Transformational Leadership, Psychological Empowerment, and  Staff Retention in Micro Finance  Institutions, Nairobi City County, Kenya

Kariuki, Josphat  Kamau

Transformational Leadership, Psychological Empowerment, and Staff Retention in Micro Finance Institutions, Nairobi City County, Kenya

dc.contributor.author	Kariuki, Josphat Kamau
dc.date.accessioned	2024-02-13T12:08:59Z
dc.date.available	2023-02-10T10:45:49Z
dc.date.available	2024-02-13T12:08:59Z
dc.date.issued	2022-07
dc.description.abstract	In the modern competitive world, the success of microfinance institutions is largely dependent on retention of their well talented and experienced staff. However, these institutions face challenges such as inappropriate leadership, low loyalty and poor staff engagement, which have led to poor staff retention. Notably, extant literature has tended to focus more on staff turnover than staff retention. Empirical studies on transformational leadership and staff retention have laid emphasis on transformational leadership as a unidimensional construct with little attention paid to its four dimensions of idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. This study therefore investigated the effect of transformational leadership on staff retention in microfinance institutions in Nairobi City County, Kenya. Specifically, it explored the effect of idealized influence, inspirational motivation, intellectual stimulation and individualized consideration on staff retention in microfinance institutions in Nairobi City County, Kenya. Further, the study determined the mediating effect of psychological empowerment on the relationship between transformational leadership and staff retention in microfinance institutions in Nairobi City County, Kenya. The study was underpinned by Transformational Leadership Theory, Leader-Member Exchange Theory, Social Exchange Theory, and Resource-Based View Theory. The study was founded on the positivism philosophy and guided by the descriptive and explanatory research designs. The target population was the 12 microfinance institutions licensed by the Central Bank of Kenya in Nairobi City County. Through census, a total of 298 respondents was obtained for data collection. The unit of analysis was the head offices of the 12 microfinance institutions, while the unit of observation comprised of employees drawn from the senior management level, middle management level, and lower-level management staff of the functional departments of these institutions. Primary data was collected using structured questionnaires. Data was analyzed through descriptive and inferential statistics. Hypothesis testing was done at 5% significance level using the multiple linear regression model. All ethical considerations were adhered to. The study will benefit microfinance institutions, achievement of the Kenya’s vision 2030 and academia with new frontiers of knowledge. The study established that transformational leadership is a significant predictor of staff retention through idealized influence, intellectual stimulation and individualized consideration and the relationship is partially mediated by psychological empowerment. The study concludes that transformational leadership has a significant effect on staff retention mediated by psychological empowerment. The study recommends that policy makers and strategists in the microfinance institutions in Nairobi City County, Kenya should align the transformational leadership practices with the strategic goals that have been formulated for sustainable staff retention. Being a regulator of the microfinance institutions in Nairobi City County, Kenya, policy makers at CBK should closely monitor the leadership of these institutions as well as the staff retention practices in place as all these to some extent can contribute to overall soundness and stability of these institutions. The Human Resource managers working in the microfinance institutions in Nairobi City County, Kenya should constantly review and align organizational commitment practices so as to retain more staff.
dc.description.sponsorship	PAC University
dc.identifier.uri	https://repo.pacuniversity.ac.ke/handle/123456789/3657.2
dc.language.iso	en
dc.publisher	PAC University
dc.subject	TRANSFORMATIONAL LEADERSHIP	en_US
dc.subject	PSYCHOLOGICAL EMPOWERMENT	en_US
dc.subject	STAFF RETENTION	en_US
dc.subject	MICROFINANCE INSTITUTIONS	en_US
dc.title	Transformational Leadership, Psychological Empowerment, and Staff Retention in Micro Finance Institutions, Nairobi City County, Kenya	en_US
dc.type	Thesis