (Khuntia and Suar, 2004).
2.9. Autocratic leadership

Autocratic leadership is described as dominant and can result in significant negative impact on employees’
motivation. It emphasizes performance and leader’s authority rather than people, hence, leaders decide
policies, procedures, task allocation, relationships, reward and punishment (Van Vugt et al. 2004) without
taking into account subordinates’ suggestions (Jung et al., 2014). Autocratic leaders assume that people’s
nature is lazy, irresponsible and unreliable, as such, the employees would cause job fuctions to be unfinished
and disrupted if the leaders are left uninvolved. Likert (1961) confirmed that autocratic leadership style uses
top downwards communication, where authority and instruction come from leaders, teamwork is non existent
and interaction is limited. Autocratic leaders rely mostly on authority, control, manipulation and hard work
to complete their job (Puni et al., 2016). Autocratic style is now the least popular among leadership behaviors,
probably due to farily low levels of job satisfaction of employees working under this style (Kerfoot, 2013).
2.10. Model hypotheses
In order to obtain all the objectives and further analyses, this study hypothesized that:
H1: Task oriented, relation oriented, change oriented, charismatic, participative, ethical and autocratic
leadership directly affect employee job satisfaction.
H2: Task oriented, relation oriented, change oriented, charismatic, participative, ethical, autocratic
leadership, and job satisfaction directly affect employee loyalty.
H3: The effects of task oriented, relation oriented, change oriented, charismatic, participative, ethical, and
autocratic leadership on employee loyalty are mediated by employee job satisfaction.
3. Methodology

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Quantitative approach was employed with survey questionnairs conveniently and directly sent to frontline employees who are working in luxury hotels and restaurants in Ho Chi Minh city to collect data with clear
guidance for them to answer correctly. The list of four and five stars hotel was be based on the approval of
Vietnam Tourism Ministry. In this research, questionnaire was be used to collect the statistics data. The main
purpose of the survey was to find out the relationship between leadership and employee loyalty through the
mediation of employee satisfaction. There were two parts in the questionnaire. The first part’s questions was
mainly for testing the hypotheses or the influence of independent variables on dependent variables.
Respondent were asked to give their opinion by following the 5-point Likert Scale from 1 - Strongly Disagree

to 5 - Strongly Agree. The second part focused on personal information of respondents to have a clearer picture
of the sampling pool’s demographics.
EFA was applied for both groups of dependent and independent variables. KMO was greater than 0.6 and
Barlett’s Test equaled p = .000. Thus, this factor analysis was acceptable. Cronbach’s Alpha was used to
measure the reliability, or internal consistency, of the variables. Factor 1 had Cronbach’s Alpha greater than
.7, proving its reliability, factor 2 has Cronbach’s Alpha within .6 and .69, indicating that this variable was also
acceptable.
Table1: Summary of Dependent Variables with Reliability Coefficients
Factors

No. of Items

Factor 1: Employee Satisfaction (EMSATIS)
Factor 2: Employee Loyalty (EMLOY)

9
3

Cronbach’s
(N=352)
.886
.619

Alpha

Similarly, with KMO index greater than .6 and Barlett’s test result proved to be significant (p = .000), it can
be firmly concluded that these independent factors were considered appropriate. Cronbach’s Alphas were
greater than .7, indicating that the data was good and these variables were highly reliable for further analysis.
Table 2: Summary of Independent Variables with Reliability Coefficients
No. of Items

Factors
Factor 1: Autocratic Leadership (AUTOLEAD)
Factor 2: Task Oriented Leadership (TASOLEAD)
Factor 3: Ethical Leadership (ETHILEAD)
Factor 4: Participative Leadership (PARTLEAD)
Factor 5: Relation Oriented Leadership (RELALEAD)
Factor 6: Charismatic Leadership (CHARILEAD)
Factor 7: Change Oriented Leadership (CHANLEAD)

7
5
5
5
4
4
4

Cronbach’s
(N=352)
.928
.837
.861
.893
.891
.806
.740

Alpha

All items from the two tests had factor loadings greater than the cut point of .5 so they were all included.
The Eigenvalues of the extracted factors were greater than one and the total variance explained was 54.4% for
the dependent variables and 67.88% for independent variables, both deemed satisfactory for the requirement
of being greater than 50%.
4. Research findings
4.1. Profile of Participants in the Research
Table 3: Demographics of participants
Gender

Male
Female
Total

Frequency (N)
165
187
352

809

Valid (%)
46.9
53.1
100.0


Age

Marital status

Position

Job tenure

Educational level

Frequency (N)
225
109
15
2
1
352
261
61
352
261
77
14
352
147
170
29
4
2
352
68
82
101
100

1
352

18-25
25-35
35-45
45-55
>55
Total
Single
Married
Total
Employee
Junior manager
Middle manager
Total
<1 year
1-4 years
4-7 years
7-10 years
>10 years
Total
High school
Vocational
College
University
Post university
Total

Valid (%)

63.9
31.0
4.3
0.6
0.3
100.0
82.7
17.3
100.0
74.1
21.9
4.0
100.0
41.8
48.3
8.2
1.1
0.6
100.0
19.3
23.3
28.7
28.4
0.3
100.0

It can be concluded that the sampling population’s gender was relatively balanced, with 46.9% participants
were male compared to 53.1% of females. Approximately 95% of the population is young, aging from 18 to 35
years old. Similarly, the majority of participants were single (82.7%). Only 17.3% of them were married. They
mostly hold employee positions (74.1%), some are junior managers (21.9%), few are middle managers (4%).

41.8% of respondents have worked for less than 1 year, 48.3% have worked for 1-4 years, 8.2% for 4-7 years,
1.1% for 7-10 years, and only 0.6% have been with the same place for more than 10 years. The common
educational level of this population were college (28.7%), university (28.4%) and vocational training (23.3%)
graduates. Only a small percentage of participants graduated from high school (19.3%) or post university
(0.3%). The demographics suggested that the sampling population is young and well-educated.
4.2. Correlations between variables
Table 4: Descriptions and Variables’ Correlations
EMLOY

1

2

1. AUTOLEAD

-.071

1.00

2. TASOLEAD

.470*

-.332

1.00

3. ETHILEAD

.389*

-.186

.579*

1.00

4. PARTLEAD

.383*

-.297

.584*

.670*

1.00

5. RELALEAD

.358*

-.232

.543*

.654*

.639*

1.00

6. CHARILEAD

.333*

-.204

.582*

.647*

.704*

.579*

1.00

7. CHANLEAD

.454*

-.220

.554*

.563*

.562*

.472*

.541*

1.00

8. EMSATIS

.399*

-.270

.566*

.598*

.597*

.714*

.615*

.495*

Mean

3.91

2.35

3.69

3.68

3.57

3.48

3.55

3.80

810

3

4

5

6

7


SD.

EMLOY

1

2

3

4

5

6

7

.556

.881

.599

.693

.719

.736

.657

.596

Note: * Significant level at p < .05

Table 4 illustrated the correlation coefficients between independent variables, mediating variable and
dependent variables. Except for autocratic leadership whose influence was negative on loyalty and
satisfaction, all other factors were confirmed to be positively correlated with employee loyalty and the
mediating factor employee satisfaction. Change leadership and task oriented leadership had the strongest
correlation with EMLOY, implying that the more task and change oriented leadership os used, the more loyal
employees will be. Furthermore, relation oriented and charismatic leadership displayed strong bond with
EMSATIS, implying that an increase in the application frequency of these two factors will lead to a rise in
satisfaction, in turn increase employee loyalty.
5. Testing hypotheses
5.1. Direct effects of leadership behaviors on Employee Job Satisfaction
Table 5: Effect Coefficients between IVs and EMSATIS
Variables
AUTOLEAD
TASOLEAD
ETHILEAD
PARTLEAD
RELALEAD
CHARLEAD
CHANLEAD

Unstandardized
Coefficients
.820
.041
.119
.046
.018
.374

.181
.060

t-value

Sig.

Correlations (Part)

4.368
1.604
2.406
.958
.376
9.104
3.667
1.296

.000
.110
.017
.339
.707
.000
.000
.196

.055
.082
.033

.013
.311
.125
.044

Note:
- Dependent Variable: EMSATIS: Employee Satisfaction
- Predictors: AUTOLEAD, TASOLEAD, ETHILEAD, PARTLEAD, RELALEAD, CHARLEAD, CHANLEAD
- ANOVA: F (7, 344) = 73.053, Sig. =000, p < .05
- Model summary: R2 = .598

Based on the Coefficient analysis, there are only three independent variables that have direct effects on
EMSATIS, including TASOLEAD (β=.119, p<.05), RELALEAD (β=.374, p<.05), and CHARLEAD (β=.181,
p<.05), with relations oriented leadership was the strongest contributor to explaining the mediating variable.
The other examined factors, namely AUTOLEAD, ETHILEAD, PARTLEAD, CHANLEAD, with p>.05, had no
impact on EMSATIS. The ANOVA table demonstrated that the model was significant at 95% confidence level
(Sig. =000, p < .05), with F = 73.053. R square equals .598, which implied that the model explained 59.8% of the
variance in employee satisfaction.
5.2. Direct effects of leadership behaviors on Employee Loyalty
Table 6: Effect Coefficients between IVs and EMPLOY
Variables
AUTOLEAD
TASOLEAD
ETHILEAD

Unstandardized
Coefficients
1.394
.080
.270

.031

811

t-value

Sig.

Correlations (Part)

6.032
2.591
4.533
.551

.000
.010
.000
.582

.117
.204
.025


Variables
PARTLEAD
RELALEAD
CHARILEAD
CHANLEAD

EMSATIS

Unstandardized
Coefficients
.064
.002
.096
.225
.135

t-value

Sig.

Correlations (Part)

1.105
.035
1.601
4.027
2.089

.270
.972
.110
.000
.037

.050
.002

.072
.182
.094

Note:
- Dependent Variable: EMPLOY: Employee Loyalty
- Predictors: AUTOLEAD, TASOLEAD, ETHILEAD, PARTLEAD, RELALEAD, CHARILEAD, CHANLEAD, EMSATIS.
- ANOVA: F (8, 342) = 18.706, Sig. =000, p < .05
- Model summary: R2 = .304

Table 6 examined whether the independent variables and mediating variable directly affect employee
satisfaction or not. With p < .05, three variables AUTOLEAD, TASOLEAD and CHANLEAD showed good
correlation with EMLOY, corresponding standardized coefficients were .080, .270 and .225 respectively. Task
oriented leadership was the most significant factor interpreting employee loyalty. Other factors, namely
ETHILEAD, PARTLEAD, RELALEAD and CHARILEAD were excluded due to high p-values. Mediating
factor EMSATIS and dependent variable EMLOY show strong positive relationship with β=.135, p<.05. The
more satisfied the employees feel, the more loyal they are to the company. R-square equaled .304, implying
that the seven independent variables and mediating variable EMSATIS explained 30.4% of the variance in
employee loyalty.
5.3. Path Diagram of Employee Loyalty
From the analysis above, a path diagram to generalized the findings of effects of leadership behavior on
employee loyalty is established as follows. The indirect effect of an independent variable on another
dependent through the mediation of a third variable was the total of independent variable’s effect on the
intervening variable and intervening variable’s effect on the dependent variable (Preacher and Hayes, 2008).
As can be observed, EMSATIS was the intervening variable standing between the leadership styles and
EMLOY. Three variables whose effects were significant on EMSATIS, including TASOLEAD, RELALEAD,
CHARLEAD also had indirect effects on EMLOY. AUTOLEAD and CHANLEAD only displayed direct
significance on EMLOY.

Task Oriented

Leadership
.270
Relation Oriented
Leadership
Charismatic
Leadership
Autocratic Leadership

.119
.374

Employee
Satisfaction

.181
.080

.225
Change Oriented
Leadership

812

.135

Employee
Loyalty


5.4. Total causal effects on employee loyalty

The table of total causal effects on employee loyalty clearly included the coefficients of all dimentions
having indirect and direct effects on loyalty. According to the result and testing all the hypotheses, the factors
with highest total effect on employee loyalty was the task oriented leadership (.286), followed by change
oriented leadership (.225), employee satisfaction (.135), autocratic leadership (.080), relation oriented
leadership (.050) and the least influencial one was the charismatic leadership (.024). However, this effect was
considered very small.
Table 7: Direct, Indirect, and Total Casual Effects
Variables
AUTOLEAD
TASOLEAD
RELALEAD
CHARILEAD
CHANLEAD
EMSATIS
Total

Causal effects
Direct
Indirect
.080
---.270
.016
---.050
---.024
.225
---.135
---.710
.90

Total

.080
.286
.050
.024
.225
.135
.80

LLCI

ULCI

-.0139
.0012
.0110
.0045
-.0020
----

.0004
.0349
.0915
.0494
.0235
----

6. Discussions and recommendations
6.1. Discussions of findings
The main concentration of the research lied in the effects of leadership styles on loyalty, with employee job
satisfaction acted as a mediating variable. Seven leadership behaviors were taken into account, including:

autocratic leadership, task oriented leadership, ethical leadership, relation oriented leadership, participative
leadership, charismatic leadership and change oriented leadership. After conducting all necessary testings, it
has been concluded that task oriented, relation oriented and charismatic leadership had direct affect on
employee job satisfaction. An increase in either one of these three elements will lead to a rise in employee
satisfaction, esperically relations oriented leadership style, whose effect yielded the highest correlation with
EMSATIS.
Similarly, task oriented, change oriented and autocratic leadership were the three factors having significant
influence on employee loyalty. Loyalty was indirectly influenced by task oriented, relation oriented and
charismatic leadership through mediating factor employee satisfaction. The result showed relative consistency
with the theories used to build the conceptual model, while some of the findings were different from previous
studies. The overall result showed that task oriented leadership had the highest significant impact on loyalty,
both directly and indirectly through EMSATIS, therefore, leaders should pay more attention to this factor in
order to improve the level of commitment the employees hold towards the organizations. While the rest of the
mentioned leadership behaviors can be commonly observed and applied in many organizations, autocratic
leadership, interestingly, also demonstrated positive relationship with loyalty. It is one particular
characteristic of hospitality industry, whose main workforce is young, inexperienced and often in need of
special guidance and instruction from leadership team, thus, this special aspect that may not be found in other
fields. The leaders should also take note of this finding to adjust their behaviors accordingly. More detailed
discussion for improvement will be presented in the recommendation section below.
6.2. Limitations and Implications for Future Research

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Although the research successfully captured the significant correlations of leadership behaviors on
employee satisfaction and employee loyalty, as well as confirming the specific aspects where organizations
must concentrate on improving, there are still limitations and suggestions that future researchers can further
develop. First of all, the study examined employee satisfaction only through the effects of leadership behaviors
and did not take into account other factors whereas these factors can greatly affect to employee satisfaction. R
square was .304, which meant that the independent factors used in this research could only explain 30.4% of

employee loyalty, therefore, there can still be many other factors affecting loyalty whose significance this
research failed to test. Eldred and Madden (2011) confirmed that pleasant working environment with proper
monitoring is positive towards achieving employee loyalty, while Malinchak (2010) further proved that
employee education as a significant factor. Therefore, in order to capture the full picture of employee loyalty,
aside from the seven leadership styles, it is recommended that the mentioned factors (i.e., working
environment, employee training program) be considered and added to model.
Furthermore, this research only applied quantitative method. Data was collected via a questionnaire that
had been built based on hypotheses and scales from previous studies, hence, the questionnaire failed to
capture open-ended questions that could otherwise suggest more aspects and practical comments to the
problem.
Finally, the scope of this research focused only on employees in the hospitality industry. Thus, the
significantly effective leadership behaviors in this research may not be applicable in other fields where the job
characteristics and nature are different. The sampling was purely collected in Ho Chi Minh City, data was
collected after interviewing 352 respondents working only in luxury hotels and restaurants, implying that the
sample size was limited, therefore increasing the possibility of the results being partially or fully inapplicable
in other regions or workers in less luxurious environment. Additionally, employees working in luxury hotels
in other regions may not find these findings appropriate since each specific place has their own different
cultures and lifestyles. In the future, it is suggested that researchers organize repeated tests with bigger
sampling pool, enlarge the geographic scale and revise the hypotheses, adding more elements to the issue in
order to generalize the whole industry.
6.3. Recommendations
The empirical result proved in this study showed that employee loyalty can directly and indirectly be most
significantly improved through task oriented leadership. One obvious weakness of task oriented leadership
style is lack of creativity and low morale in employees because they do not want to take risk of breaking the
rules set by leaders. Hence, creative employees may feel discouraged and demoralized, resulting in higher
turnover rate (Bass, 1990). The daily tactical workload pressure can prevent innovation as well (Berglund and
Renstrom, 2012), causing the subordinates to feel bored and tired of repeating the same tasks daily. Kanaga
(2007) suggested that leaders can try to develop employees in an innovative context, which includes dealing
with complicated issues and delegating routine tasks to the team. Through such difficulties, employees can
improve their individual skills, gain more self-confidence and increase morale. It is important that the leaders

know how to interfere and make employees understand that problems are possibilities, not obstacles, and
there are chances of promotion and individual development for everyone in his team. Task oriented leaders
can also develop and share their vision with employees while encouraging them to overcome obstables, in
turn establishing firmer employee loyalty (Robbins, 2003). For example, it is common practice of reception
team in luxurious hotel to let the morning shift supervisors or guest relations officers assign rooms for arriving
guests and receptionists just perform the check-in procedures. Leaders can try to give more authority by
allowing receptionists to assign rooms and they can review the performance and make necessary changes. The
department can also organize competition to shorten daily procedures and encourage innovative ideas.
Similarly, as suggested by Antoncic and Antoncic (2011), employee loyalty can be developed when they

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achieve the meaning and sense of accomplishment in the challenge behind the task and the work they perform.
Leaders can try to increase subordinates’ sense of accomplishment by breaking one big project into small
subparts and setting S.M.A.R.T goals (Specific, Measurable, Attainable, Realistic, Timely). S.M.A.R.T goal
setting allows individuals and teams chances to identify and define their objectives and understand them in a
strategically higher level (Johnson, 2010), which can benefit both the organization and the employees
themselves.
Change oriented leadership is the second most influential factor that has direct positive impact on
employee loyalty. Leaders should build an innovative environment where change is appreciated and
welcomed by their followers. According to Gilley and colleagues (2009), leadership attributes can directly
influence how employees react to change and how change is executed, therefore, it is crucial that leaders adjust
their attributes in accordance with facilitating change. One significant attribute is the recognition program.
Kompaso and Sridevi (2010) suggested that performance should be linked with reward. Organizations must
essentially ensure that employees are fairly recognized for their contribution. Recognition is an act of showing
appreciation (Sankey, 2007), which can make employees feel wanted and appreciated (Singh, 2008), thus,
strengthens the workforce (Lefton, 2012) and increases employee satisfaction, morale and loyalty (Luthans,
2000). It is suggested that leaders put the efforts into planning a heartfelt recognition that makes employees
truly feel appreciated and valued. Conley (2007) pointed out that managers in resort hotels are too concerned

with tangible compensation package that they forget how essential indizidualized recognition is to loyalty and
turnover rate. Managers can try to organize friendly competition within the department to find out the best
innovation that can shorten time spent for an activity, and those who have contributed greatly to the
organization will be offered a solid promotion track or included in nomination program. The recognition
program must be sincere, individualized and customized to employees’ needs and timely. Aside from
recognition program, leaders can apply training program. Eaglen and colleagues (2000) viewed training
program as a key driver for the increase in employee’s level of acceptance towards change and act as a
significant influential factor in hospitality industry. As of current practice, most managers in this industry
prefer internal training methods, such as on the job training or mentoring (Becton and Graetz, 2001).
Conversely, external methods are considered unnecessary. However, there are certain issues that can only be
discussed in formal class, such as soft skills development, problem solving techniques, language courses, etc.
Consequently, both training methods have their own highlights and should be given equal attention to ensure
that employees are technically and conceptually well-trained and well-prepared for individual and
organizational growth.
Autocratic leadership has been proven to have significant impact on employee loyalty as well. Suprisingly,
the result from the data analysis shows that autocratic leadership has direct positive influence on employee
loyalty. The autocratic leadership style is helpful when instructing and delegating jobs to untrained employees
who have no previous experience nor knowledge of the task they will be performing. As can be observed from
the descriptive statistics, most respondents are young, aging from 18 to 25 years old, only 10% of the
population are over 26 years old due to the unique characteristics of this industry. Therefore, employees in
hospitality sector are relatively inexperienced, resulting in the increasing need for an autocratic leader who is
able to guide them through difficulties and make decisions quickly under pressure (Puni et al., 2016). Khuong
and colleague (2015), Delia and colleagues (2013) also supported the same findings. However, autocratic
leaders ought to pay attention to the extend to which they display their autocracy, since too much autocracy
can have negative effect on employee morale. Leaders of this style can improve employee motivation by
creating a detailed set of rewards and punishments for their employees.
Aside from the mentioned leadership styles, employee loyalty can also be improved through relation
oriented leadership. Since relation oriented leaders put a strong emphasis on building a friendly working
environment and creating intimate relationships with followers, leaders must master the art of
communication. Brox (2011) declared that communication and engagement are essential to the success of

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organization. According to Men (2014), face-to-face communication is one positive channel that leaders can
utilize, since leaders can make an impression with their followers through observing and decoding correctly
to the subordinates’ non-verbal gestures and their hidden messages of each gesture while displaying the
appropriate non-verbal gestures (Remland, 1981). Open and honest communication environment must be
built (van der Does and Caldeira, 2006) in order to ensure employees feel satisfied and connected with the
organization. Downward communication streamline is usually applied in organization, which means that
leaders talk and subordinates listen. However, leaders can encourage the opposite flow of interaction via
feedback. Upward stream, with followers giving feedback and leaders receiving the feedback, can motivate
and improve employee morale and commitment with the organization and the leader.
Finally, charismatic leadership is the last behavior that has been proved to have positive influence on
employee loyalty. According to Caldwell and Dixon (2010), despite the fact that trust is considered to be the
bridge that connects an organization together, leaders are believed to be the least trustworthy. Trust is a crucial
element to the success of organization and individual, and it cannot be purchased (Ping et al., 2012). Thanks
to trust, people are more convinced into believing and executing the vision that the leader has communicated
to them, thus, increase the leader’s charismatic influence. Leaders of this style have to establish their charisma
by displaying high level of self-confidence (Khuong and Hoang, 2015). Furthermore, they should also work
on their communication and persuasion techniques, set a clear S.M.A.R.T. goals to make their vision more
trustworthy. Interactive environment, such as recognition program, as well as knowledge sharing and
training, should be thoroughly applied to make sure employee commitment and participation in completing
the goal is achieved.
7. Conclusion
The objectives set at the beginning of the research have been achieved. The five leadership behaviors with
significant impact on employee satisfaction and loyalty have been successfully identified and tested. The
regression equation demonstrating the relationship between leadership behaviors and employee satisfaction,
employee loyalty has been determined. The research findings have shed lights for further improvement on
employee loyalty of staff working in hospitality industry.

The study has contributed to leadership research fields and employee loyalty, theoretically and practically.
The research itself suggests that task oriented leadership is the factor with the highest significance on employee
loyalty, followed by employee satisfaction and change oriented leadership. Other behaviors, namely relations
oriented leadership, autocratic leadership and charismatic also impact employee loyalty, however, their
influence is not as strong.
However, there are certain limitations to the study. Due to its limited study scope and sampling choice,
there is possible bias in the final concluded result. Therefore, it is highly recommended that further studies be
conducted in different areas or in less high-class hotels and restaurants to verify and confirm the generalized
findings on the effects of leadership styles on employee loyalty.

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