Enhancing Employee Performance Through Transformational Leadership and Organizational Culture: The Mediating Role of Job Satisfaction

Vergilius Minggu; Emeralda Ayu  Kusuma

doi:10.37403/strategic.v6i2.513

Vergilius Minggu Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya
Emeralda Ayu Kusuma Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya

DOI: https://doi.org/10.37403/strategic.v6i2.513

Keywords: transformational leadership; organizational culture; job satisfaction; employee performance

Abstract

Objective. Sustaining workforce performance has become a critical challenge for manufacturing firms seeking to preserve their competitive position amid escalating industrial competition. Against this backdrop, the present study investigates the influence of transformational leadership and organizational culture on employee performance at PT Untung Bersama Sejahtera (UBS GOLD) Surabaya, while examining the mediating function of job satisfaction in explaining these relationships.

Research Method. A quantitative explanatory design was employed to explore the causal associations among the proposed constructs. Empirical data were gathered from 125 employees of PT UBS GOLD Surabaya through a structured questionnaire. The analytical procedure relied on Structural Equation Modeling–Partial Least Squares (SEM-PLS) using SmartPLS 4.0. The assessment process involved measurement model evaluation, structural model analysis, and hypothesis verification.

Results. The empirical evidence reveals that both transformational leadership and organizational culture contribute positively and significantly to job satisfaction. Employee performance is likewise enhanced by transformational leadership and job satisfaction. Conversely, organizational culture does not exhibit a statistically significant direct effect on employee performance. Further analysis demonstrates that job satisfaction serves as a significant mediating mechanism linking organizational culture to employee performance. However, its mediating role in the relationship between transformational leadership and employee performance is not statistically supported.

Conclusion. The findings underscore the pivotal role of job satisfaction in fostering employee performance. While transformational leadership exerts a direct contribution to performance enhancement, the impact of organizational culture materializes primarily through the development of employee job satisfaction. These results highlight the importance of cultivating transformative leadership practices alongside a supportive organizational culture to achieve sustainable improvements in employee performance.

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