The impact of leadership on employees’ loyalty Essay

Employees' loyalties are important elements where it can bring a lot of impacts either to leader or organization itself. If the employee loyalty are disconnected, it costs the institutions in lackluster service, absenteeism, reduce production, turnover, low motivation, vandalism, stress-related health, or poor customer service. However, there is one of elements where it can influence employees' loyalty in the institution such as leadership style.
Based on the research was done by Muskan (2013), there are 64% of the respondents that highest possible to leave the institutions by groups young generation where one of the reason because of inefficient in communication and coordination between immediate boss and seniors. As a generally, how immediate boss (leader) react to the employees also can be impact to the employees. If they did not have effective communication between leader and employees will cause reduce employees' organization commitment and no employees' loyalty in them.
In 2015, It was supported based on the interview presented to the researcher the employees of the private higher education institutions in Klang Valley agreed that they were facing unsatisfied relationship between them and their leader or head of department. They did not interested to continue working with the current leader, drop performance or commitment and will find the opportunity to transfer to another department where they think will perform it. As one ways, they will submit the transfer letters to the Human Resource Department (HRM) to ask transfer to another unit or department. Even though, their facing problems with immediate leader, but did not willing to leave the institutions because of other mattes.
Based on the generational differences, the results were found that Gen Y has lower employee loyalty compared than Gen X and Baby boomers. It shows that Gen Y employees have higher intention to leave the institution rather than stay in the current institutions (Gursoy, 2012). It means that to retain employees who born as a Gen Y more challenge and has become a more difficult task ever. Because of employees unable to loyal to the leader, their intention to leave will create impact where the employees are will reduce his or her commitment and as a result will be affect the performance of the institutions. From that, this study understands that employees' commitments are very important towards leader relationship and institutions success might have been affected. Due to this, leaders should pay close attention to the level of employees commitment to ensure employees' commitment will continuously in future. Besides that, based on this relationship these phenomena can be explained by using Social Exchange Theory (SET) or Leader Member Exchange (LMX) where employees tend to weight the potential benefits versus risks of social relationships and try to terminate the relationship (Homas, 1958). Hence, the biggest challenge for Malaysia Private Higher Institutions and leader is to foster a sense of employees' commitment and employees' loyalty with employees' it.
So that, this study will examine the impact the leadership style, organization commitment on employees' loyalty among Gen Y in Malaysia Private Higher Institutions.