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Responsible Leadership Helps Retain Talent in India

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Abstract

The role of responsible leadership—for each leader and as part of a leader’s collective actions—is essential to global competitive success (Doh and Stumpf, Handbook on responsible leadership and governance in global business, 2005; Maak and Pless, Responsible leadership, 2006a. Failures in leadership have stimulated interest in understanding “responsible leadership” by researchers and practitioners. Research on responsible leadership draws on stakeholder theory, with employees viewed as a primary stakeholder for the responsible organization (Donaldson and Preston, Acad Manag Rev 20(1):65–91, 1995; Freeman, Strategic management: a stakeholder approach, 1984; Mitchell et al., Acad Manag Rev 22:853–886, 1997; Phillips and Freeman, Stakeholder theory and organizational ethics, 2003. We define and operationalize responsible leadership from the perspective of employees and their views of the actions of their leaders. Drawing on a comprehensive survey of 28 Indian and global organizations operating in India, we report the results from 4,352 employees on the relationship between responsible leadership, their pride in and satisfaction with their organization, and retention 1 year later. Strong associations were found among these variables suggesting that responsible leadership—employee perceptions of the support they receive from managers, the HR practices, and corporate socially responsible actions—may be an overarching construct that connects them to the organization.

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Notes

  1. We use the word “retention” rather than “turnover” to reflect what is generally accepted language when referring to professional and managerial employees. 85% retention is the same as 15% turnover.

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Acknowledgment

The authors thank David Waldman for helpful feedback on an earlier draft of the manuscript.

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Authors and Affiliations

  1. Center for Global Leadership, Villanova School of Business, Villanova University, 800 Lancaster Avenue, Villanova, PA, 19085, USA

    Jonathan P. Doh

  2. Villanova School of Business, Villanova University, Villanova, USA

    Stephen A. Stumpf & Walter G. Tymon Jr.

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  1. Jonathan P. Doh
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  2. Stephen A. Stumpf
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  3. Walter G. Tymon Jr.
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Correspondence to Jonathan P. Doh.

Additional information

This article is based on research sponsored by Right Management, a subsidiary of Manpower Inc., and a Villanova School of Business research team. Contributions have been made by Holly Dolgaard, J. Karthikeyan, Priyanka Malhotra, Shabbir Merchant, Gerald Purgay, Richard R. Smith, and Kenneth Thomas. Contributors are listed alphabetically. The authors contributed equally to this article.

Appendix: Responsible leadership survey dimensions and items

Appendix: Responsible leadership survey dimensions and items

Stakeholder Culture (Responsible Leadership Component)

  • This organization takes an active role in its community.

  • This organization takes ethics seriously (e.g., is committed to ethics training).

  • This organization responds well to a diverse group of stakeholders.

  • This organization takes corporate social responsibility seriously (e.g., has a clear policy that reflects its commitment to one or more social causes).

Human Resource Practices (Responsible Leadership Component)

  • Our performance appraisal programs are effectively used to retain the best talent.

  • Our compensation programs are effectively used to retain the best talent.

  • Our organization believes that all employees deserve to be actively managed as talent.

  • Our organization’s program for high potentials helps in talent retention.

  • The company has a formal “high potential” program—people know what they need to do to get into it and to advance within it.

Managerial Support (Responsible Leadership Component)

  • My immediate manager leads by example.

  • My immediate manager gives me the support I need to do my job well.

  • My immediate manager is effective.

  • My immediate manager is good at developing people.

Pride in the Organization

  • I am proud to work for my organization.

  • I speak highly of my organization’s products and services.

  • I am confident in this organization’s ability to “do the right thing.”

  • I am proud of this organization’s reputation.

Satisfaction with the Organization

  • I would recommend my organization to my friends/colleagues as a great place to work.

  • Overall, I am satisfied with my present job.

  • I expect to be a part of this organization two or more years from now (subsequently deleted from the scale).

  • Overall, I am satisfied with my organization as an employer.

Intention to Leave

  • I am actively looking for alternative employment.

  • I intend to leave my current position within the next year.

  • I plan to work at a different organization within a year.

Retention (Turnover)

  • Retention was assessed 12 months after completion of the survey by determining if the respondents were still affiliated (coded 0) or no longer affiliated (coded 1) (Table 3).

Table 3 Factor loadings of study variables
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Doh, J.P., Stumpf, S.A. & Tymon, W.G. Responsible Leadership Helps Retain Talent in India. J Bus Ethics 98 (Suppl 1), 85–100 (2011). https://doi.org/10.1007/s10551-011-1018-3

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