Do We Stay or Do We Go? Empowering Leadership, Psychological Contracts and Turnover Intention Across Generations

Abstract

The millennial generation is described as distinct from earlier generations, characterized by high individualism, feelings of entitlement, a focus on work-life balance and high turnover. We suggest that empowering leadership is suitable for enhancing psychological contracts and retention of this generation. We tested the relationship between empowering leadership, psychological contracts, and turnover intention in a multigenerational sample of 651 employees in the science, technology, engineering, and mathematics (STEM) fields. The psychological contract, specifically overfulfillment in terms of inducements exceeding obligations, mediated the relationship between empowering leadership and turnover intention. Generation was not found to moderate any path of the mediation model. The results indicate that empowering leadership effectively attenuates turnover intention for all generations, mediated by overfulfillment of the psychological contract. Generational differences should be more frequently tested in larger models in an organizational context to avoid overestimating generational effects. By testing differential effects of generations, this paper promotes a more profound understanding of consequences of empowering leadership.