Interim leaders of workplace organizations: An investigation of trust issues between the interim leader and the workforce

The hiring of an interim leader on a short-term basis is a flexible way to augment management in an organization and provide just-in-time resources at a reasonable cost. However, studies show that interim leadership successions are associated with trust issues during transitions that disrupt organization operations and adversely impact performance. This dissertation investigated trust issues between the interim leader and the workforce to better understand how trust can be developed. Authentic leadership theory, social exchange theory, and organizational justice theory were used to interpret studies related to trust. Themes that emerged included trust and the workforce, interim leader and trust, and interim leader and organizational level trust. A systematic review process was used to gather literature and the Critical Appraisal Skills Program was used to appraise the literature and resulted in 53 studies included for analysis. The constant comparative method (CCM) was used to code, analyze, and synthesize the empirical evidence. The qualitative data showed that specific interactions between interim leaders and the workforce played a key role in successful transitions and positive performance; trust led to increased commitment, engagement, and collaboration, while lack of trust or mistrust led to increased turnover, presentism, and absenteeism. Interim leaders who develop a culture of trust and possess particular trust-building leadership characteristics will be most successful. Competency, integrity, and reliability or dependability were found to be a measure of trust, while mechanisms of trust included open dialogue, communication, fairness, active listening, collaborations, and social relationships. This dissertation provides guidance in developing trust, which will result in a positive and productive work environment during leadership transitions.Running Head: WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS Interim Leaders of Workplace Organizations: An Investigation of Trust Issues Between the Interim Leader and the Workforce by Rose Siri Ntumngia A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree of Doctor of Management University of Maryland University College 30 August 2017 Dissertation Committee Deborah M. Wharff, D.M. G. David Andersen, Ed.D. Eric B. Dent, Ph.D. WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS © 2017 Rose Siri Ntumngia ALL RIGHTS RESERVED WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 3 Abstract The hiring of an interim leader on a short-term basis is a flexible way to augment management in an organization and provide just-in-time resources at a reasonable cost. However, studies show that interim leadership successions are associated with trust issues during transitions that disrupt organization operations and adversely impact performance. This dissertation investigated trust issues between the interim leader and the workforce to better understand how trust can be developed. Authentic leadership theory, social exchange theory, and organizational justice theory were used to interpret studies related to trust. Themes that emerged included trust and the workforce, interim leader and trust, and interim leader and organizational level trust. A systematic review process was used to gather literature and the Critical Appraisal Skills Program was used to appraise the literature and resulted in 53 studies included for analysis. The constant comparative method (CCM) was used to code, analyze, and synthesize the empirical evidence. The qualitative data showed that specific interactions between interim leaders and the workforce played a key role in successful transitions and positive performance; trust led to increased commitment, engagement, and collaboration, while lack of trust or mistrust led to increased turnover, presentism, and absenteeism. Interim leaders who develop a culture of trust and possess particular trust-building leadership characteristics will be most successful. Competency, integrity, and reliability or dependability were found to be a measure of trust, while mechanisms of trust included open dialogue, communication, fairness, active listening, collaborations, and social relationships. This dissertation provides guidance in developing trust, which will result in a positive and productive work environment during leadership transitions. Keywords: interim leader, trust, workforce, organizational level trust, active listening, communication WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 4 Acknowledgements This dissertation would not have gotten to the finish line without support and assistance from family, cohort members, members of the faculty of University of Maryland University College, colleagues at work, friends, and my “well wishers” through a world class Doctor of Management program. Thank you all for helping me to achieve my dreams. To my late dad, I say thank you for teaching me the importance of education. This is for you. I know you are watching over me and I know you are proud of me. To my Mom, I say thank you for all your moral and financial support. To my daughters, Thelma and Sharon, I will tell you the same thing my dad told me: “They can take away all you have but they can never take away what is in your head.” Education is the greatest possession in life. I want to express my sincere thanks to Dr. Wharff for guiding me throughout this process. I learned a lot from you. I want to thank the dissertation committee members, especially Dr. Andersen, and other members of the faculty for their unwavering support and coaching throughout the DM program. Thanks to my cohort members for the support and the fun times during residencies. I would not have finished this journey without all your help and encouragement. To the writing center team—Aimee, Anna, and especially to Monique—thank you for working with me and even allowing me to have two hours in one session just so I could go through my dissertation. To Cynthia Thomes, the UMUC librarian—thank you for teaching me how to search for articles. To Michelle, my editor, I would never have done it without you. And, to my friends, Tsabili, Nancy, and Fred, thank you for your support and friendship. Sis Corine, thank you for making me feel at home. You are awesome! My large and extended family, in the US, Europe, and in Cameroon – thank you for being so very supportive. “Educating the girl child is educating the whole village.” Thank you all. I love you all. WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 5 Table of Contents Abstract ........................................................................................................................................... 3 Acknowledgements ......................................................................................................................... 4 List of Tables .................................................................................................................................. 9 List of Figures ............................................................................................................................... 10 Chapter 1: Introduction and Overview of the Dissertation ........................................................... 11 Background ............................................................................................................................... 12 Reasons for growth in hiring interim leaders. ....................................................................... 13 Trust and leadership. .............................................................................................................. 16 Problem Statement ..................................................................................................................... 19 Purpose of the Study .................................................................................................................. 20 Significance to Management Practice and Scholarship ............................................................. 21 Discussion of Theories, Themes/Concepts, and Relevant Literature ........................................ 22 Theories. ............................................................................................................................... 23 Definitions and Terms ............................................................................................................... 27 Summary ................................................................................................................................... 28 Chapter 2: Literature Review ........................................................................................................ 30 Theoretical Framework ............................................................................................................. 31 Authentic leadership theory. .................................................................................................. 31 Social exchange theory. ......................................................................................................... 32 Organizational justice theory. ................................................................................................ 33 Critical Review of Literature ..................................................................................................... 34 Theme 1: Workforce and trust-based actions by interim leaders. ......................................... 34 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 6 Theme 2: Interim leader and trust characteristics. ................................................................. 43 Theme 3: Interim leaders and organizational level trust. ...................................................... 52 Conceptual Diagram .................................................................................................................. 60 Propositions ............................................................................................................................... 61 Summary ................................................................................................................................... 62 Chapter 3: Methodology ................................................................................................................ 64 Systematic Review and Management ........................................................................................ 66 Search Strategies and Search Terms .......................................................................................... 67 Inclusion/Exclusion Criteria ...................................................................................................... 72 Quality Appraisal of Literature ................................................................................................. 73 Critical Appraisal Skills Programme (CASP) tool. ............................................................... 74 Synthesis ................................................................................................................................... 76 Open coding. .......................................................................................................................... 77 Selective coding. .................................................................................................................... 81 Subject Matter Expert Feedback ............................................................................................... 82 Expert Panel Review. ............................................................................................................ 83 Summary ................................................................................................................................... 84 Chapter 4: Findings and Discussion .............................................................................................. 85 Discussion of Findings .............................................................................................................. 86 Finding 1: Trust is built through specific mechanisms of interim leader involvement. ........ 87 Finding 2: Specific leadership characteristics can engender trust. ........................................ 93 Finding 3: Negative outcomes rooted in lack of trust. .......................................................... 97 Final Conceptual Model .......................................................................................................... 101 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 7 Analysis of the Findings .......................................................................................................... 103 Commitment, engagement, and collaboration are essential to workforce trust. .................. 103 Organizational trust is impacted by employee/workforce confidence in no harm. ............. 105 Insertion of an interim leader affects workforce trust. ........................................................ 106 Trust and distrust mutually can impact the workforce and the organization. ...................... 107 Alternative Perspectives .......................................................................................................... 108 Interim management and trust versus succession management/planning. .......................... 110 Summary ................................................................................................................................. 111 Chapter 5: Conclusions and Implications .................................................................................. 1122 Study Conclusions ................................................................................................................... 114 Operationalization of trust. .................................................................................................. 115 Generating fast trust. ............................................................................................................ 115 Trends ..................................................................................................................................... 116 Use of interim leaders is win-win. ....................................................................................... 116 Cost saving and mismatched needs in leadership hiring decisions. .................................... 117 Addressing staffing shortages. ............................................................................................. 117 Interim leaders as transformational leaders. ........................................................................ 118 Executives seek more flexibility. ......................................................................................... 118 Availability of placement organizations. ............................................................................. 119 Implications/Recommendations .............................................................................................. 119 Practical steps for building trust. ......................................................................................... 121 Limitations and Future Research ............................................................................................. 122 Summary ................................................................................................................................. 123 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 8 References .................................................................................................................................. 125 Appendix A. Journals of Articles Included for Systematic Review ............................................ 145 Appendix B. Results of Axial Coding, by Open Code Category ................................................ 147 Appendix C. Open Code Category 1: Workforce and Trust ....................................................... 148 Appendix D. Open Code Category 2: Interim Leader and Trust ................................................. 153 Appendix E. Open Code Category 3: Interim Leader and Organizational Level Trust ............. 157 Appendix F. Synthesis of Axial Codes, with Selective Coding .................................................. 162 Appendix G. Subject Matter Experts: Expert Panel Profiles ...................................................... 165 Appendix H. Subject Matter Experts: Executive Summary Sent ................................................ 166 Appendix I. Subject Matter Experts: Questionnaire .................................................................... 173 Appendix J. Subject Matter Experts: Questionnaire Feedback ................................................... 174 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 9 List of Tables Table 1. Search A: One Search, UMUC Library ........................................................................... 68 Table 2. Search B: One Search, UMUC Library ........................................................................... 71 Table 3. Checklist of Questions, Critical Analysis Skills Programme (CASP) ............................ 74 Table 4. Quality Appraisal Tool, Critical Appraisal Skills Prorgramme (CASP) ......................... 75 Table 5. Characteristics of Synthesis ............................................................................................. 77 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 10 List of Figures Figure 1. Conceptual framework. .................................................................................................. 61 Figure 2. PRISMA flow diagram, Search A, meta-analysis articles for synthesis. ....................... 69 Figure 3. PRISMA flow diagram, Search B, with case study limitations. .................................... 70 Figure 4. Articles included in the systematic review, by year of publication ............................... 72 Figure 5. Selective coding, conceptual diagram ............................................................................ 82 Figure 6. Conceptual model of mechanisms and outcomes of trust. ........................................... 102 WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 11 Chapter 1: Introduction and Overview of the Dissertation Constant changes in the business environment, skill shortages, retirement, career mobility, dismissals, ill health, and changes in business practices have made transitions in leadership a common occurrence in organizations. To fill vital leadership gaps, organizations have turned to interim leaders until a permanent successor is found (Ballinger & Marcel, 2010, p. 263). Because high employee involvement practices are indicators of performance and growth in an organization, the entire workforce—including non-managerial employees are very important during periods of succession and the appointment of interim leaders (Batt, 2002, p. 595). Studies have shown that 17% of successions in corporations between 1996 and 1998 hired interim leaders for at least 45 days; that number has increased four-fold since that time (Ballinger & Marcel, 2010, p. 266; Mooney, Semadeni, & Kesner, 2014). Even as the hiring of interim leaders increases, the market reaction to their appointment is mostly negative, partly because of the uncertainty created by the lack of a permanent replacement (Mooney et al., 2014; Souza, 2012, p. 24). An analysis of 2,500 public companies run by interim leaders found a lower net income and stock market performance than those run by permanent leaders (Ballinger & Marcel, 2010, p. 270). On the other hand, interim leaders tend to be more engaged in addressing growth in earnings. Chen, Luo, Tang, and Tong (2015) in their study of 145 interim leaders looked at succession events of U.S. public firms from 2004-2008 and found that interim leaders were more likely to take part in earnings management to improve performance in earnings than were non-interim leaders. Such seeming contradictions in expectations of outcomes from an interim leader’s tenure contribute to the lack of clarlity a practitioner finds when searching for best practices to guide the hiring and management of an interim leader. Yet, while the growing demand for interim leaders WORKFORCE TRUST AND INTERIM LEADER APPOINTMENTS 12 and interim leadership has seen increasing attention among scholars and practitioners, there are no studies that specifically examine trust issues associated with interim leaders’ success (Bligh, 2017, p. 27). This dissertation seeks to better inform decision-making in interim leader appointments by enhancing practitioners’ understanding of the unique nature of trust between interim leaders, the workforce, and the organization. To do so, this study highlights and evaluates the outcomes of trust and mistrust so as to identify structures that support the building of trust between interim leaders and the workforce that advance achievement of the objectives of the interim leader and the organiztion. An evidence-based management approach (EBMgt) was used to conduct the study, given the (a) growing trend in hiring interim leaders, (b) mixed assumptions about issues of trust and leadership, and (c) diverse findings presented in the literature on the structures that support the building of trust between interim leaders, the workforce, and the organization. A systematic review design method was used to obtain evidence from empirical studies and case studies in the grey literature to answer the research question, “What are the trust issues between the interim leader and the workforce, and how do these issues impact the successful outcomes of both the interim leader and the organization?” For the purpose of this dissertation, interim leaders are considered to be middle-leve