The impact of empowering leadership on job-related satisfaction of franchise employees

Abstract

Despite the recent popularity of franchises in the service industry, employee retention can be difficult. Due to the importance of employee satisfaction, this study examines the determinants of job-related satisfaction in franchise employees. In particular, it explores the impact of empowering franchisee leadership on employees' needs-based satisfaction (e.g. autonomy, competence, relatedness), which can encourage motivation. Using surveys, the study collected information from 249 restaurant franchise employees. A SmartPLS estimate showed that empowerment of employees by leadership at a franchise can increase employees' sense of satisfaction with their autonomy, competence, and relatedness, leading to positive job-related outcomes. A multigroup analysis revealed that employee job-related behaviour varies across demographic characteristics. For example, the impact of autonomy on job performance was not significant among female and young customers, and the impact of relatedness on job satisfaction was only significant among older employees. Considering the importance of the high employee turnover rate in the franchise industry, this study is unique in terms of addressing the role of empowerment from the franchise employees' point of view.