Transactional and Transformational Leadership Styles as Predictors of Employee Performance During the Covid-19 Crisis and the Mediating Role of Organisational Culture

Abstract

The purpose of this study was to examine the impact of transformational and transactional leadership styles on employee performance. The mediating role of organisational culture was also examined. This quantitative study utilised a survey approach to collect primary data from 165 respondents engaged in the private sector in Jakarta, Indonesia. The data was collected during the Covid 19 pandemic. Structural equation modelling using Smart Pls was used to analyse the data. The data analysis showed that only transformational leadership behaviour had a strong and significant impact on employees’ performance. However, the impact of transactional leadership on employee performance was not significant. In addition, the organisational culture had an indirect effect on employee’s performance. The practical implications suggest that leaders should adopt transformational leadership to inspire and motivate employees. Transformational leaders must develop the inner agility to resolve problems by being open-minded, flexible and adopt best practices. This study provided new insights from the theoretical perspective, and the findings were consistent with the transformational leadership model. From an originality perspective, this study found that organisational culture mediates the relationship between leadership styles on employee performance.