IMPACT OF LEADERSHIP STYLES ON ORGANIZATIONAL PERFORMANCE: MEDIATING ROLE OF EMPLOYEE MOTIVATION

Abstract

The current research aims at examining the effects of transformational, transactional and laissez-faire leadership styles on organizational performance, employee motivation as a mediator and HR practices as a moderator in the corporate and service sectors in Pakistan. The respondent population size (300) was used to measure the data through a structured survey tool and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Findings prove that the three leadership styles have a significant impact on motivating employees and on the performance of the organization. These relationships are completely mediated by employee motivation whereas the HR practices moderately affect the relationship between motivation and performance. The model accounts for 52.9% variation in organizational performance. Results are an addition to the body of leadership and motivation research in an emerging economy setting and have practical implications on the organizational strategists and HR practitioners.

Keywords: Transformational Leadership, Transactional Leadership, Laissez-Faire Leadership, Employee Motivation, Organizational Performance, HR Practices, Pakistan