Although coaching seems to be a subject with little highlight in Portugal, it is a practice that has gained relevance and visibility in organizations and has proven to be a vital path to improving the performance of organizations (Beattie et al. 2014). Based on personal learning and development, coaching challenges the employees to understand themselves, their needs, and desires (Perez et al. 2018), and helps develop more proactive attitudes and bond the employee to the values and mission of organizations.

The relationship between employees and leaders is fundamental in creating effective people and successful companies (Abbasi and Hollman 2000) by guiding the individual towards understanding the differences and similarities they have with the organization and enabling leaders to provide employee development.

Leaders with coaching skills build a safe working environment that employees can trust (Riddle and Ting 2006) and improve work performance, develop employee self-awareness, and increase their satisfaction with their work, leader, and company (Kalkavan and Katrinli 2014). A leader coach not only shares their knowledge but also recognizes effort, advises, and provides attentive feedback (Ali et al. 2020). This leadership style is seen as an organizational tool to motivate, promote, and satisfy innovative behaviors in workers.

A satisfied and happy employee provides the organization with superior productivity, sales, and customer service (Kumar and Mathimaran 2017). Organizations need employees who are willing to learn and develop their vision and mission. The best way to achieve this is for employees to experience positivism and satisfaction in organizations (Walsh et al. 2018) so that they are better professionals in a positive work environment.

Happiness at work, or simply affective well-being, is one of the most important psychological well-being indicators (Diener and Larsen 1993) by referring to the frequent experience of positive affect and infrequent experience of negative affect (Daniels 2000). Happiness is a term widely used in different contexts (Chekola 2007). In the work context, it helps employees to do their job, which drives the company forward (Al Suwaidi 2019). A happy worker is, above all, a person that has good experiences and finds integrity, trust, and compassion (Al Suwaidi 2019; Pryce-Jones 2010).

Employees must feel that their interests matter, that the company understands their situations and that, even so, they want to invest in their training and development. The employees understand and reflect on the good intentions of the company and create a strong sense of organizational belonging (Siew 2017). On the other hand, the absence of understanding and guidance creates labor dissatisfaction causing discouragement and doubt, which contributes to turnover intention.

Turnover Intention, that is, an individual’s plan to leave their organization (Mobley et al. 1979), has been theoretically and empirically established as a reliable predictor of turnover behavior (Gim and Ramayah 2019; Mobley 1982). Employees’ turnover intention may be caused by low job satisfaction and low psychological well-being. For companies, turnover is expensive at all levels (Al-khrabsheh et al. 2018), as it negatively affects productivity and the quality of the product and service provided, in addition to harming the company and the fulfilment of pre-planned objectives and goals.

Leaders play a dominant role in employee behavior (Lee et al. 2019). To satisfy and retain an employee, a leader must exhibit coaching skills (Stelter 2007), such as listening skills and communication that involves others, setting clear performance expectations, increasing self-awareness, providing constructive feedback, and having regular conversations with subordinates in which individual and organizational goals are discussed (Larsson and Vinberg 2010; Sparks and Gentry 2008).

Empirical research on leaders’ coaching skills is still scarce. A few studies have investigated individual (Huang and Hsieh 2015; Hsieh and Huang 2018; Ribeiro et al. 2020) and organizational outcomes (Dello Russo et al. 2017; Ellinger 2013; Zuñiga-Collazos et al. 2020) of leaders’ coaching skills. Research on the relationship between a leader’s coaching skills and the emotions, attitudes, and behaviors of employees is also still insufficient (Hsieh and Huang 2018; Ribeiro et al. 2020; Tanskanen et al. 2018).

2. Leaders’ Coaching Skills

Coaching has gained notoriety in the business environment throughout the contemporary world. According to Whitmore (2002), coaching maximizes the potential of the individual. The construction of consciousness and responsibility help create a sustained and true form of personal values, allowing people to reach further and live a better life. According to Grande et al. (2015), coaching is a form of systematic feedback that aims to improve professional skills, interpersonal awareness, and the effectiveness of the individual. This method creates a collaborative relationship between coach and coachee that promotes individual change (Grant and Gerrard 2020). In the organizational setting, leaders have the strategic role of transmitting the organization’s principles and values (Valar et al. 2020). The leadership style affects not only the performance of employees, but it can also promote their discouragement and injure the company’s ability to achieve. According to Valar et al. (2020, p. 52), “one way to develop leaders is to invest in coaching, empowering leaders to act as leaders coach”. O’Shaughnessy (2001) explained that the presence of a leader coach is akin to the process of unlocking the potential of employees and the improvement of organizations. By challenging employees to maximize their talent and achieve goals, the coaching leadership creates a pleasant working environment (Cox et al. 2014; Dello Russo et al. 2017; Lee et al. 2019). A leader coach is identified by Riddle and Ting (2006) as the person responsible for employees’ professional behavior. According to Kołodziejczak (2015), appropriate treatment, the offer of training, clarification about company decisions, and the feedback provided are actions linked to this process. For the researcheuthors Fillery-Travis and Lane (2020), the main reason for leaders to fail is lack of motivation and the inability to generate satisfactory conditions for the growth of employees. Wasylyshyn (2003) stated that the main characteristics of coaching leaders are the ability to create strong connections with the worker, professionalism, and the use of clearly communicated values and methodologies. According to Kołodziejczak (2015), a coaching leadership is seen as a special conversation that requires skills such as active listening, open-ended questions, use of paraphrasing, deliberation, feedback, and adjusting tone and rhythm of speech to the coachee. The coach must be an impartial observer (Perez et al. 2018) who creates empathy and redirects ideas and thoughts towards shared goals between employees and organizations. This practice aims to understand the employee’s feelings and investigate existing problems. Leaders’ coaching skills bring together knowledge bases that allow organizations to reach higher levels of performance (Lange and Karawejczyk 2014). According to Faustino (2017, p. 19), a leader coach “must develop capabilities that prepare them for the coaching process, with a significant emphasis on personal and relational skills”. McLean et al. (2005) presented a set of managerial skills that includes effective coaching characteristics in terms of (1) maintaining effective and open communication, (2) focusing on teams, (3) valuing people overs tasks, and (4) accepting the ambiguous nature of working environments in order to enhance employees’ development and improve their performance. The researcheuthors also validated a multidimensional measure of managerial coaching skills, later revised by Park et al. (2008). In the coaching literature, two approaches appear to be dominant: a behavioral-based approach (Ellinger 2013), and a skills-based approach (McLean et al. 2005). In the first, managerial coaching is seen exclusively as a behavioral indicator, identified through specific behaviors exhibited by managers (Hagen and Peterson 2015). The skills-based approach (McLean et al. 2005; Park et al. 2008) addressed managers as coaches if they displayed not only behaviors, but also attitudes or beliefs that support a coaching mentality (Hagen and Peterson 2015). Skills are more attitudinal, cognitive, and affective in nature, and are related to aptitude and ability (Hagen and Peterson 2015). Therefore, in this study, coaching skills are considered essential for better leadership, fostering employee happiness, development, and retention, and, consequently, performance improvement.

3. Leaders’ Coaching Skills and Employees’ Happiness

ResearcAutheors have stated that leaders play a decisive role in the subjective well-being of workers and, in turn, contribute to the well-being of the organization (De Neve and Ward 2017). According to Al Suwaidi (2019), there is a direct relationship between the employees’ happiness and the work environment, and the positive behavior of leaders promotes positive emotions in employees, subjective well-being, and organizational citizenship behaviors. Vitória and Rego (2010) explained that employees who interact with the leader are exposed to situations of influence in feelings, attitudes, and behaviors and this helps to create a solid and meaningful relationship between the employee, their happiness, and the organization. Leonard-Cross (2010) suggested that organizations seek a “coaching culture” with leaders who bring the methods and tools for the development of organizations on a larger scale and increasing employee job satisfaction. The researchersuthor has indicated that coaching has a positive impact on teamwork, work quality, communication, job satisfaction, performance, and career planning. According to Pinto and Kharbanda (1996), the key to the entire organization is the leader with coaching skills, as they are the ones who develop processes to coordinate and motivate employees. Hernandez (2003) indicated that understanding human needs is essential to satisfying them. A coaching leader must familiarize themselves with their employees, the way they act and think, and understand what their concerns are and what their dreams and aspirations are. In short, the leader coach must have specific skills, such as active listening, respect for others, and understanding, and must provide the employee with the necessary feedback so that they feel satisfied in the organization. Recently, researchers have found that a coaching leadership helps employees feel more valued in organizations, as well as happier and more committed to the company (Ali et al. 2020; Lee et al. 2019; Perez et al. 2018). Zhao and Liu (2020) consider this style of leadership as an advantage in creating a cooperative and supportive work environment, which in turn helps to develop attitudes of affection and focus.

4. Leaders’ Coaching Skills and Employees’ Turnover Intention

Organizational support is important for creating bonds, commitment, and feelings of responsibility in employees (Ali et al. 2018). When organizations support employees, they become more loyal and confident in fulfilling goals. Kumar and Mathimaran (2017) point to investment in employee training as the main reason for retaining them in organizations. An organization that invests in the training and development of its employees will be ensuring returns in productivity, efficiency, and innovation at work. Ali et al. (2020) and Hamlin et al. (2006) agree that coaching practices are essential for learning and development. The empirical study by Cabrera et al. (2006) revealed that employee behaviors are affected by the guidance of leaders. When employees feel supported by their leader, they become more committed to the organization and seek improvements and innovation at work. Organizational commitment is strongly related to the employee’s decision to continue or leave. Meyer and Allen (1997) and Simões (2020) argued that an employee’s commitment to the organization is based on reasons such as attitude and behavior. They explained that ‘commitment to attitude’ focuses on the thinking of employees about relationships with organizations, considering personal values and goals as opposed to those of the organization. Behavioral commitment, on the other hand, focuses on the processes in which the employee creates bonds with the organization and how it deals with it. The analysis of leadership style, according to Mullins (2007), should be the first step in identifying turnover intention, since it is the relationship of the leader with the employee that explains the existing commitment between the employee and the organization. There are leadership styles that help create strong connections between employee and leader and affective commitment between employee and organization (Duarte et al. 2021; Semedo et al. 2018; Siew 2017). Belete (2018) pointed out that employees under autocratic leaders are more prone to turnover. On the other hand, in a democratic leadership style, the tendency to think about turnover intention is lessened, as the approach taken helps bring the leader closer to the employee. From this perspective, several researcheuthors agree that leaders with coaching skills have a positive influence on employees’ attitudes (Ali et al. 2020; Kim 2014; Lee et al. 2019). A leader that practices active listening and that understands and gives feedback on an employee’s job performance helps them feel more valued, satisfied, and committed to the organization. A coaching leadership motivates, develops, and retains employees in organizations (Park et al. 2008).

5. Employee’s Happiness and Turnover Intention

According to Shaw et al. (1998), departures from a company are mainly due to new and better work proposals or dissatisfaction in the work environment. Employees are the “backbone” of organizations, and they need to be motivated and maintained at all costs in order to maximize their effort, make them more productive, and generate quality for the customer (Ongori 2007). According to Tett and Meyer (1993), employee turnover intention is related to job satisfaction and commitment. For Maertz and Griffeth (2004), the eight reasons for turnover intention are: emotional pressures, calculating the future, perceived obligation to the company, desire to avoid dismissal costs, confidence in finding alternatives, perceived expectations of others, maintaining consistency between behaviors and values, and good relationships with coworkers. According to Belete (2018), there are also demographic variables such as age, marital status, professional experience, leadership style, commitment, culture, justice and the organizational environment, promotion of career opportunities, remuneration, organizational stress, and job satisfaction. Therefore, if organizations support employees and produce these kinds of work conditions, it is expected that employees would feel more satisfied and happier, and consequently they would not want to leave the organization. Vitória and Rego (2010) explained that when an employee is not valued for their skills, nor helped in their difficulties, nor guided on their hard and soft skills, this will result in their loss and reduce organization efficiency. Organizations must show interest and concern for their employees by creating emotional connections (Rego et al. 2010). Thus, employees will feel appreciation and happiness in the work environment, be more committed to the organization, and turnover intention therefore decreases.

6. Employees’ Happiness Mediating the Relationship between Leaders’ Coaching Skills and Employees’ Turnover Intention

Leaders’ coaching skills become immensely relevant tools for the development and improvement of an employee’s attitudes and behaviors (Ali et al. 2018). Coaching leadership provides communication, feedback, and monitoring skills that help employee performance and facilitate organizational success (Joo and Park 2010; McLean et al. 2005). According to Colquitt et al. (2007), employees who are guided by a coaching leadership feel the responsibility and duty to engage in positive attitudes, which benefits the organization. For this, a relationship is created between the employee and the organization based on well-being, commitment, and motivation. The relationship between worker and workplace can also be translated into a positive and stable state of mind that includes competence, autonomy, and good relationships, which leads to happiness at work (Fisher 2010; Xiong and Wen 2020). Happiness at work is an important ingredient for an employee’s well-being and the productivity of the organization (Butt et al. 2020; Pryce-Jones 2010). Fisher (2010) affirms that a happy worker will perform their tasks better, be more effective, more productive, and more committed to their work. ResearcAutheors have explained that an employee’s commitment to the organization is mainly due to their positive satisfaction, an effect that influences turnover intention (Lee et al. 2019; Tett and Meyer 1993). Thus, “if an employee is deeply engaged in his job, then it is unlikely that he would leave his job” (Ali et al. 2018, p. 261). However, turnover intention can happen if there is a low connection with the type of work, leaders, and job satisfaction (Xiong and Wen 2020). Turnover intention often exists when the employee does not feel valued or supported in their performance (Vitória and Rego 2010). Park et al. (2008) indicate that such intentions can be avoided if the organization invests in a different leadership style, such as coaching. In short, leaders with coaching skills can promote employee happiness (Ali et al. 2020; Lee et al. 2019; Perez et al. 2018) which, in turn, provides the achievement of goals and performance improvements that avoid employee turnover intention (Fisher 2010; Rego et al. 2010).