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.