Impact of Transformational Leadership on Employees' Extra Effort and Leader's Effectiveness: Moderating Role of Organization Type
Purpose: This paper is based primarily on the theory of transformational leadership. Transformational leaders encourage the employees to put-in extra efforts in their work and believe that their leadership is effective. Prior research also suggests that organization type (public vs. private) could have a key role in affecting these relationships. The objective of this paper is two-fold. One is to understand the moderating role of organization type between transformational leadership and employees' extra effort. The other objective is to examine the moderating role of organization type between transformational leadership and the employees' perception of their leader's effectiveness.
Design/methodology/approach: The target population was the public and private sector organizations from the power industry. A sample comprising of 610 employees were surveyed that resulted in a usable sample of 364 employees. Step-wise regression analysis was carried out to test the hypotheses.
Findings: Results suggested that transformational leadership has a positive relationship with both the employees' extra effort and the leader's effectiveness. Also, it was discovered that organization type moderated the relationship between transformational leadership and the employees' extra effort as well as between transformational leadership and the leader's effectiveness.
Research limitations/implications: Transformational leadership plays an important role in affecting both leader's effectiveness and extra efforts. Whether the organization is private or public affects these relationships. Therefore, scholars need to take organization type as an important variable while predicting the relationships.