Running head: LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 1

A Literature Review of Servant Leadership: Model in Municipality

Diana Householder

Siena Heights University

LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 2

Abstract

The purpose of this literature review is to research the servant leadership model implementation

in municipal organizations. How can servant leadership improve employee engagement in the

organization and how does the servant leadership system improve employee retention? This

research will require both qualitative and quantitative methods. Qualitative in comparing

employee engagement and improvements in employee retention and quantitative as some data is

collected through statistics, polls, questionnaires, and surveys. The best method for this type of

research is the correlational method which will show how the two variables are related.

Addressing the question of can employee engagement in municipal organizations lead to the long

term retention of key employees while delivering higher services to the population will be

addressed, as well as the question of how is organizational culture built around servant

leadership?

Keywords: servant leadership, employee engagement, employee retention, municipality

LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 3

A Literature Review of Servant Leadership Model in Municipality

The intent of this literature review is to research the servant leadership model

implementation in municipal organizations by demonstrating how servant leadership improves

employee engagement in the organization, improves employee retention and the resulting

benefits to the employee and the public, at large. With public officials currently facing

increasing challenges with continually limited funding and increasing expectations from

constituents who demand more and more services. As such, public officials are required to pay

closer attention to employee performance and expenditures.

Various leadership trends have been studied, in depth, with Robert Greenleaf's theory

Greenleaf (2002), on Servant Leadership in 1977 acting as an impetus. Servant leadership

focuses on the servant, whether this is a community or an employee, being put first. At this

point, it is the leader's responsibility to ensure that the welfare of the servant is put first (Spain,

2015). Leadership, it is maintained, is now relegated to the volition of serving others and

providing any and all resources that fulfill a higher purpose which, it is asserted, will give higher

meaning to work (Fairholm, 2002). Greenleaf believes that organizations or large scale

institutions can, through the implementation of the servant leadership model, have an altruistic

change worldwide based on the leader serving the servant (Greenleaf, 2002).

Summary
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 4

Employee engagement, within municipal organizations, is essential for the

implementation of service related directives with anticipated results. Encouraging employee

engagement, within set parameters, will increase employee morale which increases productivity,

employment longevity, and produces a more professional and affable interaction with the

electorate, which most people expect. A municipal leadership that fosters and encourages

employee engagement and participation will realize more efficiency, trustworthiness, cost

savings and a favorable public opinion.

Outline

This research paper will focus primarily on municipal employees engagement and

retention under servant leadership.

How does servant leadership style influence employee engagement?

How does the servant leadership system effect employee retention?

How does organizational culture get established around servant leadership?

Problem Statement

Employee engagement, within municipal organizations, is essential for the

implementation of service related directives with anticipated results. It is unknown if the servant

leadership style can positively influence employee engagement as well as employee retention.

The intent of this research is to determine if there is correlation between servant leadership,

employee engagement and employee retention.

A Literature Review of Servant Leadership Model in Municipality

Leadership

The intent of this literature review is to research the implementation of the servant

leadership model in municipal organizations by demonstrating that the utilization of Servant

LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 5

Leadership improves employee engagement and retention in an organization and, ultimately,

produces benefits to the public body, or taxpayer, at large. What is the importance of employee

engagement and the relevance to retention? Covey states, Greenleaf (2002), in his introduction

of the twenty-fifth anniversary edition of Servant Leadership, that leading by the principles of

servant leadership will be the deciding point between an organizations enduring success or its

eventual demise (p. 13).

Currently, public sector elected officials, administrators and inspectors are dealing with

ever shrinking revenues and higher operating costs from a public that is demanding more and

higher quality services. Monitoring of performance outcomes and more engagement with their

constituency are essential if public sector officials are going to surmount the task of achieving

public satisfaction with less resources (Bryant, 2010).

According to Erickson (2013), various leadership trends, practices and theories have been

devised and studied in order to help managers and leaders more effectively lead, each

demonstrating varying strengths and weaknesses in their performance and effectiveness.

Anderson (2013) questions if leadership performance and communication style is relevant to

employee retention. The contingency leadership theory, based on the situational theory of

leadership suggests that a strong leader does not utilize a one size fits all approach when dealing

with employees and that there is no single, best way to lead. According to contingency theory a

strong leader must utilize several leadership principals adoptable to varying situations and be

able to determine which principal fits the best, depending on the scenario (Erickson, 2013).

A leader who has become proficient in this approach can toggle between task-
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 6

orientated and relationship-orientated modes depending on what is required. Skilled leaders are

adept at toggling between any one of six separate approaches, each one suited to a specific

situation, as research has suggested (Shahmandi & Ismail, 2011). Research has concluded that

positive leadership accelerates engagement, thus expediting performance which leads to

employee retention (Whorton, 2014).

Servant Leadership

How can servant leadership improve employee engagement in the workplace? Although

the contingency theory demonstrates many merits and seems a viable management tool, it lacks

specifics of how and when to administer what tool when needed and does not address scenarios

of dealing with grey areas - between problems and/or objectives where in certain situations

neither task-orientated and relationship-orientated approaches will not work alone. The theory

depends too much on the intuition of the leader to recognize which tool to use in which situation

(Shahmandi, & Ismail, 2011). Other research finds aspects like accountability and

empowerment also have a significant role in employee retention (Correia, & Van Dierendonck,

2014).

However, a paradigm change shifted to a more humanistic approach to management

focusing more on ethics and leadership values. Two constructs emerged from the development

of the theory, concern for task and concern for people. While the concern for task is evidently

vital if any organization is to be productive and survive, a concern for people is a moral and

ethical precept (Eddy, 2008).

Out of this idea, the servant leadership theory was founded on the premise that if the

follower was elevated to a higher status than the leader and the follower was elevated by the
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 7

leader through service, then hypothetically, this would inspire the follower to then lead and serve

others (Whorton, 2015). How does servant leadership effect employee retention? In this

progression, the servant leader is to demonstrate characteristics, such as healing, empathy and

positive persuasion among other positive traits. This in turn would make the employee (servant)

feel engaged, energized and more inclined to view their job as vital, important and essential to

perform for the good of others (Greenleaf, 2002). It is postulated that with the previously

mentioned attributes possessed by the employee on the job, happiness and job satisfaction will

prevail and any desire by the individual to leave the organization will diminish. The ultimate

pay-off for the employee's desire to stay on the job is compounded experience, expertise,

reliability and a sense of devotion to the people they are assigned to serve. Keeping highly

trained, qualified people is not only essential for job performance but also essential for meeting

the expectations of the people of the community. It is estimated that it costs an employer

approximately $4,000.00 to hire and train most employees (Erickson, 2013). Research estimates

that 150% to 200% of an employee's compensation is what it costs an organization to hire and

train that individual. That does not factor in the cost of recruiting for open positions, interviews

and many other factors to board an employee. Still many more hidden costs should be factored

in but often times are not (Importance of Retention, 2009). Servant leadership has gained

strength as a viable leadership model for implementation in various organizational cultures,

beneficial in both private and public sectors. To more clearly explain why that is, further

research is essential to differentiate the viable, valuable aspects of servant leadership from other

models, such as transformational leadership, to pinpoint what characteristics are working and

which ones are not so a fuller understanding can be achieved and, also, to recognize and avoid
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 8

potentially damaging or ineffective components such as a high power distance (Correia, & Van

Dierendonck, 2014).

Leadership and Employee Engagement

How does servant leadership style influence employee engagement? Studies have found

improving employee engagement increases employee motivation. Positive enhancements within

organizational leadership strengthens employees outlook thus improving performance. Thus, the

outcome of increased employee satisfaction positively effects employee retention (Medling &

Green, 2008).

Research, according to Lee (2012) in employee engagement has become popular with

consulting firms, the trade and business press, and organizations with numerous employees in

about the last ten years. The concept of employee engagement is a fairly new procedure that

organizations can implement to cope with the unpredictable organizational business climates.

Due to the fact, however, that the concept of work engagement and its associated studies remain

new and inconclusive, current interest on the subject has outpaced available research data. As

such, the academic community is now faced with the onus of developing comprehensive research

and conducting studies to answer the salient questions of not only how and why it benefits

individuals and organizations but, in doing so, ultimately proving its validity (Lee, 2012).

Further research into the means by which various leadership styles affect employee engagement

may establish further insight the issue. Presuming that leaders are a significant influence and are

the critical element in addressing these issues regarding the ability to cope with the

unpredictability in organizational climates. Also the limited concurrence regarding which

LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 9

leadership approach is the most suitable and potentially most effective to establish (Correia &

Van Dierendonck, 2014).

Antecedents of Engagement and Employee Retention

Employee and Leadership Development

Monitoring of performance outcomes and more engagement with their constituency are

essential if public sector officials are going to surmount the task of achieving public satisfaction

with less resources (Bryant, 2010). Studies have found initiation of employee engagement is a

crucial attribute for success within private and public sectors (Federman, 2009). Several studies

have found correlations between positive leadership methods and employee satisfaction. It is

suggested that increased levels of satisfaction among employees is the consequence to the

establishment a more participative leadership style (Trottier, Wart, & Wang, 2008).

Keeping highly trained, qualified people is not only essential for job performance but also

essential for meeting the expectations of the people of the community (Erickson, 2013). Which

research has also concluded that rewarding behavior contingent upon employees meeting certain

goals or reaching desired expectations has reinforced desirable behavior and job performance. It

is also noted, through the research, that if the employee finds value in the reward the behavior is

further reinforced and a level of fulfillment and satisfaction is achieved (Trottier et al 2008).

Costs

It is important for Public and private organizational leaders to establish strategies in

employee engagement which in turn positively influences employee retention (Medling, &

Greene, 2008). Organization and leaders must understand that money compensation is not the

only stimulus for employee. As such, other incentives should be offered as employees place
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 10

higher value on balancing personal life with work, being more included within management

decisions and allowed flexible working hours and shifts (McCabe, 2008). These are amenities

that satisfy employees without increasing costs through exorbitant payrolls. It can be said,

however, that the ultimate worth of the concept can be realized through the cost savings of

employee retention. The estimated costs to an employer is approximately $4,000.00 to hire and

train most employees (Erickson, 2013). Research estimates that 150% to 200% of an employee's

compensation is what it costs an organization to hire and train that individual. That does not

factor in the cost of recruiting for open positions, interviews and many other factors to board an

employee. Still many more hidden costs should be factored in but often times are not

(Importance of Retention, 2009), for example an employer, according to Cloutier, & Felusiak,

& Hill, & Pemberton-Jones (2015) can incur anywhere from one half up to two hundred percent

of the former employees salary just for recruiting a new or replacement employee.

Opposing Views of Servant Leadership

Servant leaderships effect on business aspects, such as employee engagement, are now

being addressed by researchers. It has been conclusively demonstrated that turnover, safety,

public satisfaction and productivity are all positively affected by employees being engaged in

their work environment through implementation of the servant leadership model (Whorton,

2014).

In recent years there has been an increase in advocating servant leadership as a viable

tool for private and public sector leaders to utilize (Russell & Stone, 2002). Findings from

Russell and Stone (2002) state that at the time of their research the servant leadership model had

not been adequately supported by comprehensive empirical research studies. Also suggesting
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 11

further research in real world applications being necessary as the concept of servant leadership is

beneficial for the employees and the leaders. Findings from Whorton (2014) regarding servant

leadership states while the model of servant leadership is gaining momentum in the business

world, there is still avoid in pertinent and relevant information. Correia and Van Dierendonck

(2014), indicated that by keeping in mind the cross sectional nature of the data that was based

solely on self-perception measures, coupled with a lack of individual performance results, among

other fallacies in the work, only underscored the questionable reliability of the study. Correia and

Van Dierendonck (2014) also found in order to gain a deeper understanding in how to

differentiate servant leadership from other leadership styles, more research must be done with

specific goals of discerning the distinction and correlation of these models.

Benefits of Retention

Research estimates that 150% to 200% of an employee's compensation is what it costs an

organization to hire and train that individual. That does not factor in the cost of recruiting for

open positions, interviews and many other factors to board an employee. Still many more hidden

costs should be factored in but often times are not (Importance of Retention, 2009). Employee

retention is critical to an organizations bottom line whether this is in the public or private sector.

Expenses incurred to fill company needs involve employee search, hiring and ongoing training to

fill positions are costly and to all organizations and in the public sector costly to the tax payer.

Valuable training and expertise attained resulting from continual employment is lost when

employment is severed. Retention strategies can be costly to an organization however this

expense is minor in comparison to replacement (Cloutier et al, 2015).

Development Strategies
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 12

Fostering positive engagement establishes employee commitment and generates

employee retention. It is suggested for private or public sector leaders to share vision, values,

goals and in office policies. Development of positive communication to engage employees to

make strides in achieving commitment (Cloutier et al, 2015). It is postulated that with the

previously mentioned attributes possessed by the employee on the job, happiness and job

satisfaction will prevail and any desire by the individual to leave the organization will diminish

(Importance of Retention, 2009). The ultimate pay-off for the employee's desire to stay on the

job is compounded experience, expertise, reliability and a sense of devotion to the people they

are assigned to serve. When the goals of the employee become a preference or priority to the

leader engagement is then established, which leads to increased employee retention (Cloutier, et

al, 2015).

Organizational Change in Public Organizations

Fernandez and Rainey (2006), have pointed out that reform initiatives are nothing new to

government, whether here or abroad, all of them seeking to transform, reinvent and reform

government. Their summation leaves one to doubt in governmental agencies possessing the

ability or real desire to change. Although there is a tremendous amount of debate about

leadership in the public sector there is relatively little broad-scale empirical analysis about

leadership styles in public agencies. Research has found consistency in employee satisfaction

although contemporary research has found inconsistencies and lack of support for this intuitive

contention. Various studies have found correlation between behaviors and satisfaction, thus

suggesting a leadership style which is more participative results in higher employee engagement

and longer retention, indicating that leadership and follower relationship has a significant effect
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 13

on the organization (Trottier et al, 2008). Studies have also examined the leadership debates in

government settings, which is an increasingly results-oriented and entrepreneurial environment.

Finding that transformational and transactional leadership styles in the government organizations

are more common than servant leadership. Civil servant sector has most often relied on

transformational leadership (Trottier et al, 2008).

Furthermore, however, while general management and organizational theory were quick

to jump on the band wagon touting the virtues of organizational change with servant leadership

as a focal point, public administration and trade journals have been noticeably devoid of the topic

only occasionally touching on the subject at any substantive length (Fernandez & Rainey, 2006).

White (2003) research of the leadership style of the City of Virginia Beach Municipality, is

consistent with servant leadership and finding this as a viable leadership for other governmental

institutions to model municipality leadership around. Anthamatten (2007) discovered a constant

theme among the leaders of public sector which is a demand for change is repetitive in both the

public and private sectors, thus a need for leaders who can strategize to accommodate these

changes. Fernandez and Rainey (2006) state that Public-management literature contains

evidence of the importance of determining the need for change and persuasively communicating

it through a continuing process of exchange with as many stakeholders and participants as

possible (p. 169). Concluding that the success of implementing new programs relies on the

leaders capacity to disburse information regarding changes and proper channeling of urgency

(Fernandez & Rainey, 2006). It is up to the government leaders to describe effectively through

use of proper communication skills to build support for change, which often begins with deriving

a unique vision. This vision, if properly conveyed articulates a future that is found appealing and
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 14

provides a direction for change within the government entity (Fernandez & Rainey, 2006,).

White (2003) states the existing research is consistent in the position of a changing

environment, and the results of those changes and understanding the impact of these changes

within the public sector is significant (p. 84). Initiation and implementation of change the

constant theme (Fernandez & Rainey, 2006).

Opposing View Point

Anderson (2009), argues one of the primary concerns with servant leadership is that with

a survey of the available research and literature, there does not exist a generally accepted

definition of what exactly servant leadership is, and it has been that way for about forty years. It

is unclear whether the character of the model is based on personality or should be interpreted as a

set of behaviors. In addition, there is no defining line between servant leaders, those who are not

servant leaders or if anyone can be a servant leader to varying degrees. On top of that, there does

not seem to be any empirically established data verifying that the theory has the prospect of even

delivering positive results within an organization. Anderson (2009) argues the establishment of a

definition clearly defining the concept as either a behavioral pattern or a personality trait must be

set before any instrument can be developed to test scientifically any anticipated results. At that

point, management can evaluate the viability of the model and make decisions of whether it

would work in their organization or if another model or approach would produce more positive

results (Anderson, 2009).

Another concern identified by Anderson (2009) with the concept is its practicality within

any organization, public or private. It must be presumed that servant leaders are those who serve

with only the interests of the subordinate in mind and the interests of the organization are held in
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 15

are relegated to a secondary status. It must be acknowledged, however, that the primary purpose

of management's existence is not to ensure employees are happier but to ensure that the

organizations productivity or service goals are attained. Leaders attain goals through others.

Therefore, a good leader, apart from serving the servant, must ultimately keep the organizations

projected and anticipated production goals in the forefront, and must keep the subordinates on

track in the same direction, if they are doing the job they were hired to do (Anderson, 2009).

Research Findings

Public and private sector organizations formulate increased strategies inherent to the

organizations principals and operations (McCabe, Feiock, Clingermayer, & Stream, 2008). This

literature review researched servant leadership model and the correlation n in employee

engagement and retention. Concluding that achievement in an organizations short and long term

economic goals, contributing factors such as employee satisfaction and retention strategies must

be addressed. Employee retention strategies such as leadership training for employee

development is essential for public or private organization. Considerations for employee

retention strategies are training and development for management level employees as well as

utilization of feedback from employees. Although there has been considerable discussion to

institute this particular strategy within public organizations, there has been considerably little

empirical analysis bolstering the model, leaving public official or consulting firms very little

material to go on for an implementation plan (Cloutier et al, 2015).

The primary purpose of the White (2003), research was to determine if the City of Virginia

Beach currently utilized the servant leadership system. This research utilized a qualitative
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 16

method and descriptive statistics since the research involved interviews with in depth

questioning, utilizing case studies, and comprehensive profile studies. White (2003), research

concluded that the servant leadership model is a viable model for governmental organizations to

implement, but also indicated more research is necessary.

The purpose of the study by Anthamatten (2007) of local municipalities in Tennessee was to

determine if a relationship existed between, population growth rates, property taxes, and

population growth rates of select municipalities in Tennessee. The research utilized

quantitative research method to study if there is a relationship between known variables. He used

inferential statistics as the study was from a large population size which would take too long to

complete otherwise. Anthamatten (2007) concluded that more research is necessary regarding

public sector leaders and change.

In the end, however, the number one tenent of the servant leadership model is

understanding. Understanding of the employee by the organization and understanding of the

organization by the employee. Leadership must be able to provide employees with an engaging

and rewarding work environment and employees must be able to perform and provide the

organization with the productivity that is expected and required to keep the company solvent.

Beginning with retention strategies an organization will make it possible to retain competent,

motivated, productive and loyal employees. Today's labor market is highly competitive and

retaining top talent is essential in order to compete in a labor market that is not only regional or

national, but global. Organizations must be able to anticipate future management needs and

recognize leaders from within and train and develop them as current and future leaders.

Organizations must make recruitment an investment priority for the return on this investment
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 17

will pay dividends far in excess of the initial investment with each, employer and employee

sharing equally in the successes. Ultimately the bottom line benefits of servant leadership are

just that - the bottom line (Cloutier et al, 2015).

Conclusion

Various leadership trends, practices and theories have been crafted and researched in

order to help organizational heads be more effective leaders, each demonstrating varying

strengths and weaknesses in their performance and effectiveness (Erickson, 2013). Government

leaders need to describe effectively through use of proper communication skills to build support

for change in the organization. Collaboration in a supportive vision for employee engagement

and community involvement, properly communicated articulates a future that is found appealing

and provides a direction for change within the municipalities (Fernandez & Rainey, 2006).

Organizations that have a responsibility to serve society also have an obligation to serve and

develop organizational constituents so they can mature and develop as servant leaders.

According to theory of Greenleaf (2002), the leadership of organizations should possess and

exude the power and characteristics of the servant leader.

Research from White (2003) demonstrated that the Virginia Beach Quality Service

System possesses such a servant leadership orientation, thus serves as a valid model for

government organizations which seek to operate under a new Public Service modality.

Demonstrating an alternative and viable approach for public service administrators and managers

to utilize within the servant leadership framework instead of relying on the predominantly

coercive and utilitarian power paradigm which has been the mainstay of past management

strategies. Additionally, White (2003) found the City of Virginia Beachs implementation of the
LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 18

servant leadership model produced very positive results echoing the hoped for and anticipated

results of Greenleaf and others who forecast what was to be realized with the models

implementation leading up to, but not limited to, happy well-adjusted employees with a

commitment to the common good of the people they are appointed to serve. White (2003) also

identified nine barriers which concluded that although they exist have little or no effect on the

utilization of the servant leadership style. Furthermore, suggesting a paradigm shift to a more

humanistic approach of leadership focusing more on ethics and values, should not make the

model attractive to just subordinates but to a management system that is tasked with the

administration of the essential services and first responder aid which suggests a civilized society

and culture. Municipalities are in existence to serve people in the most compassionate capacity

they can and to do so they must be organized and efficient and to do this must cultivate people

within the organization to develop continually as servant leaders (White, 2003).

LITERATURE REVIEW OF SERVANT LEADERSHIP IN MUNICIPALITY 19

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