Albalawi, Abdulmajeed Saad (2021) Effects of Employee Perceptions Regarding Managers’ Emotional Intelligence on Their Turnover Intention: The Case of Small and Medium Enterprises in Saudi Arabia. PhD thesis, Victoria University.

Abstract

In the small and medium enterprises (SME) sector, managers play a significant role in the decision-making process. Typically, the process involves the adoption of crucial measures that can substantially contribute to organisational development and to shaping an entrepreneurial orientation that can render decision-making more efficient and profitable. This study investigated the role of SME managers in Saudi Arabia, where the economic participation of SMEs is still in its development stage, given the predominant control of the market by the oil sector. Specifically, the study aimed to determine the extent to which the perceived emotional intelligence of Saudi SME managers directly and indirectly affects employee turnover and job satisfaction via leader–member exchange (LMX). It also examined how employees’ views of their managers’ emotional intelligence differ from the latter’s objective self-ratings. To this end, it adopted a quantitative approach to test hypotheses regarding the function of emotional intelligence in the workplace and to explore the degree of interrelationship between managerial emotional intelligence and employee turnover, as occurring through the LMX mechanism. The findings are expected to benefit the SME sector by serving as a reference for SME managers to increase employee job satisfaction and retain skilled professionals. Doing so is important because employees are best positioned to ensure that they are successful in their business environment. Further, given the competition in modern business environments, organisations must put relevant structures in place to ensure success. A cross-sectional survey design was used, and 169 SME employees in Saudi Arabia participated in this research through an online survey. The several main findings of this research were linked with the detailed secondary research that was reviewed using various sources. The present study’s results revealed a positive relationship between emotional intelligence and LMX, supporting that emotional intelligence may inform the development and management of relationships between managers and their employees in the SME sector. Further, a negative relationship was found between perceived emotional intelligence and employee intention to leave, which suggests that emotional intelligence has a role in retaining employees and reducing their desire to leave. In addition, a positive relationship was found between emotional intelligence and job satisfaction. In particular, for leaders, emotional intelligence has a direct implication on ensuring that employees are able to execute their job functions. Moreover, it means that employees are willing to put in additional efforts for their organisation’s success. The study also found that LMX was positively related to job satisfaction. However, the results did not support a hypothesised interaction between LMX and turnover intention. Last, LMX was found to mediate the relationship between emotional intelligence and job satisfaction, but not the relationship between emotional intelligence and turnover intention. Thus, an organisation that has appropriate LMX would achieve successful assignment of job functions because its leaders would support employees to achieve their job functions and to execute their roles. Conversely, in an organisation in which appropriate support from leaders is lacking, employees are not able to achieve their job roles.

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