Leadership and Public Service Motivation: How the combination of transformational leadership and contingent verbal rewards can motivate employees

Based on theoretical expectations and cross-sectional studies, transformational leadership has been argued to increase public service motivation (PSM). However, it has not been tested whether transformational leadership over... [ view full abstract ]

Based on theoretical expectations and cross-sectional studies, transformational leadership has been argued to increase public service motivation (PSM). However, it has not been tested whether transformational leadership over time actually increases public employees’ PSM, and our knowledge concerning the interaction with other types of leadership is also lacking. This paper investigates whether public managers’ leadership behavior (measured in one year) affects the PSM of the managers’ employees the year after, controlled for the initial PSM level among the same employees. The findings indicate that the combination of transformational leadership and the use of contingent verbal rewards positively affect employee PSM, but when public managers do not use verbal rewards the effect of transformational leadership on employee PSM during one year is either non-existent or so small that a statistically significant effect cannot be detected for the investigated 340 public managers and their 2,648 employees. We argue that future research should test the robustness of this finding, and that there are good perspectives for combined use of transformational leadership and contingent verbal rewards if leaders want to enhance their employees’ PSM.