Workplace Trust's Moderating Effect on the Relationship between Authentic Leadership and Employee Commitment among Managers in Kenyan Public Financial Management Reforms Agencies

Abstract

This paper addresses the moderating effect of workplace trust on the relationship between authentic leadership and employee  commitment  in agencies implementing public financial management reforms  (PFMRs) in Kenya. Methodically, the study was guided by  the  positivism research philosophy. The study applied descriptive  correlational research design because it reveals accurate information  that allows for inferences through hypothesis testing. The population  of the study was 747 managers from the Kenyan PFMR  implementing  agencies. Simple random sampling technique was used to select 260  managers for the study. Primary data was collected  using a structured  questionnaire. Both descriptive and inferential analysis were  employed for analysis. The Binary logit regression  model was  significant with Chi-square χ² (1) = 77.263, p<.001, and the model  summary result shows the Nagelkerke R square of .859  (equivalent to  R² on the linear regression model). In a combined model with all the  constructs for authentic leadership; the interaction  of the Leader's  Relational transparency as an independent variable was significant (β = 13.098, Wald = 6.410, p<.05) while the other  constructs were not  significant (p>.05). Similarly, the inclusion of workplace trusts as  moderating variable shows the interaction with the  Relational  transparency as an independent variable (workplace trust*relational  transparency) was significant (β = 4.235, Wald = 7.759,  p<.05). In  contrast, the other constructs were not significant (p>.05). This shows,  in a combined model with specific constructs for the  authentic  leadership as the independent variable only relational transparency is  significant and has significant interaction effect with the  workplace  trust as moderating variable in agencies implementing public  financial management reforms in Kenya. From the  empirical evidence  and conclusion, the study recommends that the foundation of effective  leadership is when leaders are perceived as  having a high degree of trust and are believed to practice ethical behavior. Trust formation  was explained, as well as how trust can be  strengthened or lost  through leadership behaviors.