Journal Screenshot

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

The Effect of Transformational Leadership on Employees’ Performance in Malaysia’s Public Sector

Aminah Ahmad, Sylvia Nabila Azwa Ambad, Syed Jamal Abdul Nasir Syed Mohd, Nelson Lajuni

http://dx.doi.org/10.6007/IJARBSS/v10-i11/8363

Open access

Employee performance is one of the main management topics that received substantial attention from scholars and practitioners. Thus, this study aims to investigate the effect of transformational leadership on employees’ performance in Malaysia’s public sector. A total of 286 sets of questionnaires are manually collected from a public sector department. The data are then analyzed by utilizing Partial Least Squares-Structural Equation Modeling (PLS-SEM) using SmartPLS 3.3.2. This study found that transformational leadership has a significant positive influence on employee performance in Malaysia public service sector. This paper contributes to the body of knowledge on management literature by developing and empirically testing a causal model of transformational leadership on employee performance in the context of Malaysia’s public sector. The findings also suggest the importance of leadership styles that focuses on improving employees’ development, process-oriented, a commitment based on trust and expectations, which motivate employees to perform beyond expectation.

Aarabi, M. S., Subramaniam, I. D., & Akeel, A. B. A. A. B. (2013). Relationship between motivational factors and job performance of employees in Malaysian service industry. Asian Social Science, 9(9), 301-310.
Abzari, M., & Ghujali, T. (2011). Examining the impact of internal marketing on organizational citizenship behavior. International Journal of Marketing Studies, 3(4), 95.
Adi, M. N. M., Noor, H. M., Rahman, A. G. A., & Yushuang, T. (2013). The influence of leadership style on job satisfaction among nurses. Asian Social Science, 9(9), 172-178.
Ag Budin, D. K., & Wafa, S. A. (2015). The relationship between culture and leadership style preference among Malay-Brunei, Bajau and Kadazan-Dusun community in Sabah, Malaysia. Journal of Management Development, 34(10), 1202-1210.
Bass, B. (1988). The inspirational processes of leadership. Journal of management development, 7(5), 21-31.
Bass, B. M., & Avolio, B. J. (1990). The implications of transactional and transformational leadership for individual, team, and organizational development. Research in organizational change and development, 4(1), 231-272.
Bass, B. M., & Avolio, B. J. (Eds.). (1994). Improving organizational effectiveness through transformational leadership. Sage.
Brain, K., & Lewis, D. (2004). Exploring leadership preferences in multicultural workgroups. Leadership & Organization Development Journal, 25(3), 263-278.
Burns, J. M. (1978). Leadership. NY: Harper & Row.
Chin, W. (1998). Commentary: Issues and Opinion on Structural Equation Modeling. MIS Quarterly, 22(1), 7-16.
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Hillsdale, NJ: Lawrence Earlbaum Associates.
Deslie, N. (2015). The impact of leadership style on employee performance. Unpublished manuscript.
Diamantopoulos, A., & Siguaw, J. A. (2006). Formative versus reflective indicators in organizational measure development: A comparison and empirical illustration. British journal of management, 17(4), 263-282.
Dumdum, U. R., Lowe, K. B., & Avolio, B. J. (2013). A meta-analysis of transformational and transactional leadership correlates of effectiveness and satisfaction: An update and extension. Transformational and charismatic leadership: The road ahead, 35-66.
Faul, F., Erdfelder, E., Lang, A. G., & Buchner, A. (2007). G* Power 3: A flexible statistical power analysis program for the social, behavioral, and biomedical sciences. Behavior research methods, 39(2), 175-191.
Fernandez, S. (2008). Examining the effects of leadership behavior on employee perceptions of performance and job satisfaction. Public Performance & Management Review, 32(2), 175-205.
Fernandez, S., & Rainey, H. G. (2006). Managing successful organizational change in the public sector. Public administration review, 66(2), 168-176.
Groenewald, A., & Ashfield, G. (2008). When leaders are also explorers. The Star Workplace, 7, 56.
Hair Jr, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM). Sage publications.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. (2006). Multivariate data analysis. Uppersaddle River.
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., & Thiele, K. O. (2017). Mirror, mirror on the wall: a comparative evaluation of composite-based structural equation modeling methods. Journal of the Academy of Marketing Science, 45(5), 616-632.
Hardy, C. A. (2014). Transformational leadership: a quasi-experimental study. Leadership and Organization Development Journal, 35(1), 38-53.
Hargis, M. B., Watt, J. D., & Piotrowski, C. (2011). Developing leaders: Examining the role of transactional and transformational leadership across business contexts. Organization Development Journal, 29(3), 51-68.
Hargrove, E. C. (1990). Impossible jobs in public management. University Press of Kansas.
Hater, J. J., & Bass, B. M. (1988). Superiors' evaluations and subordinates' perceptions of transformational and transactional leadership. Journal of Applied psychology, 73(4), 695.
Hayduk, L. A., & Littvay, L. (2012). Should researchers use single indicators, best indicators, or multiple indicators in structural equation models?. BMC medical research methodology, 12(1), 1-17.
Hofstede, G., Hofstede, G. J., & Minkov, M. (1991). Cultures and organizations: Intercultural cooperation and its importance for survival. Software of the Mind London: McGraw-Hill.
Indrawati, N. K. (2014). Management by inspiration: Implementation of transformational leadership on business at pondok Pesantren, Sunan Drajat. Procedia-Social and Behavioral Sciences, 115, 79-90.
Ivey, G. W., & Kline, T. J. (2010). Transformational and active transactional leadership in the Canadian military. Leadership & Organization Development Journal, 31(3), 246-262.
Jogulu, U., & Ferkins, L. (2012). Leadership and culture in Asia: The case of Malaysia. Asia Pacific Business Review, 18(4), 531-549.
Katou, A. A. (2015). Transformational leadership and organisational performance. Employee Relations, 37(3), 329-353.
Khalid, N. (2020). Artificial intelligence learning and entrepreneurial performance among university students: evidence from malaysian higher educational institutions. Journal of Intelligent & Fuzzy Systems, (Preprint), 1-19.
Kim, S., & Yoon, G. (2015). An innovation-driven culture in local government: do senior manager’s transformational leadership and the climate for creativity matter?. Public Personnel Management, 44(2), 147-168.
Krishnan, V. R. (2012). Transformational leadership and personal outcomes: empowerment as mediator. Leadership & Organization Development Journal, 33(6), 550-563.
Lo, M. C., Ramayah, T., & Min, H. W. (2009). Leadership styles and organizational commitment: a test on Malaysia manufacturing industry. African Journal of Marketing Management, 1(6), 133-139.
Manzoor, F., Wei, L., Nurunnabi, M., Subhan, Q. A., Shah, S. I. A., & Fallatah, S. (2019). The impact of transformational leadership on job performance and CSR as mediator in SMEs. Sustainability, 11(2), 436-450.
Mokgolo, M. M., Modiba, M., & Mokgolo, P. (2012). Transformational leadership in the South African public service after the April 2009 national elections. Journal of Human Resource Management, 10(1), 1-9.
Musa, Y., Danjuma, S., Alaba, F. A., Ritonga, R., Muhammad, A., Djajanto, L., & Herawan, T. (2018). An Impact of Transformational Leadership on Employees’ Performance: A Case Study in Nigeria. In Information Systems Design and Intelligent Applications, 708-719.
Napitupulu, S., Haryono, T., Riani, L. A., Sawitri, H. S. R., & Harsono, M. (2017). The impact of career development on employee performance: an empirical study of the public sector in Indonesia. International Review of Public Administration, 22(3), 276-299.
Ozaralli, N. (2003). Effects of transformational leadership on empowerment and team effectiveness. Leadership & Organization Development Journal, 24(6), 335-344.
Pawirosumarto, S., Sarjana, P., & Muchtar, M. (2017). Factors affecting employee performance of PT.Kiyokuni Indonesia. International Journal of Law and Management, 59(4), 602-614.
Pradhan, R. K., & Jena, L. K. (2017). Employee performance at workplace: Conceptual model and empirical validation. Business Perspectives and Research, 5(1), 69-85.
Ramayah, T., Samat, N., & Lo, M. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1), 8-27.
Ringle, C., Wende, S., & Will, A. (2020). SmartPLS 3.3.2. Retrieved from http://www.smartpls.com.
Rita, M., Payangan, R. O., Rante, Y., Tuhumena, R., and Erari, A. (2018). Moderating effect of organizational citizenship behavior on the effect of organizational commitment, transformational leadership and work motivation on employee performance. International Journal of Law and Management, 60(4), 953-964.
Robbins, S., & Judge, T. A. (2017). Organizational Behavior. 13th Edition. Essex: Pearson Education Limited.
Saifuddin, H. N., & Sermsri, S.(2008). Job satisfaction among nurses in Aceh timer district Nanggroe Aceh Darussalam province Indonesia. Science Journal, 38(2), 233-250.
Sarros, J. C., & Santora, J. C. (2001). The transformational?transactional leadership model in practice. Leadership & Organization Development Journal, 22(8), 383-394.
Schmitt, N. W., Highhouse, S. E., & Weiner, I. B. (2013). Handbook of psychology: Industrial and organizational psychology, 12. John Wiley & Sons Inc.
Torlak, N. G., & Kuzey, C. (2019), Leadership, job satisfaction and performance links in private education institutes of Pakistan. International Journal of Productivity and Performance Management, 68(2), 276-295.
Van Slyke, D. M., & Alexander, R. W. (2006). Public service leadership: Opportunities for clarity and coherence. The American Review of Public Administration, 36(4), 362-374.
Vera, D., & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of management review, 29(2), 222-240.
Wardana, I. M., Utama, I. W. M., & Astawa, I. P. (2018). Model of local population perception in supporting Coastal Tourism development and planning in Bali. GeoJournal of Tourism and Geosites, 23(3), 873-880.
Williams, L. J., & Anderson, S. E. (1991). Job satisfaction and organizational commitment as predictors of organizational citizenship and in-role behaviors. Journal of management, 17(3), 601-617.
Wright, B. E., & Pandey, S. K. (2010). Transformational leadership in the public sector: Does structure matter?. Journal of public administration research and theory, 20(1), 75-89.
Xirasagar, S. (2008). Transformational, transactional and laissez?faire leadership among physician executives. Journal of Health Organization and Management, 22(6), 599-613.
Yusuf, M. O., Muhammed, U. D., & Kazeem, A. O. (2014). Management of leadership style: An approach to organizational performance and effectiveness in Nigeria. International Journal of Humanities Social Sciences and Education, 1(2), 17-29.

In-Text Citation: (Ahmad, 2020)
To Cite this Article: Ahmad, A. (2020). The Effect of Transformational Leadership on Employees’ Performance in Malaysia’s Public Sector. International Journal of Academic Research in Business and Social Sciences, 10(11), 1396–1407.