The Role of Transformational Leadership in Improving Employee Performance Through A High-Performance Work System As A Mediation
DOI:
https://doi.org/10.37385/ijedr.v6i6.9835Keywords:
Transformational Leadership, Employee Performance, High-Performance Work System, Knowledge Sharing, SEM, Bank MandiriAbstract
Optimal employee performance is a crucial aspect in the banking industry, which is characterized by high pressure, demanding targets, and complex service processes. Bank Mandiri, as one of the largest banks in Indonesia, faces ongoing challenges in maintaining superior human resource performance within an increasingly dynamic and competitive environment. In this context, leadership and work systems play a vital role in supporting both individual and organizational performance. This study aims to examine the role of transformational leadership in enhancing employee performance through the implementation of a high-performance work system (HPWS) and the facilitation of knowledge sharing as mediating variables. The study adopts a quantitative explanatory approach, with data collected through questionnaires distributed to employees of Bank Mandiri in Semarang City. Data were analyzed using Structural Equation Modeling (SEM) with the support of AMOS software. The findings indicate that transformational leadership positively influences employee performance and the implementation of HPWS. HPWS is also found to have a positive effect on employee performance and knowledge sharing, while knowledge sharing contributes positively to employee performance. Furthermore, the results demonstrate that HPWS plays a significant mediating role in the relationship between transformational leadership and employee performance. The combined mediation of HPWS and knowledge sharing further strengthens this relationship. Overall, these findings highlight the importance of effective leadership, well-designed work systems, and a strong knowledge-sharing culture in optimizing employee performance within the banking sector.
References
Abou-Al-Ross, S. A., Abualigah, A., Barbar, J., Kundi, Y. M., and Dahleez, K. A. (2024). High-performance work systems and employee voice behavior: A sequential mediation analysis. Evidence-Based HRM: A Global Forum for Empirical Scholarship. https://doi.org/10.1108/EBHRM-07-2024-0252
Abugre, J. B., and Nasere, D. (2020). Do high-performance work systems mediate the relationship between HR practices and employee performance in multinational corporations in developing economies? African Journal of Economic and Management Studies, 11(4), 541-557.
Aljaddouih, H. N., and Alkhraishi, M. Y. (2024). Impact of leadership style on employee performance and job satisfaction among Jordanian physiotherapists. Asia Pacific Journal of Health Management.
Almadana, A. V., Suharnomo, S., and Perdhana, M. S. (2022). Work engagement through social exchange mechanisms: Does the role of knowledge-sharing behavior matter? VINE Journal of Information and Knowledge Management Systems, 55(1), 135-145. https://doi.org/10.1108/VJIKMS-05-2022-0149
Alrowwad, A. A., Abualoush, S. H., and Masadeh, R. E. (2020). Innovation and intellectual capital as intermediary variables among transformational leadership, transactional leadership, and organizational performance. Journal of Management Development, 39(2), 196-222.
Arefin, M. S., Faroque, O., Zhang, J., and Long, L. (2022). High-performance work systems and organizational citizenship behavior: The role of goal congruence and servant leadership. International Journal of Emerging Markets, 18(11), 5432-5453. https://doi.org/10.1108/IJOEM-03-2019-0209
Arous, J. A. (2024). The impact of transformational leadership on employee performance in diverse work environments: A field study on Saudi university employees. Pakistan Journal of Life and Social Sciences, 22(2).
Baron, R. M., and Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182.
Bartram, T., Cooper, B., Cooke, F. L., and Wang, J. (2020). High-performance work systems and job performance: The mediating role of social identity, social climate, and empowerment in Chinese banks. Personnel Review, 50(1), 285-302. https://doi.org/10.1108/PR-08-2019-0425
Bass, B. M. (1995). Theory of transformational leadership redux. The Leadership Quarterly, 6(4), 463-478.
Bass, B. M., and Avolio, B. J. (1990). Developing transformational leadership: 1992 and beyond. Journal of European Industrial Training, 14(5).
Bass, B. M., and Avolio, B. J. (1993). Transformational leadership and organizational culture. Public Administration Quarterly, 17(1), 112-121.
Bass, B. M., and Riggio, R. E. (2006). Transformational leadership (2nd ed.). Lawrence Erlbaum Associates.
Bentler, P. M., and Bonett, D. G. (1980). Significance tests and goodness of fit in the analysis of covariance structures. Psychological Bulletin, 88(3), 588-606.
Byrne, B. M. (2016). Structural equation modeling with AMOS: Basic concepts, applications, and programming (3rd ed.). Routledge.
Caliskan, A., and Koroglu, E. O. (2022). Job performance, task performance, contextual performance: Development and validation of a new scale. Uluslararasi Iktisadi ve Idari Bilimler Dergisi, 8(2), 180-201.
Chen, M., Mi, X., Xue, J., Li, Y., and Shi, J. (2023). The impact of entrepreneurial team psychological capital on innovation performance: The mediating role of knowledge sharing and knowledge hiding. Frontiers in Psychology, 14, 1133270.
Collier, J. E. (2020). Applied structural equation modeling using AMOS: Basic to advanced techniques. Routledge.
De Clercq, D., and Pereira, R. (2020). Knowledge-sharing efforts and employee creative behavior: The invigorating roles of passion for work, time sufficiency, and procedural justice. Journal of Knowledge Management, 24(5), 1131-1155.
Ferdinand, A. (2019). Structural equation modeling in management research (2nd ed.). BP UNDIP.
Ferdinand, A. T. (2014). Management research methods: Research guidelines for writing theses and dissertations (5th ed.). Diponegoro University Press.
Ferdinand, A. T., and Zuhroh, S. (2021). A study on socio-aesthetic value accentuation and marketing performance: An SDL perspective. International Journal of Innovation Science, 14(2), 213-229. https://doi.org/10.1108/IJIS-11-2020-0255
Forbes. (2025). The best banks in the world.
George, D., and Mallery, P. (2024). IBM SPSS statistics 29 step by step: A simple guide and reference. Routledge.
Ha, H. D., and Hang, H. T. T. (2024). The impact of transformational leadership on employee performance in the Vietnamese banking industry. Journal of Organizational Behavior Research, 9(2), 12-27.
Hair, J. F., Black, W. C., Babin, B. J., and Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage Learning.
Jaroliya, D., and Gyanchandani, R. (2021). Transformational leadership style: A boost or hindrance to team performance in the IT sector. Vilakshan XIMB Journal of Management, 19(1), 87-105. https://doi.org/10.1108/XJM-10-2020-0167
Mahajan, V., Sharma, J., Singh, A., Bresciani, S., and Alam, G. M. (2024). Knowledge sharing behavior of service sector employees to achieve sustainable development goals. Journal of Knowledge Management, 28(8), 2253-2274.
Siddiqui, S., Muduli, A., and McLean, G. N. (2024). Training transfer climate: Examining the role of high-performance work systems and organizational performance. Benchmarking: An International Journal, 28(1), 291-306.
Saif, N., Ruben, B. D., and Gigliotti, R. A. (2024). Explaining incongruities between leadership theory and practice. Leadership and Organization Development Journal, 42(6), 942-957.
