Transformational Leadership and Employee Performance: A Serial Mediation Model of Psychological Safety and Innovative Work Behaviour

Abstract

This study aims to understand whether transformational leadership practices have an impact on the employees’ performance in the Indian IT sector of Delhi/NCR. In this paper transformational leadership is considered as independent variable studied via serial mediation, where the indirect effect of leadership on performance is realized by two subsequent variables. Mediators are psychological safety and innovative work behavior, with psychological safety being a first mediator and innovative work behavior as a second mediator. The study is supported by Transformational Leadership Theory, Social Exchange Theory, and Conservation of Resources Theory. The study develops and study seven research hypotheses using a cross-sectional survey design. The research instrument consists of 26 items grouped in different sections. By using a non-probability judgmental sampling technique, the study focuses on 260 Indian IT professionals located in the Delhi/NCR, with every participant being a full-time employee, and uses Partial Least Squares Structural Equation Modelling (PLS-SEM) for analysis. The study finds that transformational leadership has an indirect influence on employee performance, with psychological safety and innovative work behaviour fully mediating the relationship. There is evidence of a direct link between transformational leadership and each of the mediated variable as well as between innovative work behaviour and employee performance. Thus, the study reveals that serial mediation partially explains the relationship between transformational leadership and employee performance. The study contributes to Conservation of Resources Theory by extending it to a four-construct model, provides insights for leadership development practice in high-performance industries, and outlines directions for future research.