DOI: 10.1002/hrdq.

21404

QUANTITATIVE STUDY

Transformational leadership and human resource

development: Linking employee learning, job
satisfaction, and organizational performance

Mesut Akdere1 | Toby Egan2

1
Department of Technology Leadership and
Innovation, Purdue University, West
Abstract
Lafayette, Indiana This large-scale study (n = 5,349) explores a long-standing,
2
School of Public Policy and Robert H. Smith but rarely validated value chain. Since the inception of
School of Business, University of Maryland,
human resource development (HRD), the intersection
College Park, Maryland
between top organizational leadership, HRD, and organiza-
Correspondence tional performance outcomes has been emphasized by
Mesut Akdere, Department of Technology
Leadership and Innovation, Purdue University,
scholars and practitioners. Leadership has been highlighted
355 Young Hall, 155 S. Grant St. West as the key catalyst both in encouraging employee learning
Lafayette, IN 47907, USA.
and performance and in formulating an HRD supportive cul-
Email: makdere@[Link]
ture toward key organizational outcomes. However, there is
a dearth of empirical studies that have focused on the inter-
section of leadership, HRD, and organizational performance,
and virtually no studies have systematically investigated
specific leadership practices, such as transformational lead-
ership (TL). We explore the intersection between TL, HRD,
and organizational performance by engaging 3,474
employees and 1,875 customers from 69 healthcare loca-
tions in the United States. Ideally, transformational leaders
encourage followers to enrich their knowledge, skills, and
abilities in order to increase individual and shared learning
to advance organizational performance. A major organiza-
tional support function toward such employee development
is HRD and its core domains—learning and performance.
Those organizations fostering excellence in learning and
performance have been identified as having strong organi-
zational HRD cultures. The study reported herein supported

© 2020 Wiley Periodicals LLC.

Human Resource Development Quarterly. 2020;1–29. [Link]/journal/hrdq 1

2 AKDERE AND EGAN

that TL behaviors aligned to support HRD culture through

leader support of employee learning and performance in
the US healthcare context. Organizational HRD culture
was found to align with key positive employee and cus-
tomer-reported performance outcomes. Implications for
leadership and HRD research, theory, and practice are
explicated.

KEYWORDS

health care, HRD, learning culture, managerial and leadership

effectiveness, organizational performance, transformational
leadership

1 | I N T RO DU CT I O N

Most contemporary organizations are faced with significant challenges that are the results of uncertainty in the
world economy, globalization, technological and practice-related advancements, and crises. Such dynamics are par-
ticularly demanding in industries highly dependent on technology and service innovations, and/or are highly
influenced by national and international legal and policy changes. Along with increased demand for individual exper-
tise, employees across all levels have become the most significant asset for their organizations. Human resource
development (HRD) aims to achieve proactive change and development in individuals, organizations, and social sys-
tems (McLean & McLean, 2001). The common value chain (Porter, 1985) in HRD connects managerial/executive lead-
ership ! support for employee learning and performance ! employee experience of organizational HRD culture and
functions ! employee satisfaction ! key organizational performance outcomes (Jo, Jeung, Park, & Yoon, 2009; Keefer
& Yap, 2007; Short, Brandenburg, May, & Bierema, 2002; Swanson & Holton, 2009; Werner & DeSimone, 2011).
Such logic is imbedded in founding definitions of HRD (Woodall, 2001) including an emphasis on the importance of
leadership to enable and support organizational development (Egan, 2002; McLean, 2009). However, these central
ideas have rarely been validated systematically or empirically.
In formulating the organizational value chain concept, Porter (1985) moved away from the traditional focus of
looking at departments and accounting types to establish organization value and, instead, emphasized organiza-
tional systems and how inputs are transformed into outputs. The value chain concept can be applied to core ele-
ments of HRD with a system's inputs-to-outputs perspective (Jacobs, 1989). The HRD value chain is further
elaborated upon by practitioner and scholarly perspectives. Corporate leaders have emphasized transformational
leadership (TL) as essential to both excellence in employee performance and highly dependent strong partnerships
with HRD-related functions (Belcher, 2015; Bolza, 2016). Former Executive Vice President of the largest HRD
practitioner organization in the world, the Association for Talent Development (previously American Society for
Training and Development), and economist Anthony Carnevele emphasized the importance of leadership for HRD.
Carnevele stated that organization leaders who embrace HRD are “driven to identify and use learning approaches
that rarely stray from the day-to-day reality of the workplace and are linked to both the individuals on the job,
and, ultimately, the employer's bottom line” (Carnevale, Gainer, & Villet, 1990, pp. 28–29). Implicit in such an
emphasis are leadership behaviors that first focus on transformational growth, support employee learning and per-
formance, and shape organizational culture toward strategic organizational outcomes regardless of sector—
for-profit, nonprofit, or governmental.
AKDERE AND EGAN 3

Yorks (2005) further linked leadership and learning to an organizational HRD environment that supports job-spe-
cific performance toward long-term strategic outcomes. He stated:

The fundamental purpose of HRD is to contribute to both long-term strategic performance and more
immediate performance improvement through ensuring that organizational members have access to
resources for developing their capacity for performance and for making meaning of their experience
in the context of the organization's strategic needs and the requirements of their jobs (pp. 20–21).

McLean (2009) also underlined the importance of employee satisfaction as a key benefit for organizations.
Implied in these statements is a leadership that encourages employee learning and performance and which offers
linkages to the organizational HRD culture toward positive employee attitudes and organizational performance out-
comes—the HRD value chain. In the only other identified use of HRD value chain terminology, Leimbach and
Baldwin (1997) described it in terms of HRD research value. Their theoretical/research-oriented value chain termi-
nology focus-learn-apply-prove aligns with the pragmatic, applied approach described earlier. The way Leimbach and
Hatcher's research-focused value chain connects to the HRD value chain is (a) focus emphasized by TL, and leader
support for (b) learning and (c) application/performance will lead to an HRD culture responsive to (d) proven customer
outcomes that are key measures of sustained organizational performance. According to AIHR Analytics (2020), not
only does such a value chain contribute to organizational performance outcomes, it demonstrates the import role
that HRD-related practices play, which can affirm leaders' support of transformational action and the learning and
performance-oriented culture.
Despite these conceptual linkages, which emerge again and again, few studies have explored the HRD value
chain empirically. This is especially true when it comes to key, measurable organizational performance outcomes
(Kim, Hahn, & Lee, 2015; Park & Jacobs, 2011; Park, Kim, & Song, 2015; Rasheed, Khan, Rasheed, & Munir, 2015).
Of the few studies available, even fewer have used large or multilocation organizational samples (Carter & Youssef-
Morgan, 2019; Kontoghiorghes, Awbre, & Feurig, 2005). Although leadership has been identified as a key factor in
support for HRD-oriented work cultures (Jeong, Hsiao, Song, Kim, & Bae, 2016; Park et al., 2015; Shuck, Alagaraja,
Immekus, Cumberland, & Honeycutt-Elliott, 2019), there has been little examination or agreement regarding the
leadership characteristics that may be most effective—and far less in terms of empirical assessment.
The potential for TL to play a significant role in the achievement of organizational performance through sup-
port of HRD appears to be a growing theme in the existing HRD literature (Crane & Hartwell, 2018; Gillet & Van-
denberghe, 2014; Han, Seo, Li, & Yoon, 2016; Jeong et al., 2016; Kim & Kim, 2017; Park, Song, Yoon, &
Kim, 2013; Sheehan, Garavan, & Moreley, 2020). However, despite marked increases in TL-related research and
publications overall, TL has rarely been examined empirically in relation to either HRD or measured organizational
performance outcomes. In particular, HRD-related literature has consistently emphasized the importance of execu-
tive and managerial support for HRD as central to employee learning, development, and performance outcomes.
Even fewer studies have involved empirical exploration of executive/managerial behavior in support of employee
learning and performance across firms, their connections to organizational HRD and key organizational outcomes.
The rationale for examining overt leader support for employee learning and performance as critical for organiza-
tional success has long been connected to dynamic, ongoing change characterizing organizational environments,
across sectors and globally. These dynamic workplaces often require immediate responses and place unique
demands on leaders, employees, and organizational culture (Cho & Egan, 2013). The consequences for lagged reac-
tion or non-responsiveness is organizational underperformance and, ultimately, failure—whether due to reduced
revenue, losses to competitors in the private sector, or loss of public and/or donor support in the governmental
and nonprofit sectors.
TL is a distinctive, contemporary leadership approach that emphasizes the collective interest of followers/
employees, supporting their achievement in reaching collective goals. The rise of TL-related theory and research in
recent years points to the likelihood that TL practices have begun to resonate for researchers and practitioners
4 AKDERE AND EGAN

(Gardner, Lowe, Moss, Mahoney, & Cogliser, 2010; Sungu, Weng, & Xu, 2019). At the same time, examinations of TL
behaviors specifically tied to learning and performance are few (Joo, 2010; Kim et al., 2015; Park & Jacobs, 2011;
Turner & Baker, 2018). TL presents significant potential in supporting HRD goals to leverage learning and perfor-
mance toward organizational success. What we know little about is the extent to which employees experience sup-
port for learning and performance from their managers, how such support may or may not be related to TL, the
extent to which TL influences employee perceptions about their organization's overall support for HRD, and whether
such support influences their own and their customers' experiences with key performance outcomes (Schuh
et al., 2012; Sungu et al., 2019).
Given that there have been few overt historical intersections and fewer empirical investigations, the conceptual
interconnection among TL and HRD and the related potential is notable. TL focuses on the capacity of leaders to
develop employees including their morale, motivation, and performance through a variety of mechanisms. HRD
emphasizes some of the very developmentally oriented mechanisms (e.g., organization development [OD], training
and development [T&D], career development [CD], coaching) through which employee motivation, learning and per-
formance can be catalyzed. Although the connection has rarely been made, even in conceptual literature, when suc-
cessfully executed, TL appears to have the capacity to connect HRD with employees to collective efforts, shared
mission, and organizationally oriented outcomes (Froehlich, Segers, & Van den Bossche, 2014). Despite mirroring
foundational assumptions and foci, few studies have examined the intersection between TL and HRD in practice.
Particularly important is the extent to which positional leaders actually exhibit TL and if or how these related behav-
iors connect to actual support for HRD organization of a wide range.
Within organizations, HRD serves as both structural and cultural elements, linking employee learning to organi-
zational performance (Alagaraja & Shuck, 2015; Egan, 2008). Following a lengthy scholarly debate among HRD
scholars and practitioners juxtaposing performance versus learning as the central focus for HRD, a consilience has
emerged emphasizing support for both learning and performance as core domains for HRD research, theory, and
practice (Russ-Eft, 2016; Watkins, 2016). Although it is clear that the combined HRD focus on learning and perfor-
mance fits the realities of today's workplace—regardless of sector or national context—there is more work needed to
solidify HRD models and practices focusing on learning and performance processes and outcomes. Therefore, we
propose focusing on leader support for both performance and learning perspectives, resulting in a strong organiza-
tional HRD culture leading to increased satisfaction for customers. We argue leaders' organizational support for per-
formance and learning contributes to organizational HRD culture leading to key mission-centered outcomes.
Although this argument can be found in HRD literature (Egan, Turner, & Blackman, 2017; Loewenberger, 2013),
empirical evidence connecting leader support for learning and performance to organizational HRD culture and per-
formance is limited. Overall, research connections between HRD and employee performance have been few, and
there is a dearth of studies connecting HRD to organizational performance outcomes as reported by customers.
Although TL, HRD, and organizational performance have previously been framed conceptually in the existing lit-
erature, empirical studies have typically been limited to various employee attitudes, behaviors, and engagement. Our
study not only builds upon existing literature by empirically examining relationships among these organizational fac-
tors but also advances HRD research by contextualizing these relationships to both employees and customers. Con-
sidering customers are the ultimate judge of an organization's products/services, the study reported herein provides
unique insights on overall organizational performance through employee and customer satisfaction. Furthermore,
not only have there been few HRD-related studies that incorporate organizational performance data, there is no
prior empirical study in the HRD literature that incorporates customer satisfaction as an empirically determined orga-
nizational performance outcome. Moreover, Turner and Baker (2018) reported that “the most common leadership
theory represented in the HRD literature included TL” (p. 473). In fact, out of the 19 studies identified in these
authors' search for TL articles in the HRD literature, only three were empirical. And, of these three, one was a case
study on mentoring and leader identity development (Muir, 2014); the second focused on executive coaching inter-
vention and perceived leader effectiveness (Nieminen, Smerek, Kotrba, & Denison, 2013); and, the third was an
AKDERE AND EGAN 5

exploratory case study on organizational learning as an OD intervention (Lien, Hung, & McLean, 2007). Therefore,
while TL has been increasingly championed in the HRD literature, related empirical inquiry has not followed suit.
In this study, we examine how TL behaviors influence organizational support for performance, learning, and
HRD culture, which, in turn, influences employee and customer satisfaction within the context of health care. Given
the underlying industry dynamics, health care is especially relevant and appropriate for the context for this study. As
TL (Bedgood, 2019; Fischer, 2016; Jambawo, 2018; Muir, 2014), learning (Avgar, Tambe, & Hitt, 2018; Rafter
et al., 2015; Willie, 2019) and performance (Akdere, Top, & Tekingündüz, 2020; Emami & Doolen, 2015; Levesque &
Sutherland, 2020) are of major importance in this industry. One needs to look no further than the recent coronavi-
rus/COVID-19 outbreak to witness how the ever-changing dynamics in healthcare technology, policy, and service
place significant, seemingly unending demands on each healthcare employee. Given the overt manner in which
healthcare-related learning and performance failures can be life threatening, it is essential that leaders embrace a cul-
ture that reflects a vital partnership with HRD-related functions and key organizational outcomes. As such, along
with the purposeful examination the aforementioned HRD value chain, the research questions guiding this study are:

1 What is the relationship between TL, support for learning, performance, and organizational HRD culture?
2 How does TL and organizational HRD culture impact mission-driven employee and customer outcomes?

1.1 | Theoretical background and hypotheses

For about as long as scholars and practitioners have been meeting and writing about HRD, they have implicitly or
explicitly supported a simple idea that, at the organizational level, HRD needs to be strongly supported by leadership
in order to be successful over the long term (McLean, 2009). And, that HRD involves learning and performance—with
some scholars and practitioners interested more in HRD processes and others in HRD outcomes (Swanson & Hol-
ton, 2009). As outlined earlier, the HRD logic chain commonly connects managerial/executive leadership ! support
for employee learning and performance ! employee experience of organizational HRD culture and
functions ! employee satisfaction ! key organizational performance outcomes. TL has been found to be an effec-
tive approach in a variety of industries including health care (Akdere, 2009; Gider, Akdere, & Top, 2019; Top, Akdere,
& Tarcan, 2015). Based on the aforementioned, we hypothesize that TL is positively related to leader support for
performance and learning, which in turn influences organizational HRD culture. Additionally, organizational HRD cul-
ture positively impacts both employee job satisfaction and customer satisfaction. Figure 1 illustrates our hypothe-
sized theoretical model for the study. Although such a model may well represent extant literature and practice, there
is a dearth of evidence supporting these interactions along a chain from leadership-to-organizational performance
outcomes. Extending the very limited evidence base associated with the HRD value chain is the aim of our study.

1.2 | Transformational leadership

The rich scholarly foundation of TL (Bass, 1990, 1999) has been adopted around the world by practitioners. Paul
Landy, chief of people and transformation at the 108-year-old Australian company QSuper, Inc., stated that the
importance of transformational leaders is that “They walk the walk and demonstrate to their people that they can
achieve great things and get satisfaction from their work,” he said. “They are instrumental in guiding and motivating
them to do this” (Landy quoted in Bolza, 2016). Landy elaborated that transformational leaders create a positive
organizational culture that both has high expectations for employee achievement and involves a vital partnership
with HRD-related functions that creates and sustains systems integral to sustaining key organizational outcomes
(Bolza, 2016). TL theory is framed as a process including individual consideration, intellectual stimulation, inspira-
tional motivation, and idealized influence. Such an approach changes people and organization culture whereby
6 AKDERE AND EGAN

FIGURE 1 Hypothesized theoretical model

leaders and followers are inextricably bound together (Northouse, 2018). Juxtaposed against transactional leader-
ship, TL is said to heighten consciousness of collective interests among organizational members and helps them to
achieve collective goals. TL has been identified by Northouse (2018) as a distinctive approach to leading individuals
and organizations and, therefore, worthy of specific empirical examination. TL can be compared to general manage-
ment and transactional approaches emphasizing the core of a business operation and its functions. Such approaches
promote individual interests of management and employees and satisfaction of contractual obligations through
establishment of objectives and the controlling and tracking of results (Bass & Avolio, 1990).
The transactional nature of many managerial practices has largely been perceived as bureaucratic and ineffective
(Egan et al., 2017; Lunenburg, 2011). Scholars and practitioners have come to differentiate leadership from manage-
ment in a manner whereby both leaders are seen to be more in touch with employees and are more proactive
regarding their development while elevating organizational mission (Northouse, 2018). In essence, while managerial
practices are associated with continuity of current, established organizational norms, leadership practices are highly
associated with responsiveness, change, and transformation. Such shifts between managerial and leadership prac-
tices can also be observed within the HRD context (Gillet & Vandenberghe, 2014; Hamlin, Kim, Chai, Kim, &
Jeong, 2016; Jeong et al., 2016).
TL “occurs when leaders broaden and elevate the interests of their employees, when they generate awareness
and acceptance of the purposes and mission of the group” (Bass, 1990, p. 21). Therefore, TL is considered to be a
process, which transforms individual members of the organization, including both leaders and their followers. It
involves influence that plays a vital role to move followers to accomplish much bigger goals than what is usually
expected utilizing core elements such as emotions, values, ethics, standards, and long-term objectives. Overall, TL
theory uses an encompassing approach, bonding followers and leaders in the transformation process. Furthermore,
TL-related behavior is more likely to promote employees' achieving their mastery goals (Hamstra, Van Yperen, Wisse,
& Sassenberg, 2014). Such work-related mastery goals are commonly related to learning, development, and perfor-
mance. Implicit in this orientation to employee mastery is the leveraging of organizational resources and structures,
including organizational HRD (learning, development, and performance-oriented) functions.
Bass and Bass (2008) articulated four elements of TL including (a) individualized consideration—the degree to
which the leader can give empathy and provide support for each follower's needs; (b) intellectual stimulation—the
degree to which the leader can stimulate and encourage creativity among the followers through challenging their
assumptions, taking risks, and soliciting their ideas; (c) inspirational motivation—the degree to which the leader instills
AKDERE AND EGAN 7

a strong sense of purpose among the followers through articulating a vision appealing and inspiring to them; and (d)
idealized influence—the ability of the leader to serve as a role model for ethical behavior through gaining the fol-
lowers' respect and trust. Despite the changing nature of the workplace, these elements are increasingly vital for
employee engagement and success as the organization is still expected to support the development of the technical,
human, and conceptual skills of its employees, which requires leadership support for organizational performance,
learning, and culture. In fact, these skills will likely remain relevant to HRD contexts (Jacobs, 2017) in the face of
technological advancements.
Several researchers have explored the influence of TL on organizational performance through intermediate vari-
ables such as knowledge management (Gowen, Henagan, & McFadden, 2009); congruence in top management teams
(Colbert, Kristof-Brown, Bradley, & Barrick, 2008); flexibility (Rodriguez Ponce, 2007); human capital (Zhu, Chew, &
Spangler, 2005); competitive strategies (Memon, Salleh, & Baharom, 2016); absorptive capacity (García-Morales,
Jimenez-Barrionuevo, & Gutierrez-Gutierrez, 2012); market orientation (Menguc, Auh, & Shih, 2007), and culture
(Ogbonna & Harris, 2000). However, the extent of our understanding regarding the ways in which leaders actually
exert TL-related influence is still limited and speculative (Epitropaki & Martin, 2013; Totten, 2019).
Additionally, based on our review of literature, we were unable to identify previous studies in Academy of HRD-
sponsored journals (HRDQ, HRDR, HRDI, and ADHR) exploring TL $ HRD $ performance linkages. In fact, no
AHRD journal article in our search, neither empirically nor conceptually, focused on TL and performance within the
context of HRD (Turner & Baker, 2018). Furthermore, these studies primarily focused on the relationship of TL to a
variety of employee attitudes, including employee engagement, employee commitment, job satisfaction, emotional
intelligence, among others, none included an organizational performance approach. As illustrated earlier, TL has been
examined through multiple lenses in HRD-specific journals. However, neither has an empirical examination of TL
within the context of primary HRD domains been previously conducted, nor has TL in the context of learning and
performance been explored in direct relationship to these historically important HRD domains. In this study, we
explore the extent to which TL behaviors may be critical for organizational support for performance, learning, and
HRD culture and test the following hypotheses:

H1 There is a positive relationship between TL behaviors and employee perceptions of leader support for performance.

H2 There is a positive relationship between TL behaviors and employee perceptions of leader support for learning.

1.3 | Leader support for performance

HRD scholars and practitioners have commonly focused on two central domains for its functions and processes—learning
and performance (Holton, 1999; McLean, 2009; Rummler & Brache, 1990; Swanson, 1994, 1995a, 1995b, 1999;
Swanson & Holton, 2009; Watkins & Marsick, 1995). Organizational leaders often view performance as the key to
organizational survival (Burns, 1978). Often tied to the economic outcomes of organizations, performance
improvement is considered a central HRD function (Swanson, 1999). Initial perspectives regarding the perfor-
mance paradigm of HRD were primarily concerned with capital utilization (Harbison & Myers, 1964; Holton, 1999),
which also viewed employees as human capital available to organizations. Over the last decade, a once one-sided
view of the paradigm has evolved in time to distinguish employees as the most important organizational asset
(Park et al., 2015; van Rooij & Merkebu, 2015).
Within organizational contexts, HRD positions performance at three levels including individual job performance,
team performance, and organizational performance. Performance is closely related to organizational outcomes
regardless of the mission of the organization as its “competitiveness depends on its capacity to manage performance
and improve the development of the skills and competencies of employees” (Adhikari, 2010, p. 306). A performance
orientation also supports organizational HRD culture—as HRD aims to facilitate organizational efforts around
8 AKDERE AND EGAN

performance improvement. Despite the growing importance of employees, it is clear that both HRD and other HR
functions are poorly represented at the top of many organizations (Becker & Huselid, 2009). HRD serves as a key for
helping top management realize the role employees play in enhancing and improving organizational performance.
For example, HRD efforts to increase employee engagement contribute to organizational performance (Kim, Kolb, &
Kim, 2013), which supports an organizational HRD culture centered around ongoing improvement and learning. Simi-
larly, Lans, Verhees, and Verstegen (2016) studied social competence in firm performance and identified a positive
influence of organizational support for performance to organizational HRD culture. Employee feedback is critical for
organizational performance efforts and contributes to the formation of and buy-in to organizational HRD culture
(Rasheed et al., 2015).
Traditionally, research has focused on the impact of HRD on factors related to organizational performance such
as employee job satisfaction (Muduli, 2015), organizational commitment (Gong, Law, Chang, & Xin, 2009), organiza-
tional citizenship behaviors (Sun, Aryee, & Law, 2007), social learning (Takeuchi, Chen, & Lepak, 2009), employee
psychological contract (Raeder, Knorr, & Hilb, 2012), competitive organizational strategies (Shin, 2014), and contin-
gent labor force (Luigi, Bonache, & Revilla, 2014). However, the assumption that leader support for performance can
influence organizational HRD culture has remained largely unexplored. Organizational HRD culture can be a strategic
asset in stimulating positive behavior in employees and enhancing their knowledge, skills, and attitudes, which can
increase productivity and performance (Clardy, 2008). In addition to Hypotheses 1, mentioned earlier, we also
hypothesize that about the impact of leader support for performance—.

H3 There is a positive relationship between employee perceptions of leader support for performance and organizational
HRD culture.

1.4 | Leader support for learning

Also considered a core domain of HRD, learning can take on many forms as a key strategic HRD process particularly
with the shift in the workplace on the importance of continuous improvement and lifelong learning. Despite the fact
that learning efforts in organizations typically are often the first to be cut in an economic downturn (Laff, 2008),
learning still remains a significant component relating to every aspect of the organization (Swanson & Holton, 2009;
Watkins & Marsick, 2014). As organizations change and new and innovative ways of doing business become the
norm, there is a greater need for learning to help employees reskill for newer technologies or gain new competencies
to meet the demands of more complex jobs. Therefore, learning remains relevant to organizational HRD culture to
advance development and improvement.
Various factors influence successful leader support for learning, which is “a process of both cognitive and behav-
ioral participation” (Yeo & Marquardt, 2015, p. 83). Among those most critical are managerial support (Odor, 2019),
employee motivation (Massenberg, Schulte, & Kauffeld, 2017), and program delivery (Kim et al., 2015). In addition to
Hypotheses 2, mentioned earlier, we also posit that leader support for learning influences organizational HRD culture
as an embedded factor within all HRD functions—.

H4 There is a positive relationship between employee perceptions of leader support for learning and organizational HRD
culture.

1.5 | Organizational HRD culture

As a field, HRD frames culture as an important context for its functions, programs, and outcomes as HRD exists in
organizations that “are human-made entities that rely on human expertise to establish and achieve goals” (Swanson
AKDERE AND EGAN 9

& Holton, 2009, p. 10). Although a definition of organizational HRD culture has rarely been elaborated upon, the
concept of culture typically evolves around the notions of learning and performance improvement at the individual,
team, and organization levels as these constitute the foundations of HRD's view of itself and the way it operates.
Based on their research of Fortune 500 companies, Hansen, Kahnweiler, and Wilensky (1994) found HRD to be a cul-
tural entity that is most concerned with people development and work autonomy. Stated in another way, an organi-
zational HRD culture positions the advancement of human assets to be most important for successful achievement
of organizational mission and outcomes. For the purposes of this study, HRD culture is the premise and environment
that supports and fosters learning and performance improvement-related functions and activities across all levels of
an organization.
HRD culture both complements the broader culture of the host organization and aims to develop and enhance
the work of organizational members through HRD processes and functions while supporting organizational vision,
mission, and goals (Werner & DeSimone, 2011). Specifically, organizational HRD culture encompasses OD, T&D, CD,
coaching, and related activities, all of which include critical organizational outcomes of performance and learning
(Swanson & Holton, 2009). Performance is most often described to be multilayered whereby organizations measure
the degree they accomplish their goals effectively and efficiently at the individual, team, organizational, and external
stakeholder levels (Guinot & Chiva, 2019). Learning, on the other hand, aims to enable employees to deal with the
challenges of the daily tasks (Sparr, Knipfer, & Willems, 2017). Performance and learning both relate to organizational
HRD culture through T&D and OD efforts in the organization (Brown, O'Kane, Mazumdar, & McCracken, 2019).
Oftentimes, when organizational support for performance and learning is poor, employee perceptions of HRD may
be limited to instructional design, training delivery, learning management systems, and learning technologies
(Hirudayaraj & Baker, 2018). However, HRD is often broadly involved in all aspects and levels of the organization
with a mission to support employees to gain knowledge, skills, and expertise to excel in their jobs while helping them
achieve the work–life balance (Egan, 2011). Therefore, organizational support for both performance and learning is
critical for developing and fostering an effective and strategic HRD culture.
Primarily centered on learning and performance, organizational HRD culture aims to support organizational pro-
cesses to nurture human expertise in the workplace. Such distinction reveals itself in the HRD literature where most
of the previous studies have generally focused on the performance aspect of HRD, such as employee engagement
(Davis & Van der Heijden, 2018; Lee & Eissenstat, 2018) and training effectiveness (Flatt & Jacobs, 2018; Kim
et al., 2015), or general learning aspects of HRD, such as transfer of training (Govaerts, Kyndt, Vreye, & Dochy, 2017;
Johnson, Blackman, & Buick, 2018) and training costs (Benda, Koster, & Romke, 2019; Islam, 2019; Nguyen &
Truong, 2011). However, such foci may be limiting as they either emphasize distinct implications for critical organiza-
tional outcomes or contributions. As a result of recent changes in the workplace, particularly with the rampant inte-
gration of technology, more holistic approaches to organizational HRD culture have emerged (Garavan et al., 2019;
Sung & Choi, 2014). In this study, we adopted a holistic view of organizational HRD culture in the organization that
encompasses both the realm of performance and learning to study its influence on employee job satisfaction and
customer satisfaction.
As illustrated in our theoretical framework, TL has the capacity to influence organizational HRD culture. Consid-
ering that “transformational leaders motivate followers to achieve their goals through idealized influence, inspira-
tional motivation, intellectual stimulation, and individualized consideration” (Turner & Baker, 2018, p. 476), TL has
the capacity to transform organizational HRD culture through dramatically affecting followers and changing how
they see and interpret the world (Meuser et al., 2016). Such a capacity is critical for HRD functions as it would sup-
port the development of an organizational HRD culture that fosters continuous improvement through learning and
performance.
In this study, we measured organizational HRD culture using items aimed at identifying how employees per-
ceived the way HRD facilitated support for their development and improvement and sustained an environment and
proactive mindset that reinforced the importance of learning and performance. Survey items focused on (a) being
encouraged to find new ways to better perform job tasks, (b) opportunities for participating in decision-making, (c)
10 AKDERE AND EGAN

opportunities to acquire knowledge and skills, (d) recognition of performance, (e) efforts to improve work practices,
(f) support for career development, and (g) the overall effectiveness of development and improvement efforts. There-
fore, we propose that organizational HRD culture is vital for achieving employee job satisfaction through strategically
facilitating activities to support learning and development—.

H5 There is a positive relationship between employee perceptions of organizational HRD culture and employee job
satisfaction.

With the rapid changes and increased global competition in all sectors, customer satisfaction has become the
benchmark to determine organizational survival. Customers are expecting more personalized products and service
delivery (Layun, 2018), and HRD's role in supporting organizational capacity for customer responsiveness is rising in
importance. Customers perceive the efficiency and effectiveness of service provided to be a characteristic of the ser-
vice provider (Grönroos & Ojasalo, 2004). Providing personalized HRD products (programs and processes) to cus-
tomers requires effective HRD practices (Kang & Bartlett, 2013). Because HRD is most often focused on the
organization (internal customers), there is generally a lack of emphasis by researchers on how its practices are related
or affect external customer satisfaction (Kim et al., 2013; Shuck, 2011). This is partly due to the fact that most HRD
research is done within the confines of the organization—emphasizing the importance of employee and manager-
related processes and outcomes—rarely stepping out to connect with the customers. In this study, we argue that
organizational HRD culture affects customer/patient satisfaction and test it with the following hypotheses.

H6 There is a positive relationship between employee perceptions of organizational HRD culture and customer satisfaction.

1.6 | Employee job satisfaction

With many organizations becoming much more integrated, employee job satisfaction is a critical organizational out-
come, particularly in tight labor markets such as healthcare (Akdere, Gider, & Top, 2012). Employee job satisfaction is
“the degree to which an individual's desires, expectations, and needs are fulfilled by his or her employment in an
organization” (Szilagyi, 1977, p. 379). As the cost of replacing an employee has significantly increased (Duffield &
Duffield, 2014), employee retention through addressing their needs to decrease turnover (Joo, 2010) and increase
job satisfaction (Eldor, 2016) has become a mandate to the organization.
Not surprisingly, researchers and practitioners most often link employee job satisfaction to HRD by examining
employee evaluations of training satisfaction (Huang & Chih-Hao, 2016; Memon et al., 2016) and lack a more holistic
approach to measure the impact of HRD practices on overall employee job satisfaction (Kim, 2014). As a broader field of
practice, human resources (HR) has already begun embracing the notion that employees are also their clients or internal
customers (Chia-Chi & Pei-Yi, 2018; Pluta & Rudawska, 2016). Such emergence should be equally reflected in the HRD
realm, especially given that HRD has historically been tasked with supporting employees. As HRD exists across the host
organization and in all three organizational levels (individual, group/team, organizational) its potential impact on employee
job satisfaction is apparent. Previous studies point the relationship between employee job satisfaction and customer satis-
faction (Akdere, 2009; Shuck & Wollard, 2010), which leads to the idea that happy employees catalyze happy customers.
We argue that organizational HRD culture will influence employee job satisfaction.

1.7 | Customer satisfaction as central organization performance measure

Achieving high levels of customer satisfaction is one of the preeminent performance goals of any organization.
According to accounting scholars Ittner and Larcker (1998) “customer satisfaction measures are leading indicators of
AKDERE AND EGAN 11

customer purchase behavior (retention, revenue, and revenue growth), growth in the number of customers, and
accounting performance (business-unit revenues, profit margins, and return on sales)” (p. 35). These researchers have
established nonfinancial measures to be the best predictors of future organizational success and customer satisfac-
tion to be the key measure of such performance. “Satisfied customers are economic assets with high returns and low
risk” (p. 3) and customer satisfaction measures have been long established predictors of long-term organizational sta-
bility and sustainable net and long-term cash flows (Fornell, Mithas, Morgeson, & Krishnan, 2006a).
In the case of health care, patient/customer outcomes are a central organizational performance measure
(Zotterman, Skär, & Söderberg, 2018). Conceptualized as both an emotional and a cognitive response, customer sat-
isfaction is defined as “a judgment that a product or service feature, or the product or service itself, provided (or is
providing) a pleasurable level of consumption-related fulfillment, including levels of under- or overfulfillment” (Oli-
ver, 1997, p. 13). Organizations allocate significant amounts of resources to achieve customer satisfaction and
remain competitive and maintain or extend their market share. Even though it is not typically kept in perspective,
organizational HRD culture, along with other HR functions and processes, target to support organizational goals
around the notion of achieving customer satisfaction (Eldor, 2016). Such aims are increasingly important for
healthcare organizations (Vogus & McClelland, 2016). The indirect link is simply a result of the nature of the organi-
zational HRD culture, which aims to support developing employees and improving organizations (Baldwin, Ford, &
Blume, 2017) to enhance critical organizational outcomes, including customer satisfaction. Put simply, “Customers
will never love a company until employees love it first” (Simon Sinek quoted in Herrick, 2017). As such, we advance
the following:

H7 There is a positive relationship between employee job satisfaction and customer satisfaction.

In order to test Hypotheses 1–7, data were collected from employees and customers/patients. Our approach to
study design and deployment are detailed later.

2 | METHODS

2.1 | Sample and procedures

The sample in this study consisted of 3,474 employee respondents working at 69 healthcare facilities, which are sub-
sidiaries of two large nonprofit long-term healthcare organizations in the central United States, and 1,875 customer/
patient respondents being served by these 69 organizations during the same period. Employees provide long-term care
on an on-going basis to resident patients in these facilities. A third party collected the data reported herein, along with
other data used toward the primary motivation for data collection, which was to assess key metrics associated with
organizational quality practices. Although our research questions overlapped with the larger data collection process,
our aim was to explore the aforementioned HRD value chain and associated hypothesized model (Figure 1). Further-
more, the large sample size of this study for both employee and customer/patient segments is another unique strength
of this study that most existing empirical HRD and TL studies have been conducted with far smaller sample sizes.

2.2 | Employee respondents

The Organizational Quality Survey (Potthoff, Olson, Thompson, Kissner, & Stofac, 1999) was deployed to gather infor-
mation from respondents in an effort to understand how employees think about and perceive factors underlying the
hypothesized model (Table 1). Demographic information was also collected from each respondent. The respondents
received a letter elaborating on the study, the survey, and the ethical practices used to ensure respondent
12 AKDERE AND EGAN

TABLE 1 Employee position of population sample

Positions Frequency Percent Final sample percent

Administrative 45 1.4 1.3
Assistant administrative 6 0.2 0.2
Director of nursing 59 1.8 1.7
Director of information management 28 0.9 0.8
Other director 478 14.7 13.8
Nursing (RN LPN) 573 17.6 16.5
Nursing (NAR CNA TMA) 1027 31.6 29.6
Food service 312 9.6 9.0
Office 181 5.6 5.2
Social services/recreation 165 5.1 4.7
House/laundry/maintenance 303 9.3 8.7
Therapy/rehabilitation 46 1.4 1.3
Other 24 0.7 0.7
Missing cases 227 6.5
Total 3474 100.00 100.0

anonymity. Of the 7,014 employee questionnaires distributed, 3,474 were returned and fully completed—a response
rate of 49.5%. About 88% of the sample were female, and 37% had a college education or higher. The average age
and organizational tenure of the sample were 27.8 and 3.1 years, respectively. Table 1 provides details regarding the
respondent roles within their healthcare facility. Although additional perspectives would have been garnered if the
organizations provided the option to disaggregate employee and customer response data to each specific healthcare
location, confidentiality limited the opportunity to do so; however, this presented no limitation to our answering the
aforementioned research questions.

2.2.1 | Customer/patient respondents

The Service Quality Customer Survey (Potthoff et al., 1999) was conducted to measure customer/patient satisfaction
with the quality of care and services received. Data collection was performed based on an aspiration by the organiza-
tion for quality patient care; and therefore, only aggregate customer data were available. With respect to demo-
graphic information, only gender-related data were collected as other data were restricted due to privacy policies of
the 69 healthcare facilities and their two parent organizations. Of the 1,875 customer/patient respondents of the
study, 61% were female while 39% were male.

2.3 | Measures

2.3.1 | Transformational leadership

TL was measured with eight items associated with the four elements of multifactor leadership model (Bass &
Avolio, 1990). In line with MLQ, survey items were used to measure inspirational motivation (e.g., “Our leadership
has a vision which has been the focus of our energies”); intellectual stimulation (e.g., “Our leadership has a clear set
of priorities”); individualized consideration (e.g., “Our leadership listens to employees” and “…is approachable”); and
AKDERE AND EGAN 13

idealized influence (e.g., “Our leadership ensures employees adhere to agreed upon standards” and “…is visible in our
facility”). Each respondent answered these items referring to his/her immediate leader/supervisor using a 7-point
scale ranging from 1 (never) to 7 (always), and items were averaged to create a mean score for each dimension (note
that all instrument reliabilities are reported in Table 2).

2.3.2 | Leader support for performance

The extent to which leaders provided the means for employees to perform and improve employee performance was
measured utilizing five items from the Organizational Quality Survey with a 7-point scale ranging from 1 (strongly dis-
agree) to 7 (strongly agree). Items included “My immediate supervisor gives constructive feedback to improve my
work performance” and “Our leadership staff encourages employees to participate in improvement efforts.”

2.3.3 | Leader support for learning

The amount of perceived support employees received from their managers for learning and development efforts was
measured using four items from the Organizational Quality Survey. Sample items include “Our leadership staff encour-
ages learning and growth” and “There is a commitment to education and training.” A 7-point scale was also utilized.

2.3.4 | Organizational HRD culture

A 7-item scale was used to measure the extent to which employees perceived the overall organizational environment to
support learning and performance—organizational HRD culture. The response format was a 7-point scale (as described
earlier) with such items as: “I am encouraged to think of better ways to do things” and “Good performance is recognized.”

2.3.5 | Employee job satisfaction

Example items measuring employee job satisfaction included—“I find my work to be satisfying and fulfilling” and “I
would recommend this facility as a good place to work.” The 3-item satisfaction scale had a 7-point scale ranging
from 1 (strongly disagree) to 7 (strongly agree).

2.3.6 | Customer satisfaction/organization performance

A 7-point scale ranging from 1 (strongly disagree) to 7 (strongly agree) was utilized to determine customer satisfac-
tion. “This facility does a good job of meeting my needs” and “I would recommend this facility to others” are exam-
ples from the three-item customer satisfaction survey. As noted earlier, customer service has consistent
preeminence as an empirically supported organization performance outcome across organizations surveyed.

2.4 | Control variables

Related research suggests the demographic background of employees—age, education, gender, organizational affilia-
tion, and tenure—can be related to job-related attitudes (Eckhardt, Laumer, Maier, & Weitzel, 2016; Joung, Choi, &
 14

TABLE 2 Descriptive statistics

Variables M SD 1 2 3 4 5 6 7 8 9 10
1. Gender 0.10 0.33
2. Age 27.8 7.1 0.02
3. Education 0.37 0.51 0.11 0.14**
4. Tenure 3.13 2.54 −0.14** 0.33** 0.30**
5. Transformational leadership 4.55 0.78 0.05 0.03 0.04 0.01 (0.82)
6. Leader support for performance 4.21 0.81 0.03 0.04 0.03 0.02 0.67** (0.88)
7. Leader support for learning 4.44 0.77 −0.01 −0.02 −0.04 0.03 0.79** 0.70** (0.85)
8. Organizational HRD culture 4.01 0.67 0.02 −0.01 0.02 −0.01 0.50** 0.55** 0.60** (0.79)
9. Employee job satisfaction 4.70 0.48 0.04 0.03 0.10* 0.11* 0.45** 0.54** 0.60** 0.51** (0.91)
10. Customer satisfaction 4.85 0.79 −0.03 0.04 −0.01 −0.02 0.10 0.11 0.13 0.18* 0.30** (0.90)

Note: N = 3,474. Reliabilities/internal consistency results are reported in parentheses along diagonal.
*p < .05; **p < .01.
AKDERE AND EGAN
AKDERE AND EGAN 15

Taylor, 2018; Sengupta, 2011). In order to avoid the possible impact of such observed relationships in this study,
dummy variables were created to measure education level (0 = high school or below, 1 = undergraduate degree or
higher), gender (0 = male, 1 = female), and the exact age and the length of employee work tenure. As study partici-
pants worked for two separate parent companies, these factors were included (0 = company A, 1 = company B).
Because study participants were nested within workgroups, it was deemed important that within-group obser-
vation interdependence was not impacting model testing at the individual level. Intraclass correlation (ICC) coeffi-
cients were determined based on analysis of variance (ANOVA) results. To explore the observation independence of
our data, ICC coefficients of TL, leader support for performance, leader support for learning, and organizational HRD
culture were 0.08, 0.11, 0.09, and 0.08, respectively. The identified ICC coefficients were relatively low (Glick, 1985).
Additionally, the design effect was calculated to determine if a supervisory effect was influencing nested data (Kai-
ser, Woodruff, Bilukha, Spiegel, & Salama, 2006; Xu, Huang, Lam, & Miao, 2012). We found that the design effects
of TL, support for learning, support for performance, HRD culture, job satisfaction, and customer satisfaction were
1.52, 1.69, 1.55, 1.53, 1.60, and 1.54 respectively—these are below the established conservative cutoff point (2.0). In
summary, the observations mentioned earlier support our individual-level model development including respondent
reactions to personal, managerial, and organizational contexts. Therefore, we moved ahead using structural equation
modeling (SEM) to test the hypotheses (H1–H7).

2.5 | Descriptive statistics

Table 2 presents the descriptive statistics, reliabilities, and correlations for all study variables. Consistent with the
proposed HRD value chain and specified model, all study variables were significantly related to each other. More
importantly, TL was found to be related to leader support for performance (r = 0.67, <0.01), leader support for learn-
ing (r = 0.79, <0.01), organizational HRD culture (r = 0.50, <0.01) and job satisfaction (r = .45, <0.01). These correla-
tion results also reveal a connection between HRD culture and job satisfaction (r = 0.51, < 0.01). Furthermore, job
satisfaction and HRD culture were found to be positively related to customer satisfaction (r = 0.30, < 0.01) and
(r = 0.18, <0.05).

3 | DATA ANALYSIS

Confirmatory factor analyses (CFAs) were deployed in order to examine our measurement models. Hypotheses test-
ing was supported by Mplus 8.3 (Muthén & Muthén, 2007) to formulate a best-fit SEM. According to Mia, Majri, and
Abdul Rahman (2019), SEM is increasingly used and most suitable with sample sizes over 400, which allow factor
loadings that can be “good for identifying of model fits, and normality assumption accordingly” (p. 58). More specifi-
cally, based on Mia et al.'s recommendations, we chose covariance-based structural equation modeling (CB-SEM),
which has been widely applied in HRD, management, and social science research over the past four decades, and
continues today as the preferred method for data analysis for confirming or rejecting theories/models via hypothesis
testing. Our study matches what are described as the most favorable conditions for choosing CB-SEM over other
options (e.g., partial least squares [PLS]; generalized structural component analysis [GSCA]) when the sample size is
large (n > 400), the data are normally distributed, and most importantly, the support for the model is specified, that
is, the appropriate variables are chosen and linked to a theory or hypothesized model (Mia et al., 2019). As empha-
sized by Goodhue, Lewis and Thompson (2012), regardless of the statistical technique selected, researchers share
the same objectives—(a) ensuring the measurement model is adequate including reliability and validity; (b) generating
estimates of the strengths of paths in the structural model; and (c) determining statistical significance of the path
estimates derived.
16 AKDERE AND EGAN

Each dependent variable in our model is categorical; therefore, Mplus 8.3 was the appropriate tool for our statis-
tical data analysis. The software utilizes robust-weighted least squares (WLSMV) for model estimation—there is
strong history of using this approach to generate reliable fit indices for SEMs with several categorical dependent var-
iables (Muthén, 1984, 1993; Muthén, Toit, & Spisic, 1997). Hu and Bentler (1999) and Kline (2016) distinguish
between several types of fit indices, including absolute fit indices (e.g., χ 2), relative fit indices (e.g., Tucker Lewis index
[TLI]), and noncentrality-based indices (e.g., root mean square error of approximation [RMSEA]; comparative fit index
[CFI]). CFI, TLI, RMSEA, and chi-square tests were the fit statistics utilized (Browne & Cudeck, 1993; Jöreskog &
Sörbom, 1993). Taasoobshirazi and Wang (2016) emphasize the benefits of SEM in studying the interaction between
various affective, motivational, contextual, and cognitive variables and, in particular, their effectiveness with large
sample sizes and, in particular, these authors cited the extensive use of CFI, TLI, RMSEA, and chi-square tests as cen-
tral to social science and management research questions such as those posed herein. Xia and Yang (2019) are care-
ful to point out that there is increasing discussion regarding the importance of cutoff values in RMSEA, CFI, and TLI,
and that steps being taken to clarify ways to examine these measures more stringently are just beginning to emerge.
As with other scholars exploring key critiques of SEM, Xia and Yang indicate that larger sample sizes help to mitigate
the majority of concerns about the use of the RMSEA, CFI and TLI indices in management and organization studies.
The aforementioned emphasized the importance of exploring alternative models. Although Mplus does not produce
chi-square statistics for use in model comparisons, we utilized a specific Mplus WLSMV procedure to produce a
corrected chi-square difference test (Muthén & Muthén, 2007). As such, we carefully compared alternative models,
and report the chi-square difference test results along with CFI, TLI, and RMSEA (Table 3).
A prevailing standard across much of social science research, Baron and Kenny's (1986) three-step regression
analysis was utilized to assess mediating hypotheses. However, Edwards and Lambert (2007) expressed concern
regarding the three-step regression procedure. For example, the Sobel (1982) test has often been recommended as
an approach to examine mediating effects through the testing the product term of the regression coefficient for the
connection from the independent variable to the mediator and between the mediator and the dependent variable.
The assumption that the product term is normally distributed is common when using the Sobel test; however, this
assumption is often violated (Preacher & Hayes, 2004). An alternative approach is to use bootstrapping—as confi-
dence intervals are bias-corrected (Edwards & Lambert, 2007). The full sample and the median of the product term
estimated are derived from the adjustment for the differences between the product term obtained from the boot-
strap samples (Efron & Tibshirani, 1993; Mooney & Duval, 1993). A minimum of 1,000 bootstrap samples is required
to locate the upper and lower bounds of the 95–99% confidence interval within the sample (Efron & Tibshirani, 1993;
Mooney & Duval, 1993). We used bootstrapping in Mplus 8.3 to test the six mediating hypotheses. We
retested study hypotheses (H1–H8) using leadership–employee dyad tenure as a control variable. The possible
interaction effects of performance, learning, and HRD culture were explored. These supplementary analyses
found that the additional interaction coefficient was not statistically significant and all study findings
remained unchanged. Although these supplementary results were not significant, future research should con-
tinue to examine the potential effects of leadership–employee dyad tenure and the interaction term for the
interrelationship of TL–job satisfaction (see Table 4).

4 | RESULTS

4.1 | Measurement model

A series of CFAs using Mplus 8.3 was conducted in an effort to verify our hypothesized framework—including TL,
support for performance, support for learning, HRD culture, employee job satisfaction, and customer satisfaction/
organization performance. The measurement models were estimated using maximum likelihood, as categorical vari-
ables were not involved in the CFA. The fit of the hypothesized six-factor measurement model in which the items
AKDERE AND EGAN 17

T A B L E 3 Comparison of structural Model and structure Δχ 2 CFI TLI RMSEA

equation models
Hypothesized model 1
TL!P + L!C!JS + CS — 0.919 0.965 0.045
Nested models
Model 2 vs. Model 1 4.519** 0.921 0.965 0.046
TL!P + L!C!JS + CS (df = 1)
Direct paths
TL!C + JS; JS!CS
Model 3 vs. Model 1 3.434 0.898 0.945 0.055.
TL!P + L!C!JS + CS (df = 1)
Direct path
T!C
Model 4 vs. Model 1 2.939 0.901 0.909 0.57
TL!P + L!C!JS + CS (df = 1)
Direct paths
TL!JS + CS
Model 5 vs. Model 3 3.845 0.887 0.898 0.56
TL!P + L!C!JS + CS (df = 1)
Additional path
JS!CS
Model 6 vs. Model 3 3.193 0.816 0.8S9 0.59
TL!P + L!C!JS + CS (df = 1)
Additional paths
TL!C + JS + CS

Note: C, organizational HRD culture; CFI, comparative fit index; CS, cus-
tomer satisfaction; JS, employee job satisfaction; L, leader support for
learning; P, leader support for performance; RMSEA, root mean square
error of approximation; TL, transformational leadership; TLI, Tucker Lewis
index.
**p < .01.

concerning TL, leader support for performance, leader support for learning, HRD culture, employee job satisfaction,
and customer satisfaction were expected to load on their respective variables with other underlying alternative mea-
surement models. The chi-square and fit indices in Table 3 show that the hypothesized six-factor measurement
model (χ 2 = 4.519; df = 1; CFI = 0.92; TLI = 0.96; RMSEA = 0.046) yielded a better data fit than other plausible mea-
surement models (see Table 3). The CFA results provide evidence supporting the distinctiveness of the study vari-
ables and suggest that common-method variance (CMV) did not have a substantial effect on the relationships among
the study's self-reported variables (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). Additionally, the use of both
employee response data and customer outcome data removes a major CMV problem in many cross-sectional studies
in HRD—especially given a core organizational outcome is customer results and customer satisfaction is the primary
outcome variable for the study and is largely associated with services provided by employee respondents. CMV is
far less of a concern, as there is more than one data source (Reio Jr., 2010); however, these results supply additional
confirmation regarding the within-employee responses comprising five of the factors.
18 AKDERE AND EGAN

TABLE 4 Bootstrapping results for the indirect effects

Mediating effects Boot indirect effect Boot SE Boot z Boot P LL 99% CI UL 99% CI
TL!P!C 0.70*** 0.08 9.40 .001 0.94 0.55
TL!L!C 0.79*** 0.08 9.65 .001 0.95 0.57
P!C!JS 0.34*** 0.07 3.61 .001 0.52 0.36
P!C!CS 0.01 0.01 0.08 .84 0.07 0.07
L!C!JS 0.39*** 0.07 3.76 .001 0.58 0.39
L!C!CS 0.00 0.02 0.07 .90 0.08 0.06

Note: C, organizational HRD culture; CS, customer satisfaction; J, employee job satisfaction; L, leader support for learning;
P, leader support for performance; TL, transformational leadership.
***p < .001.

4.2 | Test of hypotheses and related validity

We first examined the model fit of our hypothesized model, performing SEM analysis with robust weighted (note:
N = 3,474 employees and 1,875 customers/patients). Internal consistency reliabilities are reported in parentheses
along diagonal. * < .01; ** < .001 (see Table 3; Figure 2). Seven of the eight interrelationships in the hypothesized
model were supported with lower support (at the .05 level) for the hypothesized positive relationship between orga-
nizational HRD culture and customer satisfaction/organization performance—suggesting that HRD culture influences
customer-related outcomes indirectly through its influence on employee job satisfaction to customer satisfaction.

F I G U R E 2 Structural equation model—transformational leadership, leader support for performance, leader

support for learning, organizational HRD culture, employee job satisfaction, and customer satisfaction. Note:
** = .01; * = .05
AKDERE AND EGAN 19

Following guidance from Fornell and Larcker (1981), we examined construct, convergent, and discriminant valid-
ity. Evidence for internal consistency was found in the Cronbach's α scores reported in Table 2 and composite reli-
ability scores, as follows: TL = 0.82; p = .88; L = 0.86; C = 0.80; JS = 0.91; and CS = 0.90. Additional support can be
seen in the results for reflective outer models for each indicator/item associated with each study variable and related
loadings (e.g., TL1–TL8 are loadings for TL in Figure 2). Convergent validity, the average variance extracted (AVE)
was evaluated and all AVE values found to be greater than the established cutoff value of 0.5 (Fornell &
Larcker, 1981). AVE scores were as follows—TL = 0.7501; p = .7212; L = 0.6990; C = 0.7499; JS = 0.7443;
CS = 0.7101)—therefore, convergent validity was confirmed. Finally, discriminant validity was assessed using two
commonly utilized measures: the Fornell–Larcker criterion and the cross loadings (Henseler & Fassott, 2009). For
Fornell and Larcker (1981), the AVE of each construct should be higher than the squared correlations of all other
constructs. As the range of squared correlations for all study constructs is 0.6241–0.0841 and is lower than the low-
est AVE overall (0.6990), and because all indicators had higher loadings on the construct each is supposed to mea-
sure, discriminant validity is confirmed.

5 | DISCUSSION

In order to advance organizational success, there is a need for effective leadership and HRD practices. We explored
how TL and related leader support for learning and performance impacted organizational HRD culture and, ulti-
mately, organizational performance. Our conclusion is that TL and TL theory goes beyond a strong conceptual fit to
provide empirical evidence of a strong alliance between TL and HRD. Specifically, the results of this study support all
hypotheses indicating that TL through leader learning and performance support behaviors linked to a supportive
HRD culture that, in turn, has a positive impact on employee–job satisfaction and customer/patient satisfaction. Of
particular importance is direct alignment of customer satisfaction with the core mission and key performance out-
comes of the organizations in study. Although several studies have explored organizational outcomes and TL and a
few have examined the interrelationship between TL and organizational performance, no identified previous
research linked TL with organizational HRD culture and customer/organizational performance outcomes. In addition
to positioning TL and HRD as allied organizational features that led to mission-based organizational performance,
our study makes several unique contributions regarding connections between TL and leader support for performance
and learning. This is a logical connection, as transformational leaders are, in part, distinctive due to their attention to
employee development and organizational advancement (Bass, 1990). These conclusions support the HRD value
chain connecting leadership ! HRD ! organization performance.
These study outcomes suggest that transformational leaders who attend to employee needs and viewpoints in a
manner that includes learning and performance can shape a broader environment that has a distinguishable HRD-ori-
ented culture—and, in turn, impact the most important organizational outcomes (in this case customer satisfaction).
The findings indicate the actions of transformational leaders are critical in achieving both the learning and perfor-
mance outcomes connected to the organization's key functions and mission. In the case of the healthcare organiza-
tions, customer (or patient) satisfaction is directly aligned with organizational purpose—as the end goal is to
positively impact the health and well-being of all who receive their care and assistance. Furthermore, our findings
also demonstrate that HRD culture impacts both employee job satisfaction and customer satisfaction.
The results of this study are important in demonstrating HRD's contribution to the organizational bottom line
and to accomplishing the most important mission-focused outcomes. Future studies may explore these positive rela-
tionships in other industries and organizational contexts. With the advent of technology and brisk organizational
change, the workplace is rapidly changing and increasingly moving toward a greater need for learning and develop-
ment. This study demonstrates the importance of leadership in establishing HRD and organizational HRD culture
and the meaningful outcomes that result for employees, customers, and the organization overall.
20 AKDERE AND EGAN

Moreover, transformational leaders can support HRD culture through integration of a commitment to learning,
performance, and HRD systems. In particular, our study supports that transformational leaders, implicitly interested
in employee learning, development and performance, utilize HRD systems and culture to support employees and key
mission-focused organizational outcomes. This is due to the ability of HRD to support key knowledge and skill devel-
opment, which, in turn, leads to high-quality customer/patient outcomes. This TL ! HRD interchange not only
impacts organizational culture and key outcomes, it presents a competitive advantage. Another contribution of this
study is that the improvement orientation implicit in leaders' support for employee performance advances their
knowledge about organizational procedures and solutions that benefit customers/patients. By solving customer/
patient problems based on their experiences in learning and performance improvement efforts within a culture that
employees know supports their efforts to improve their services, employees increase the likelihood for positive cus-
tomer/patient outcomes and their own satisfaction in contributing to the organizational mission. This also occurs
through new knowledge transfer to central work processes creating new individual and organizational capabilities
that expand collective capacity and reinforce the possibilities for ongoing improvement. Both TL and HRD are key
processes in advancing organizational performance. Because the processes of experiencing leader support for indi-
vidual learning and performance integrated with the organization's HRD culture and support systems help employees
to adapt to key changes and enhance shared outcomes for the benefit of key internal and external stakeholders.

6 | I M P L I C A T I O N S A N D L I M I TA T I ON S

This research has several implications for HRD research and practice. The HRD value chain, implicit in the prepon-
derance of HRD literature and conceptual discussions, has now been supported empirically. TL shapes employee
learning and performance and supports organizational HRD culture. Organizations that are able to support leadership
practices that embrace TL will be most able to advance their organizational mission and organizational performance.
TL practices and related support for learning and performance can lead to an HRD culture that leverages employee
talents, increases their enthusiasm for their work, and supports incremental, positive change that increases cus-
tomer/patient outcomes. Openness to learning and performance among employees impacts their abilities to apply
new learning and sponsor work-related improvements—which, in turn, encourages ongoing TL behavior and helps to
build outstanding organizational performance.
First, support was found for the hypothesis that TL contributes positively to firm performance through the medi-
ation of leader support for learning and performance and HRD culture. Therefore, organizations should support man-
agers in their development of TL behaviors. These leaders should actively engage employees, recognize their
individual efforts, support them, and link them to learning and performance opportunities for their development.
Overall, they must be engaged in improvement activities, review needed improvements and the contributions learn-
ing and development can make to improve focal areas, stimulate cooperation among employees, and strive to meet
customer/patient needs.
Second, in support of the HRD value chain, transformational leaders must promote HRD-related practices that
lead to advances in productivity. Concretely, through participation in the system of HRD practices—OD, T&D, career
development, coaching, and so on—a learning and performance-oriented culture is created and employees' actual
value to the organization is increased—as they are likely to perform more efficiently and effectively. Each of these
practices promote an organizational HRD culture favoring learning and performance improvement, new knowledge
and skill development, and utilization of new knowledge. It is important to note that HRD literature and practice has
long emphasized that HRD-related actions should be managed from the top of the organization (Beckard, 1969;
Egan, 2002). These study results not only reinforce that notion, but also provide further clarity that, more specifically,
TL from the top reinforces HRD. However, the need for additional research to ascertain which HRD practices are
most closely linked to core organizational performance outcomes should be addressed.
AKDERE AND EGAN 21

Third, leaders should make a concerted effort to highlight learning as a central element of their daily practices
and work to embrace and communicate a transformational mindset. This may include leader training and careful
development of TL-related skills that link to specific learning and performance needs for each employee (Parry &
Sinha, 2005). Leader support for related advancements in learning and performance is essential. Leaders should ana-
lyze the production resources and capacity that allow them to be more competitive and dynamic in today's environ-
ment. They should know (or learn) how to help others learn and motivate them to apply learning to important
performance outcomes (Cook & Artino, 2016; MacKenzie, Podsakoff, & Rich, 2001). They should be good coaches,
supporting subordinates, guiding them, and demonstrating positive support for their abilities. Leaders must therefore
invest in necessary resources to develop organization-wide HRD, making learning a central aspect of strategic direc-
tion and establishing HRD practices that encourage individual and team learning.
Fourth, the inverse of the implications mentioned earlier is also true; therefore, organizations without transfor-
mational leaders who fail to actively support HRD and do not support employee development will increase the likeli-
hood of turnover—as there is a well-established inverse relationship between job satisfaction and turnover (Dole &
Schroeder, 2001; Tett & Meyer, 1993), underperformance, and customer/stakeholder dissatisfaction.
Finally, some study limitations should be considered. The most important limitation of this study is the cross-sec-
tional design of this research—as all data except customer/patient satisfaction were gathered from employees in a
single round of data collection. Even though customer/patient performance-related responses were included in the
study (addressing much of the concern regarding CMV; Reio Jr., 2010), and appropriate statistical tools used to
address these issues (Tippins & Sohi, 2003), a longitudinal/multiwave study will provide additional insights and
improved results. As this study was situated in the healthcare context, including additional patient-related results
(e.g., physical/medical/psychological outcomes) would be beneficial. Furthermore, while selected constructs in this
study explain key elements associated with HRD and organizational outcomes, other variables could also be
included, such as available technology, physical characteristics of the organizational environment, teamwork, data
management, employee empowerment, and/or engagement (Vermeeren et al., 2014). Although our study suggests
active TL and related support behaviors align with positive organizational outcomes, the specific nature of exchanges
between leaders and employees and the precise nature of the HRD culture and related support need further
clarification.

7 | CONCLUSIONS AND FUTURE RESEARCH

In today's organizational environments, the way employee learning and development is led has become very impor-
tant. The central goal of this study was to assess a commonly represented, but largely untested HRD value chain
connecting leadership to HRD and organizational performance. Although featured across a substantial portion of the
HRD literature, the evidence base for the HRD value chain model tested herein was previously scarce and weak. The
findings from this study provide substantially more support for a commonly assumed interchange. We established
the impact of TL on learning, performance, and HRD related support and practices found in the HRD value chain.
These are in alignment with employee–job satisfaction and customer/patient outcomes that reflect the central mis-
sion of the organization. Our findings contribute research and practice on understanding of how leaders can manage
beneficial HRD-related approaches that enhance employee quality of work and job satisfaction.
As managers look for ways to improve their own and their organization's future and potential, this research pre-
sents a deeper understanding regarding how they can lead employee development toward measurable, meaningful
organizational outcomes. Most importantly, this study puts into motion a key area for future focus in HRD and a
framework that can inform future research and practice. Essential to our study were employee and customer/patient
outcomes. These raise the bar not only in terms of our understanding of the TL and the HRD value chain but also
provide verification regarding the value of leadership and HRD for key performance results.
22 AKDERE AND EGAN

Future research should involve longitudinal and experimental designs as well as phenomenological, critical race
and critical gender studies that examine the lived experiences of leaders and followers and elaborates upon the
values, behaviors, and capacities observed by leaders and followers. Looking at these issues from both employee
diversity and across a number of sectors and industries will broaden our understanding and increase the potential for
practice-related impact. As the HRD profession continues to evolve to meet the ever-growing demands of the orga-
nization, closely working with organizational leadership to align business strategies with HRD culture will present
new opportunities for the field.

ORCID
Mesut Akdere [Link]

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10.1017/S1463423618000178

AUTHOR BIOGRAPHI ES

Mesut Akdere, is a Professor of Human Resource Development in the Department of Technology Leadership &
Innovation at Purdue University, West Lafayette. Dr. Akdere is the founding faculty of the Human Resource
Development undergraduate program at Purdue University. As the director of the Purdue HRD Virtual Lab and
Purdue HR Analytics Interactive Learning Lab, Dr. Akdere's research focuses on simulated training in augmented
reality and virtual reality platforms for skills acquisition, workforce development in STEM fields, and human
resource analytics in the age of big data. He has received over $13 million in funded external research grants
from the US Department of State, US Department of Labor, and other state agencies. He published in business,
management, human resources, technology, training, organization development, and education journals. Dr.
Akdere is the faculty fellow of Future Work & Learning Research Impact Area at Purdue Polytechnic Institute
and he is serving on the editorial boards of several international journals including Human Resource Develop-
ment Quarterly, Total Quality Management & Business Excellence, Human Resource Development Review, and
Human Resource Development International.

Toby Egan, PhD, is a tenured associate professor and senior executive fellow at the University of Maryland. An
experienced organization development practitioner, he has twice received The Richard A. Swanson Research
Excellence Award–given to the author(s) of the outstanding Human Resource Development Quarterly refereed
article.

How to cite this article: Akdere M, Egan T. Transformational leadership and human resource development:
Linking employee learning, job satisfaction, and organizational performance. Human Resource Development
Quarterly. 2020;1–29. [Link]