Transformational Leadership, High-Performance Work System Consensus, and Customer Satisfaction

Abstract

We use human resources (HR) system strength theory to argue that transformational leadership leads to employee consensus on a unit’s high-performance work system (HPWS), that consensus helps align employee attitudes, and that a compression in attitudes facilitates strategy execution and unit-level outcomes. Empirical tests based on a 4-year linked employee–customer panel data set, involving 255 do-it-yourself stores, support our predictions. Transformational leadership is positively related to HPWS consensus. Consensus is negatively associated with unit-level job satisfaction dispersion, which in turn relates positively to unit-level customer satisfaction. Our study makes important contributions to the strategic HR and HR system strength literatures, highlighting the roles of leadership and employee consensus in strategy execution.