Assessing the Effect of Transformational Leadership on Employee Performance: The Case Study of a Banking Sector

Abstract

Scholars and administrators alike continue to be interested in the study of how a leader's style affects staff performance. Examining the complexities of this connection in the context of commercial banks, this study sought to determine how a leader's style affects employees' productivity, with a particular emphasis on the moderating role of psychological capital. The investigation revealed interesting findings using a Structural Equation Modeling (SEM) methodology and primary data collected through a survey given to banking sector workers. The findings showed that transformative leadership has an indirect impact on company culture in addition to having a direct impact on employee performance. The study also emphasized the critical role that positive psychological capital plays in enhancing the impact of leadership styles on worker performance. Equipped with these insights, bank executives may make well-informed choices on corporate culture and leadership styles, which will improve overall employee productivity and organizational efficacy.

Keywords: Transformational leadership, employee performance, banking sector