The Effect of Leadership Style on Employee Engagement: Case of Aduana Group of

Companies

Presented To
Mr. Raymond D. Paderna
Of the Decision Sciences and Innovation Department
Ramon V. Del Rosario-College of Business
In partial Fulfillment of the Course Requirements in
Business Research
(BUSIRES) K31

Submitted by:
Austria, Jay Brendan M.
Galang, Maria Patricia Pauline F.
Palacios, Joaquin Miguel B.
Policarpio, James Ernest T.
Venturina, Gabriella S.

Submitted on:
April 6, 2016

ACKNOWLEDGEMENTS

The researchers would like to thank Aduana Group of Companies, specifically, the assistance
of Maria Lourdes M. Austria, Angelica Tubig, Rose Anne Padua, Reynaldo Danao, Maria
Antonette Marfil, and Esperanza Buhay, for without their assistance, we would not have been
able to gather the data needed for this study.
We would also like to acknowledge the assistance of certain members of the School of
Economics in De La Salle University, specifically Prof. Christopher R. Cabuay, Manuel Jopson,
Faith De Gracia, and Paul Daniel S. Tayag, for their assistance regarding the statistical methods
and analysis in this study.
Lastly, we would like to acknowledge and greatly thank Prof. Raymond D. Paderna, for his
undying support and guidance throughout the process of executing the study. We would not be
close to where we are without his guidance.

ABSTRACT
Various studies regarding the relationship between employee engagement its influence
from numerous factors have been done in the academe, as this has been one of the major
concerns of the average business owner, though the amount of studies involving leadership styles
is very minimal. Several related studies made use of descriptive statistic methodologies which
simply presents quantitative descriptions and not generalizations. In fact, there is only a minority
of studies that make use of regression analysis, which could have produced generalizations that
could have been used as supplementary data for the study. The Philippines also has insufficient
research sets on the subject matter. This study was conducted to determine whether there is a
relationship between a managers leadership style and employee engagement. A structured
questionnaire was used to gather data for further examination in the study. The data used in this
study was collected from a conducted census among the 60 employees of Aduana Group of
Companies, including the Sta. Ana Warehouse branch. Simple linear regression analysis was
conducted to confirm the relationship of the two variables. Based on the results of the study, it
was found that there is a strong relationship

between leadership styles and employee

engagement

the

levels

among

company

employees.

Table of Contents
CHAPTER 1: BACKGROUND OF THE STUDY ................................................................................. 1
1.1 Background of the study ..................................................................................................................... 1
1.2 Objective of the study ......................................................................................................................... 1
1.3 Significance of The Study ................................................................................................................... 2
1.4 Scope and Limitation .......................................................................................................................... 3
CHAPTER 2: REVIEW OF RELATED LITERATRE .......................................................................... 6
2.1 Leadership Styles ................................................................................................................................ 6
2.1.1 Definition ..................................................................................................................................... 6
2.1.2 Types of Leadership Styles .......................................................................................................... 9
2.1.3 Measuring Leadership styles ...................................................................................................... 11
2.2 Employee Engagement ................................................................................................................. 12
2.2.1 Definition ................................................................................................................................... 12
2.2.2 Measuring Employee Engagement ............................................................................................ 15
2.3 The Link Between Leadership Styles and Employee Engagement................................................... 15
2.4 Synthesis ........................................................................................................................................... 17
2.5 Research Gap .................................................................................................................................... 18
2.5.1 Lack of Philippine Studies in The Field..................................................................................... 18
2.5.2 Methodology Gap ...................................................................................................................... 18
CHAPTER 3: THEORETICAL/CONCEPTUAL FRAMEWORK OF THE STUDY ...................... 20
3.1 Theoretical Framework ..................................................................................................................... 20
3.2 Conceptual Framework ..................................................................................................................... 23
3.3 Operational Framework .................................................................................................................... 24
3.3.1 Hypothesis/Proposition of the Study.......................................................................................... 25
3.3.2 Assumptions of the Study .......................................................................................................... 26
3.3.3 Operational Definition of Terms ................................................................................................ 26
CHAPTER 4: RESEARCH METHODOLOGY ................................................................................... 28
4.1 Research Design................................................................................................................................ 28
4.2 Research Locale ................................................................................................................................ 28
4.3 Profile of Respondents ...................................................................................................................... 29
4.3.1 Warehouse Employees ............................................................................................................... 29
4.3.2 In- Office Employees ................................................................................................................. 30
4.4 Sampling Design ............................................................................................................................... 31

4.5 Methods of Data Collection .............................................................................................................. 31

4.5.1 Employee engagement (Malasakit sa trabaho, sa kumpanya, at sa mga kapwa empleyado) ... 31
4.5.2 Leadership styles (Estilo ng Pamumuno)................................................................................... 33
4.6 Methods of Data Analysis ................................................................................................................. 34
CHAPTER 5: PRESENTATION AND ANALYSIS OF DATA........................................................... 37
5.1 Presentation and Analysis of Data .................................................................................................... 37
5.1.1 Pearson Correlation Coefficient ................................................................................................. 37
5.1.2 Spearmans Correlation Coefficient........................................................................................... 38
5.1.3 Simple Linear Regression Analysis ........................................................................................... 39
CHAPTER 6: CONCLUSION AND RECOMMENDATIONS ........................................................... 42
6.1 CONCLUSION ................................................................................................................................. 42
6.2 RECOMMENDATION .................................................................................................................... 44
For Aduana Group of Companies ....................................................................................................... 44
For Businessmen/leaders of an organization....................................................................................... 44
For Future Researchers ....................................................................................................................... 45
BIBLIOGRPAHY ..................................................................................................................................... 46
APPENDIX ................................................................................................................................................ 50
A. Questionnaire ..................................................................................................................................... 50

CHAPTER 1: BACKGROUND OF THE STUDY

1.1 Background of the study

Aduana Group of Companies is a freight-forwarding and customs specialist company,
which aims to be a client's one-stop shop for all their logistics and freight-forwarding needs. In
this hypercompetitive industry, the company must always perform at its efficient level. This can
be ensured by looking at different leadership styles that would engage employees and encourage
them to be dedicated in their jobs. This study is conducted because the researchers have found
that there is a lack of research done regarding this topic in the Philippines. Most studies done
regarding the effect of leadership style to employee engagement were conducted in other
countries such as the United States of America.
The main problem of this research study asks: Does leadership style affect the level of
employee engagement at Aduana Group of Companies?
Moreover, the researchers would also like to pose the following specific problems:
What is the current level of employee engagement at Aduana Group of Companies?
What specific recommendations can be made in order to further enhance the leadership
style used at Aduana Group of Companies?
What specific recommendations can be made in order to further enhance the level of
employee engagement at Aduana Group of Companies?

1.2 Objective of the study

The objective of this study is to find out if the leadership style affects the level of
employee engagement at Aduana Group of Companies. Furthermore, the group would also like
to know the current level of employee engagement at Aduana Group of Companies. In addition,

the group will be researching on the factors that affect the level of engagement of employees to
support the groups description of engagement. Moreover, at the end of the research the group
would identify specific recommendations that can be made in order to further enhance the
leadership style used and the level of employee engagement at Aduana Group of Companies

1.3 Significance of The Study

According to Gruman (2011), employee engagement has been seen as one of the factors
that brings an organization to its competitiveness and success among other organizations. It is
then through finding the right leadership to bring about the engagement among employees in an
organization. Moreover, among the sample of 65 firms that Gruman did a study on, the ones
among the top 25% of employee engagement index was more profitable, doubled their
shareholder value and had greater return on assets (ROA). However, in the Philippines, not even
a single study was found about how leadership style affects the level of employee engagement.
Our group focuses on studying Aduana Group of Companies which is in the hypercompetitive
freight forwarding industry. It should also be noted that it is in the companys best interest to
have employees who are well engaged in their jobs to ensure that the company is operating at its
optimal level.
For Aduana Group of Companies - This study will be beneficial for the Aduana Group of
Companies since the organization would have an idea regarding the effects of their managers
leadership styles on the engagement of their employees. The company may then take the
appropriate steps needed to address the findings of the study, which would hopefully help
increase employee engagement in the organization.
For businessmen/leaders of an organization - It is important to know the level of
employee engagement and the corresponding leadership style applied in the business. Moreover,

this study would help business organizations to recognize the effective leadership styles that
would help the organization to increase in engagement among employees. This, in return, would
provide more productive employees since they would be more satisfied with their work. Also,
this would result to higher profits in the future ventures of the company and return on assets.
For Future Researchers- This study would allow future researchers to know the different
leadership styles that are prevalent in the Philippines. This research may also be used as
supplementary information that can be used to enhance future research topics that are correlated
to this research. They may also cite this research paper for future purposes. Also, this would also
help future researchers cite the appropriate leadership style in a company.

1.4 Scope and Limitation

This section outlines the parameters under which study evolved. Within the acceptable
range of this empirical investigation in its scope and they include the following:
1. The variables to be investigated are independent and dependent variables. The variables
will be quantitative in nature. For the dependent variable, which is employee
engagement, the questions to be used will be adopted from the Gallup 12 questionnaire,
which is a widely accepted survey of measuring employee engagement. For the
independent variable, which is leadership style, the measurement will be taken in the
form of a survey comprised of questions based on the researchers review of related
literature. Given these variables, coupled with the very limited time the group has of two
months, the group will determine if a causal relationship exists via use of a simple
regression model.
2. The company that will be used for the study is Aduana Group of Companies. The study
will hand out questionnaires for the entire population of the company to gather the

needed data. Respondents would range from top management, HR manager, current
employees and department heads.
a. The top management is comprised of the owners of the company. Given that the
company is a partnership, this will include the Chief Executive Officer, and the
Chief Operations Officer.
b. The HR manager will be the point person for the researchers in order to carry out
the survey needed. The HR manager will be the one to clearly define the roles
and goals and what their performance expectations are for the employees, making
them the logical choice for a point person.
c. The company would utilize the all employees of the company in their Sta. Ana
branch. The reason for this is that the researchers want to make sure that the
results are ample and applicable to everyone in the company. Given also the
hyper-competitiveness of the industry, it is vital that the employees, both full-time
and part-time, need to be at their optimal performance in order to compete
effectively with other companies.
d. Individual department heads will be helping out in establishing the performance
requirements of the employees on a more specific level. This is so that the
proficiency level needed in the study matches the requirements of the company.
This is to ensure that the results of the study will be applicable to the company.
3. The study has a causal relationship nature, and therefore, will be using a simple
regression model, as regression models are effective at ensuring there is a causal
relationship between variables. Given the data collected and the model chosen, the

researchers will then gather the data and do proper analysis techniques to come up with a
policy brief that the company can utilize.
4. The research will be conducted at the Sta. Ana warehouse and office branch of Aduana
Group of Companies.
Matter and occurrences that are beyond the control of the researchers are the
limitations, and these are as follows:
1. The group only has seven to eight weeks to complete the output and therefore will
be limited to the measures they can implement.
2. Given the time constraints, only a simple regression model will be used, despite
the existence of other regression models that are better suited for the study. These
regression models, such as the Qualitative Response Model, which aims to
quantify qualitative variables, are beyond the current standing abilities of the
researchers to perform.
3. Our measurement of engagement and leadership styles will be anchored to
existing literature of the study, specifically the Gallup 12 survey. Other metrics
used to measure the effects of leadership styles to employee engagement will not
be used in the study.
Given the existence of better regression models in the field of econometrics, the results
may not be the most optimal solution for the problem. These results may not be
applicable to other businesses since the study is limited to only one company, and will
not include other companies in the industry. Given also the fact that the company only
has 60 employees; this number is not a viable sample size for the entire freightforwarding industry.

CHAPTER 2: REVIEW OF RELATED LITERATRE

Employee engagement predicts employees outcomes, financial performance, and success
in the organization (Saks, 2006). This can be achieved through the application of the most
suitable leadership style in the workplace of an organization and how the Leadership Style fits
the organization will affect its performance, allowing it to move forward. (Denning, 2010). As
Lu (1997) said, managers must engage in different leadership styles in the workplace, to
determine which suits best for the organization and its workers, for this will influence the
workers to be more engaged in their work. This is why the group finds it significant to study the
effects of Leadership Style on employee engagement, in the case of Aduana group of companies,
for this will be beneficial to the company as well.
This chapter discusses the definition of leadership style and employee engagement based
on related literature. The terms leadership styles and leadership styles are also defined and
differentiated from each other. Moreover, the different types of leadership Styles and their
characteristics are elaborated. Measuring employee engagement and the link between the two
variables are also included in the review of related literature.

2.1 Leadership Styles

2.1.1 Definition
The term leadership style can be defined as the binding together of the object of an
organizations diversity in terms of operations and functions. (Quang & Tai Vuong, 2002).
Quang (2002) stated a study of Kandwalla (1995) which said that leadership style is an
organization's unique way of making decisions, setting goals and corresponding strategies in
order to achieve them, and all the other factors performed by basic management. Furthermore,

leadership style is another element of an organizations success and employees participation (Lu
& Wang, 1997). Lu (1997) also stated, that different leadership styles are used in the different
phases of an organization's growth.
Moreover, the leadership style of an organization is also one of the factors that affects its
effectiveness. It is stated in in Quangs (2002) study that the different kinds of leadership styles
strongly influence the behavior of employees towards work and therefore affects the level of
engagement in the organization. The study suggests that leadership style affects the whole
organization's overall performance, which could either lead to the organization's success or
failure.

Difference between Management Styles and Leadership Styles

The term leader in its mere definition is one who can influence other people with the use
of skills, persuasion, and visualization. A leader may also be defined as someone who
encourages and influences his or her entitys members to perform well through the use of
intellectual capabilities. A leader is deemed to be the most dominant member of a group, the
most distinguished associate in a field of expertise that is followed by a group of supporters or
believers. The term leadership has turned into a term that is subordinated by definitions of power
and influence. Leadership is a process that involves vision, motivation, and actions of the
leader that enables the followers to achieve certain collective goals. It involves the leader,
followers, and the situation. The purpose of leadership is to provide direction and bring about
change (Toor & Ofori, 2008, p. 64).
On the contrary, a manager is someone who strategizes, puts things in order, sets out
goals, and controls resources with the application of his set of skills. He is a member that
administers or supervises the different tasks that are parallel to the goals or objectives that he has

set out for his organization. Management is about overseeing different entities that can range
from a unit or department to a whole institution.
Murray (n.d.) stated that although management is different from leadership, the two are
complementary and must therefore go hand in hand. He mentions that a management styles have
something to do with planning, organizing and coordinating, while leadership deals more with
motivating and inspiring employees. He goes on by saying that management and leadership are
not easily separated in the new economy as value comes increasingly from the knowledge of a
companys people.
According to Toor & Ofori (2008), by nature, managers have the drive to formulae
solutions to problems that involve their organizations objectives, composition, wealth, and its
members. Developed under an environment that highlights the importance of wisdom in
governance, managers are systematic unlike leaders. They are coherent and conscious in the way
they deal with problems. They are reliable and consistent in their conduct and determined and
firm in their procedures. The environment of leadership, on the contrary, is sweeping,
unrestrained and straightforward therefore it enjoins the utilization of new philosophies to
address setbacks. Leaders convince their supporters to creatively handle problems and these are
often perceived as opportunities. Leaders lean more to the defiant side while managers stick to
organization culture, procedures and ranking.
The study will be extremely important to the present managers now and, moreover, to the
future managers. This would help the managers choose and adapt to different kinds of leadership
styles that are present in their workplace. By adapting to the most fitted leadership style for a
specific organization, a business is bound to be more successful in their industry.

2.1.2 Types of Leadership Styles

1. Autocratic / Authoritarian
According to Rao (2011), an autocratic style of management does not involve the
employees in the decision making process. Employees tend to feel restricted or bound by the
managers rules and instructions, which does not promote creativity. He also stated that this kind
of leadership style is justifiable in organizations where business processes are under time
constraint or when there is an element of secrecy involved in decision making. This leadership
Style works best when a large number of the companys employees are newly hired and they are
not yet familiar as to how to perform their tasks. According to Mind Tools (n.d.), Autocratic
leaders are those who make decisions without further consultation from the members of the
team, despite the fact that these members may contribute input that may be made useful. This
type of leadership may tend to cause low employee morale and high levels of absenteeism and
staff turnover. However, this may be helpful in times when decisions are urgent and must be
done quickly or at times when team input is no longer necessary.
Lewins Leadership Styles framework describes this to be a style in which the leaders
take command. These leaders do not pass on any decision-making responsibilities to employees
or members of the team. They make decisions independently, and without input from
subordinates. Nayab (2011) stated that autocratic leadership, which bases itself on Douglas
McGregors Theory X workers who are believed to be inherently lazy and will not work unless
forced to do so, advocates the close supervision and control of managers to the workers. The
autocratic leadership style assumes that rewards and punishments are what trigger employee
motivation rather than empowerment given by the leader. He further adds that managers
applying this leadership style tend to involve themselves in the detailed day-to-day

organizational processes to be able to make sure that every instruction given to the workers is
followed.
2. Democratic
The democratic leadership style makes room for the employees participation in decision
making. Managers who use this style encourage their subordinates to share their ideas and
suggestions in free discussions for arriving at decisions in the company. This leadership style
narrows the gap between managers and employees, as it promotes teamwork and collaboration.
(Rao, 2011)
According to Mind Tools (n.d.), Democratic leaders are those who have the final say in
decision-making. In contrast to the autocratic leadership style, they include and encourage team
members in the decision-making process. They also foster creativity and employee engagement
in projects and decisions. This style yields to high job satisfaction and high productivity for
employees. Though it may be useful, it is not always effective, especially when an abrupt
decision is necessary.
In the Lewins Leadership Styles Framework, this is also called the Participative
leadership style, in which the leader takes into account input and perspective from employees.
This style is very collaborative and very cooperative, with ideas and feedback being encouraged
from subordinates.
3. Delegative / Laissez-Faire
According to (Gastil, 1994) as cited by enotes.com, the laissez-faire leadership style is
the absence of an actual leadership style, for no policies are followed, and no group-related
decisions made, therefore there is more freedom. Leaders under this style have barely any
authority, since the approach in this style requires them to be hands-off. Members of under this

style are usually those who are reliable, highly-trained, experienced, and independent individuals
and experts, and with that, can be trusted by their leaders to manage things on their own. Laissezfaire leadership is best applied with long-term employees belonging to established companies.
The Lewins Leadership Styles Framework also calls this the Delegative leadership style,
given the nature of the leader to delegate the tasks to employees. The leader typically becomes
hands-off with the employees, only to intervene in times of need. The leader will check in from
time to time for progress reports and updates on the assigned tasks. In this style, leaders have
complete trust in their subordinates to do their best.

2.1.3 Measuring Leadership styles

Leadership can be measured through the use of the Transformational Leadership
Questionnaire (TLQ). According to Real World Group (2013), TLQ is the only verified
leadership 360-degree feedback tool used solely for the intention of raising engagement and
performance levels. It also determines the missing correlation for the transformation of managers
into leaders. According to Dudovskiy (2013), TLQ is based on nine scales which are the
following:
1. The genuine concern for others well-being and development
2. Political/stakeholder sensitivity and skills,
3. Inspirational networker and visionary promoter,
4. Empowers, delegates, develops leadership potential,
5. Integrity, consistency, honesty, and openness
6. Accessibility, approachability, sensitivity
7. Decisive, determined, self-confident, resilient
8. Clarifies boundaries, involves others in decision-making

9. Encourages critical and strategic thinking

With the use of TLQ, leadership can be measured thoroughly and effectively within any
organization.

2.2 Employee Engagement

2.2.1 Definition
Kruse (2011) defined employee engagement by first stating what it isnt. He stated that
employee engagement must not be mistaken for employee happiness and satisfaction. He says
that while an employee may be happy at work, it does not necessarily mean that they exert more
effort into their work for the sake of the organization. Is also is not employee satisfaction, since
satisfaction sets the bar too low. An employee might show up without complaint, but it does
not necessarily mean that s/he would exert the extra effort on his/her own. Contrary to the
common misconception, employee engagement does not mean happiness or satisfaction for the
employees, but it is simply an employees emotional commitment to the organization and desire
to achieve its goals. An engaged employee is one who works hard and is willing to take the extra
mile not just to receive the compensation in return, but in order to meet and exceed goals for the
organization.
According to Markos (2010), there is no standard definition of employee engagement as
the different studies done on the field have differing answers to what is its definition. Towers
Perrin Global Workforce Study in 2003 defines employee engagement as a measure of how
much a person can and will give discretion at a job at hand. Moreover, Markos also cited the
Gallup Business Journal (2000), which was also cited in a study being done by Dernovsek
(2008), which defines employee engagement as the enthusiastic involvement of employees to

their work, and compares its similarities to the emotional attachment and commitment of an
employee
Additionally, it was also mentioned in Markos (2010) study that Robinson, Perryman, &
Hayday (2004) defines employee engagement as a positive attitude of an employee to their
organizations and its values. It is also mentioned that engaged employees are aware of the
context of the business, and cooperates with co-workers to ensure that the organization works at
its optimal level. To achieve this, Robinson et al. (2004) mentions that there must be a two-way
relationship between the management and employee.
According to Wellins (2005), employee engagement is defined as the extent where the
employees within the organization enjoy and believe in their responsibilities and feel a sense of
fulfillment in doing so.
Aside from Markos, Bhuvanaiah & Raya (2014) have also mentioned that there is not
generally acceptable definition and a definite conceptual understanding of employee
engagement, despite the topic being a well-researched topic.
Cataldo (2011) stated that engaged employees are employees who possess characteristics
such as strongly believing in their organization and what they uphold, understanding what the
business aims to achieve in the future. In terms of performance, these employees are those who
strive for betterment not just for themselves, but also to their colleagues. These employees are
those who are willing to take the extra mile in order to do better. They must also be able to work
will with their colleagues, lending a hand when needed, and maintaining a good level of respect
all throughout.
Furthermore, Gruman and Saks (2011) stated that employee engagement is one of the key
aspects of a successful and competitive organization. This is because employee engagement

reflects the attitude, behavior, and performance of an employee. Gruman also stated a study from
Macey et al. (2009) that organizations that are successful in employee engagement increases its
return on assets (ROA) and can even double a firms shareholder value.
Devi (2009) mentioned that finding and retaining talent are important to increase a
company's competitive advantage. Employee engagement may be cultivated by encouraging
teamwork, pleasant working conditions, considerate treatment of employees, growth
opportunities, flexibleworking practices, and good leadership and management practices.
Nink & Welte (2011) stated that employee engagement is crucial to the productivity of
the organization as a whole. They said that the more engaged employees are, the more that they
are willing to work in the interest of the employer, and this can be achieved by optimizing the
work environment of the employees.
The Harvard Business Review (2013) also reported on employee engagement, and
emphasized on how employee engagement is also very difficult to measure for many companies,
with about 50% reporting that they have difficulty measuring employee engagement. To
complement that, 71% of the respondents in their study, who are businesses, have reported that
employee engagement is very important in achieving overall organizational success. Although
most business leaders understand the importance of making sure that their employees are
engaged in their work, most of the managers interviewed admitted that most of their employees
are not highly engaged. The respondents also stated that they find it difficult to measure
employee engagement and its impact to the company's financial results. The study also showed
that top-level managers are much more optimistic than middle managers in terms of their
perception of the employee engagement in their company. It was also found that NPS and

service-profit chain are the most powerful tools that could be used to link engagement initiatives
with business goals.

2.2.2 Measuring Employee Engagement

Employee engagement can be measured through a reliable instrument that has been used
in researches in the past, and it is called the Gallups Q12 feedback system. According to Cataldo
(2011), Gallups Q12 feedback system consists of twelve questions that could be used in
conducting a survey as determinants of employee engagement for research purposes.
Cataldo also cited the three different employee engagement levels namely actively
engaged, disengaged, and actively disengaged. Each possessed different qualities. Actively
engaged workers are those who have consistently perform exemplary. They project a high level
of enthusiasm and have a positive outlook in work for they are highly motivated. Disengaged
employees on the other hand are those who only perceive work as something to be done in
exchange of a paycheck to satisfy their daily needs. This outlook may have been caused through
lack of career growth, perception of salary inequity, low job satisfaction, and lack of trust with
the management of the company. Whereas the actively disengaged employees are those who are
evidently unhappy in their workplace, which greatly affects their performance in work.

2.3 The Link Between Leadership Styles and Employee Engagement

A paper done by Batista-Taran, Shuck, Gutierrez, & Baralt (2009) from the University of
Florida International University, USA aimed to delve into the relationship between leadership
Styles and employee engagement. Theories such as the Leader-Member Exchange Theory,
Transactional Leadership Style, etc., have determined that a transformative leadership style
promotes a sense of belongingness among employees. In addition to that, giving incentives and

rewards in the form of monetary compensation and benefits fosters employee engagement in an
organization. Since the study was a qualitative study, the quantitative level of effects to
employee engagement was no longer stated.
Similarly, a study was performed by Shafie, Baghersalimi, & Barghi (2013), aimed to
quantitatively determine the relationship between leadership style and employee performance. In
their research, they were able to conclude that leadership inclined to the development and
pragmatisms has a positive impact on employee engagement.
Nwadukwe, & Timinepere (2012) explored the different leadership styles and its effect
on organizational effectiveness in private enterprises in Nigeria. Data was gathered via survey,
and the population consisted of top, middle, and lower levels in management in the private
businesses in eight industrial sectors of Anambra State. With the use of descriptive statistics and
Pearson product moment correlation statistic, the study discovered that participative and
paternalistic leadership styles were the dominant styles in the area. Effectiveness of the
businesses were all above par. The authors recommended that the enterprises adapt leadership
styles that go hand in hand with the achievement of set goals, cultural values, and idiosyncratic
characteristics of the organization, as it was discovered as well that there was no best leadership
Style.
In the study of Darwish Yousef (1999), he indicated that the relationship between
leadership style and employee engagement, which he termed organizational commitment, are
inconsistent. Some researchers found out that there is no link in the two variables and some
agreed that there was indeed a link. He added, among those who agreed that the two variables
were linked, employees were likely to engage in their work if the leadership style of their leaders

was participative and consultative. This resulted to the increase in performance of the employees
in organizations which practices these kind of leadership styles.
Nevertheless, Metzler (2006), strengthened the stand that leadership styles are employee
engagement are closely related to each other. This is because the kind of leadership style a leader
uses affects the level of performance or engagement of an employee in a workplace. He then
proved this by saying transformational leadership is effective in helping the employee engage in
their work since it helps them improve and excel in their expertise.
Studying the effects of different leadership styles to employee engagement is essential
because managers play a crucial role in the performance of their subordinates. They have direct
control over the employees, and are looked up to by these employees. There are currently six (6)
leadership styles as mentioned by Cardinal (2013). These leadership styles include directive,
authoritative, affiliative, participative, pacesetting, and coaching. These leadership styles affect
the behavior of employees; such as how they act in the workplace, their performance, and many
other factors. It is important to know the level of engagement of an employee to the specific
leadership style because as a number of authors would say, the employees engagement increases
the overall performance of an organization. Thus, we could say that the success of an
organization relies on the level of engagement of an employee to his/her work.

2.4 Synthesis
Leadership and management are two distinct terms often mistaken to be synonymous to
one another. A leader is more of an identity used for someone who is often seen as a person of
influence, power and ability. When the term leadership is used, a strong and coercive personality
supported by a set of ideals, abilities and dominance comes into play. Leadership is more
inclined to being supported and being followed by a persons subordinates and this greatly

projects a vertical type of relationship with its members. On the other hand, a manager is more of
an associate which involves himself in the execution of the goals that he himself has set up. It is
more of a person who binds an organization and its affiliates into following and achieving a
mutual goal. However, for this particular study, the terms leader and manager shall be used
interchangeably, since the managers of the company act as its leaders.
A majority of the studies found concluded that a multi-stream style of management,
which involves the enrichment of employees morale and worth via improving their well-being.
Efforts that allow management to collaborate with all stakeholders have reported to have an
increase in employee wellbeing (Lugtu Jr., 2012). This improvement in engagement is crucial to
any business as it has been proven in the previous sections that engaged workers are productive
workers that work towards an organizations goals and objectives.

2.5 Research Gap

2.5.1 Lack of Philippine Studies in The Field
There are numerous literature and researches about the study; however, not one article
was found to have been was set in the Philippines or on any company in the Philippines with
regards to leadership styles and employee engagement or the sole study of each leadership. The
most similar study to the Philippines that explored our topic was conducted in Vietnam, which
was conducted by Quang, T. and Tai Vuong, N. in 2002.

2.5.2 Methodology Gap

The studies that have quantified the improvement in employee engagement given a
certain Leadership Style have all resorted to using either descriptive statistics or utilized Pearson
Product-Moment correlation, but there are little to no studies that have gone with the use of

regression analysis to find out the effects. The problem with the use of basic descriptive statistics
and Pearson Product-Moment correlation is that it only checks for a relationship, or a correlation.
With the use of the different applicable models in regression analysis, we can check for the
validity of the correlations discovered in with the previous models (Anderson, n.d.). Regression
analysis also allows one to accurately forecast the trend of the data in the business (Gujarati &
Porter, 2012). This leads to a more accurate and reliable result, which in turn, will give more
effective policy and management recommendations for Aduana Group of Companies.

CHAPTER 3: THEORETICAL/CONCEPTUAL FRAMEWORK OF THE STUDY

3.1 Theoretical Framework

Figure 1. Leadership style framework. Framework that distinguishes three broad styles of leadership from one
another, namely, autocratic, democratic, and laissez-faire cited by Palad, O. (2015, March 28). Most Effective
Leadership and Management Styles and Approaches. Retrieved February 28, 2016, from
https://okpalad.wordpress.com/2015/03/28/most-effective-leadership-and-management-styles-and-approaches/

In order for the researchers to conduct the study, research was done on the frameworks
that are used in similar studies. This is done to further support the flow of information the
researchers would collect and interpret for the future readers. For the theoretical framework, we
have researched on the three most common leadership styles used and studied. Furthermore, the
group included the hierarchy of level engagement (figure 2) to describe the areas that affects
employee engagement. Palad, O. (2015) suggests that there are three broad leadership styles
commonly used in organizations as of this day, namely autocratic, democratic, and laissez-faire
leadership styles. The figure above suggests that in order for a leader to be effective, it is
essential to practice the three broad leadership styles with the right balance, since each one of
these styles have their pros and cons, and are suitable depending on the situations and the time to
do so.

A leader cannot solely be an autocratic leader, since problems such as employee

dissatisfaction and decrease in employee engagement may arise in the long run, due to the fact
that employees have no say in decisions to be made and do not have the opportunity to contribute
any inputs. Moreover, a leader cannot be fully democratic as it can delay the decision-making
processes in the organization, which can lead to more challenges in situations wherein an abrupt
decision is necessary. Lastly, a leader cannot solely practice laissez-faire leadership, since this
leadership style involves no control or supervision in terms of the decision-making process, as
the authority to do so lies within the employees alone.

Figure 2. Employee engagement hierarchy framework. A framework that divides the Q12 measure of employee
engagement into four groups, namely basic needs, management support, teamwork, and growth, each in their order
of importance. Nink, M., & Welte, K. (2011, December 6). Involving Employees in Change. Retrieved February 28,
2016, from http://www.gallup.com/businessjournal/150932/involving-employees-change.aspx

According to Nink & Welte (2011), as depicted in figure 2, the key to completely make
an employee feel involved in their work is not only through their salaries but also by attaining an

employee's core needs and expectations within the workplace. This is done by being emotionally
attached to an employee or being engaged in their daily work. Also, by having a strong bond
within the employee and the employer it is more likely that the employee would do what the
employer ask him or her to do. The authors then concluded that if an employee is more engaged
with their leaders the whole organization would be more productive. Furthermore, Gruman and
Saks (2011) stated that employee engagement is one of the key aspects of a successful and
competitive organization. This is because employee engagement reflects the attitude, behavior,
and performance of an employee. Moreover, it is included in the study of Nink & Welte (2011)
that the figure above shows how Gallup explained the state of the engagement of an employee in
a workplace. The authors explained that the first step in helping employees be more engage in
work is by providing them with their basic needs. Examples of these needs are their expectations
of work and the materials and equipment they use for work. Furthermore, next level of employee
engagement is through the support of the management. This is done by helping the employee
develop in the workplace, feels that management is taking care of them, recognizing their efforts,
and thus able to do their best in work. The next level would then be determined by teamwork
begins to develop and thus factors such as opinions, friendship, quality of work, and mission or
purpose arises. The highest level of employee engagement which is the growth of an employee is
then determined by their progress, and ability to learn more and growth.

3.2 Conceptual Framework

Independent Variable

LEADERSHIP STYLE
Palad (2015)

Dependent Variable

EMPLOYEE
ENGAGEMENT
Gallup as cited by Nink
and Welte (2011)

Figure 3. The Relationship of Leadership styles and Employee engagement. Framework regarding employee
engagement was adapted from Metzler, J. M. (2006). The relationships between leadership styles and employee
engagement. Retrieved from http://scholarworks.sjsu.edu/cgi/viewcontent.cgi?article=3963&context=etd_theses

This framework consists of the independent and dependent variables mentioned in the
theoretical framework, namely, leadership styles and employee engagement respectively. This
framework suggests that the type of leadership style used within an organization would directly
affect the level of employee engagement. Metzler (2006), stated that leadership styles and
employee engagement are closely related to each other. This is for the reason that the kind of
leadership style a leader uses affects the level of performance or engagement of an employee in a
workplace. He then proved this by saying transformational leadership is effective in helping the
employee engage in their work since it helps them improve and excel in their expertise.

3.3 Operational Framework

Figure 4. Specific areas in leadership styles and their effects on employee engagement. The framework above
was derived from various authors Metzler, et.al.

The operational framework seen above was adopted from various authors with the similar
study. As Metzler (2006) stated, a leader with a positive feedback and who coaches their
employees help the employee understand, incorporate, and help them be more dedicated with
their work. Moreover, Nink (2011) stated that a leader must also engage with the employees that
are present in a company. A leader must know how to mingle and form a professional friendship
with their employees. This results to a high possibility that an employee would act to what the
employer wants in a workplace. In addition, a leader must be able to create a compelling vision
and make that vision clear to all the employees in the organization (Mindtools, n.d. & Quang,
2002). This would change the behavior of employees to support the organization and thus engage
more in their work. Not only should a leader make the vision of the organization clear, but also
connect the organization's vision to its employees necessities. Also, leaders who make a clear
vision in the organization creates an employee mindset that if the employee or the organization
made exceptional results for their project they will be rewarded. Furthermore, (Mindtools, n.d.)

says that if an individual expect a desirable and positive outcome, they usually strive to the
quality of work they are expected to. With this, employees tend to be more satisfied with what
with their doing and also increase their productivity. Additionally, a leader must manifest
delegation skills (SkillsYouNeed, n.d.). Delegation skill is the ability to control the situation and
the employees. On top of that, Gastil (1994) said that leaders become more hands-off with the
employees, only to intervene in times of need. The leader will check in from time to time for
progress reports and updates on the assigned tasks. In this style, leaders have complete trust in
their subordinates to do their best. It is said in the related literature that, the manner of control
over the situation and the employees affects employee engagement. On the other hand, Cataldo
(2011) stated that engaged employees are employees who possess characteristics such as strongly
believing in their organization and what they uphold, understanding what the business aims to
achieve in the future. This also results to better performance of employees because they become
committed to work.

3.3.1 Hypothesis/Proposition of the Study

In this study, the group would study the leadership style of Aduana group of companies.
The leadership styles that are going to be investigated is defined in the groups review of related
literature. Moreover, the group would then test, via survey, if the leadership style of Aduana
group of companies which affects employee engagement.

Thus, the group came up with the hypothesis that:

Ho: There is no relationship between leadership style and employee engagement.
H+: There is a relationship between leadership style and employee engagement.
3.3.2 Assumptions of the Study
1. Different kinds of leadership styles strongly influence the behavior of employees towards
work and therefore affects the level of engagement in the organization. (Quang, 2002)
(Metzler,2006)
2. Employee engagement is crucial to the productivity of the organization as a whole. The
more engaged employees are, the more that they are willing to work in the interest of the
employer, and this can be achieved by optimizing the work environment of the
employees. (Nink & Welte, 2011)
3. The researchers assume that the respondents will answer the survey with honesty and
integrity to ensure that the data collected will be accurate, which will in turn, come up
with accurate results from analysis.
3.3.3 Operational Definition of Terms
1. Leadership Style - The manner or style with which the organizations managers lead
their subordinates in implementing plans and providing instructions
2. Employee Engagement - The extent to which employees are committed to their
organization and are passionate about their jobs
3. Autocratic Leadership - Leadership style characterized by a single person making all
the decisions alone, with employees simply following the instructions given to them.

4. Democratic Leadership - Leadership style where consensus is given importance through

the participation of the employees
5. Laissez-Faire - Leadership style where authority and freedom to determine goals, decide,
resolve problems and manage situations is given to employees.

CHAPTER 4: RESEARCH METHODOLOGY

4.1 Research Design

The causal method was used since it is most relevant in gathering relevant data on the
effects of leadership styles to the engagement of employees working at Aduana Group of
Companies. It was the goal of the researchers to establish and analyze the impact of the
independent variable leadership styles used by managers with the dependent variable
employee engagement.

4.2 Research Locale

Aduana Group of Companies began in 1993 as Saviour Insurance, an insurance company
that sold insurances to other freight-forwarding companies in the industry. The initial employees
were composed of the CEO, Maria Lourdes M. Austria, the General Manager, Antonio Marfil,
who was Lourdess father, and a Finance and Accounting Officer, Maria Victoria M. Marfil, who
was Lourdess older sister. With the advice and help of a family friend, Bombet Sayarot, Saviour
Insurance evolved from an insurance company into Aduana Group of Companies, a one-stop
shop for all your customs solutions specialist needs.
Aduana Group of Companies opened up more branches around the Pacific region, in
which they opened their first international office in Guam. This included the formation of
partnerships with many agents around the world. From Guam, they opened a secondary satellite
office in the pacific island of Saipan. In a few years, they opened up another branch in Los
Angeles, California, USA. Currently, another branch is in the works to open up in the city of
Honolulu, Hawaii.

Today, Aduana has expanded as well into the import-export industry, importing products
such as poultry, petroleum, and paper products from China to countries like the United States,
and the Philippines. Aduana has a history of notable clients, which include Petron, Krispy
Kreme, Maxs Chicken, Magnolias poultry division, Xerox, Jamba Juice, and Disney with their
hit show, Disney on Ice.

4.3 Profile of Respondents

The respondents of the survey will include all of the employees of the Aduana
Group of Companies Sta. Ana Branch. This includes the following departments:

4.3.1 Warehouse Employees

Warehouse employees cover those who work hands-on at the actual warehouse of
Aduana in the Sta. Ana branch. These employees are in charge of receiving cargo, creating
docking receipts for the cargo, placed into the warehouse, which will be loaded into containers
that will be sent to other countries. They are also in charge of handling cargo that are hazardous
in nature, such as dangerous chemicals, and corrosives. A system is currently in place that
ensures the seamless transition of the cargo. It is not always being followed as has proven to be a
setback in terms of the operations in the warehouse.
Warehouse employees length of stay in the company vary from employee to employee
in the company. Some employees have been with Aduana for as long as 15 years, while some
have only recently been hired this year.

4.3.2 In- Office Employees

Office employees are divided into different departments. The different departments are
the following:
The Accounting department is in charge of the financial and monetary matters of the
company. They handle the employee payrolls, the movement of the money in the company,
ensuring that everything is well funded and prioritized. The CEO has the final say where the
money goes.
The Marketing department is in charge of getting new clients. In this hyper-competitive
industry, clients have to be courted in the sense that they not only take into consideration the
best services given a certain price, but the ability of Aduana to make them happy by giving them
promotional items and other items such as personal effects, ensure that Aduana does not only
have a freight forwarder- client relationship, but that the leaders of the two companies are also
friends. The marketing department is allotted a certain amount of funds that are to be used for
bringing clients out for recreation purposes.
The Human Resource department is in charge of ensuring that the companys employees
are treated well, and that their welfare is maintained so that employees are happy. They handle
employee benefits, company outings, and employee bonding activities.
The Logistics and Forwarding department is in charge of the warehouse and ensuring that
the company prioritizes the right cargo. Certain cargo may arrive early, but are expected at a later
time, and given Aduanas limited resources, proper prioritization is needed to ensure that all
clients are satisfied with the services.

4.4 Sampling Design

The researchers will conduct a census of the Aduana Sta. Ana branch in Manila. This
branch includes a wide variety of different employees, ranging from warehouse, accounting,
marketing, human resource, human development, logistics and forwarding, as well as different
managers on the different department.

4.5 Methods of Data Collection

A survey will be given to the employees of the Sta. Ana branch. The survey will provide
the researchers with primary data, in which the survey will take into consideration the different
management styles, and the level of employee engagement. Secondary data will be taken from
other sources, such as academic text, online databanks, and other available sources of data. The
questions to be used, as well as their respective sources:

4.5.1 Employee engagement (Malasakit sa trabaho, sa kumpanya, at sa mga kapwa

empleyado)
Statements

Reference

1. I know what is expected of me at work

Malinaw sa akin ang mga tungkuling dapat kong gampanan para sa
kumpanya.

(Gallup, n.d)

2. I have the materials and equipment to do my work right

Kumpleto ako sa gamit o makina na kailangan ko sa aking pagtatrabaho.
3. I have the opportunity to do what I do best every day at work
Sa pamamagitan ng aking pagtatrabaho sa araw-araw, nabibigyan ako ng
pagkakataong maipakita ang aking kahusayan at kasipagan.
4. I have received recognition or praise for doing good work in the last seven
days
Nitong nakaraan na linggo, mayroong pumuri sa aking kahusayan sa

pagtatrabaho.
5. My supervisor, or someone else at work, seem to care about me as a
person
Ang aking supervisor o kapwa empleyado ay nagpapakita ng malasakit sa
aking kapakanan.
6. There is someone at work who encourages my development
Mayroon akong kasama sa kumpanya na lagi akong hinihimok at
pinapalakas din niya ang aking loob upang mas mapahusay ko pa ang aking
pagtatarabaho.
7. My opinions seem to count at work
Binibigyang halaga ng kumpanya ang aking mga opinion o panukala.
8. The mission/purpose of the company make me feel my job is important
Batid ko ang kahalagahan ng aking trabaho sa ikatutupad ng mga layunin
ng kumpanya.
9. My associates (fellow employees) are committed to doing quality work
Ang aking mga kapwa empleyado ay mahuhusay at masisipag.
10. I have a best friend at work
Mayroon akong matalik na kaibigan sa hanay ng kapwa kong empleyado.
11. In the last six months, someone at work has talked to me about me
progress
Nitong nakaraang anim na buwan, mayroong taga-kumpanya na kinausap
ako upang talakayin ang aking pag-unlad sa kumpanya.
12. I have had opportunities to learn and grow in the last year
Nitong nakaraang taon, binigyan ako ng kumpanya ng pagkakataon na
mapalawak ang aking kaalaman sa pagtatrabaho upang umunlad naman
ako sa buhay.
Table 1: The Gallup Q12 Index : The Questionnaire above was taken from
http://www.goalbusters.net/uploads/2/2/0/4/22040464/gallup_q12.pdf

4.5.2 Leadership styles (Estilo ng Pamumuno)

Statements

Reference

1. The employees want to be a part of the decision-making process.

Nais ng mga empleado na maging bahagi sa paggawa ng desisyon sa
trabaho.

(Rao, 2011)

2. The employees need to be supervised closely, or they are not likely to do (Nayab, 2011)
their work.
Kailangan mapangasiwaan nang maigi ang mga empleado, dahil kung
hindi, maaaring hindi nila gawin ang kanilang trabaho.
3. The leader takes into account the suggestions of his/her subordinates in
(Rao, 2011)
the decision making process
Sinasama sa pagdesisyon ng mga pinuno ang mga opinyon at mungkahi ng
mga empleado.
4. The leader checks for updates from employees from time to time.
Oras-oras binabantayan ng superbisor ang progreso/updates ng mga
empleado.

(Gastil, 1994)

5. As a rule, employees must be given rewards or punishments in order to

motivate them to achieve organizational objectives.
Madalas, ang empleado ay dapat na binibigyan ng parusa o papuri upang
maudyok silang magtrabaho para sa pagkamit ng mga layuniin ng
kumpanya

(Nayab, 2011)

6. The leader stays out of the way of subordinates as they do their work.
Hinahayaan lamang ng lider na gawin ng mga empleado ang kanilang
trabaho at hindi ito nangingialam.

(Gastil, 1994)

7. Ideas and feedbacks from employees are highly valued by the leader.
Binibigyang importansya ng lider ang mga ideya at mga saloobin ng mga
empleado.

(Rao, 2011)

8. The manager gives his/her subordinates complete freedom to solve

problems on their own.
Binibigyan ng lider ang mga empleado ng kalayaang lutasin ang mga
problemang hinaharap sa trabaho mag-isa.

(Gastil, 1994)

9. The manager makes all the decisions alone without consulting their
subordinates
Lahat ng mga desisyon sa kumpanya ay nanggagaling lamang sa manager
at hindi nito kinukunsulta ang mga empleado.

(Mind Tools, n.d)

10. The leader encourages teamwork and collaboration between him and
his employees in accomplishing tasks.
Hinihimok ng lider ang mga empleado na makiisa at makipagtulungan sa
kanya upang makumpleto ang mga gawain.

(Rao, 2011)

11. Managers tend to give orders and clarify every procedure.

Mas pinipili ng manager na utusan at linawin ng maigi sa mga empleado
ang mga gawain sa trabaho.

(Nayab, 2011)

12. Employees are skilled and experienced enough to accomplish a task

and can manage things on their own.
Marunong at may karanasan na sa parehong trabaho ang empleado para
makumpleto ang mga gawain sa sariling kakayahan.

(Gastil, 1994)

Table 2: Leadership style Questionnaire. This table was derived from the various authors Rao, et.al. and was
translated by the authors of this paper.

4.6 Methods of Data Analysis

4.6.1 Simple Linear Regression Analysis
The research will make use of simple regression. A simple linear regression analysis aims
to find the effects of an independent variable onto a dependent variable, while at the same time,
confirm a causal relationship between the two.
Our estimation model is shown as follows:
yi = 1 + 2 X1 + ui
Wherein:
yi:

Level of Employee Engagement

1:

Constant

2:

Estimator or Leadership Styles

X1 :

Leadership Style

ui:

Stochastic Error Term

The model tells that that assuming that we stay with the current leadership style (Xi)
being implemented by Aduana, our level of employee engagement is equal constant (1), which
is the current level of employee engagement. The estimator of leadership styles (2) tells us how
much the level of employee engagement (yi) increases as the leadership style (X1) changes. The
stochastic error term (ui) is the catch-all variable that takes into account the exogenous variables
that are not a part of the model, but still have an effect on the model. It is imperative that the
stochastic error term to not be correlated with the variable X1 as this will have a misspecification
error.
4.6.2 Improvised Gallup Employee Engagement Index
Mean response to
Items on Employee
Engagement

Interpretation

5.00 - 4.20

The employee is ACTIVELY ENGAGED

4.19 - 3.40

The employee is ENGAGED.

3.39 - 2.60

The employee is MARGINALLY ENGAGED.

2.59 - 1.80

The employee is DISENGAGED.

1.79 - 1.00

The employee is ACTIVELY DISENGAGED.

Table 3: Improvised Scoring Index to measure employee engagement.

The Gallup Employee Engagement Index is based on the response of the workers
regarding the workplace elements or conditions. According to Gallup (n.d.) this includes the
performance outcomes of an employee such as customer service, quality of work, safety and
profit, and productivity. The improvised index above provides an insight whether an employee is

actively disengaged, disengaged, marginally engaged, engage, and actively engaged. Note that
this is not the actual index interpretation used by Gallup as their way of interpreting their data is
confidential. There are five levels in the level of engagement. They are as follows:
Actively disengaged- These are the employees who jeopardize their team's performance
and who are emotionally disconnected from their work and workplace. Also, according to
Business Training Center from Pryor.com. (2015) these are the employees who undermines the
organization's success.
Disengaged- These are the employees who are emotionally disconnected from their work
and workplace but puts minimal effort to increase the overall quality of work done by the team.
Marginally engaged-

These are the employees who, according to Gallup, are not

engaged but satisfied and only putting minimal effort to their work. Furthermore, these are the
employees who simply work to accomplish things or to finish their quota for a specific day.
Engaged- These are the employees who are more satisfied with their work and feels the
need to engage on teamwork to improve quality.
Actively engaged- These are the employees that are enthusiastic about their work and are
more involved. Also, they are the employees who are passionate when working and thus
innovate for the growth of the company.

CHAPTER 5: PRESENTATION AND ANALYSIS OF DATA

Data for this experiment was collected from March 17, 2016 to March 22, 2016. The selfadministered questionnaires were distributed to the respondents as indicated in the data
collection protocol. Out of the 60 questionnaires deployed, all were determined to be useable for
this study.

5.1 Presentation and Analysis of Data

The software used in statistical and regression analysis is Stata 13. For reference, the
variables and their respective names are given in the table below:
Variable

Type of Variable

Variable Name

Employee Engagement Level

Dependent/ Regressand

emp

Leadership Styles

Independent/ Regressor

lead

Table 4. Variables and their corresponding types and labels

5.1.1 Pearson Correlation Coefficient

To check for the strength of correlation, as well as to check for level of significance of
the variable, we can use the Pearson Correlation Coefficient Result, which gives us a r value, as
well as a p-value. (Gujarati & Porter, 2012) The Pearson Correlation Coefficient Results are as
follows:

Pearson Correlation Coefficient Results

Table 5. Pearson Correlation Coefficient Results

Given the above results from the Pearson Correlation Coefficient shown in table 5, the rlevel of employee engagement with respect to leadership styles is 0.5673, while the p-value is
0.0000. Since | r | is greater than 0.50, then we have a strong correlation between leadership
styles and employee engagement. We also know that leadership styles are statistically
significant, given the p-value level of 0.0000. A variable is statistically significant if the p-value
is smaller than the given significance level, which in this case, is 0.05. Since it is statistically
significant, we have evidence to reject the null hypothesis.

5.1.2 Spearmans Correlation Coefficient

Alternatively, the Spearmans Correlation Coefficient is used to find the level of correlation
between two variables that are ordinal in nature. (Gujarati & Porter, 2012) Since the data makes
use of a Likert Scale for both variables, the Spearmans Correlation Coefficient is a more
accurate measurement of correlation between the leadership styles and employee engagement,
given the dataset taken using a survey of the census of Aduana Group of Companies nonmanagerial staff.

Below is the Spearmans Correlation Coefficient output:

Spearmans Correlation Coefficient Results
Number of Observations

60

Spearmans rho

0.4665

Test of Ho

emp and lead are Independent

Prob>|t|

0.0002
Table 6. Spearmans Correlation Coefficient Results

As seen in table 6, the Spearmans rho level is 0.4665, and that the p-value taken from the
t-test is 0.0002, we know that:
1. Leadership styles and employee engagement has a positive moderate correlation,
and that there is a monotonic trend between the regressor and the regressand.
2. Leadership styles is statistically significant, since it is lower than the significance
level used in the analysis, which, in this case is 0.05. This gives us even more
reason to reject the null hypothesis.

5.1.3 Simple Linear Regression Analysis

To delve deeper in the analysis, we make use of a simple linear regression analysis to
find out the significance of leadership styles to employee engagement, and how much of
employee engagement is being explained by leadership styles.

Below we have the simple linear regression output taken from Stata13:
Simple Linear Regression Results

Table 7. Simple Linear Regression Results

Given the regression results given in the figure above, the updated regression model is
now as follows:
yi = .60273771 + .8504042 X1
This tells us that if we have the current leadership style implemented, meaning that at the
current level of implementation in terms of leadership styles (X1) is equal to zero, and that
stochastic error term ui is zero, then our level of employee engagement is at 0.60273771, or at
60.2738%. We also know that for every 1-point increase in the measurement for leadership
styles, then we know that employee engagement will increase by .8504042.

Figure 5. Scatterplot with fitted mean line Stata13 output

The R-squared, which measures the goodness- of- fit of the model, or how the variables
fit the mean, is at 0.3102, which tells us that leadership styles explains 31.02% of the entire
model. This does not give us a very good results for overall model significance, as the rest of the
model is being explained by the stochastic error term, meaning that there are other variables that
are making up the remaining 68.98% of the dependent variable, assuming ceteris paribus1. These
variables may include wage level, employee perks and benefits, workplace related stress, and
external factors like family issues. This means that a multiple regression model may be a better
choice for future studies. The goodness of fit of the model derived from the R-Squared
computations can be better visualized in the scatterplot graph depicted in figure.
Given the p-value level of 0.000 for leadership styles, with respect to employee
engagement, we know that leadership styles are very much significant since the p-value is less
than the significant value of 0.05. This means that we reject the null hypothesis.

CHAPTER 6: CONCLUSION AND RECOMMENDATIONS

6.1 CONCLUSION
This research aims to determine if there is a relationship between leadership styles and
the level of employee engagement at Aduana Group of Companies. The researchers have
determined in the previous chapters the following questions that need to be answered in order to
have a conclusion:
What is the current level of employee engagement at Aduana Group of Companies?
After conducting the rigorous study of the relationship of leadership styles and employee
engagement in Aduana group of companies, we, the researchers, may conclude that the
leadership style affects the level of employee engagement. According to our results regarding the
correlation of employee engagement and leadership styles, the r value is greater than 0.50
which indicates that we have a strong relationship between leadership styles and employee
engagement.

What specific recommendations can be made in order to further enhance the leadership
style used at Aduana Group of Companies?
The Gallup 12 Questionnaire is the medium of measurement used in measuring employee

engagement. The questionnaire takes the mean of every survey question results. This will all then
be combined and averaged in order to get the grandmean2 of the entire questionnaire. The
Employee Engagement Index is then computed, by dividing the total number of engaged
employees by the total number of survey respondents, to determine the level of employee
engagement in the company. Currently, computing for the actual Employee Engagement Index is

impossible, and Gallup refuses to show the public what their cut-off mark are for engaged, not
engaged, and disengaged employees. Currently, the closest thing the researchers can do is to get
the grandmean of the entire survey and create a score out of 5. This score is currently at
3.9028/5, or at 78.056%. This means that the employees at Aduana group of companies are
engaged. The employees are more satisfied with their work and feels the need to engage on
teamwork to improve quality of work done.

What specific recommendations can be made in order to further enhance the level of
employee engagement at Aduana Group of Companies?
The group would recommend that leaders should not limit themselves to the use of a

single leadership style, since there are pros and cons to each type. Each leadership style is also
best used in certain situations. Therefore, these should be used with balance, in order for the
leaders to be made truly effective.
In this study, the group would study the leadership style of Aduana group of companies.
The leadership styles that are going to be investigated is defined in the groups review of related
literature. Moreover, the group would then test, via survey, if the leadership style of Aduana
group of companies which affects employee engagement. Thus, the group came up with the
hypothesis that:
Ho: There is no relationship between leadership style and employee engagement
Ha: There is a relationship between leadership style and employee engagement
It was stated in chapter 3 of this study that the groups null hypothesis is that there is no
relationship between leadership style and employee engagement. Based on the findings of the

study, the researchers reject the null hypothesis, therefore supporting the groups claim that there
exists a relationship between the two variables. The group also recommends to not only use
leadership styles as the sole determinant of employee engagement, as there may be other
variables that have a larger effect on employee engagement, as seen in the low level of overall
model significance showed by our R-squared value in the regression analysis.

6.2 RECOMMENDATION
For Aduana Group of Companies
The group would like to recommend to the Aduana Group of companies that their
Democratic type of leadership should often be the most dominant leadership style in their means
of leading their employees. This leadership style has correlated with the level of engagement that
their employees have and having a leadership style that is dominantly Democratic has rendered
Aduanas employees engaged and satisfied with their work. This does not mean that that other
leadership styles should be disregarded and not be used since other leadership styles also have
effects and might be effective if mixed or combined with the most dominant style of leading
people. The leadership style that scored the lowest is the Authoritative type of leadership but this
also does not mean that this type of leadership should be avoided since this might also bring
effective results but should be used or done occasionally or in moderation.

For Businessmen/leaders of an organization

The group would like to recommend to the leaders of organization that they should learn
the different types of leadership styles and use them in their field of expertise if possible. This is
to encourage employees to work and produce a more productive workplace in the organization.

This is for the reason that leadership styles have a strong relationship with employee
engagement.
The group would also like recommend that business leaders should not limit themselves
to the use of a single leadership style, since there are pros and cons to each type. Each leadership
style is also best used in certain situations however, not all, therefore should be used with the
right balance, in order for the leaders to be made truly effective.

For Future Researchers

The group would recommend that the future researchers who wish to delve into this study
should experiment with other possible variables that have not been used in too many studies, that
may be correlated with employee engagement. Variables such as salary, external forces in work,
and alike.
The group also recommends the use of more proper regression analysis methods to suit
the data gathered. A good model to use for ordinal data that can tell us the improvement
contribution of the independent variable(s) to the dependent variables would be the use of an
Ordered Logit Model. The separation of leadership styles into the different leadership styles as
an independent variable each can lead to more accurate results. Lastly, include the previously
suggested variables as well, assuming that the data is of the same nature to make sure the data
suits the suggested model. Since the suggested model is an advanced multiple regression
analysis, tests for heteroscedasticity and multicollinearity will be necessary to validate the
results.

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APPENDIX

A. Questionnaire
Mahal naming manggagawa,
Kami ay mga mag-aaral na taga Pamantasan ng De La Salle at nais naming kayong
imbitahan na sumagot sa survey na ito hinggil sa mga ibat-ibang mga gawain ng mga manager
at supervisor sa kumpanya. Layunin din ng survey na ito na alamin kung kayo ay kuntento at
masaya sa inyong pagtatrabaho sa kumpanyang ito.
Maraming salamat sa inyong pagsagot.
Sumasainyo,
Jay Austria
Patricia Galang
Jamo Palacios
Jet Policarpio
Gabriella Venturina
Posisyon/trabaho sa kumpanya: ___________________________________

I. Estilo ng pamumuno ng mga supervisor/manager ng kumpanya (Leadership Styles)

Itala ang antas ng inyong pagsang-ayon o hindi pagsang-ayon na ang mga sumusunod na
gawain ay ipinapamalas sa kumpanya na inyong pinapasukan. Para sa bahaging ito ng survey,
gamiting sagot ang mga bilang na sumusunod:
5

Ako ay lubusang sumasang-ayon sa pangungusap na ito. (Strongly agree)

Banayad lamang ang pagsang-ayon ko sa pangungusap na ito. (Agree)

Hindi ako makapagpasiya kung ako ay sang-ayon o di sang-ayon sa

pangungusap na ito. (Undecided)

Hindi ako sumasang-ayon sa pangungusap na ito. (Disagree)

Labis ang hindi ko pagsang-ayon sa pangungusap na ito.

disagree)

(Strongly

1. Nais ng mga empleado na maging bahagi sa paggawa ng 5

desisyon sa trabaho.

2. Kailangan mapangasiwaan nang maigi ang mga empleado, dahil 5

kung hindi, maaaring hindi nila gawin ang kanilang trabaho.

3. Sinasama sa pagdesisyon ng mga pinuno ang mga opinyon at 5

mungkahi ng mga empleado.

4. Oras-oras binabantayan ng superbisor ang progreso/updates ng 5

mga empleado.

5. Madalas, ang empleado ay dapat na binibigyan ng parusa o 5

papuri upang maudyok silang magtrabaho para sa pagkamit ng mga
layunin ng kumpanya

6. Hinahayaan lamang ng lider na gawin ng mga empleado ang

kanilang trabaho at hindi ito nangingialam.

7. Binibigyang importansya ng lider ang mga ideya at mga saloobin 5

ng mga empleado.

8. Binibigyan ng lider ang mga empleado ng kalayaang lutasin ang

mga problemang hinaharap sa trabaho mag-isa.

9. Lahat ng mga desisyon sa kumpanya ay nanggagaling lamang sa 5

manager at hindi nito kinukunsulta ang mga empleado.

10. Hinihimok ng lider ang mga empleado na makiisa at

makipagtulungan sa kanya upang makumpleto ang mga gawain.

11. Mas pinipili ng manager na utusan at linawin ng maigi sa mga

empleado ang mga gawain sa trabaho.

12. Marunong at may karanasan na sa parehong trabaho ang 5

empleado para makumpleto ang mga gawain sa sariling kakayahan.

II. Malasakit sa trabaho, sa kumpanya, at sa mga kapwa empleyado (Employee

Engagement)
1. Malinaw sa akin ang mga tungkuling dapat kong gampanan para 5
sa kumpanya.

2. Kumpleto ako sa gamit o makina na kailangan ko sa aking

pagtatrabaho.

3. Sa pamamagitan ng aking pagtatrabaho sa araw-araw, 5

nabibigyan ako ng pagkakataong maipakita ang aking kahusayan at
kasipagan.

4. Nitong nakaraan na linggo, mayroong pumuri sa aking 5

kahusayan sa pagtatrabaho.

5. Ang aking supervisor o kapwa empleyado ay nagpapakita ng

malasakit sa aking kapakanan.

6. Mayroon akong kasama sa kumpanya na lagi akong hinihimok at 5

pinapalakas din niya ang aking loob upang mas mapahusay ko pa
ang aking pagtatarabaho.

7. Binibigyang halaga ng kumpanya ang aking mga opinion o 5

panukala.

8. Batid ko ang kahalagahan ng aking trabaho sa ikatutupad ng mga 5

layunin ng kumpanya.

9. Ang aking mga kapwa empleyado ay mahuhusay at masisipag.

10. Mayroon akong matalik na kaibigan sa hanay ng kapwa kong 5

empleyado.

11. Nitong nakaraang anim na buwan, mayroong taga-kumpanya na 5

kinausap ako upang talakayin ang aking pag-unlad sa kumpanya.

12. Nitong nakaraang taon, binigyan ako ng kumpanya ng 5

pagkakataon na mapalawak ang aking kaalaman sa pagtatrabaho
upang umunlad naman ako sa buhay.