Transformational Leadership Style and Employee Performance
Transformational Leadership
Transformational leadership is like visionary leadership whereby leaders motivate their
employees to exceed certain expectations (Hater & Bass, 1988). A transformational leader leads
employees by providing them with a vision. Burns (1978) introduced the concept of
transformational leadership and identified that transformational leaders modify the beliefs and
attitudes of the employees by inspiring them. They provide their employees with a vision and
motivate them in achieving goals. Transformational leadership is a theory of leadership where a
leader works with teams to identify needed change, creating a vision to guide the change
through inspiration, and executing the change in tandem with committed members of a group; it
is an integral part of the full range leadership model. Transformational leaders likely foster
competence need satisfaction by providing challenges while also showing confidence in and
enhancing followers’ abilities through coaching and role modeling.
According to Rouche, Baker and Rose (1989), transformational leaders work with their employees
and encourage their followers by influencing their beliefs, values, attitudes and behaviour.
Transformational leaders motivate their followers in such a way that it goes beyond the usual
rewards and monetary exchanges. Transformational leadership styles have given evidence that
when a leader employs transformational leadership style, it results in the emotional attachment of
the followers or employees towards the leader. The quality of transformational leader can be judged
by the impact generated by the leader on the followers (Tajasom et.al, 2015).
Khan, Anjam, Faiz, Khan, and Khan, (2020) explored how various dimensions of leadership style
are being used to measure organizational effectiveness. Job satisfaction is one of the essential
indicators used to measure organizational effectiveness. Literature suggests that the manager’s
transformational leadership style highly influences the employees’ job satisfaction. This study
focuses on identifying the role of a transformational leader in developing job satisfaction in
employees of the banking industry, using the organizations’ learning culture as the moderating
variable. For this purpose, a total of 180 respondents were surveyed from UAE’s banking sector. In
this study descriptive statistics, Pearson’s correlation coefficient, and multiple regression analysis
were employed for the data analyses. The results confirmed that the five dimensions of
transformational leaders and overall transformational leadership style significantly affect the
employee’s job satisfaction, whereas the moderating effect of the organizational learning culture on
any of the said relationships was found insignificant. This study used self-reported data based on a
cross-sectional survey in the banking sector only. The research emphasizes the implication of the
leaders’ personal traits to be a significant determinant of an employee’s satisfaction. In addition,
managers in the banking sector in UAE realized that organization learning culture (OLC) has not
had any significant impact on employees’ job satisfaction.
A study by Magasi, (2021) examined the role of transformational leadership on employee
performance based on employee empowerment perspective. A sample of 325 banking sector
employees was surveyed using a self-administered structured questionnaire. Multiple linear
regressions were employed to find the relationship between individualised consideration and
intellectual stimulation with the performance of banking sector employees. A Statistical
Package for Social Sciences was employed as an analytical tool for quantitative data. An in-
depth interview was conducted to twelve employees who were selected by using the purposive
sampling technique from twelve different banks. Thematic analysis was used to analyse
12
qualitative data from in-depth interview to supplement the quantitative findings. The study
revealed that individualised consideration and intellectual stimulation had a positive relationship
with the performance of banking sector employees. That relationship was enhanced by effectively
empowering employees and fostering an environment that encourages learning, creativity, and
innovation. The study recommends that leaders in any bank’s section must empower employees
and foster the learning, creativity, and innovation environment as the preconditions for enhanced
employees’ performance. However, the study was done in the Dar es Salaam city and therefore
limiting the generalisation of the results due to contextual differences in sub-Saharan countries.
A study by Donkor, Sekyere, and Oduro, (2021) investigated the psychological mechanisms
that cause the influence of transformational and transactional leadership on employee
performance. Based on employee stewardship theory (EST) and social exchange theory (SET),
an organizational commitment was selected as a perfect moderating variable to conduct the
study. The data were collected from sixteen (16) organizations in the public sector of Ghana,
consisting of 330 full-time employees. The results indicate that organizational commitment
positively moderates transformational leadership while transactional leadership does not. We
realized that when transformational leadership is high, organizational commitment goes up,
thereby increasing employee performance. On the other hand, when transactional leadership
goes up, organizational commitment decreases, causing employees performance to dwindle.
Therefore, transactional leaders should augment their approach with transformational
leadership to increase employee performance. This research offers practical implications
relevant to provide strategies for leaders to PSOs to influence employees to perform beyond
the limit.
According to Kimani, (2021) established the influence of transformational leadership styles on
performance. The paper used a desk study review methodology where relevant empirical
literature was reviewed to identify main themes and to extract knowledge gaps. The study found
out that transformational leadership encourages loyal followers who give results. Leaders must
be encouraged to use this management style. The findings denote a positive relationship between
performance and transformational leadership style. Moreover, responsive, and supportive
transformational leadership behavior have a positive impact on organizational growth. The study
recommends that leaders need to adopt transformative leadership to achieve organizational
performance. Organization should embrace transformational leadership and sound policies that
will strengthen their position as a fundamental sector in generating human capital for the
country’s developmental and economic needs as well as the development of training programs in
leadership skills and competences in transformational leadership for the leaders of enterprises.
Inspirational Motivation
Inspirational motivation represents the use of images and symbols that enable the leader to raise the
expectations and beliefs of their follower concerning the mission and vision (Johnson, 2006). In
Inspirational motivation (IM), transformational leaders behave in ways that motivate and inspire
those around them by providing meaning and challenge to their follower’s work. According to in
Bolkan et al. (2011), in inspirational motivation, team spirit is aroused, enthusiasm and optimism
are displayed; leaders get followers involved in envisioning attractive future states; leaders create
clearly communicated expectations that followers want to meet and demonstrate commitment to
goals and the shared vision. By using inspiration, transformational leaders’ express confidence in
followers and their shared vision. Through the content of this vision and behavior that is
consistent with the vision, inspirational leaders energize followers to exert extra effort in
challenging situations. In addition, the leaders champion collective action and team synergy
(Sosik & Jung, 2010). The leader comes up with high goals, ensures that the followers
understand the meaning in their tasks, builds a team spirit, enthusiasm and constantly motivates
his followers. Transformational leaders who exhibit inspirational motivation persuade their
followers to actively be part of the overall organizational culture and environment (Stone,
Russell, & Patterson, 2003).
Intellectual Stimulation
In Intellectual stimulation (IS), transformational leaders stimulate their follower’s effort to be
innovative and creative by questioning assumptions, reframing problems, and approaching old
situations in new ways, creativity is encouraged, new ideas and creative problem solutions are
solicited from followers, who are included in the process of addressing problems and finding
solutions. According to Bass and Riggio (2010), as cited in Bolkan et al. (2011), followers are
encouraged to try new approaches, and their ideas are not criticized because of their differences from
the leaders’ ideas. While inspirational motivation triggers the emotions of followers, intellectual
stimulation values followers’ rationality and intellect (Sosik & Jung, 2010). According to Ayiro
(2014), intellectual stimulation is the degree to which the leader challenges assumptions, takes risks,
and solicits followers’ ideas. Leaders with this trait stimulate and encourage creativity in their
followers. Intellectual stimulation represents cognitive development of the follower and occurs when
the leader arouses followers to think in new ways and emphasizes problem solving and the use of
reasoning before acting. Transformational leaders both encourage and motivate their followers to be
innovative and analytical which promotes follower initiative and liberty, independence in tackling
issues, and active thinking. Encouraging follower freedom and creativity is likely to result in higher
engagement levels (Johnson, 2006).
Individual Consideration
The fourth dimension of transformational leadership is individual consideration which is concerned
with developing followers by coaching and mentoring. According to Bass and Riggio 2010), as cited
in Bolkan et al. (2011), followers are treated individually to raise their levels of maturity and to
enhance effective ways of addressing their goals and challenge. In Individualized consideration (IC)
transformational leaders pay special attention to each individual follower’s needs for achievement
and growth by acting as a coach or mentor. Followers and colleagues are developed to successively
higher levels of potential. Individual consideration is practiced when new learning opportunities are
created along with a supportive climate. Individual differences in terms of needs and desires are
recognized. In this leadership dimension, a two-way exchange in communication is encouraged, and
management by walking around workspace is often practiced.
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