Transformational Leadership and Employee Performance in the Hospitality Industry: the Mediating role of Job Satisfaction

Abstract

This study examined the relationship between transformational leadership and employee performance in the hospitality industry, with particular emphasis on the mediating role of job satisfaction. This study employed a quantitative, cross-sectional design to examine the direct effect of transformational leadership on employee performance and the indirect effect of transformational leadership on employee performance through job satisfaction. The study used a structured questionnaire on the established measurement scales to gather primary data from employees of the hospitality industry. The data collected were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS software. The measurement model was evaluated by indicator loadings, Cronbach's alpha, composite reliability, average variance extracted (AVE), and heterotrait-monotrait (HTMT) ratio. Path coefficients, t-values, p-values, R2 and bootstrapping were used to evaluate the structural model. The results showed that transformational leadership had a positive and significant influence on employee performance and job satisfaction. The satisfaction of the job also had a significant positive impact on employee performance. In addition, transformational leadership had partial mediation on the relationship between job satisfaction and employee performance, as job satisfaction was a significant mediator in the relationship. The study finds that transformational leadership and employee satisfaction are significant factors that can enhance employee performance in the hospitality industry.