Linking Transformational Leadership to Organizational Learning Culture and Employee Performance: the Mediation-Moderation Model

Abstract

Purpose: This study focuses on examining the role of organizational learning culture as a mediator and moderator variable between transformational leadership and employee performance. The model and the relationship between these variables have been tested at the community health center in Indonesia. Theoretical framework: In The Full Range Leadership Model, Avolio and Bass (1991) offer transformational leadership as one of the most effective leadership styles in mobilizing employees and advancing modern organizations. Transformational leadership encourages employees' self-confidence, optimism and commitment to better continue learning in order to achieve superior performance. However, based on the inconsistent findings, mediator and moderator variables are required to confirm a clearer relationship between transformational leadership and employee performance. Therefore, the novelty of this study is to extend organizational learning culture as a mediating and moderating variable to link these relationships. Design/methodology/approach: All permanent employees who work in the community health center sector have been contacted to serve as research samples. Partial Least Squares Structural Equation Modeling (PLS-SEM) utilizing SmartPLS 3.0 software is used to verify the proposed hypotheses. Findings: The findings evidence indicated that transformational leadership is significantly associated with employee performance and organizational learning culture. Furthermore, organizational learning culture is significantly associated with employee performance. In addition, organizational learning culture exhibits a mediating and moderating role between transformational leadership and employee performance. Research, Practical & Social implications: The evidence of this study offer theoretical and practical implications for strengthening organizational learning culture in the workplace in order to improve sustainable employee performance. Originality/value: This study provides and offers an academic contribution regarding the effect of organizational learning culture in mediating and moderating the relationship between transformational leadership and employee performance at the community health center in Indonesia.