When we scrutinise transformation leadership, they also employ participative leadership style for decision making, they tend to create a sense of inclusiveness by share the problem with followers and seeking consensus before the final decision (Bass, 1985). However, with transactional leadership style, the final say remains with the leader and employees may not feel empowered and merely be motivated to participate because of extrinsic value and employment agreement (Piccolo and Colquitt, 2006).
Leader-member exchange theory (LMX) focuses on the two-way relationship between leaders and subordinates. This theory assumes that leaders and subordinates develop an exchange with each other (Deluga, 1998).However, it is a divergence from the common leadership theories because LMX focus on the relationship which can be affected by personal characteristics of leaders and followers rather than an emphasis on the characteristics of effective leaders (Graen and Uhl-Bien, 1995). (Wang et al., 2005) argues that “LMX makes transformational leadership more personally meaningful.”
Human Resource Management
Human resource management (HRM) relate to a system to increase the effectiveness of utilisation of human capital and related productivity through developing relationship and objective of the employment between organisation and staff (Armstrong and Taylor, 2014). HRM involves setting policies which are aligned with business strategy and seek to achieve competitive advantage by reinforcing appropriate organisational cultural change (Legge, 1995).
Leader’s actions affect HRM practices; it is considered the reflection of leadership intents and, therefore it shapes the psychological contracts of the employees (Rousseau, 1995). When there is an inclusiveness within the organisation (participation) or shared leadership style, it creates an atmosphere to produce HRM practices focusing on training and development of the employees and job redesign (Hackman and Oldham, 1980) which improve motivational needs of employees.
The way leadership styles is linked to HRM practices in John Lewis is through two dimensions; soft HRM and hard HRM, the hard HRM practices is more associated with correcting leadership style (transactional), whereas, the soft HRM practices if more related to stimulating leadership style (transactional) (Guest,
