The Role of Transformational Leadership in Building Organizational Citizenship: The Civil Servants of Indonesia

Abstract

For civil servants in the legal sector, the best performance that must be shown is not how they carry out activities following standard operational procedures but what is more important is how they show Organizational Citizenship Behavior (OCB) in daily activities. This study aims to examine what factors influence the formation of OCB civil servants in the legal sector in Indonesia. The study was conducted on 145 civil servant respondents who were involved in secretarial activities, each from the Judicial Commission Secretariat, the Attorney General's Office, the Ministry of Justice, the Supreme Court, the Police Headquarters, and the Constitutional Court. The research methodology used Partial Least Square (PLS) Version 3.0. The empirical findings of the research show that organizational culture has a significant influence in shaping transformational leadership that can build OCB among civil servants in Indonesia. This effect is much larger and more significant than the compensation system, which is widely believed to be the main factor in forming OCB, such as the results of previous studies. The results of this study imply that the formation of an organizational culture with values that can create high work productivity which has an impact on transformational leadership styles in building OCB.

1. Introduction

Legal certainty that is a product of law servants will never be separated from those who have been working, supporting, and serving law enforcers’ activities, namely the state civil apparatus in the field of law. They are not only required to be competent, loyal, and productive and maximize performance. However, the performance here is not merely the level of conformity of what they do with what is written in standard operating procedures alone.

Keeping in mind that for state civil servants who serve in the legal field, their performance will be influenced by the level of their Organizational Citizenship Behavior (OCB), so through an observation process carried out from February 2020 to June 2020, we began to identify the aspects which have a significant influence on the OCB of the country’s civil servants. From several aspects we examined, the preliminary study we conducted showed that OCB was greatly influenced by how well superiors directly applied transformational leadership values in their daily activities. More in-depth research shows that transformational leadership values are closely related to how organizational culture and compensation systems are implemented properly and fairly. Based on these considerations, this research focuses on what state institutions in law should make efforts to build transformational leadership abilities as leaders to increase the supervised state civil servants’ OCB value.

2. Literature Review

2.1. Organizational Citizenship Behavior

Structural workers’ perceptions of procedural justice and international justice have a smart predictive role for civilian structural behavior (Wang, 2011; Thanh & Toan, 2018).). Organizational Citizenship Behavior (OCB) as an interest in independent work in some way or as expressly recognized by formal reward systems combined with effective organizational functioning (Bogler & Somech, 2005; Rayner et al., 2012). Structure of Citizenship Behavior is described as the behavior that is beneficial to others but can also harm actors and people’s behavior over time (Kusumaningrum et al., 2020; Kutcher et al., 2010). Respected and unsuccessful civic behavior structures are put forward by supporting repayment (Zhang et al., 2011). One potential pathway through exhibited OCB could trigger structurally unhelpful outcomes by reducing workers’ perceptions of organizational fairness (Farrell & Finkelstein, 2011). One of OCB’s most consistent predictors is the neglected mediating role of the specific meaning between leadership and civic organizational behavior (Astuty & Udin, 2020). Kutcher et al. (2000) suggested to take action on OCB or organizational citizen behavior where they see a benefit in a highly hierarchical trial and error reading in favor of organization vs. damage to someone who has been violated by denouncing job performance (Levine, 2010). Leaders rely on their perceptions of ‘motives for judging employee structure’ of civic behavior. Thus, the source of employee motivation is expected to have a good relationship with organizational citizenship behavior (Pancasila et al., 2020; Barbuto & Story, 2011). OCB differentiates task and performance from Counterproductive Work Behavior (CWB), which considers it to be three distinct classes of behavior with two main classes that facilitate structures’ functioning. The latter adversely replaces them (Spector & Fox, 2010). The WHO staff’s additional expertise follows social exchange theory, which has suggested demonstrating different civic behavior structures and higher job performance due to behaviors that are useful to the organization (Shen et al., 2014). There are two types of civic behavior structures namely: Organizational Citizenship Behavior directed at Organizations (OCBO) and Organizational Citizenship Behavior directed at Individuals (OCBI), which is represented in the literature. OCBO is connected to the organization to be valuable to the organization, whereas OCBI is associated directly with relevant people to staff and indirectly useful to the organization (Raza et al., 2018). Some staff interacts in the OCB out of concern for the organization and their coworkers. Others are motivated to perform this behavior to help them achieve their personal goals (Halbesleben et al., 2010).

OCB fosters direct and interactive performance behavior of individual workers, acting as a moderator to weaken the relationship between worker role ambiguity and performance behavior (Chen et al., 2013). Organizational Citizenship Behavior (OCB) is a discretionary behavior that is not part of the association’s formal work requirements that contribute to the worker’s psychological and social atmosphere (Robbins & Resolve, 2018). A happy staff is reflected in higher performance and structured citizenship (OCB) behavior, less CWB, and less turnover, especially after they feel supported by their organization to do well in performance (Haerani et al., 2020). Extra role performance includes structured civic behavior and refers to aspects, such as personal initiative (Pancasila et al., 2020). The initial known OCB scale consists of 5 factors: selflessness, conscientiousness, civic virtue, politeness, and justice (Barbuto & Story, 2011).

2.2. Organization Culture

Organizations exist for many reasons, and therefore the reasons that cause them to re-emerge will drive their culture in the way they work or work ethics (Rayner et al., 2012). Organizational culture is an organizational value and behavior that contributes to a unique social and psychological environment (Wang, 2011). The definition of organizational learning is a pattern of basic assumptions developed by certain groups when learning problems of external adaptation and internal integration that have worked at a level sufficient to be considered valid. Therefore, to be taught to new members, it is necessary to express gratitude for seeing, thinking, and feeling from these problems (Kutcher, 2010). Meanwhile, culture is a way of getting things done or implicit rules that govern how people behave through their work (Haerani et al., 2020). Cultural development usually takes years, with standard competency models that influence strategic priorities applied to talent management systems (Swalhi et al., 2017). The intentions to reduce the characteristics of organizational culture include:

1. An organizational glue that is maintained by a commitment to innovation and development,

2. Achievement of current resources and challenges, and

3. Define success through the latest or minimal ordinary products and services.

Creatingacultureallowsusandotherstogrow,expandingour capacities as leaders, employees, and citizens (Kusumaningrum et al., 2020). Cultures that value entrepreneurship has more entrepreneurship than societies where entrepreneurship is not fostered or may not be valued (Stone et al., 2007). The informal adoption of flexible working practices in small companies has been designed to address individual circumstances that have been shown to respond to diverse employee needs and build a reciprocity culture (Atkinson & Hall, 2009). Lack of culture indicates a lack of trust. If the organization has the right culture and people, there is no need for rules (Meng & Berger, 2019). Organizations make more intensive use of recruiting through the organization’s website from countries with a higher level of individualism.

Meanwhile, organizations from a culture with a high degree of uncertainty tend to use less intensive corporate recruitment websites (Silla., 2017). The components of various elegance as components of employer culture are substantial variations (Meng & Berger, 2019). Banks with a conservative risk culture are simultaneously considered to have a more robust risk management structure and lower risks (Karabay, 2014).

2.3. Compensation System

Compensation consists of the main incentive system and is also important when obtaining the best talent (Kusumaningrum et al., 2020). The processes described include compensation analysis, performance management, recruitment, selection, placement or training, and development slips (Zhang et al., 2015). Traditional personnel management involves a series of functions normally performed by personnel offices in organizations dealing with selection and recruitment, training, compensation (salaries and benefits), performance appraisal, promotion, motivation policy, retirement, etc. (Nurjanah et al.,2020). The employee’s contribution may reduce compensation in dismissal or if the worker does not comply with the minimum complaint procedures under the law, including internal appeals procedures, or if the employee unreasonably rejects an acceptable re-employment offer (Dockery & Bawa, 2014). Failure tolerance, which requires rethinking how projects are selected and financed, is an important point that is often overlooked. The main reason for the inability to tolerate is that the decision-maker cannot jeopardize any project’s long-term funding (Carter et al., 2018). A good compensation plan can impact the organization’s progress to new levels of strategic and financial success (Pancasila et al., 2020). Measuring human capital can be a difficult task, but several actions can help investors understand an organization’s strength. The mutual investment that organizations make for future productivity is expenditure on training that has been provided by the employer (Ugbomhe et al., 2016). At the same time, compensation is a part of human resources that handle payments made by an employer to its employees. Salary factors include basic salary, variable salary, and stocks (Zeb et al., 2019). Most of the compensation, for now, is designed based on performance because of the costs incurred by executives to manipulate their earnings and share prices for personal gain (Susanto et al., 2020). At the same time, this is partly a practical problem. In some markets, it is difficult for managers to determine individual compensation to understand exactly what market value is for human capital (Kusumaningrum et al., 2020).

Regarding Compensation, Benefits, and Training, it should be noted that it consists of 1/2 points for all workers, and otherwise, workers are allocated evenly between work environment and work ownership area (Astrauskaite et al., 2015). The consequence of workers’ interests is more focused on compensation issues such as salary, benefits, working hours, shift patterns, and transportation (Sun & Anderson, 2012). The emergence of statutory workers’ compensation schemes in the late nineteenth and early twentieth centuries immensely helped reduce the power referred to as work accident compensation (Wright et al., 2012). The global approach to employment and international recruitment requires comprehensive compensation and immigration strategies to avoid delays in obtaining visas for workers (Collings, 2012).

2.4. Transformational Leadership

Some authors say that leadership is an approach to develop a conducive innovative environment (Kamariah et al., 2013) and determine the attributes and behaviors. The personality they reflect is an important aspect of leadership (Astuty & Udin, 2020). Transformational leadership assumes that four human needs cannot be negotiated; these needs must be met if we are to become a healthy, happy, fully functioning group, a need that the Leader will fulfill (Yuan & Lee, 2011). In the leadership literature, this can be a significant correlation between the amount of effort made by followers, Leader and member satisfaction, employee performance, and overall effectiveness (Biswas, 2009). In their empirical research, Liaw et al. (2010) prove that transformational leadership has a strong effect on various outcomes by considering the characteristics of work as a mediator (Astrauskaite et al., 2015). Based on the perception of followers, acceptance of transformational leadership is determined by the specific behavior of a pioneer and the characteristics of followers (Felfe & Schyns, 2009). Transformational leadership has two parallel effects: 1) transformational leaders are assumed to positively influence followers’ creativity because they provide intellectual stimulation and become role models. Then 2) transformational leaders, thanks to their charisma and narcissistic tendencies, tend to encourage follower dependence, which can negatively impact follower creativity (Eisenbeiß & Boerner, 2013). When a supervisor exhibits this leadership style, employees can perceive this as support from their supervisor, so they reciprocate the support by maintaining a positive work attitude, such as customer orientation. Moreover, it can activate mutual support among their followers to achieve collective goals (Liaw et al., 2010). Jiao et al. (2011) have presented proposals related to four transformational leadership styles. 1. Idealized influence: The Leader serves as a task model for others by demonstrating high ethical standards and being trustworthy. 2. Inspirational motivation: Leaders inspire others by generating enthusiasm and optimism, showing shared commitment to goals, and communicating expectations clearly. 3. Intellectual stimulation: Leaders demonstrate innovation by approaching old situations in innovative ways and by encouraging others to present ideas and dare to be criticized. 4. Individual consideration: The Leader acts as a mentor or coach by reaching out to others and helping team members develop skills so that they can reach their potential.

Transformational leadership factors consist of the influence of ideal attributes, ideal behavior, inspirational motivation, intellectual stimulation, and individual considerations (Hsiao & Chang, 2011). Wright et al. (2012) broaden the pseudo transformational conceptualization of leadership by considering the relationship between leaders and followers more broadly (Silitonga et al., 2020; Christie et al., 2011). Given the importance of organizational mission and outcomes, transformational leadership is also very useful for public and non-profit organizations (Wright et al., 2012). A leader’s positive mood can influence processes, such as: explicit and implicit (Chi et al., 2011). Leadership is an inherently social phenomenon, and the ability to understand and effectively respond to complex social behavior is considered a prototype for transformational leader behavior (Sun & Anderson, 2012). Leadership is initially a source of beliefs and values accepted by groups dealing with internal and external problems (Yuan & Lee, 2011). The discussion of the history of leadership is discussed in various ancient books and manuscripts. Leadership was initially believed to be a trait inherent in a person, arises with the birth of an individual, cannot be learned, and is associated with genes or glory (Mittal & Dhar, 2015). Continuous independent learning, training, and accumulation of relevant leadership experiences reflect good leadership. The following are experiences across disciplines, such as organizational behavior, social and human relations. Organizational leaders ready to change must have the power to create transformatively (Chammas & Hernandez, 2019), including: 1. Having the vision to influence followers to move up to the next level of consciousness. 2. Build a vision of commitment and trust by communicating, which is part of the organizational culture. 3. The Leader supports and facilitates the continuous learning process.

3. Researh Methodology

The data used in this study use primary data from the survey results. Research, including quantitative analysis with a basic view of the relationship between variables, is causal research. The research variables used consisted of four independent variables: Organizational Culture, Compensation System, Transformational Leadership, and Organizational Citizenship Behavior.

4. Results and Discussion

4.1. Validation Test

An indicator is declared valid if it has a loading factor above 0.5 against the intended construct. First, we will discuss the effect of indicators on each of the predetermined variables:

1. In the Organizational Culture (OC) variable, it can be seen that the feeling of calm and sincerity in work activities (OC.9) has a more significant influence on Organizational Culture by 0.751 and OC.03 Developing yourself to get optimal results in completing work has a small effect which is 0.564.

2. In the Compensation System (CS), the amount of work accident insurance following the work risk (CS.9 = 0.732) has a significant effect on the Compensation System. Simultaneously, the organization does not pay attention to occupational accident insurance due to work risks (CS.12 = 0.382) is a point which requires smallest improvement in the Compensation System.

3. In Transformational Leadership (TL), a Leader can encourage employees to convey good ideas for the organization (TL.13 = 0.889), and has a significant effect on Transformational Leadership. In contrast (TL.8= 0.563), Leaders are willing to listen to employee complaints if there is a problem. The lowest indicator in giving influence to Transformational Leadership. The results of the analysis related to each variable show that Organizational Culture has a positive and significant effect on Transformational Leadership with a value of 0.349 compared to the Compensation System with a value of 0.244. At the same time, the Transformational Leadership variable has a more positive and significant influence on Organizational Citizenship Behavior (OCB) with a value of 0.510. In the data above, there is still an effect of indicators on each variable below 0.5, namely:

1. Salary received can meet the needs of life with a value of 0.494,

2. Not all employees have the opportunity to get a higher promotion with a value of 0.419,

3. Organization pays less attention to work accident insurance due to occupational risks with a value of 0.382.

Another method to see discriminant validity is to look at the square root of the Fornell-Lacker Criterium. The value mentioned above is 0.5. However, all the variables tested have a value above 0.5.

The discriminant validity table analysis results show that the constructs in this research model can still be said to have good discriminant validity.

Table 1: Research variables and Indicators

Table 2: Discriminant Validity (Fornell-Lacker Criterium)

Table 3: Composite Reliability and Cronbach’s Alpha

Table 4: R-square

Table 5: Fit Summary

4.2. Reliability Test

A reliability test is done by looking at the indicator block’s composite reliability value that measures the construct. The results of the composite reliability will show a good value if it is above 0.7. The following are the composite reliability values for the output:

It appears that all variables meet the desired composite reliability value, which is above 0.7, which means that all variables are realistic. The recommended value is above 0.6, and the table above shows that Cronbach’s Alpha> 0.6 with the lowest value of 0.825, meaning that it has met the desired criteria.

4.3. Structural Model Testing (Inner Model)

After the estimated model meets the Outer Model performance, the next step is testing the Structural Model (Inner Model). Below are the R-Square values in construction.

It can be seen that the variables of organizational culture and compensation systems affect organizational citizenship behavior by 76.00%, while transformational leadership is not very influential.

To determine whether a hypothesis is accepted or rejected, it can be done by paying attention to the significance value between the construct, t-statistic, and p-value. In this way, measurement estimates and standard errors are no longer calculated using statistical assumptions but are based on empirical observations. In this study’s bootstrap resampling method, all the hypothesis is accepted if the significance value of the t-value is greater than 1.96 and or the p-value is less than 0.05.

The table 6 shows that the relationship between the compensation system and organizational citizenship behavior is very significant, with a T statistic of 2.487 (> 1.96). The original sample’s estimated value is positive, namely 0.109, which indicates that the relationship between the compensation system and organizational citizenship behavior is positive. The P-value obtained was 0.013 (<0.05). Thus there is an effect of the compensation system on the OCB. Table 7 shows that the relationship between organizational culture and OCB is significant, with a T statistic of 4.022 (> 1.96). The original sample’s estimated value is positive, namely 0.193, which indicates that the relationship between organizational culture and OCB is positive. The P-value obtained was 0.000 (<0.05). So there is an influence of organizational culture on organizational citizenship behavior. The following is a diagram of the statistical T value based on the output with Smart PLS.

Table 6: Summary of the structural model

Now the indicator can influence the variable. First, the highest indicator for organizational culture is OC.9, with a value of 18.343, and the lowest is OC.3, with a value of 6.447. Second, regarding the compensation system, the highest indicator is CS.9 with a value of 16,707, and the lowest is CS.7 with a value of 5,609. Third, in transformational leadership, the highest indicator is TL.13 with a value of 41,524, and the lowest is TL.8 with a value of 6.807. Fourth, regarding the behavior of community organizations, the highest indicator is OCB.10 with a value of 15,868, and the lowest is OCB.15 with a value of 6,569, so it can be said that organizational culture has a more significant influence on organizational citizenship behavior when compared to the compensation system. Then the OCB is more significant and is positively influenced by transformational leadership with a value of 10.410, and the smallest is a compensation system with a value of 5.811.

5. Conclusions

Organizational culture partially influences and reacts violently to the OCB, especially in feeling calm and sincere in work activities. Always think and be positive has the most significant influence than have high loyalty to the institution. Organizational culture still has less impact on the company but amplifies the impact on the workers themselves. Culture development usually takes years, with a standard competency model that influences the management system’s strategic priorities. If the organization has the right culture and people, re-emerging both will encourage how they work according to the created organizational culture. The compensation system has a positive and strong reaction to the OCB. However, Work accident insurance after occupational risk gets more attention from workers than rewards from the organization. The main organizational incentive system is compensation given by the organization as a result of employee contributions, so that the organization should pay more attention to employee safety.

Transformational leadership positively influences and reacts strongly to social organizations’ behavior, especially leaders who can encourage employees to convey good ideas for the organization. Leaders in this organization should be able to encourage employees to convey good ideas but less in listening to employee complaints. Leaders inspire others by generating enthusiasm and optimism, showing shared commitment to goals, and communicating expectations clearly. The leader acts as a mentor or coach by reaching out to others and helping team members develop skills to reach their potential. Employees can perceive this as support from their supervisor, so they reciprocate the support by maintaining a positive work attitude. Transformational leadership, Organization Culture, and Compensation systems have a positive and significant influence on OCB, significantly increasing employee awareness of their presence at work, providing leaders can encourage employees to convey good ideas thereby reducing the emergence of interpersonal conflicts, meanwhile work accident insurance after work risk can prevent employees from losing their enthusiasm for work.