Compassionate leadership and job performance: the mediating role of supervisor support and financial anxiety in emerging economies

Abstract

Drawing upon Social Exchange Theory and Organizational Support Theory, this study investigates how Compassionate Leadership (CFL) influences employee Job Performance (PERF) in an emerging Asian economy, focusing on the mediating role of Perceived Supervisor Support (PSS) and the stress-induced influence of Financial Anxiety (FIN_ANX). Using a quantitative, cross-sectional design, data were collected from 250 employees in Vietnam facing a cost-of-living crisis. The hypothesized dual-pathway model was tested using structural equation modeling (SEM) and bias-corrected bootstrapping in Stata 17.0. Results indicate that CFL significantly enhances PSS, which in turn positively drives Job Performance (a partial mediation effect). Concurrently, Financial Anxiety also positively impacted performance, revealing a dual-pathway mechanism where performance is driven by both reciprocal leadership support and survival-based economic stress. The reliance on cross-sectional, self-reported data restricts causal inferences. Future research should employ longitudinal designs and supervisor-rated performance metrics. Cultivating compassionate leadership is a strategic imperative. Organizations are encouraged to train leaders in financial empathy to transition employees from a reactive scarcity mindset into a proactive state of reciprocal dedication. This study advances organizational behavior literature by expanding the Organizational Compassion to macro-economic stressors, proving that leadership compassion is a critical boundary-spanning competency that sustains performance during a permacrisis.