Transformational and Transactional Leadership as a Function of Employee Performance
Keywords:
Transformational leadership (TFLS), Transactional leadership (TRLS), Employee Performance, FMCG Sector
Abstract
Purpose: Using responses from 176 employees working in the top leadership role in the FMCG sector of Pakistan, this study aimed to investigate the effect of transformational and transactional leadership on employee performance.
Design/Methodology/Approach: A quantitative approach was adopted, while a convenience sampling technique was used for data collection. The results were analyzed using the SmartPLS and SPSS, i.e., Partial Least Square, and the Measurement Model included Confirmatory Factor Analysis and Factor Loadings.
Findings: According to the findings of our study, transactional (TRLS) and transformational leadership (TFLS) are positively correlated with employee performance. Thus, transformational and transactional leadership positively affect employee performance in Pakistan’s FMCG sector
Implications/Originality/Value: This study shall help the directors, top management, and executives working in the leadership roles to develop better pathways for achieving high objectives in terms of performance.
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References
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Afolabi, O. A., Obude, et al. (2008). Influence of gender and leadership style on career commitment and job performance of subordinates. Global Journal of Humanities,, 7(1&2), 1-8.
Ahmad, M., & Ejaz, T. (2019). Transformational and transactional leadership impact on Organizational Performance: Evidence from Textile sector of Pakistan. European Online Journal of Natural and Social Sciences:Proceedings,, 8(2 ), pp-97.
Apoi, A., & Latip, H. B. A. (2019). The impact of transformational leadership on employee reactions towards individual work performance: A conceptual paper. International Journal of Academic Research in Business and Social Sciences,, 9(8), 47-60.
Ashibogwu, M. (2008). Common failures of family business. . Business Day, 18.
Bass. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational dynamics, 18(3), 19-31.
Bass, & Avolio, B. J. (1994). Transformational leadership and organizational culture. The International Journal of Public Administration, 17(3-4), 541-554.
Bass, & M., B. (1985). Leadership and performance beyond expectations. , Collier Macmillan.
Brahim, B., A., Ridic, O., et al. (2015). The effect of transactional leadership on employees performance-case study of 5 Algerian banking institutions. Economic Review: Journal of Economics and Business, 13(2), 7-20.
Butler, K., J., Cantrell, et al. (1999). Transformation leadership behaviors, upward trust, and satisfaction in self-managed work teams. Organization Development Journal, 17(1), 13.
Couto. (2007). Reflections on leadership. University Press of America.
Dessler, G. (2011). Fundamentals of human resource management. Pearson Higher Ed.
Diebig, Bormann, C., K., et al. (2017). Day-level transformational leadership and followers’ daily level of stress: A moderated mediation model of team cooperation, role conflict, and type of communication. European Journal of Work and Organizational Psychology,, 26(2), 234-249.
Fernandes, C., & Awamleh, R. (2004). The impact of transformational and transactional leadership styles on employees satisfaction and performance: an empirical test in a multicultural environment. International Business & Economics Research Journal (IBER), 3( 8), 3.
Fornell, C. G., & Larcker, D. F. (1981). “Evaluating structural equation models with unobservable variables and measurement error”. Journal of Marketing Research,, 18(1), 39-50.
Hair, F, J., Ringle, et al. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
Howell, & Avolio, B. J. (1993). Transformational leadership, transactional leadership, locus of control, and support for innovation: Key predictors of consolidated-business-unit performance. Journal of applied psychology, 78(6), 891.
Jamaludin, Rahman, A, N. M. N., et al. (2011). Do transactional, transformational and spiritual leadership styles distinct? A conceptual insight. Journal of global business and economics, 2(1), 73-85.
Jung. (2001). Transformational and transactional leadership and their effects on creativity in groups. Creativity Research Journal, 13( 2), 185-195.
Kabiru. (2020). Influence of Transactional Leadership Style on Employee Performance at Selected Commercial Banks in Nairobi City County, Kenya. International Journal of Research and Innovation in Social Science (IJRISS). 6(9), 520-524.
Khan, R., Rehman, et al. (2009). Transformational leadership and organizational innovation: Moderated by organizational size. African Journal of Business Management, 3(11), 678-684.
Khan, Rehma, H., Butt, M., et al. (2020). Impact of transformational leadership on work performance, burnout and social loafing: a mediation model. . Future Business Journal, 6(1), 1-13.
Krishnan. (2002). Transformational leadership and value system congruence. International Journal of Value-Based Management, 15( 1), 19-33.
Kuhnert, & Lewis, P. X. (1987). Transformational and transactional leadership: A constructive/developmental analysis. Academy of Management review,, 648-657.
Lievens, Van, P., Pol, G., et al. (1997). Identification of transformational leadership qualities: An examination of potential biases. European Journal of Work and Organizational Psychology, 6(4), 415-430.
Luthans. ( 2006). Organizational Behavior. New York: McGraw-hill.
McColl-Kennedy, & Anderson, R. D. (2002). Impact of leadership style and emotions on subordinate performance. The leadership quarterly, 13(5), 545-559.
Mintzberg. (2010). Managing on three planes. Leader to Leader, 2010(57), 29-33.
Naeem, & Khanzada, B. (2018). Role of transformational leadership in employee’s performance with mediating role of job satisfaction in health sector of Pakistan. Journal of Health Education Research & Development, 6(1), 1-6.
Naeem, & Nawaz, M. A. (2017). The Impact of Transformational and Transactional Leadership Styles on Employee’s Performance. Pakistan Social Sciences Review, 1(2), 35-48.
Paracha, U., M., Qamar, et al. (2012). Impact of leadership style (transformational & transactional leadership) on employee performance & mediating role of job satisfaction.tudy of private school (educator) in Pakistan. Global Journal of Management and Business Research: Administration and Management, 12(4), 55-64.
Rafferty, & Griffin, M. A. (2004). Dimensions of transformational leadership: Conceptual and empirical extensions. The leadership quarterly,, 15(3), 329-354.
Rafia, & Sudiro, A. (2020). The Effect of Transformational Leadership on Employee Performance Mediated by Job Satisfaction and Employee Engagement. International Journal of Business, Economics and Law, International Journal of Business, Economics and Law(5), 119-125.
Rivai, V., & Basri, A. F. M. (2005). Performance Appraisal: Sistem yang tepat untuk menilai kinerja karyawan dan meningkatkan daya saing perusahaan. PT RajaGrafindo Persada.
Robbins, & Judge, T. A. (2003). Organizational Behavior Prentice Hall. New Jersey, USA.
Sundi. (2013). Effect of transformational leadership and transactional leadership on employee performance of Konawe Education Department at Southeast Sulawesi Province. International journal of business and management invention, 2(12), 50-58.
Teclemichael , M., Soeters, et al. (2006). Challenges and prospects of HRM in developing countries: testing the HRM–performance link in the Eritrean civil service. The international journal of human resource management, 17(1), 86-105.
Thomas, & Velthouse, B. A. (1990). Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation. Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation, 15(4), 666-681.
Walumbwa, & Hartnell, C. A. (2011). Understanding transformational leadership–employee performance links: The role of relational identification and self‐efficacy. . Journal of occupational and organizational psychology, (1), , 84(1), 153-172.
Walumbwa, O., F., Avolio, et al. (2008). How transformational leadership weaves its influence on individual job performance: The role of identification and efficacy beliefs. . Personnel psychology, 61( 4), 793-825.
Yukl. (1998). Kepemimpinan Dalam Organisasi, Terjemahan Jusuf Udaya. Jakarta: Prenhallindo.
Yukl. (1999). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The leadership quarterly, 10(2), 285-305.
Zeb, A., Saeed, et al. (2015). Transformational and Transactional Leadership Styles and its Impact on the Performance of the Public Sector Organizations in Pakistan. Abasyn University Journal of Social Sciences, 8(1).
Afolabi, O. A., Obude, et al. (2008). Influence of gender and leadership style on career commitment and job performance of subordinates. Global Journal of Humanities,, 7(1&2), 1-8.
Ahmad, M., & Ejaz, T. (2019). Transformational and transactional leadership impact on Organizational Performance: Evidence from Textile sector of Pakistan. European Online Journal of Natural and Social Sciences:Proceedings,, 8(2 ), pp-97.
Apoi, A., & Latip, H. B. A. (2019). The impact of transformational leadership on employee reactions towards individual work performance: A conceptual paper. International Journal of Academic Research in Business and Social Sciences,, 9(8), 47-60.
Ashibogwu, M. (2008). Common failures of family business. . Business Day, 18.
Bass. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational dynamics, 18(3), 19-31.
Bass, & Avolio, B. J. (1994). Transformational leadership and organizational culture. The International Journal of Public Administration, 17(3-4), 541-554.
Bass, & M., B. (1985). Leadership and performance beyond expectations. , Collier Macmillan.
Brahim, B., A., Ridic, O., et al. (2015). The effect of transactional leadership on employees performance-case study of 5 Algerian banking institutions. Economic Review: Journal of Economics and Business, 13(2), 7-20.
Butler, K., J., Cantrell, et al. (1999). Transformation leadership behaviors, upward trust, and satisfaction in self-managed work teams. Organization Development Journal, 17(1), 13.
Couto. (2007). Reflections on leadership. University Press of America.
Dessler, G. (2011). Fundamentals of human resource management. Pearson Higher Ed.
Diebig, Bormann, C., K., et al. (2017). Day-level transformational leadership and followers’ daily level of stress: A moderated mediation model of team cooperation, role conflict, and type of communication. European Journal of Work and Organizational Psychology,, 26(2), 234-249.
Fernandes, C., & Awamleh, R. (2004). The impact of transformational and transactional leadership styles on employees satisfaction and performance: an empirical test in a multicultural environment. International Business & Economics Research Journal (IBER), 3( 8), 3.
Fornell, C. G., & Larcker, D. F. (1981). “Evaluating structural equation models with unobservable variables and measurement error”. Journal of Marketing Research,, 18(1), 39-50.
Hair, F, J., Ringle, et al. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
Howell, & Avolio, B. J. (1993). Transformational leadership, transactional leadership, locus of control, and support for innovation: Key predictors of consolidated-business-unit performance. Journal of applied psychology, 78(6), 891.
Jamaludin, Rahman, A, N. M. N., et al. (2011). Do transactional, transformational and spiritual leadership styles distinct? A conceptual insight. Journal of global business and economics, 2(1), 73-85.
Jung. (2001). Transformational and transactional leadership and their effects on creativity in groups. Creativity Research Journal, 13( 2), 185-195.
Kabiru. (2020). Influence of Transactional Leadership Style on Employee Performance at Selected Commercial Banks in Nairobi City County, Kenya. International Journal of Research and Innovation in Social Science (IJRISS). 6(9), 520-524.
Khan, R., Rehman, et al. (2009). Transformational leadership and organizational innovation: Moderated by organizational size. African Journal of Business Management, 3(11), 678-684.
Khan, Rehma, H., Butt, M., et al. (2020). Impact of transformational leadership on work performance, burnout and social loafing: a mediation model. . Future Business Journal, 6(1), 1-13.
Krishnan. (2002). Transformational leadership and value system congruence. International Journal of Value-Based Management, 15( 1), 19-33.
Kuhnert, & Lewis, P. X. (1987). Transformational and transactional leadership: A constructive/developmental analysis. Academy of Management review,, 648-657.
Lievens, Van, P., Pol, G., et al. (1997). Identification of transformational leadership qualities: An examination of potential biases. European Journal of Work and Organizational Psychology, 6(4), 415-430.
Luthans. ( 2006). Organizational Behavior. New York: McGraw-hill.
McColl-Kennedy, & Anderson, R. D. (2002). Impact of leadership style and emotions on subordinate performance. The leadership quarterly, 13(5), 545-559.
Mintzberg. (2010). Managing on three planes. Leader to Leader, 2010(57), 29-33.
Naeem, & Khanzada, B. (2018). Role of transformational leadership in employee’s performance with mediating role of job satisfaction in health sector of Pakistan. Journal of Health Education Research & Development, 6(1), 1-6.
Naeem, & Nawaz, M. A. (2017). The Impact of Transformational and Transactional Leadership Styles on Employee’s Performance. Pakistan Social Sciences Review, 1(2), 35-48.
Paracha, U., M., Qamar, et al. (2012). Impact of leadership style (transformational & transactional leadership) on employee performance & mediating role of job satisfaction.tudy of private school (educator) in Pakistan. Global Journal of Management and Business Research: Administration and Management, 12(4), 55-64.
Rafferty, & Griffin, M. A. (2004). Dimensions of transformational leadership: Conceptual and empirical extensions. The leadership quarterly,, 15(3), 329-354.
Rafia, & Sudiro, A. (2020). The Effect of Transformational Leadership on Employee Performance Mediated by Job Satisfaction and Employee Engagement. International Journal of Business, Economics and Law, International Journal of Business, Economics and Law(5), 119-125.
Rivai, V., & Basri, A. F. M. (2005). Performance Appraisal: Sistem yang tepat untuk menilai kinerja karyawan dan meningkatkan daya saing perusahaan. PT RajaGrafindo Persada.
Robbins, & Judge, T. A. (2003). Organizational Behavior Prentice Hall. New Jersey, USA.
Sundi. (2013). Effect of transformational leadership and transactional leadership on employee performance of Konawe Education Department at Southeast Sulawesi Province. International journal of business and management invention, 2(12), 50-58.
Teclemichael , M., Soeters, et al. (2006). Challenges and prospects of HRM in developing countries: testing the HRM–performance link in the Eritrean civil service. The international journal of human resource management, 17(1), 86-105.
Thomas, & Velthouse, B. A. (1990). Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation. Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation, 15(4), 666-681.
Walumbwa, & Hartnell, C. A. (2011). Understanding transformational leadership–employee performance links: The role of relational identification and self‐efficacy. . Journal of occupational and organizational psychology, (1), , 84(1), 153-172.
Walumbwa, O., F., Avolio, et al. (2008). How transformational leadership weaves its influence on individual job performance: The role of identification and efficacy beliefs. . Personnel psychology, 61( 4), 793-825.
Yukl. (1998). Kepemimpinan Dalam Organisasi, Terjemahan Jusuf Udaya. Jakarta: Prenhallindo.
Yukl. (1999). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The leadership quarterly, 10(2), 285-305.
Zeb, A., Saeed, et al. (2015). Transformational and Transactional Leadership Styles and its Impact on the Performance of the Public Sector Organizations in Pakistan. Abasyn University Journal of Social Sciences, 8(1).
Published
2022-06-30
How to Cite
Adnan, M., Ali, M. A., Rafiq, S., & Malik, A. (2022). Transformational and Transactional Leadership as a Function of Employee Performance. Journal of Business and Social Review in Emerging Economies, 8(2), 557-566. https://doi.org/10.26710/jbsee.v8i2.2418
Section
Articles
Copyright (c) 2022 Muhammad Adnan, Muhammad Ahsan Ali, Sidra Rafiq, Ayesha Malik
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