Linking Transformational Leadership With Employees’ Job Performance And Satisfaction In Uncertain Environment: A Moderation Mediation Analysis

Abstract

The hospitality industry has experienced a considerable decrease in employee satisfaction and performance in the post-pandemic era. Using social exchange theory, this study examines the role of transformational leadership (TL) in employee performance in an unfavorable environment of hotels in Pakistan. It also undertakes work engagement (WEN) as a mediator and social interaction (SI) as a moderator in the relationship of TL and performance. Using cross-sectional design, data were gathered from 230 frontline hotel association workers through physically administered questionnaires. Data were analyzed using mediation-moderation techniques. The results show that even in the most vulnerable conditions, employee performance can positively be enhanced using managers’ transformation style of leadership. Further, WEN and Knowledge management (KM) are found to entirely mediate the relationship between TL, job performance (JP) and job satisfaction (JS). In addition, SI bears a moderating effect on the linkage of TL, KM and WEN. This research promulgates a framework model to help policy makers in emerging economies to formulate the most effective HR polices by highlighting a key role of TL in hospitality industry. To the authors’ knowledge, this is the first study to examine the role of TL in reinvigorating employee performance in uncertain environments. It also offers new insights into mediating mechanisms and moderators associated with the relationship between leadership style, JP and JS.