Bolstering workplace psychological well-being through transactional and transformational leadership

Globalization, compressed market cycles, technology infusions, hyper-competition, and other factors increasingly make many organizations complex, stressful, and high-performance contexts (Barling, Kelloway, & Frone, 2005; Cascio, 2013). The effects of such contexts, if left unmanaged, can threaten the psychological health of employees (Quick, Wright, Adkins, Nelson, & Quick, 2013). The resulting burden of suffering in organizations has direct financial impact in addition to humanitarian effects (Cascio & Boudreau, 2011; Macik-Frey, Quick, & Nelson, 2007). The organizational costs incurred due to mental and psychological disorders in terms of medical and insurance expenses, reduced productivity, deviant and dysfunctional behaviors, sick days, turnover, and litigation is staggering; costs grow even larger when accounting for the comorbidity of physical maladies that often accompany psychological disorders, such as heart disease and stroke (Cascio, 2013; Cascio & Boudreau, 2011; Quick et al., 2013). Psychological distress also prompts threat-rigidity, suppressing individuals’ flexibility and adaptation (Staw, Sandelands, & Dutton, 1981), stifling organizational innovation and change. Negative psychological effects from work can also spillover to effect workers’ personal lives (e.g., Cascio, 2013; Quick et al., 2013). Conversely, we offer that the psychological well-being of employees can be a basis for innovation, peak performance, and the fulfillment of human potential. Organizations should thus be particularly concerned about the deleterious effects of poor psychological well-being while recognizing the positive gains possible from its bolstering. Beyond the inherent virtue and social responsibility-based arguments for increasing workers psychological well-being, there are clear utilitarian, bottom-line impacts as human resources are central to organizational performance and competitive advantage (Cascio & Boudreau, 2011; Pfeffer, 1998). It is thus important that research better identifies the factors attenuating and bolstering psychological well-being in the workplace.