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The Influence of Leadership Styles on Employees Performance under

Perceptions of Organizational Politics: A Study of Telecom Sector in Pakistan

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International Journal of
Management Research and
Emerging
Volume 7 Issue 1 (2017) PP. 106-140

The Influence of Leadership Styles on Employees Performance under Perceptions of

Organizational Politics: A Study of Telecom Sector in Pakistan
Kashif Rathore1, Chaudhry Abdul Khaliq2, Nauman Aslam3

Abstract

The purpose of this study is to investigate the relationship of leadership styles and employee performance. In
addition to that, this study also examines the mediation effect of perceived organizational politics between
leadership styles and employee performance in the telecom sector of Lahore, Pakistan. Positivism research paradigm
and deductive research approach has been adopted. Survey research method and focus group interviews have been
triangulated in order to validate the findings of the research. Random sampling technique has been used in which
360 questionnaires has been distributed in the selected telecom companies of Lahore, Pakistan and 249 valid
questionnaire were received at a response rate of 69%. Results of this study indicated that transformational
leadership is insignificantly related with employee performance while transactional leadership significantly related
with the employee performance. This findings of this study also indicated that perceived organizational politics fully
mediate the relationship of transformational leadership and employee performance. Moreover, perceived
organizational politics partially mediate the relationship of transactional leadership and employee performance.
Future implications and limitations are also discussed.

Keyword: Transformational Leadership, Transactional Leadership, Employee Performance, Perceived

Organizational Politics, Telecom Sector

1. Introduction
Leadership is defined as a process of leader-subordinate interaction where leaders can influence
the behavior of their subordinates for achieving organizational objectives (Kanter, 1982; Conger
& Kanungo, 1998; Pavett & Lau, 1983; Reid, 2016). It is important for an organization to have
knowledge about leadership styles that can play a role in increasing employee performance.
Different studies show that leadership style is important for influencing performance of
employees, several studies have revealed correlation between leadership style and employee
performance (Turner & Muller, 2005; Asrar ul Haq & Kuchinke, 2016). In a fast changing
world, it is highly important to select leadership style according to the situation for achieving
high performance (Galperin & Alamuri, 2017). According to Bass & Stogdill (1990), there have
been two styles of leadership: include transactional and transformational leadership styles.

1
Assistant Professor, Institute of Administration Sciences , University of Punjab Lahore, [email protected]
2
Assistant Professor, Hailey Collage of Commerce, University of Punjab Lahore, [email protected]
3
senior Lecturer, Superior university Lahore, [email protected]
 Rathore et al., The Influence of Leadership Styles on Employees…
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Nowadays organizations include multifunctional teams integrated in a horizontal structure where
employees are given autonomy in setting goals and evaluating outcomes (Elangovan & Xie,
2000). Organizations are reengineering themselves and no longer using the traditional
hierarchical structure, this stresses the significance of expanding roles of subordinates in the
decision making of organization (Carlton & Perloff, 2015). Such trends justify the readiness of
leaders to delegate power to lower levels (Choy, McCormack & Djurkovic, 2016). Past studies
highlight that such leadership styles are more helpful in developing a learning culture by
focusing on creative behaviors and creating new values and norms (Dvir, Eden, Avolio &
Shamir, 2015; Qu, Janssen & Shi, 2015).
Nowadays Pakistan is facing uncertain environment. Pakistan is experiencing lots of problems
including inflation, unstable policies, insufficient capacity to innovate, inadequately educated
work force, crime and theft (World Bank report, 2016). Under such conditions developing
appropriate leadership style for managing turbulent environment is not an easy task. The choice
of leadership style gets complex in the politicized environment. Ferris and Hochwarter (2011)
describe organization politics as self-serving behavior intended to get advantage over other
employees and hence viewed as negative. They suggest that in uncertain environment
organization politics is more likely. To remain efficient and sustain competitive advantage in
uncertain environment along with organization politics, it is necessary to continuously search
such leadership style that improves employee performance.
The purpose of this study is to investigate the mediating effect of organization politics on the
relationship between leadership style and employee performance in telecommunication sector of
Lahore, Pakistan. For this purpose, a mixed method approach has been employed. The rationale
behind using a mixed method approach is that the findings from quantitative part of this study
were contradictory to other correlation studies done in the past in different contexts. Thus
interviews were conducted to validate the quantitative findings.

1.1 Significance of the study

The majority of the past studies have examined organizational politics as antecedent of
performance (Gandz & Murray, 1980; Kacmar & Baron, 1999; Valle & Perrewe, 2000) or
studied organization politics as mediating variable (Islam, Rehman & Ahmed, 2013; Vigoda-
Gadot, 2007). The study will contribute to the existing literature of politics as well as employee
performance by using organization politics as a mediating variable between leadership style and
International Journal of
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Emerging

employee performance. Literature regards the importance of employee performance for most of
the organizations. However, it gets less attention from scholars around the world in the area of
organization politics and leadership style. Thus, the study contributes to existing stream of
literature by placing focus on employee performance.
The study is also important because the result refute the accumulated body of research in this
area and results of this study also necessitate of using a mixed method approach. The majority of
prior literature has used either quantitative approach (Ferris & Rowland, 1981; Islam et al., 2013;
Mackenzie, Podssakoff & Rich, 2001; Pillai, Schriesheim & Williams, 1999; Rahman, Hussain
& Haque, 2011; Vigoda-Gadot, 2007) or qualitative approach (Klenk, 2008; Fletcher & Arnold,
2011) and rarely employed mixed method approach for investigating the leadership style and
employee performance along with organization politics as a mediating variable. Another major
contribution of the study is that it will have important consequences for practitioners. The study
will be helpful for managers for identifying contingencies of different leadership styles as these
may have influence on employee performance.

2. Literature Review
In this modern era, organizations give more emphasis to team work for the accomplishment of
organizational tasks. The effectiveness of teams however is dependent on a good extent on
competence of the focal person (Durham, Knight & Locke, 1997). Leadership is of primary
importance in organizational settings as the direction, instructions and guidance to the team is
primarily provided by the leader (Yukl, 2002). Transformational leadership is a way to lead a
team in which the change needs are identified by the leader in association with the members of
the team (Bass, 1997). In other words, there is involvement of common team members who can
have their say, upon how transformation can take place or how they expect to adopt the change.
The transformational leader is a visionary, capable of conveying a clear message to his or her
team why and what type of change is necessary (Bass, 1999).

Transformational leaders hold positive expectations from their followers as their primary trait
(Ogbonnaya & Nielsen, 2016). Such leaders are enthusiastic by nature and capable of making the
team members believe that they can actually deliver up to their potentials. It follows that, a
transformational leader believes that his or her subordinates are both talented and willing to
work, such expectation elevate the spirit and inspiration of the work unit (Bass & Steidlmeier,
 Rathore et al., The Influence of Leadership Styles on Employees…
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1999; Dong, Bartol, Zhang & Li, 2016). Other related traits of the transformational leaders
include that they are considerate to personal and professional needs of team members. This
means that not only is such a leader capable of utilizing his or her team members up to their full
potential but is also kind hearted to understand and appreciate the humanly capacity of the team
members (Brodbeck, Frese & Javidan, 2002).

A transformational leader is motivational in nature for his or her team members. Where an
organization is capable to offer economic and non-economic rewards to team members, a
transformational leader utilizes these rewards to enhance the performance of his/her employees
(Ahmad, Abbas, Latif, Rasheed, 2014). It is because a leader who closely works with the
subordinates, shows consideration is able to achieve motivation of team members to deliver their
best output. At the same time, a transformational leader is also an image that employees can
idealize. Therefore, the role of the transformational leader is not solely, of a supervisor and
performance enhancer but also of a guider and role model for their team member. (Barling,
Slater & Kevin Kelloway, 2000). Transformational leaders actions has an appealing impact on
their team members (Avolio & Bass, 1988).

In order to increase the performance of employees, it is inevitable that the leader encourages the
employees to deliver. This can be viewed as a way through which the employees can deliver,
based on a belief that the service of their organization benefits them as primary stakeholders.
Boosting the confidence of the team to evolve with the change and to accept challenges is
another associable trait of a transformational leader duly reflected in their behaviors (Avolio et.
al, 2004). It is possible for the employees to come across confusions and complaints regarding
colleagues and the leader himself. This adds to the responsibility of the transformational leader
to ensure that he or she does not ignore or suppress the complaints and concerns of his or her
team members. Such attitude on the part of the leader can give rise to toxic emotions towards the
organization and can harm the performance (Braun et. al, 2013).

According to Gong, Huang & Farh (2009), the transformational leadership style leads to
employee performance because such a style of leadership is effective in bringing out the
creativity of employees. Because this style of leadership allows the employees to think creatively
and without any restrictions, it can help create a competitive advantage for an organization and
find unique and quick solutions to their problems (Mittal & Dhar, 2015). Similarly, Wang et. al
International Journal of
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(2005) confirm that the incidence of organizational citizenship behavior in employees and their
performance is enhanced with the help of transformational leadership style opted by
organizations.

Transactional leaders are very consistent in accomplishing the organization goals and objectives.
These goals can be made by the leader themselves or they can be passed down from the top
management. Transactional leaders’ prime concern is the accomplishment of task by all means
through reward and punishment strategy (Tremblay, Vandenberghe & Doucet, 2013). When the
goals are set by the top management the leader is expected to complete these goals by making
explicit agreements with the team members about the rewards if they adhere to the policies and
are threatened with punishment if they fail to do so. The efforts and commitment of the
employees is thus driven by a promise of reward and fear of punishment (Podsakoff, Bommer,
Podsakoff & MacKenzie, 2006). The purpose of feedback in such a leadership style is purposed
only to ensure that a message is conveyed across the team and that the leader is aware of the
individual efforts of the team members. For an organization, this style maybe useful to keep
every working unit in the organization on track (Vera & Crossan, 2004).

The study of MacKenzie and Podsakoff (2001) that was held in the field of marketing suggests
that the transactional leadership style has substantial influence over the performance of
employees considering that they fear the outcomes of their poor performance and are motivated
by the rewards that are promised for better performance. Hater and Bass (1988) suggest that the
supervisors who evaluate their subordinates strictly on rewards and punishment are able to
extract the best out of their subordinates. This means that the transactional leadership style has
the capacity of enhancing the performance of employees. The main difference between
transformational leadership style and the transactional leadership style is that the former focuses
on enabling of employees to give their best on the job through support provided by their leader
whereas the later demands output from the employees rendering them solely accountable for
their actions, performance and output.

According to Witt, Andrews and Kacmar (2000), the processes of decision making get affected
by the organizational politics and the interference of people’s bias, preferences and emotions that
are inserted in the system because of the politics and hence cause dissatisfaction on the job for
employees. According to Ferris and Kacmar (1992), the incidence and prevalence of
 Rathore et al., The Influence of Leadership Styles on Employees…
…,Performance…
organizational politics is mostly perceived as a negative thing in the organizations across the
employees. Although it is an undesirable thing for most of the employees who perceive that it is
a bad thing for organizational fairness, it is unavoidable aggregates since most employees either
knowingly or unknowingly indulge in politics. Cavanagh, Moberg and Velasquez (1981) studied
that the employees in an organization develop tendencies of playing politics in organizations
because they view it as a way for them to survive in the organization.

Most employees try to influence their supervisors and managers through unethical means so that
they can find a better place for themselves in the view of their management as compared to their
colleagues (Karatepe, Babakus & Yavas, 2012). Employees also involve themselves in politics in
their organizations because they believe that others will do the same against them. It is hence a
preemptive approach of the employees that is meant to seek comfort through support of
supervisor before someone could damage their repute (Madison, 1980). The prevalence of the
organizational politics is not only in the lower levels of the organization but also affects the
upper levels of the organization equally. The study of Pearce (1997), found that there is a good
deal of incidence of organizational politics on the top level management emerging from the roles
of employees and venture owners.

Organizational politics can have a great influence on the employee performance for several
reasons. Firstly, the incidence of organizational politics can have a great influence over the
appraisal systems. In the organizations where politics is commonly considered as a way through
which employee enter the good books of the supervisors and management, the devoted
employees get neglected. There establishes a norm that the employees are better off doing
politics than their jobs since the former promises to benefit them more. Consequently, the
performance of the organizational members is reduced. Considering that there is no escape from
the incidence of organizational politics, it is safe to say that organizational politics is inevitable
and mostly influences the organization in a negative way. As the study of Aryee, Chen and
Budhwar (2004) suggests that the extent to which there is organizational politics in a workplace,
the perception regarding the fairness of procedures in view of the employees is reduced. This
means that the employee perception of prevalence of politics in organization is inversely related
with the perception of fairness of procedures. As Greenberg (1986) suggests the fairness of
organizations directly influences the performance of the employees.
International Journal of
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Emerging

The study of Vigoda (2000) suggests that the incidence of organizational politics in a work place
deteriorates the working attitudes of employees as they consider themselves better off if they
focus their attention towards politics in the organizations rather than working. The most
important concept that relates incidence of politics in the organization with performance of
employees is the fairness of systems in the organizations. In other words, the organizational
systems, with intense politics become unfair in evaluating the employees on their performances
and favoritism sets in as the criteria for employee performance. The nature of politics in
organizations can also change over the course of time and according to the study of Chang,
Rosen and Levy (2009) this change can influence the attitudes of employees as well as their
behavior towards the organization. Hence, it can also change the performance levels of the
employees considering that the need for doing politics and the perception about the prevalence of
the politics changes. The study of Hochwarter, Witt and Kacmar (2000) have suggested that
employees purposefully wither engage in politics or avoid it and that organizational politics
directly interferes with the level of performance of employees.

2.1 Hypothesis
H1: Transformational Leadership significantly affects Employee Performance.

H2: Transactional Leadership significantly affects Employee Performance.

H3: Transformational Leadership significantly affects Perceived Organizational politic.

H4: Transactional Leadership significantly affects Perceived Organizational politic.

H5: Perceived Organizational Politics mediate the relationship of transformational leadership

and employee performance.

H6: Perceived Organizational Politics mediate the relationship of transactional leadership and
employee performance.

H7: Perceived Organizational Politics significantly affect employee performance.

 Rathore et al., The Influence of Leadership Styles on Employees…
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3. Research Methodology

3.1 Research Philosophy

Positivism research paradigm has been adopted for this study. In this paradigm knowledge is
considered as objective. However it also explain the reality exist independently and knowledge is
objective for all (Bryman, 2015).

3.2 Research Approach

Deductive and quantitative research approach has been adopted for this study because the model
has been developed on the basis of existing theories and then tested statistically. Deductive
approach is normally considered when the research process has been developed to test whether
the observed phenomena fit with the existing research or not (Silverman, 2013).

3.3 Research Strategy

Triangulation has been used for this study in which survey and interviews are used for the
validation of findings. Triangulation means combination of two or more research strategies for
rigorous results findings (Bryman, 2015). Triangulation has also been adopted by using different
data sources in order to enhance the understanding of phenomena (Creswell & Clark, 2007). In
International Journal of
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Emerging

the first step research has been conducted through survey method and in the second step focus
group discussions were used in order to validate the findings of the research.

3.4 Research Design

Cross sectional research design has been used because data was collected at one point in time.
Cross sectional design is used when the researcher is concerned about a specific phenomenon in
particular of time (Bryman, 2015).

3.5 Data Collection Method

Self-monitored questionnaire has been used for this study because it increase the valid response
rate and make respondent attentive in data collection phase. The population of this study were
the customer representative officers (CRO`s) of the telecom industry.

3.6 Sampling

The sampling process has been done into two phases. First 4 companies were selected randomly
out of 8 companies then in the second phase data has been collected randomly from the sampling
frame which has been obtained from the selected telecom companies. The details of the
companies are given in Table 1. The sample size has been calculated through Slovin`s formula
(Ellen, 2012).

n= N/ (1+N e2)

n= 2135/ (1+ (2135) (0.05)2

n= 2135/6.3375

n= 337

In this formula N is the total population, e is equal to the error of tolerance and n is the sample
size. The total population consists of 2135 CROs of the selected companies. With the help of
slovin`s formula 337 sample size has been calculated so population segmentation and
questionnaire distribution mentioned in Table 2. So 340 questionnaires were distributed and 249
valid questionnaires were received at a response rate of 73.23%.
 Rathore et al., The Influence of Leadership Styles on Employees…
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Table 1. Companies List

Sr No Companies Name Selected/ Not Selected

1 Digital Global Services Company (DGS) Not Selected

2 Mobilink Selected

3 The Resource Group (TRG) Not Selected

4 Telenor Selected

5 Ufone Selected

6 Zong Not Selected

7 Abacus Consulting Not Selected

8 Warid Selected

Table 2. Sampling

Sr Companies Name Total CROs Selected CROs

No

1 Mobilink 650 85

2 Abacus Consulting 475 85

3 Ufone 487 85

4 Warid 523 85

Total 2135 340

3.7 Questionnaire Development and Pre-testing:

International Journal of
Management Research and
Emerging

Structured questionnaire was used for this study comprises the variables of transformational,
transactional leadership, organizational politics and employee performance. The transformational
and transactional leadership scale has been adapted from MLQ5x which is developed by (Bass
and Avolio, 1992) and perceived organizational politics scale has been adapted from (Kacmar &
ferris, 1991) study. The leadership and organizational politics scale based on five point likert
scale 1-5 i-e (Strongly Disagree to Strongly Agree). On the major contribution of this study is the
development of Employee Performance scale which ranges from 1-10 in which respondent asked
to compare its performance from the best one its team. At the initial stage the questionnaire was
discussed from the linguistic and psychological experts for face validity that whether the
questionnaire is giving same concept or not.

4. Data Analysis and Interpretation

4.1 Demographic Statistics

The questionnaire demographic consists of gender, age and marital status. In Table 1
(Demographic statistics) shows that number of male and female from the respondents. As table
explains from total respondents of 239, male respondents were 154 having a percentage of 64.4
% while there are 85 respondents from female gender giving us the response rate of 35.6%. This
table also depicts that the number of respondents from 15-20 years were 36, from the 20-25 were
126, from 25-30 were 62, from 30-35 were 15 having a percentage of 15.1%, 52.7%, 25.9% and
6.3 % respectively. This table also shows the marital segmentation of the sample in which 75
respondents were married (38%) while 164 were unmarried (68.6%) form the total respondents
of 239.

Table 3. Demographic Statistics

Demographics Categories Frequency Percentage (%)

Gender Male 154 64.4
Female 85 35.6
Age 15 to 20 years 36 15.1
More than 20 to 25 126 52.7
years
 Rathore et al., The Influence of Leadership Styles on Employees…
…,Performance…
More than 25 to 30 62 25.9
years
More than 30 to 35 15 6.3
years
Marital Status Married 75 31.4
Single 164 68.6

4.2 Correlation Analysis

Correlation analysis shows us the relationship among variables of the model. In Table 4 of
correlation shows the association among Transformational Leadership, Transactional Leadership,
Perception of Politics and Employees Performance. Correlation coefficient of r = .283 between
transformational leadership and employee’s performance signify that there is a positive and weak
correlation between them but it is highly significant as the P =. 000 which is less than 0.01 that
is the highest significance level in two-tailed.

Similarly, the correlation coefficient value of (r) for transactional leadership and employee’s
performance is .315 as shown in the table which shows that there is a weak but positive
correlation exists however again they are highly significant with each other as the level of
significance (shown by p value) is 0.000 which is less than 0.01. Correlation coefficient for
perception of politics and employee’s performance is also positive and there also exist a
relationship between them which is weak (.269) and again the value of P (.000) which is less
than 0.01 shows that they are highly significant with each other.

Table 4. Correlational Analysis

Variables TFL TSL POP EP

Transformational 1
Leadership (TFL)

Transactional .794** 1
Leadership (TSL)
International Journal of
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Perceived .454** .331** 1

Organizational
Politics (POP)

Employee .283** .315** .269** 1

Performance (EP)

* Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed).
4.3 Regression Analysis

Table 5. Model Summary of Regression of TFL, TSL on EP

R .319

R-Square .102

Adjusted R Square .094

F-Value 13.407

Sig.Value .000

Durbin- Watson 1.83

Tolerance -Value .373

VIF-Value 2.71

Predictor: Transformational Leadership (TFL), Transactional Leadership (TSL). Dependent Variable: Employee
Performance (EP)

Table 5 shows that R Square explains the variation in the dependent variable above mentioned
table explains the effect on employee’s performance due to Transformational and Transactional
Leadership style. As social sciences are more complex and fluid than natural sciences, the value
of R varies depending on the nature of the respondents. Value of R- Square in this case is .102
which shows that independent variable (Transformational and Transactional Leadership) is
 Rathore et al., The Influence of Leadership Styles on Employees…
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producing a variation in the dependent variable (Employee Performance) by 10.2%. Adjusted R
square is attained by reducing irrelevant value form the data set and catering the estimated error,
therefore the value of the adjusted R square is less than the R square value and thus produce a
more realistic regression line. Adjusted R square is .094 which is acceptable in social sciences.

The value of F shows the fitness of the model which in this case is 13.407 as shown in Table 5
which is more than the standard required i.e. 5. P value is .000 which shows the significance
level of the model. The value of significance should be less than the .05 (p<.05). As value of the
P shows, model is statistically significant and there is also a good fitness of model. The value of
Durbin Watson is 1.83 and tolerance value is 0.37 and VIF value is 2.71.
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Table 6. Regression of Transformational and Transactional leadership on Employee

Performance
Variables B Std. Error β t Sig.Value

Constant 4.309 .579 7.447 .000

TSL .601 .250 .244 2.403 .017

TFL .267 .302 .090 .884 .377

Predictor: Transformational Leadership (TFL), Transactional Leadership (TSL). Dependent Variable: Employee
Performance (EP)
Table 6 shows that Beta value of coefficient explains that how much change 1% of change in the
independent variable will bring about a change in the dependent variable. Results in above
mentioned table shows that there is positive effect on dependent variable (Employee’s
Performance) due to independent variable (Transformational and Transactional Leadership).

Above table provide a regression line of: Employee Performance = 4.309 + .244 (Transactional
Leadership). This equation shows that one unit of change in Transactional Change will generate
a change in Employee Performance by .244 units and they are significant with each other.

Above table provide a regression line of: Employee Performance = 4.309 + .090
(Transformational Leadership). This equation shows that one unit of change in Transformational
Change will generate a change in Employee Performance by .090 units but they are not
significant with each other (P=.377>0.05).

4.5 Mediation Analysis

The mediation analysis is carried out through Preacher and Hayes process. The effect size of
mediation is measured through Kappa Squared. The results of mediation of Perceived
organizational politics between transformational leadership and employee performance are as
follows:
 Rathore et al., The Influence of Leadership Styles on Employees…
…,Performance…
Table 7. Indirect Effect of X on Y
Effect Boot SE Boot LLCI Boot ULCI

POP .2395 .1493 .0231 .5898

Independent: Transformational Leadership (TFL). Dependent: Employee Performance (EP)

Table 7 shows the indirect effect of transformational leadership on employee performance. The
B-value effect size is .2395 and the standard error is .1493. The upper and lower limit boot
ranges from .0231 to .5898 which shows that perceived organizational politics mediates the
relationship of transformational leadership and employee performance.

Table 8. Preacher and Kelly (2011) Kappa-Squared

Effect Boot SE Boot LLCI Boot ULCI

POP .0747 .0409 .0081 .1712

Independent: Transformational Leadership (TFL). Dependent: Employee Performance (EP)

In the above table the confidence interval range which ranges from .0081-.1712 does not include
zero so it is significantly related with each other. The value of K2 which is .0747 which shows
that perceived organizational politics explain 7.47% variation in the relationship of
transformational leadership and employee performance. As in table 10 the relationship if
transformational leadership is insignificant but in the presence of perceived organizational
politics the relationship becomes significant which shows that there is full mediation exist.

The results of mediation of Perceived organizational politics between transactional leadership

and employee performance are as follows:

Table 9. Indirect Effect of X on Y

Effect Boot SE Boot LLCI Boot ULCI

POP .1512 .0890 .0058 .3664

Independent: Transactional Leadership (TSL). Dependent: Employee Performance (EP)

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Table 9 shows the indirect effect of transactional leadership on employee performance. The B-
value effect size is .1512 and the standard error is .0890. The upper and lower limit boot ranges
from .0058 to .3664 which shows that perceived organizational politics mediates the relationship
of transactional leadership and employee performance.

Table 10: Preacher and Kelly (2011) Kappa-Squared

Effect Boot SE Boot LLCI Boot ULCI

POP .0610 .0321 .0096 .1366

Independent: Transactional Leadership (TSL). Dependent: Employee Performance (EP)

In the above table the confidence interval range which ranges from .0096-.1366 does not include
zero so it is significantly related with each other. The value of K2 which is .0610 which shows
that perceived organizational politics explain 6.10% variation in the relationship of transactional
leadership and employee performance. As in table 10 the relationship if transactional leadership
is significant and in the presence of perceived organizational politics the relationship also remain
significant which shows that there is partial mediation exist.

5. Discussion
Transformational leadership has a significant relationship with the employee performance
(Yammarino, Spangler & Bass, 1993). It has also been found as part of literature review that
transformational leadership can single- handedly question and change employee performance
values. Transformational leaders do it by setting personal examples and aligning personal and
professional goals (Wang et. al, 2011). However, the current study implies that transformational
leadership may not significantly affect the employee performance in organizational settings.
Existing research has also failed to establish a conclusive between transformational leadership
and higher levels of employee performance. Walumba and Hartnell (2011) observed that
transformational leadership alone does not influence employee performance in a positive
direction. Rather employee self-efficacy is necessary amongst employees in order to get
influenced positively by transformational leadership.

Similarly, Piccolo and Colquitt (2006) suggest that the characteristics of an employee’s job are
the deciding factors in the performance and transformational leaders that satisfy the employee
 Rathore et al., The Influence of Leadership Styles on Employees…
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requirements of these characteristics are able to enhance employee performance. Interviews were
conducted in the current study to explore the reason as to why the employee performance did not
get affected by the transformational leadership. One of the respondents explained:

“Every person wants to progress in his organization but since he is ambiguous about their
standing in their organization, they prefer sticking to routine relationship with their bosses”.
[R1]

This suggests that managers find transactional leadership style as much clearer as compared to
the transformational leadership style for the employee to follow and managers also find more
clarity in their own standing in their organization when they adopt a transactional style. This may
be because a transactional set of managerial behaviors can be clearly matched with job
expectations from the managers as reflected in their job descriptions. Managers also claimed that
the transactional leadership is more suitable for enhancement of employee performance because
of the fact that it saves employees from getting de tracked. Standardized methods and procedures
are preferred by the managers because these methods are embedded in the organizational
routines and norms. Another respondent said:

“People do not generally see long-term,…. for 5 or 6 years in the future, rather they
simply think short term” [R2]

It may be argued that one of the reasons why employee performance does not get influenced by
transformational leadership is that the employees do not believe in staying in their organization
for a long period. Change oriented behaviors intended to contribute purposefully and sincerely
towards organizational development require long term commitment of the employees towards
their organizations. However since employees may have little intention to stick with a specific
organization for a long time, such a commitment may not develop. Consequently, a leadership
style encouraging change oriented behaviors i-e transformational leadership the employee may
be preferred.

Transactional leadership has been found to have a significant relationship with employee
performance and the findings of this study is in line with the literature. It was found by Bass et.
al (2003) that the transactional leadership style takes control over the employee activities and
performance to the managers. The organizations that are bureaucratic in nature, particularly find
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Emerging

transactional leadership style to be more suited well developed job methods and processes.
Howell and Avolio (1993) support the idea of effectiveness of transactional leadership towards
the enhancement of employee performance. They suggest that although the transactional style of
leadership hinders with the employees’ innovative capacities but it provides control over
employee activities to the leaders keeping projects and multi-function units work as per
operational plans.

Managers confirm that the transactional leadership style keeps the employees disciplined
because it has a very clear system of rewards and punishments. The transactional leadership style
is the ideal style for leaders who believe that the ability to fulfill organizational objectives and
goals is the most important thing and experimentation within organization is of secondary
importance, even uncalled for. There is a general belief that experimentation may or may not
pay. However existing practices that have a proven track are believe. As a consequence
transactional style of leadership becomes a style of choice for managers and fits well with
expectations of employees as well. Managers believe that the employees are more inclined
towards their own interests rather than the interest of their colleagues or their organization at
large. This may explain the relationship between transactional leadership style and higher level
of employee performance. Another respondent said in an interview

“On the higher organizational levels, transformational leadership may be

important……….,, there is certainly no significance of transformational leadership style for the
lower and middle level employees and only transactional leadership style affects their
performance”. [R3]

This suggests that transactional leadership style serves as a better control mechanism and
promises uniformity and consistency in the employee job processes owing to which the
employees’ performance is significantly related with the transactional leadership style.

Organizational politics has been discussed as a significant role player towards organizational
performance as well as employee performance (Randall et. al, 1999; Lieberson, & O'Connor,
1972). Politics has been found to be an inevitable outcome of human interactions in any
organization. This study found a significant direct relationship between the organizational
politics and employee performance. The study has also confirmed that there is a partial
 Rathore et al., The Influence of Leadership Styles on Employees…
…,Performance…
mediating effect of organizational politics in the relationship of transactional leadership and
employee performance (Vigoda-Gadot, 2007; Islam et al., 2013). This study also found that the
transformational leadership has insignificant relationship with the employee performance but it
became significant in the presence of organizational politics so that’s why there is full mediation
between them. Although the study of Ferris and Kacmar (1992) suggests that the prevalence of
organizational politics is a negative thing in an organization, the findings of this study disagree
as it has been found to play a very significant role in the enhancement of employee performance
through transformational leadership style. The study of Braun (2013) stated that trust plays a
mediating role in the relationship of transformational leadership and performance as a part of the
political domain of organizational interactions.

Pearce (1997) suggests that the organizational politics is more prevalent on the upper levels of an
organization and the lower levels are not much affected by the organizational politics. According
to one respondent:

“Organizational politics affects the transformational leadership” and “organizational

politics affects the higher levels more”. [R4]

This gives an impression that organizational politics is more relevant at the higher levels of an
organization. Managers in interviews suggest that the transformational leadership is suitable for
uplifting the spirits of the employees, whereas in order to enable them to perform their duties
effectively, transactional leadership is more effective. They suggested that organizational politics
serves as a great way for uplifting the spirits of the employees if done constructively.

Another respondent said:

“Managerial role in the direction of organizational politics is very crucial towards the
effectiveness of management and leadership, only the leaders who are good politicians in their
organizations are well heard by their employees”. [R5]

Employees also tend to perform well as a result of presence of transformational leaders because
once they identify their organizational leader as their representative and political savior, they
wish to please him or her in order to get in their good books. Therefore, as suggested in the
International Journal of
Management Research and
Emerging

managerial responses, the employees seek their personal and professional benefits from a
transformational leader that results in enhancement of their performance.

6. Conclusion

There has been a long debate on the importance of transformational leadership and transactional
leadership in organizational context with advocates of both these leadership styles presenting
their ideas and arguments backed by hard facts and findings. However, this study shows that the
employee performance is significantly influenced by the transactional leadership style. This
finding comes in line with the literature that advocates a significant relationship between
transactional leadership and employee performance. Employees tend to have improved
performance when they have witnessed and expect to get visible rewards and punishment as
consequences of their actions. This means that employees are more influenced by the leadership
roles that directly influence their experience on the job that may be related to their compensation
or appreciation on the job.

The study found that there is no significant relationship between the transformational leadership
and employee performance. It may be because the employees have little concern with the long
term outcome of the leadership style in their organizations. Employees are more concerned with
their direct, individual and short term affiliation and exchange within the organization and so
they do not get affected by the transformational leadership processes. Culturally and habitually,
employees are more comfortable with hard and fast and objective methods of leadership which
makes transformational leadership a less influential style of leadership in organizational context.

The study indicated that organizational politics is a full mediator in the relationship between
transformational leadership and employee performance. The previously insignificant relationship
between transformational leadership and employee performance turns to a significant one in the
presence of organizational politics. This happens because constructive political behaviors in an
organization can encourage employees to enhance their performance in order to gratify the
transformational leaders that they wish to follow. Even if is for their individual gain, the
presence of organizational politics enhances performance of employees in order to consolidate
their position in the organization in the future.
 Rathore et al., The Influence of Leadership Styles on Employees…
…,Performance…
6.1 Limitations and Future Directions

There are some limitations of this study and future directions for the researchers which are as
follows:

 Data has been collected from the telecommunication companies of Lahore only due to
time and resources constraint. In order to increase the generalizability of the findings
future researchers can collect the data from all over the Punjab through stratified
sampling.
 Data has been collected through cross sectional research design in order to examine the
influence of leadership style on the employee performance with respect to time
longitudinal research design may be adopted by the future researchers.
 This study is based on quantitative research in which questionnaire has been used as
instrument tool. Future researchers may conduct an interview in order to explore the
reasons of the insignificant effect of leadership style on employee performance.
 SPSS 20 version has been used for the data analysis other statistical software can be used
by the researchers in future for the better understandability of the model.
 The questionnaires which are used in this study are based on self-rating scale (Subjective
measure). In order to remove the biasness of the respondents some objective measures
can be used by the researchers in future.
 Two types of leadership styles i-e Transformational and Transactional leadership styles
are used in this study other types of leadership such as networking, democratic and
autocratic leadership styles can be used by the researchers in future studies.

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