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EMPLOYEES’ ENGAGEMENT IN THE PUBLIC SECTOR: THE IMPACT OF

EXTERNALLY FOCUSED ORGANIZATIONAL CLIMATE

Alessandro Ancarani Department of Civil and Environmental Engineering, University of Catania, Viale A. Doria 6, 95125 Catania, Italy

aancaran@dica.unict.it, +390957382715

Carmela Di Mauro

Department of Civil and Environmental Engineering, University of Catania, Viale A. Doria 6, 95125 Catania, Italy

cdimauro@unict.it, +390957382717

Maria Daniela Giammanco Department of Political and Social Sciences, University of Catania, Via Vittorio Emanuele 8, 95131, Catania, Italy

mdgiamma@unict.it, +3909570305271

ABSTRACT

Recent governmental reports emphasize that, as public services face the prospect of declining

growth in investment, the quality of service citizens expect can be achieved only by putting

the engagement and commitment of civil servants at the top of delivery strategies. We

investigate the impact on work engagement of the organizational climate models introduced

with the most recent wave of public sector reforms in Italy, requesting a switch of the focus

of the public sector from the traditional inward focus of the bureaucratic model to an external

focus towards citizens. We further consider the possible role of mediation of such

organizational climate models between engagement and transactional and transformational

styles of leadership.

Keywords: engagement, public administration, organizational climate, leadership

INTRODUCTION

Today, one of the main challenges for the public sector is to deliver improved services

through a motivated workforce in an age of austerity. In fact, although the financial crisis has

left governments to cope with large budget deficits, electorates still expect increased standards

in public services, especially as the tax burden rises (Leslie & Canwell, 2010).

In the last thirty years, the public sector has strived to move away from the traditional

bureaucratic model of organization, in response to severe pressures coming from public

expense rationalization and citizens’ demand for better services, transparency and

accountability (Parker and Bradley, 2000). Civil servants have been asked to embrace the

goals of productivity and efficiency, while at the same time being required to make their

action more accountable to external stakeholders. The pursue of these goals has been

accompanied by the adoption of new models of work organization and evaluation, based,

among others, on more transparent accountancy and reporting methods, target-based

performance management, and performance-pay. Especially in those countries where the

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bureaucratic model was strongest, the transition from traditional red tape behaviour to

managerially oriented models, has no doubt placed new and additional job demands on civil

servants, and has been associated with physical and psychological costs.

As a labour-intensive organization, the public sector crucially relies on its employees to

perform its service delivery strategies (Kellough & Nigro, 2006) and, hence, attention must be

focused on developing the critical labour component in order to improve service performance

(Meyer Goldstein, 2003) while keeping budgets under control.

The public administration literature has devoted ample attention to human resource

management issues and, more recently, has recognised the importance of employees’ positive

psychological constructs as key drivers of organizational performance (Vigoda-Gadot &

Beeri, 2011; Perry & Wise, 1990; Paarlberg & LaVigna, 2010; Bellè, 2012).

In the last decade, within Positive Organizational Behaviour (POB) (Luthans, 2002) a

growing attention has been paid to the concept of work engagement, a construct described as

a positive, rewarding work-related psychological state characterized by energy and mental

resilience at work, by strong involvement at work matched with feelings of enthusiasm, pride

and challenge, by great concentration and happy interest at work (Schaufeli et al., 2002). The

interest of the engagement construct stems from the fact that it is an antecedent of several

outcomes such as OCB, commitment on the job, and job satisfaction (Saks et al., 2006).

Growing evidence suggests that engaged employees produce better organizational

performance (Salanova et al., 2005). In particular, engaged employees are willing not only to

give rise to better in-role performance but also to take part in extra-role activities and

innovativeness (Hakanen et al., 2008).

Interest in the concept of engagement is not limited to academia, since recent governmental

documents and white papers have emphasised that, as public services face the prospect of

declining growth in investment and cost-cutting, the quality of service citizens demand from

the public sector can be achieved only by putting the enthusiasm, engagement and

commitment of civil servants at the top of delivery strategies (MacLeod & Clarke, 2009;

Kernaghan, 2011).

The relations between the new managerial oriented models of public sector organization and

the work engagement of civil servants represents an important issue for research and public

management and, to the best of our knowledge, has not been addressed so far by the public

sector literature.

According to the Job Demand-Resources model (J D-R) (Bakker et al., 2003) engagement on

the job stems from the provision of organizational resources, while an unbalanced ratio

between organizational resources and job demands determines low engagement and high

stress (Bakker et al., 2007). Within this framework, whether the changes in the public sector

have an impact on civil servants’ engagement depends on whether resources have been

provided in the workplace to balance and offset the new demands.

The literature on engagement has emphasized the crucial role of management and of middle

management in particular as key providers of resources that can get employees engaged

(Harter et al., 2002; Janssen and Van Yperen, 2004;Tuckey et al., 2012). In the public sector,

middle managers have been acknowledged as agents of organizational renewal (Huy, 2002;

Balogun & Johnson, 2004) and as key actors in the implementation of public sector strategic

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changes (Currie & Procter, 2005). Middle managers act as “brokers”, since they perform a

coordinating role mediating, negotiating and interpreting connections between the

institutional and technical levels (Floyd & Wooldridge, 1997; Shi et al., 2009).

The aim of this study is to contribute to the understanding of the determinants of engagement

among civil servants. To this end we develop and test a model that envisages middle

managers in public organizations both as a potential lever to create engaged employees

through their leadership, and as brokers of the implementation of changes. Different

leadership styles are bound to determine a different job resource-demand mix, and thus

impact differently on workers’ engagement. With reference to the brokerage role of middle

managers, we assume that one key path through which they enact changes coherent with the

mandate of public sector reforms’ is through the creation of appropriate organizational

climate models, i.e. through the creation of shared perceptions among subordinates about the

values, norms, and behavior aligned with the reforms’ prescriptions (Denison, 1996). In turn,

these organizational climates will have an impact on workers’ engagement, since they

embody the mix of resources and demands implied by public sector reforms.

Although the two paths to engagement (from middle managers’ leadership style and from

organizational climate models consistent with public sector reforms) could be analyzed

separately, we argue that a unified model is appropriate. In fact, although institutional theory

(Meyer & Rowan, 1983; Di Maggio & Powell, 1983) predicts that, given the pressure by top

management and external environment to implement the reform, all peripheral units should

share the same organizational climate, the brokerage role played by middle managers through

their leadership style determines the degree to which these organizational climates are

implemented, and therefore, the final impact on engagement.

To sum up, our model allows us to study two different paths stemming from middle

management leadership to engagement: a direct relation between the leadership styles and

work engagement, and an indirect path mediated by organizational climate.

The rest of the paper is organized as follows: we first review the relevant literature which

guides us in the formulation of hypotheses, next we present the methodology and the study

design, model estimation results, and conclude with a discussion of the implications of our

research.

THEORETICAL FRAMEWORK

Employee’s engagement and J D-R model

It is possible to identify different strands of research tackling engagement. They embrace

personal engagement, employee engagement, work engagement, and burnout/engagement

(Simpson, 2009). While the first engagement construct encompasses individual, work context

and outside work antecedents of engagement (Kahn, 1990), the other constructs have a

narrower focus as they include only work-related antecedents and consequences.

In the present paper we adopt the definition of engagement provided by Schaufeli et al.

(2002), and focus on the positive, rewarding work-related psychological state which is

characterized by energy and mental resilience at work, by strong involvement at work

matched with feelings of significance, enthusiasm inspiration, pride and challenge, by great

concentration and happy interest at work. Vigor, dedication and absorption at work are the

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fundamental features of work engagement which, according to these authors, is a quite

persistent and pervasive affective-cognitive state. The Utrecht Work Engagement Scale

(UWES), a self-report questionnaire first developed by Schaufeli and Bakker (2003) makes

the three aspects of work engagement operational. The definition adopted relies on the

consideration that engagement is not just a trait-like factor, but may vary within the same

person over time (Sonnentag, 2003; Sonnentag et al., 2010), as a result of the experience of

the work activity (Bakker et al., 2008).

In order to explain how the work experience affects engagement, the Job Demand-Resources

model (J D-R) posits that every job is characterized by specific factors which may be

classified in two general categories: job demands and job resources (Bakker et al., 2003).

Job demands are those physical, psychological, social and organizational features of the job

calling for continuous physical and psychological effort or ability, and which are associated

with physical and psychological costs.

Job resources are those physical, psychological, social and organizational features of the job

that foster employees’ growth and learning, increase job competence and - by offering

decision space and social support - meet the employees’ need for autonomy and competence,

as well as their need to belong to. Building on Social Exchange Theory (Emerson, 1976;

Cropanzano & Mitchell, 2005), Sacks (2006) argues that the amount of cognitive, emotional,

and physical resources devoted in the work role by employees is dependent on the economic

and socio-emotional resources received from the organization. Examples include support

from colleagues and from the manager, performance feedback, autonomy, and professional

growth opportunities. Job resources may counterbalance the effects of job demands and the

associated costs (Schaufeli & Bakker, 2004). The job resources are paralleled and reinforced

by personal resources which stem from characteristics of the individual employee such as

optimism, resilience, and self-efficacy (Bakker, 2011).

There is growing evidence that when adequate resources are provided, employees are much

more willing to dedicate their efforts and competencies to the work tasks (Bakker &

Schaufeli, 2008). In particular, engagement is positively related with autonomy, leader–

member exchange, and the extent of opportunities for learning and development (Bakker &

Bal, 2010), gratification of essential needs and attainment of work objective (Schaufeli &

Salanova, 2007), performance feedback, social support, and supervisory coaching (Schaufeli

& Bakker, 2004), job control, information, supervisory support and innovative climate

(Hakanen et al., 2006), rewards and recognition (Koyuncu et al., 2006). Finally, support for a

causal relation between engagement and job resources is provided by longitudinal studies (de

Lange et al., 2008; Hakanen et al., 2008; Mauno et al., 2007; Schaufeli et al., 2008).

Engagement: its meaning for the public sector

Positive states such as work engagement play an important role in public organizations.

Traditionally, civil servants have been portrayed as interested only in supporting changes that

expand the activities of the public sector and increase public sector budgets (Downs, 1964). In

this view, such policies represent a way to protect their jobs, to obtain higher salaries, and to

gain more power. However, more recent empirical support indicates that civil servants are

capable of placing a high value on the intrinsic rewards of their work (among others Houston,

2000; Perry et al., 2008), and in giving their support for the organization change-oriented

efforts (Naff & Crum, 1999).

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Engagement is a useful concept for public organizations and complementary to other widely

studied concept such as Organizational Citizenship Behaviour (OCB) (Vigota-Gadoot &

Beeri, 2011) and public service motivation (PSM) (Perry, 1996).

With respect to OCB, both conceptual and indirect empirical evidence suggests that work

engagement is an antecedent of OCB. OCB is altruistic behaviour towards the organization,

characterised by conscientiousness, civic virtue, courtesy towards fellow workers, and

sportsmanship (Organ, 1988; Podsakoff et al., 2000). Both a negative relation between OCB

and burnout (Chiu & Tsai, 2006) and a positive relation between organizational commitment

and OCB (Ehigie & Otukoya, 2005) have been be used to argue in favour of engagement as

an antecedent of OCB, given that engagement is at odds with burnout and that it is an

antecedent of organizational commitment (Hakanen et al., 2006).

As for PSM, it has been defined as “a general, altruistic motivation to serve the interests of a

community of people, a state, a nation or humankind” (Rainey & Steinbauer, 1999). As such,

PSM goes beyond self-interest, and may entail the provision of effort through self-sacrifice,

i.e. out of concern for its costs (Francois, 2000). Like engagement, PSM is not necessarily the

result of a transactional exchange and can be present even in the absence of material rewards

such as promotions, and income. Both PSM and engagement studies are built under the

general contention that civil servants’ actions are not motivated by utilitarian incentives, or

that, at least, civil servants are less dependent on monetary incentives than private sector

employees to perform their duties.

However, unlike PSM, engagement emphasizes enjoyment and pleasure as drivers of effort on

the job, and is therefore more akin to intrinsic motivation (Grant, 2008). Elaborating on the

discussion by Perry et al. (2010), PSM might be heterogeneous across the public sector, as

one might plausibly expect PSM to be higher in educational institutions, social services, and

fire-fighters with respect to accounting departments. Therefore, PSM cannot be expected to

motivate ubiquitously behavior that leads to public sector performance (Wise, 2000). In

particular, nowadays, many public sector organizations work within the framework of quasi-

markets, in which public and private entities compete. In this setting the competitive motive is

emphasized and the altruistic motive downsized (LeGrand, 2003). Hence, as the public sector

moves towards greater competition with private providers and enlarges its range of activities,

performance must find intrinsic motivation in self-gratification. Next, since PSM is not

contingent on feelings of pleasure, PSM might coexist with burnout. Civil servants might

pursue public sector motives, at the cost of their physical and psychological integrity.

The above discussion not only points to the complementarities between engagement and other

motivational constructs relevant for public sector performance but also highlights that the

concept of engagement can provide a potential linkage between developmental interventions

and authentic performance improvement throughout the public sector based on the positive

strengths of employees.

Public sector reforms and civil servants behaviour

For a number of years already, New Public Management has called for the transformation of

the bureaucratic structures of public organizations into a more effective and efficient type of

activity (Bernier & Hafsi, 2007). The reasoning behind such a call for reforming the public

sector emphasizes that the rapidly changing nature of economy and society requires public

administration to conform more closely to the managerial practices and organizational

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models originally developed for the private sector (Lane, 1997; Weibel et al., 2010).

Common features have been the introduction of accruals accounting, management control,

and performance measurement, and an increasing emphasis on external reporting (Hood,

1995).

The argument of NPM driven reforms is that the introduction of new organizational models

and managerial practises would lead civil servants to shift away from bureaucratic behaviour

and to become more outcome- and customer service-oriented. However, since the

specificities of the public sector remain, civil servants are required to adopt organizational

behaviours that may compensate for bureaucratic red tape, slow procedures, and inflexibility

(Vigoda-Gadot, 2007).

Predicting the impact of reforms is not easy since they can run slowly and proceed in

staggering fashion. Moreover, they do not always produce the intended outcomes because of

gaps between the formal design of change and its actual implementation at the management

level, and, more generally, because of inertia in civil servants’ behaviour. In fact, adopting

new managerial practices into public systems and in service to demanding citizens must

involve a comprehensive set of change-oriented behaviour among public personnel. These

changes include wider adoption of information technology, changes in the organization of the

workplace, being more accountable to citizens-clients, and facing increased competition from

private sector service providers (Vigoda-Gadot & Beeri, 2011).

In order to predict the impact of public sector reforms on civil servants’ behaviour and public

sector performance, O’Toole and Meier (1999) posit that civil service reform can be viewed

as environmental shocks to the system. These shocks can be destabilizing and may negatively

affect organizational performance in the short term (Boyne & Meier, 2009; Rubin &

Kellough, 2013). One key to interpret this result is that the reforms are perceived as placing

new and additional demands on workers, thus creating more stressful job conditions, whereas

the resources available to civil servants are not perceived as appropriate to cope with such

demands.

The problem of perceived additional demands is exacerbated in those countries where,

following the global crisis, public organizations are facing severe challenges to respect

efficiency and innovation targets, due to strictly limited financial resources and cost-cutting.

We argue that where public organizations cannot provide any kind of material support

(promotions, monetary rewards, etc.) to motivate employees in addressing increased

demands, managers can play a crucial role, especially those middle managers who are

responsible for the day-by-day operations. Today, a major challenge for many public

organizations is to establish a leadership that can maximize the public interest, and reconcile

this goal with a tight budget (Vigoda-Gadot & Beeri, 2011).

The role of middle management and organizational climate

What makes middle managers unique is their access to top management coupled with their

knowledge of operations. It is this combination that enables them to function as mediators

between the organization’s strategy and day-to-day activities (Nonaka, 1994; Wooldridge et

al., 2008). Shi et al. (2009) refined this broker role attributed to middle managers as mediator

between top management and employees considering the multidimensional and sometimes

conflicting goals that the organization ask managers to pursue and the degree of autonomy

they have in applying the strategy process.

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Extant research about reforms in the public sector has stressed the role of public managers as

leaders, and their contribution to the innovation of organizational structures, the improvement

of processes, the creation of appropriate constructive cultures and climates for public servants

in order to motivate their workers to innovate and to make constructive changes (Van Slyke

& Alexander, 2006). In particular, administrative leaders rather than having a passive role in

public bureaucracies may have a strong influence on operational activities, crucial to the

implementation of the reforms of local governments (Cristofoli et al., 2011).

As for public sector middle managers, earlier acknowledgments of their influential position

focused on middle managers as sources of resistance to change (Guth & MacMillan, 1986;

Fenton-O’Creevy, 1996). In this view, middle managers had prospered in pre-NPM times

because they had developed in public organizations an isolated work culture, thus exerting

their discretion power over critical process and information flows. In this respect, the

transparency, the accountability, and the external scrutiny requested by reforms would have

been at odds with the status quo of middle management power structure. Therefore, reforms

might be seen as a threat to the traditional authority and job security of middle managers.

However, later accounts have highlighted the potential of middle managers as agents of

change (Huy, 2002; Balogun and Johnson, 2004; Currie and Procter, 2005), as they perform a

coordinating role where they mediate, negotiate and interpret connections between the

institutional and technical levels (Floyd & Wooldridge, 1997). This brokerage role allows

them to influence the performance of public organizations, and to be core to organisational

renewal (Floyd & Wooldridge, 1997; Shi et al., 2009). Moreover, since both continuity and

change have to be assured (Brown & Eisenhardt, 1997; Leana & Barry, 2000), maintaining

continuity into their working units during relevant changes is a task that totally falls to middle

managers (Huy, 2002; Piderit, 2000).

The application of reforms implies that there is an institutional pressure to create an

organizational climate which moves away from formal rules and procedures as control

mechanisms and focuses on external environment and readiness to change while uses

planning and goal setting to achieve productivity and efficiency. According to their brokerage

role, middle managers can transfer to civil servants the organizational climate models

consistent with the reform.

Organizational climate has been defined as the shared perception of what behaviours are

expected and rewarded inside the organization (Zohar & Luria, 2005). It has been further

defined as a reflection of the collective attitudes and behaviour of the organization members

(Burnes & James, 1995). Climate is often considered actionable, i.e. management can shape

climate in order to pursue organizational goals and affect performance (Litwin and Stringer,

1968; Denison, 1996; Rogg et al., 2001; Haakonsson et al., 2008). Managers’ influence over

climate is important since successful leaders tend to create a climate within the work

environment where they are able to assist employees to set and achieve individual, team, and

ultimately organizational objectives (Perryer & Jordan, 2005; Salvaggio et al., 2007). Hence,

in the public sector, climate can be used to create shared perceptions among subordinates

about the values, norms, and behavior aligned with the reforms’ prescriptions.

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MODEL AND HYPOTHESES

Leadership styles and engagement

Middle managers play key roles in directly motivating civil servants. According to Wayne et

al. (1997), “the exchange between an employee and his or her direct superior is the primary

determinant of employee behaviour” (p. 103).

In examining the relationship between managers and employees’ behaviour, Blau’s (1964)

concept of social exchange, which refers to relationships that involve unspecified future

obligations, has been found to be very useful. Social exchange provides a different basis for

casting relationships from economic or transactional exchanges in which the obligations are

clearly specified and are more short-term in orientation. Macneil (1985) described a

continuum of exchange and relational contracts. On the one hand, exchange contracts are

economic in nature, based on transactions, and are short-term (Konovsky & Pugh, 1994).

Relational contracts, on the other hand, take the form of social exchange, covenantal, and

psychological contracts, which go beyond economic exchange and strictly transactional

contracts. Social exchange explains why subordinates become obligated to their supervisors,

and contribute in ways that transcend the requirements of the formal employment contract

(Settoon et al., 1996).

The crucial role of management in getting employees engaged is emphasised by Harter et al.

(2002) and Tuckey et al. (2012) who argue that this connection stems from factors that are

strictly linked to the manager’s choices and actions. In particular, Janssen and Van Yperen

(2004) highlight the role of individual immediate managers and supervisors in terms of day-

to-day individual support (e.g. performance appraisal) and development of work teams. Thus,

immediate managers’ action is crucial in shaping the work context, making available for each

employee resources such as support from colleagues, performance feedback, worker’s

autonomy, and professional growth opportunities. Consistent with this approach, the Job

Demand-Resource model expressly envisages the inspiring vision of the supervisor among

the job resources promoting engagement (Llorens et al., 2007; Xanthopoulou et al., 2009).

Notwithstanding leadership can have a great impact on engaging employees within the

organization, whether transactional or transformational styles of leadership play different

roles in making employees engaged or not is not yet clear.

Although there is no direct evidence on the direction of the linkage between transactional

leadership (Bass, 1985) and work engagement, several authors back the contention that the

transactional style contributes negatively or not at all to employees' work engagement, due to

the lack of inspirational appeal (Tims et al., 2011; van Vugt et al., 2004) and intrinsic

motivation (Deci et al., 1999). This assumption is in line with recent findings from the public

sector, where the transactional style of leadership is predominant due to the bureaucratic

model of organization. MacLeod and Clarke (2009) find a generally low level of engagement

among the UK civil servants and suggest that departments with higher engagement levels

perform better. Similarly, research in Canada finds a positive link between engagement,

customer service, trust and public confidence (Kernaghan, 2011).

To conclude, extant research favours the hypothesis that transactional leadership undermines

the level of engagement of the employees, leading to the following hypothesis:

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H1: Transactional leadership has a negative direct or no impact on engagement.

Transformational leadership is defined as leadership style that transforms the norms and

values of the employees, whereby the leader motivates the workers to have extra-role

behaviour. This leadership style focuses on the enhancement of employees' participation in

the goals of the organization (Bass, 1985). According to Podsakoff et al. (1990),

transformational leadership aims at increasing employees’ awareness of task outcomes, at

stimulating employees both to activate their higher-order needs and to act in the interests of

their work-unit. Transformational leaders provide an inspiring vision of goals that can help

overcome egoism and narrow task perspective in organizations, as they exploit new vitalities

among employees.

Transformational leadership emerges as a style that fosters the development of employee

engagement (Kaiser et al., 2008). Currently, to the best of our knowledge, there is limited

direct evidence of a link between transformational leadership and work engagement (Tims et

al., 2011). Indirect evidence is provided by the finding that when employees perceive positive

interactions with their managers (Bakker & Schaufeli, 2008) as well as when leaders focus on

relationship building and trust development (Cartwright & Holmes, 2006) increased levels of

engagement can be detected among employees. Additionally, a transformational leadership

style leads to increased organizational commitment and job satisfaction that are proved to be

linked with employees’ engagement (Walumbwa et al., 2005; Walumbwa et al., 2008).

Transformational leadership would then be expected to increase the feeling that followers are

making a valued contribution to the organization determining an increased levels of

identification with the work being done (Avolio, 1999; Bass, 1998), and consequently higher

work engagement (Zhu et al., 2009). Transformational leaders also have been described as

paying closer attention to their employees’ needs for achievement and growth, while also

encouraging them to take on greater responsibilities to develop their full potential (Avolio,

1999; Kark & Shamir, 2002). Thus, employees working with such leaders would be expected

to experience higher levels of work engagement, due both to the greater responsibility they

are used to get and to the freedom they have to contribute to the organizational performance.

Thus we formulate the following hypothesis:

H2: Transformational leadership has a positive direct impact on engagement

Organizational climate and work engagement

In order to identify organizational climate models consistent with public sector reforms we

draw from one highly rated model of organizational climate, namely the Competing Values

Framework (CVF) developed by Quinn and Rohrbaugh (1981, 1983). The CVF explicitly

recognises that within organizations multiple competing values and cultures may coexist. The

organizational competing values correspond to well-known dilemmas of organizational life.

The first dilemma regards the choice between a focus on the internal environment and inner

processes vs. the external environment and relationships with the outside (e.g. suppliers,

customers). A second dilemma concerns the emphasis put on control over resources and

processes vs. flexibility. By crossing external/internal focus with control/flexibility, four

alternative organizational models can be identified:

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- the Human Relations model (internal focus and flexibility) uses cohesion and morale to

achieve human resources development;

- the Open System model (flexibility and external focus) is characterised by flexibility

and external focus, and attributes the foremost importance to the goals of growth, and

external support, and to flexibility and readiness as means of reaching such ends;

- the Rational Goal model (external focus and control) adopts planning and goal setting

as means to achieve productivity and efficiency;

- the Internal Process model (internal focus and control) stresses stability trying to

minimise interactions with the external environment by means of vertical

communication and formal rules.

The CVF has already been applied to interpret public sector reforms and to identify the

organizational model coherent with the reform goals (Bradley & Parker, 2006). In our view,

two are the CVF quadrants consistent with NPM oriented reforms: the Open System (OS) and

the Rational Goal (RG). Both models share the focus towards external stakeholders of public

organizations, although with a different emphasis on control.

Both the OS and RG climate models can be interpreted as placing demands on civil servants

while also offering resources that offset the costs created by these demands. The balance

between demands-resources determines the extent of work engagement (Hakanen et al.,

2006).

In particular, in terms of demand, in the OS model, internal change programmes may create

heterogeneous, conflicting and fluid organizational identities in place of uniform and stable

ones (Skalen, 2004). Also, in the RG model, performance evaluation creates mixed requests

for achieving unit’s own objectives while pressing to maximize intra-organizational

cooperation and whole-of-government objectives (Emery & Giauque, 2003).

It has been claimed that reforms have over-emphasized structures, demanding increased

unproductive work such as reporting (Farrell & Morris, 1999), and have paid insufficient

attention to cultural change and staff concerns (Coram & Burnes, 2001).

Looking at the models in terms of resources, the implementation of an OS model asks

managers to facilitate and to support adaptation and change, and to absorb uncertainty by

monitoring the environment and by fostering participation in decision processes (O'Neill &

Quinn, 1993; DiPadova & Faerman, 1993). In the RG model, key management activities

include planning, directing, goal setting and evaluating performance (Cooper & Quinn,

1993). Thus, employees working in such climate models may receive from their organization

sufficient job resources to pursue efficiency, transparency, and accountability goals.

Job resources are particularly relevant under highly stressful conditions, when employees’

engagement can take place only if they receive support and appreciation from their supervisor

and colleagues and when they perceive a supportive climate (Bakker et al., 2007; Luthans et

al., 2008). In this direction, since we consider that the application of the public sector reforms

requires significant and potentially stressful change to the employees, the organizational

climate perceived within the organization can affect employees’ engagement (Koene et al.,

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2002), and possibly leading employees to feel challenged and energized to seek innovative

approaches (Gumusluoglu & Ilsev, 2009).

Taking into account our hypotheses H1 and H2, envisaging a direct effect of transformational

leadership on engagement, and a null effect of transactional leadership on engagement, we

posit that the mediation of organizational climate between transformational leadership and

engagement is partial, whereas the mediation between transactional leadership and

engagement is total.

H3: Organizational climate partially mediates between transformational leadership and

engagement.

H4: Organizational climate totally mediates between transactional leadership and

engagement.

Figure 1 summarises the model hypotheses.

Figure 1 – Hypothesised model

METHODS

Sample

In order to empirically test the above model, a questionnaire was developed and submitted to

the employees of 18 Italian local governments, ranging from very small municipalities

(population < 10,000) to large towns (population > 250,000). Italian municipalities

underwent a significant reform of civil service in 2009, meant to introduce performance

management and greater accountability towards citizens, and therefore, represent an up-to-

date example of civil servants’ response to a reform in terms of engagement.

Respondents belonged to a variety of departments within the municipalities (tax collection,

human resources, engineering, city development and maintenance, welfare, culture and

education), to different jobs and assignment (clerks, accountants, engineers, social workers,

technical occupations), and to different positions in the organizational hierarchy (employees,

low- and mid-level managers).

Ancarani et al. Employees’s Engagement in the Public Sector

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A total of 2680 valid responses were obtained in the course of 2012. Although we attempted

to elicit basic socio-demographic variables (gender, age, education, work role, seniority), in

addition to the constructs of interest, the great majority of participants did not provide

personal information, most probably for fear of being recognised.

Measures

Transactional and Transformational Leadership were measured using the Leader Behavior

Scale (Podsakoff et al., 1990). Climate was assessed by means of OS and RG models of

climate as made operational by Patterson et al. (2005). Engagement was measured through

the 9-item UWES engagement scale (Shaufeli et al., 2003).

All the constructs used were subject to validation through Confirmatory Factor Analysis

(CFA) in order to keep account of the different cultural and organizational context to which

they were being applied with respect to the extant literature.

Concerning climate scales, since the model validated by Patterson et al. (2005) hypothesizes

the existence of six scales belonging to the RG model (Clarity of Organizational Goals,

Effort, Performance Feedback, Quality, Efficiency, and Pressure to Produce), we started by

assessing how well this six-factor structure described the co-variation between items.

Correlation among latent factors was allowed. A negative correlation was found between the

scale Efficiency and some of the remaining scales. We then proceeded to test for the

existence of a second order RG factor encompassing the remaining five scales. The model

was further refined by dropping the Pressure to produce scale because of a low loading. The

final second order structure, encompassing Clarity of Organizational Goals (alpha = 0.855),

Effort (alpha = 0.829), Performance Feedback (alpha = 0.621), and Quality (alpha = 0.863),

exhibited satisfactory fit indices (RMSEA = 0.048, SRMR = 0.018, CFI = 0.988, TLI =

0.979). Loading factors for first order factors were all above 0.6. Efficiency (alpha = 0.800)

was considered as a separate scale from the remaining RG model.

Regarding the Open System model, we begun by conducting CFA on the factor structure

hypothesized by Patterson et al., encompassing three scales: Outward Focus, Reflexivity, and

Flexibility. We then proceeded to test for the existence of a second order factor structure. The

final model structure validated includes two first order factors, namely Flexibility (alpha =

0.986) and Reflexivity (alpha = 0.846) mapping on a second order construct, while Outward

Focus (alpha = 0.766) was considered as a separate factor. The fit indexes of this model were

all adequate and loadings exceeded 0.6.

Following Podsakoff et al. (1990), transformational leadership was measured by a second

order factor, Core Transformational, encompassing three scales: Vision (alpha = 0.943),

Model (alpha = 0.925), and Group Goals (alpha = 0.952). Other first order factors that define

Transformational Leadership are High Performance Expectations (alpha = 0.837), Providing

Individual Support (alpha = 0.827), and Intellectual Stimulation (alpha = 0.893).

Transactional Leadership (alpha = 0.919) was measured through a 4-item factor. Goodness of

fit indices were satisfactory (RMSEA= 0.054; CFI=0.970, TLI=0.966, SMRS=0.034).

RESULTS

Table 1 reports path coefficients obtained from the estimation of the SEM model. Goodness

of fit indices for the model are satisfactory. Standardized path coefficients and p-values are

Ancarani et al. Employees’s Engagement in the Public Sector

671866-13

shown for each path of the hypothesized model. Considering the impact of leadership style on

engagement, the path coefficient of transformational leadership on climate scales are all

positive and significant, except for Efficiency. As for transactional leadership, path

coefficients are all positive except for Outward Focus. All climate dimensions have a positive

impact on engagement, suggesting that the resources offered by these climate models more

than offset the job demands they pose to workers. However, the impact of Outward Focus on

engagement is statistically insignificant.

Table 1 – Path coefficients from SEM model

*p < 0.05

**p<0.01

Table 2 tests mediation effects by breaking down direct effects of leadership styles on

engagement and indirect effects via organizational climate dimensions. The table shows that

transformational leadership has a significant impact both directly and indirectly, with the

indirect effect being the strongest, especially via the Rational Goals model. On the contrary,

Transactional leadership has no direct impact on engagement and the only significant impact

takes place through the mediation of climate, especially Rational Goals and Open Systems.

Summing up, considering direct effects of leadership on engagement, only Transformational

Leadership is significantly related to engagement, whereas Transactional leadership has no

significant direct impact on engagement, thus confirming Hypotheses 1 and 2 in our model.

The total impact of transformational leadership on engagement is one of partial mediation:

transformational leaders are prone to adopt both flexible and change oriented climate models

(Open Systems), as well as models emphasizing clear goals, and performance feedback

(Rational Goals), and these, in turn, are positively related to engagement.

The effect of transactional leadership on engagement, on the other hand, is one of total

mediation: the direct effect is insignificant, while a significant indirect effect takes place

through the Rational Goal climate. Overall, these results confirm Hypotheses 3 and 4

concerning mediation effects of climate.

Dependent Variable

Predictors

Transforma

tional

Leadership

Transaction

al

Leadership

Open Systems

Outward focus Efficiency Rational Goals

Open

Systems

0.572**

0.146** - -

-

-

Outward

focus

0.229**

-0.125*

- -

-

-

Efficiency -0.105*

0.058

- -

-

-

Rational Goals

0.582**

0.153**

- -

-

-

Engagement 0.170**

-0.068

0.101*

0.017

0.157**

0.534**

Goodness of

fit indices RMSEA = 0.048 (C.I. 0.047-0.049), CFI = 0.929, TLI = 0.925, SRMR = 0.066

Ancarani et al. Employees’s Engagement in the Public Sector

671866-14

Table 2 – Breakdown of direct and indirect effects on engagement

CONCLUSIONS

We believe that interesting managerial considerations are to be drawn from this study. In

particular, our aim is to highlight the role public sector middle management can play in

affecting employees’ work engagement and to determine what values and practices managers

should prioritize when their subordinates are not engaged.

Our results highlight that the implementation of climate models consistent with recent public

sector reforms is not necessarily detrimental to civil servants’ engagement. To the contrary,

both climate models emphasising flexibility and innovation and those stressing performance

and goal setting increase engagement. The effect of innovation and flexibility oriented

climate, however, is weaker, possibly a reflection of the fact that innovation values are at

odds with the traditional bureaucratic culture still prevalent in municipalities.

Both transactional and transformational leaderships have positive effects on engagement, but

the size of the effect of transformational leadership on engagement is larger, suggesting that,

as part of a general strategy to generate or foster civil service engagement, efforts should be

put in encouraging transformational approaches.

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