Abstract

The study is aimed at examining the effect of transformational leadership on employee performance through employee empowerment and organizational commitment as a mediating variables of the cluster of carving copper in Cepogo Boyolali. The research samples cover 30 employees of the CV. Intermedia Logam as part of a cluster of carving copper. Sample determination applies totals sampling or population sampling in which all members of the population are used as research samples. In examining the established model relationship, the data are analyzed by using path analysis. The results revealed: transformational leadership gives positive and significant effect on employee empowerment; transformational leadership gives positive and significant effect on employee performance; employee empowerment gives positive and significant effect on employee performance; organizational commitment as a mediating variables between transformational leadership and employee performance, employee empowerment as a mediating variables between transformational leadership and employee performance, and organizational commitment as a mediating variables between employee empowerment and employee performance. This research suggests that companies disseminate the vision, mission and goals; conduct of training; and providing incentives to the agreement in order to achieve employment targets.

Highlights

  • The paradigm of competition that used to be a material or physical asset has shifted to knowledge-based competition (Tuomi, 1999)

  • The objectives of the study is to find out the effect of transformational leadership on employee empowerment, organizational commitment, employee performance as well as to determine the mediating variables on the effect of transformational leadership on employee performance and the effect of employee empowerment on employee performance in small-medium enterprise of cooper carving center

  • Mean employee performance variable is 3.10, which means that the variable performance of the employees is in good condition

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Summary

Introduction

The paradigm of competition that used to be a material or physical asset has shifted to knowledge-based competition (Tuomi, 1999). It requires both efficiency and effectiveness in the use of human resources as the foundation for organization in order to be able to compete and have a competitive advantage. The utilization of human resources as the basic capital must be followed by the development and renewal of the workers’ capabilities and expertise so that every member of the organization is able to respond and be susceptible towards any changes, and every member of the organization supports the organization renewal (Khan, 2004). A leader who can provide knowledge, expertise and capabilities in managing human resources is needed. The essence of leadership is facilitating individual development to realize his potential (Haryanto, 2002)

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