6 Impact of Leadership Style (Transformational) PDF

Global Journal of Management and Business Research
Volume 12 Issue 4 Version 1.0 March 2012

Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Online ISSN: 2249-4588 & Print ISSN: 0975-5853
Impact of Leadership Style (Transformational & Transactional

Leadership) On Employee Performance & Mediating Role of
Job Satisfaction Study of Private School (Educator) In
Pakistan
By M. Umer Paracha, Adnan Qamar, Anam Mirza, Inam-ul-Hassan
& Hamid Waqas
Muhamad Ali Jinnah University
Abstract - The purpose of this research is to determine that does leadership styles that is Transformational
leadership style and transactional leadership style has an impact on employee performance. Also we wish
to see that if job satisfaction has a mediating effect or not. For this purpose data was collected from 6
schools working in Rawalpindi and Islamabad. Result shows that transactional and transformational both
are significantly positive associated with Employee performance however transactional leadership was
more significant then transformational. Another important discovery made was there is no mediating role
of Job satisfaction between transactional leadership. But it mediates with transformation leadership and
employee performance.
Keywords : Leadership style, Transformational Leadership, Transactional Leadership, Job satisfaction,

Employee performance.
GJMBR-A Classification : FOR Code: 130304, 150305 JEL Code: O15, M31
ImpactofLeadershipStyleTransformationalTransactionalLeadershipOnEmployeePerformanceMediatingRoleofJobSatisfactionStudyofPrivateSchoolEducatorInPakistan
Strictly as per the compliance and regulations of:
2012 . M. Umer Paracha, Adnan Qamar, Anam Mirza, Inam-ul-Hassan & Hamid Waqas.This is a research/review paper,
distributed under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License
http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any
medium, provided the original work is properly cited.
Abstract - The purpose of this research is to determine that
does leadership styles that is Transformational leadership style

and transactional leadership style has an impact on employee
performance. Also we wish to see that if job satisfaction has a
mediating effect or not. For this purpose data was collected
from 6 schools working in Rawalpindi and Islamabad. Result
shows that transactional and transformational both are
significantly positive associated with Employee performance
however transactional leadership was more significant then
transformational. Another important discovery made was there
is no mediating role of Job satisfaction between transactional
leadership. But it mediates with transformation leadership and
employee performance.
Keywords : Leadership style, Transformational

Leadership, Transactional Leadership, Job satisfaction,
Employee performance.
I.
Introduction
n todays competitive environment, organizations

expand globally and face a lot of challenges to meet
their objectives and chased to be more successful
from others. Leaders play essential role in
accomplishment of these goals and boost employees
performance by satisfying them with their jobs therefore,
it grasps the attention of researchers from many years,
yet we are unable to focus on one definition. Many
researchers have studied different aspects of
leadership. According to Mintzberg (2010) Leadership is
the key of trust that comes from the respect of others.
Jamaludin (2011) conducted their research on the
leadership and their styles and suggested that effective
Author : MS (Management Sciences) Muhammad Ali Jinnah
University Islamabad Campus. Tel:0334-95633699
(Corresponding author) E-mail : umar.cr_maju@yahoo.com
University Islamabad Campus. (Corresponding author)
E-mail : adnanqamar3@gmail.com
University Islamabad Campus. E-mail : anamcapricorn5@yahoo.com
University Islamabad Campus. E-mail : inamhq2005@yahoo.com
University Islamabad Campus. E-mail : hamid_wqs@hotmail.com
& Hamid Waqas
leaders are those who use their powers for betterment of

the followers and organization as well. Leaders are one 55
of the major key drivers in enhancing the production and
innovations (Lievens et al, 1997). According to Raelin
(2011) Leadership is directly connected to the practices
to which people are dedicated. The most substantial
of leaders is their influential personality that has positive
relation with the followers job satisfaction and the
performance (Lian et al, 2011).
Although different theoretical approaches being
study leadership but most renowned frame-work is
transformational and transactional leadership. (Hambley
et al, 2007). Transactional leadership is used when
organizations give appraisals by recognition, pay
increases and career advancement for well performers
and punishment for poor performers (Bass, 1998).
Transactional leadership exchange agreements rewards
effort, promises of rewards for better performance and
recognizes
the
achievements,
in
contrary,
transformational leadership gives vision and sense of
mission, instills pride and gain, respect and trust (Bass,
1990). Mulla & Krishnan (2011) proposed that
transformational leadership is associated with
subordinates moral values.
Most of the researchers emphasized on
transformational leadership but some also gave
importance to transactional leadership. Egan, Sarros &
Santore (1995) articulate, transformational style is more
effective then transactional style, regardless of
organizational type, method adopted by the leaders is
based on his personal ability, preferences and
experiences. But organizations output is negatively
affected by the transactional leadership, (Bass, 1999).
When the situation is unapparent, a leader must follow
the transformational style to identify the key factors of
the situation and choose the right style to situation
appropriately (Somech & Wenderow, 2006). The positive
effect of transformational leadership is that it enhances
self knowledge, increasing the performance expectation
value to the financial performance of the teams (Avolio,
Waldman & Einstein, 1988). Afolabi, Obude, Okediji, &
Volume XII Issue IV Version I
M. Umer Paracha , Adnan Qamar , Anam Mirza , Inam-ul-Hassan
March 2012
Impact of Leadership Style (Transformational &

Transactional Leadership) On Employee
Performance & Mediating Role of Job
Satisfaction Study of Private School (Educator)
In Pakistan
2012 Global Journals Inc. (US)
Impact of Leadership Style (Transformational & Transactional Leadership) On Employee Performance &
Mediating Role of Job Satisfaction Study of Private School (Educator) In Pakistan
March 2012
Ezeh (2008) did analysis and give evidence in the favor

of transactional leadership, they observed that
transactional leadership is more effective when
organization desire to achieve their aims and objectives.
Supervisors play a vital role in job satisfaction of the
and gives a new direction of thinking, but on other side
transformer leaders can some time exploit workers by
using their power to achieve personal goals (Franke &
Felfe, 2011). Transformational leadership also adds
employees. Moyes (2007) carry out research on
determinants of job satisfaction and resulted that loyalty
to ones employer and job longevity are more important
as compared to compensation, benefits and supervisors
for Mexican-American and vice versa for the NonHispanic. There is a strongest correlation between the
leadership style and the job satisfaction (Lok, 1999). But
the result demonstrated that transformational leadership
56 has a higher correlation with job satisfaction. (Charles et
al, 2007). Employees perception about their job
occupation is considered to be imperative element in
measuring job satisfaction, their perception refers to
occupational prestige, career development and
employees self esteem, transformational leadership
focuses on all dimensions (Bogler, 2001).
Most of the researcher
follows
the
transformational leadership, but in the context of
Pakistan, very narrow research has been done on the
leadership style adopted in the education sector. The
purpose of our research is to identify effective
leadership style in Education sector of Pakistan, as
Pakistani culture is based on the power distance and
gives priority to the autocratic decision making style. In
Pakistani culture there is high power distance but low
individualism (Routamaa & Hautala, 2008). Jeger (1986)
manifested that transactional leadership is more
successful in variety of countries outside North America
including India, Nigeria, Japan and Pakistan. Pakistan is
bureaucratic state where command and control rules
(Ahmed, 1996). Therefore transactional leadership can
be more effective in this specified culture, yet the main
objective of our research is to identify the true leadership
styles in education sector that will leads towards
increasing job satisfaction and ultimately resulted in
higher employee performance.
II.
Literature Review
a) Transactional leadership
To promise the success of organization it is

important to adopt the appropriate leadership style.
Examining, praising and assessing a leader do not truly
assure the followers honesty in this case
transformational leadership becomes inapplicable (Parry
& Thomson, 2002). Leaders can than practice
transactional style of leadership. Transaction literally
means exchange therefore, transactional leadership
deals with the exchange between leader and his
followers. Kuhnert & Lewis, (1987) Stated that

transactional leadership is an exchange between
followers and leaders desired outcomes by fulfilling the
leaders interest and followers expectations, which
involves promises or commitments embedded by
respect and trust. Jung, (20002001) also defines
transactional leadership as leader aptitude towards
identification of followers needs and aspirations and
clearly demonstrate the ways to fulfill these needs in
exchange for performance of followers. Bass (2000)
reported that effective leaders accommodate the
interests of their subordinates by giving contingent
incentives, honor and promises for those who
auspiciously succeeded in fulfilling the commitments of
the leaders or the organization
Transactional leadership is in focus of
researcher from many years and premeditated in
numerous ways with different variables. (Howell &
Merenda, 1999) conducted his research on association
between leader-member exchange, transactional and
transformational leadership in forecasting employees
performance and concluded that transactional
leadership style is a positive predictor of followers
performance. (Bass, Avolio, Jung, & Berson, 2003) carry
out their research for military platoon which was an
organization, working in an unstable environment and it
proves that transactional leadership increases
performance among the soldiers. Transactional
leadership style is relatively weakly associated with
performance and is optimistically related to perception
of organizational politics (Gadot, 2007). Rejas, Ponce,
Almonte, & Ponce, (2006) Indicated that there is a
dominance of the transactional leadership style over
transformational and laissez faire styles. Personality
factors, agreeableness and conscientiousness are
positively related to transactional leadership which is
moderated by perceived dynamic working atmosphere
(Hoogh, Hartog, & Koopman, 2005). While investigating
the effect of leadership on organizational performance in
Russian companies, (Elenkov, 2002) observed that in
Russia managers who adopt transactional leadership
behavior positively correlates with organizational
performance and innovation.
From last few decades there has been an
explosion of speculative and empirical work conducted
on leadership styles. Transactional leadership is also
measured in terms of job satisfaction and employee
performance. (Bass, 1998) defines that transactional
leadership occurs when the leaders incentive and
control are depending on the adequacy of followers
performance. Research conducted by (Burke, Stagl,
Klein, Goodwin, Salas, & Halpin, 2006) on leadership
behaviors and team performance outcomes revealed
that transactional leadership behavior is significantly
related to team performance. The relationship of
transactional leadership and performance was also
b) Transformational leadership
Leadership has two main dimensions i.e.

transactional and transformational leadership (Adnan &
Mubarak, 2010). Leadership that creates valuable and
positive change in the followers is Transformational
Leadership. Such a leader focuses on "transforming"
others to help each other, to look out for each other, to
encourage and be harmonious, and to pay attention
towards organization as a whole. Lievens, Geit &
Coetsier (1997) and Berson, Shamir, Avolio & Popper
(2001) articulate that transformational leadership is
helpful for innovation implemented by the organization in
the era of competition. Transformational Leader can
smooth the progress of these changes by placing value
on the enlargement of a vision and by encouraging
subordinates to pursue that vision. It notifies four
leadership scales, namely charisma, inspiration,
individual consideration, and intellectual stimulation.
Employees can easily share their knowledge
among them when organization used transformational
leadership style (Behery, 2008). Zafra, Retamero &
Landa (2008) wrap up that transformational leader have
high emotional intelligence and they emerge as leader
during group cohesiveness, it also uplifts the morale,
motivation, and morals of their followers (Bass, 1999). It
also focuses on more sensitive side of organizational
interactions like vision, culture, values, development,
teamwork, and service (Fairholm, 2001). By
emphasizing the symbolic and expressive aspects of
task goal efforts and the important values involved, the
transformational leader makes the difference (Bass,
1998). Transformational leadership has been chosen
due to its innovative as well as productive and
supportive nature (Fatima & Ahmad & Usman, 2011).
One can observe the combination of three mechanisms
in Transformational Leadership: Leaders give values to
their subordinates, motivate their subordinates and
persuade in mounting or varying followers needs
(William, Richards, Steers & James, 1995).
Majority of the researchers had associated
transformational
leadership
with
employees
57
uncertainty avoidance high power distance and followed

those practice that produces centralization, fraud,
discrimination and gender differences in administrative
position (Islam,2004) shows that culture is based on
autocratic style and the person hold the power is always
right and more respectful with having privileges and
more centralization whereas strong uncertainty
avoidance reflects the High stress, Aggression,
obedience of rules and regulation and leads towards
fear and threat of unambiguous situations (Hofstede,
1991). While conducting research on different style of
leadership in an organization, a researcher must keep in
mind the cultural variations in different countries.
H1: transactional leadership is associated with
employees performance
investigated by (Rowold & Schlotz, 2009) in their study

they explain that transactional leadership is the trade of
explicit transactions, in result of these transactions
leaders rewards amplifies the performance of their
followers. Transactional leadership is based on tentative
support and subordinates are motivated through
recognition or else corrected through punishment due to
this exchange relationship, the expected performance
achievement leads towards followers promotion (Munaf,
2011). In other words, transactional leadership
encourages followers to perform according to the
leaders expectation and get rewards and promotion.
Ample support is available in the leadership literature
according to (Avolio, Bass, & Jung, 1999), to make
transactional leadership more effective, appropriate
usage of contingent reward is an important feedback to
assemble expectations with followers in term of their
performance. Facilitating the followers to be familiar with
job obligations and recognized objectives to achieve
estimated degree of performance is an important aspect
of transactional leadership style (Lo, Ramayah, & Min,
2009). (Janssen & Yperen, 2004) acknowledged that
transactional leadership assists the efficiency by
enhancing innovative job performance and job
satisfaction. Hence, the study shows that transactional
leadership has significant impact on employee
performance and job satisfaction.
Culture is an imperative distinguished
characteristic of every country. Researchers studied the
current phenomenon in different cultures which changes
the impact of one variable on another due to variation in
cultural ethics. The significance of culture on leadership
is reported by (Bass, Avolio, & Suny, 1993) as culture
influences the leadership as much as leadership
influences the culture. The concept of culture is
commonly used in literature in field of global
management, human resource development, and
organization behavior to gauge the effects that can
differentiate between countries and work-related or
ethnic groups (Kuchinke, 1999). He compared
leadership style of German and US telecommunication
employees and proposed that the rank of US
respondents on two dimension of transformational
leadership(charisma and inspirational motivation) are
higher than of German managers. (Ardichvili &
Kuchinke, 2002) in his comparison of leadership styles
and cultural values among leaders and followers in four
different countries, has found that, with reference to four
dimensions of transformational leadership style, there is
a higher level in Republic of Georgia than other
countries and also found higher level of transactional
leaderships styles in four states of former USSR. Cultural
differences between the countries are commonly
determined by Geert Hofstede cultural dimension
comprises of power distance, individualism, masculinity
Uncertainty avoidance and long-term orientation. In
Pakistan there is a high power distance and strong
March 2012
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58
performance and job satisfaction and argued that

transformational leadership can be the best predictor of
employee performance (Raja & Palanichamy, 2011).
Transformational culture boosts both the organization
and the employees performance (Bass & avolio 1993)
without enforcing extra burden (Schlotz, 2009). The
transformational leadership condition was connected
with high task performance, higher collective support
acuity, greater efficacy beliefs, lower harmful effect, and
lower threat assessment compared to the transactional
conditions. (Lyons & Schneider, 2009) and also provide
guidance to their followers towards organizational
objectives (Metcalfe & Metcalfe, 2005). Prior researcher
has demonstrated that followers who work under
transformational leaders are motivated and committed
which facilitates their satisfaction with jobs (Givens,
2008). Khan, Ramzan, Ahmed and Nawaz have made
their research on Transformational, Transactional, and
Laissez-Faire Styles of teaching faculty as predictors of
satisfaction, which direct towards extra effort among the
students and summarized that teacher faculty, must
have to adopt transformational style because it brings
higher satisfaction among their students, but the
transformational leadership does not keep the check
and balance of democratic dissertation and deals with
emotions instead of facts. So the transformational
leaders are going against the principles of
organizational development (Bass & Steidlmeier, 2006).
Transformational leadership is proved to be more useful
in variety of businesses, military, engineering, hospital,
and educational conditions than transactional
leadership (Bass 1998). Masi & cook (2000) also have
the same thoughts and believed that transformational
leadership style is only the factor of increasing
employee productivity but transactional leadership is
now useless.
Culture plays an important role in describing
leadership style adopted in every country as the cultures
distinguishes the members of one group from another.
We can say that culture and leadership style interrelate
to each other. Dickson, Hartog & Mitchelson (2003) and
Byrne, Bradley (2007) have described the importance of
culture and suggested that only the societal cultures
point out the best leadership style. Hofstede (1980) have
made their research on Pakistani culture and notify that
there is high power distance and uncertainty avoidance.
Power distance is a level where less powerful members
of the society with in a nation agree to its unequal
distribution. Whereas uncertainty avoidance can be
explained, the extent to which the members of the
culture always feel insecure by any unknown situation
(Hofstede, 1997). Lok (2003) suggested; where power
distance and bureaucratic culture exists, firms provide
strong autocratic style of leadership. Bass, avolio (1993)
clearly indicated that culture gives the direction to
organization whether transactional or transformational
leadership is effective.
H2: transformational leadership is associated with

employees performance
c) Job Satisfaction
From decades, researchers take considerable

attention on job satisfaction. Researchers discussed
different aspects and determinants of job satisfaction in
their own ways. Job satisfaction was first presented by
Hoppock (1935) in his book as theoretical construct
(Young & Tsu, 2010). McNamara (1999) defines job
satisfaction as: ones feelings or state of mind
regarding the nature of their work. Job satisfaction can
be influenced by a variety of factors, e.g. the quality of
ones relationship with their supervisor, the quality of the
physical environment in which they work, degree of the
fulfillment of their work, etc. Employee explores the
things by job satisfaction that is important to him
(Commander and Dinesh, 2011) and feels a level of
satisfaction (Bekele & G.M, 2011). Good relations with
co- workers increase the job satisfaction (Nazir, 1988).
For an organization to compete international market,
one of the key factors is that its employees are satisfied
with their jobs and leaders have amusing relationship
with their subordinates and as result employees are
pioneer and innovative that helps to grow up the
business (Fatima, Bushra & Usman, 2011). An
increasing aid provided by peers cause decrease in role
ambiguity and role conflict which increases job
satisfaction (Goldstein, Rockart, 1984).
Job satisfaction is a very important aspect for
modern organization and much research work has been
performed to increase job satisfaction. (Hungra, Chuni,
Aslam, Azam and Rehman, 2005) conclude that there is
a positive relationship between autonomy, leadership
behavior, team work environment and job satisfaction.
Voon, Ngui and Ayob (2011) show the stronger
relationship between transformational leadership and
job satisfaction. If the organization has to enhance job
satisfaction among their workers and to increases
commitment, researcher viewed that they must follow
transformational leaders (Koh, Steers & Terborc, 1995).
Krishnan (2005) express transformational leadership as
a key factor of high job satisfaction and thus increased
employee performance. Schaubroeck, Lam (2007) is of
view that there is positive relationship between
transformational leadership and employee performance
and it creates a positive impact on team performance.
Transformational leadership is effective in two ways, 1st
it builds enthusiasm, secondly, instills sense of vision
that lead to higher job satisfaction, due to this,
employers performance takes a positive slope
(Kennedy, Anderson, 2002).
Janssen, Yperen (2004) says that transactional
leadership entertains employee performance by
increasing the followers job satisfaction. Participative
leadership style or directive both can become the
element of increasing employees participation, and in
From the initiation of globalization, the foremost

confront for manager is to expertise different strategies
to boost firms performance (Habib, Khurram & Idress,
2010). For the strength of an organization job
satisfaction plays a vital role which has significant effect
on employee performance. And the word performance
we used to pass on the individual aptitude to be
inspired, stirring, pioneering and to determinant to
achieving the goals on an organization (Walumbwa &
Hartnell, 2011). Previous study has examined that a
positive relation is found between satisfied employees
and organization, as the performance of the satisfied
employees are more productive for the organization
then less satisfied employees (Ostroff, 1992).
Leadership is associated with employee performance
(Ogbonna & Harris 2000). The relationship between
Leadership
and
performance
is
established
considerable attention (Gadot, 2006). The main theme
of the every organization is to enhance employee
performance. Howell, Merenda (1999) suggested that
transformational leadership will play an imperative role in
increasing job satisfaction as well as role play to achieve
organizations goal and employees acts (Goodwin,
2001). Walumbwa, Avolio & Zhu (2008) expressed,
transformational leadership correlated with subordinate
skills with work worth to asses employees performance.
They trained their workers, arranged meeting with their
subordinates and take feedback from their subordinates
and in end result employee productivity added. Firm
mostly increase employees performance by giving
empowerment to their team members (Ozaralli, 2002).
Researchers have also studied the employee
performance with extraverted leadership and gave very
interested results, employee performance are increased
under the extraverted leadership when employees are
passive. And if employees are proactive, result will be
opposite (Grant, Gino & Hofmann, 2011).
III.
Research Methodology
Measures : Data was collected For leadership

style by using a multifactor leadership questionnaire,
adopted from ( Avolio & Bass 2004) for transformational
leader ship style having three question and two question
from LMX-7 (Graen and Uhl-Bien,1995). Transactional
leadership style was also measured by using multifactor
leadership questionnaire, developed by (Avolio & Bass
2004), having 2 items. While Job satisfaction questions
were adopted from ( Brayfield and Rothe,1951) and
employee performance questions.
A five point likert scale was used with 1
representing strongly agree and 5 representing strongly
disagree. The questionnaires were personally distributed
to respondents working in private schools.
Participants: A total of 250 questionnaires were
distributed from the employees of private Educator
school, out of which 124 were received back making
response rate of 49.6%.
a) Research model
Sample: Respondents included employees

working in private schools located in Rawalpindi,
Islamabad. The following table describes the sample
composition.
59
d) Employee Performance
Researchers
have
studied
employees
performance with variety of variables. One of the
researcher observed that, satisfied employees not only
be the cause of increasing employee performance but
also they dont think to leave organization (Opren, 1986).
Firms also arranging training secession for their
employees, in order to enhance job satisfaction,
because firms know, satisfied employees will give more
performance (Jones, Jones, Latreille & Sloane, 2004).
Su, Baird and Blair (2009) feels, major involvement to
give up any organization by satisfied employees, how
much they are satisfied the level of productivity will be
high as much. Karatepe and Kilic (2009) indicate that
work-family conflict and work-family facilitation affect
employees performance and find out that work-family
facilitation enhances job satisfaction. According to
Biswas (2009), organizational communication act in way
to fastening workforce by transmitting cultural norms
from an organizational framework to an individuals way
of life in the organization and by supporting style of
manager also plays incredible role for increasing
employees performance.
turn enlarged performance (Kahai, Sosik & Avolio,

2004). Liang, Chan, Lin and Huang (2011) take job
satisfaction as mediator between transactional and
transformational leadership style and articulate that
these styles create strong correlation between
employees performance. Nemanich and Keller (2007)
also have made a linkage between leadership style, job
satisfaction and employee performance. Though
researchers have conducted research on different
aspects of leadership styles, their impact on job
satisfaction and employee performance, however
momentous thrust in context to the Pakistani culture yet
to imparted (Adnan & Mubarak, 2010).
H3a:
job
satisfaction
is
mediator
between
transformational leadership style and employee
performance.
H3b: job satisfaction is mediator between transactional
leadership style and employee performance.
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60
Frequency
Description
Gender
Male
Female
Age
18 25
25 30
30 35
35- 40
40 above
Tenure
1
2 -3
36
69
9 12
Qualification
Matric
Fsc
Bachelor
Master
Percentage
97
25
79
21
27
34
39
13
9
22
28
32
11
7
24
36
42
14
6
20
30
34
11
5
8
21
53
40
7
17
43
33
IV.
Model
1
Correlations
LDTR
LDTS
JS
EP
LDTR
.200*
.103
.274**
LDTS
.200*
.738**
.184*
JS
.103
.738**
.139
EP
.274** .184*
.139
*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).
** Correlation is significant at the 0.01 level (2-tailed). n=122
The correlation matrix indicates that employee

performance is strongly correlated with the transactional
leadership style that is .274** similarly the
transformational leadership is also positively correlated
with team performance that is .184*
Table 2 : Regression analysis

Sig
LDTR
3.121
.001
LDTS
2.039
.044
Dependent Variable: Employee performance
R2
Transformational Leadership
34%
Transactional leadership
55%
Regression analysis indicates that the value of
R square is .88% which indicates that it is significant,
Sig.
LDTR .264
2.990
.003
LDTS .161a
1.202
.232
a) Analysis
Table 1: Correlation coefficient matrix
Beta In t
Dependent variable EP
Results
model
which means that 88% creates an impact on dependent

variable is used in this study. While only 12% variation
remained UN explained due to some unknown
variables.
Result of the mediating regression approach for JS
H1: transactional leadership is associated with

employee performance
The result clearly indicates that transactional
leadership is highly correlated with employee
performance as above table of correlation analysis
shows that transactional leadership is positively
connected with employee performance and in
regression analysis value of t is also greater than 2 (i.e.
3.121) it is lump sum that
Transactional leadership is positively associated
with employee performance (H1- Accepted)
H2: transformational leadership is associated with
employee performance
The result clearly indicates that transformational
leadership is correlated with employee performance but
less than transactional leadership
Above table of correlation analysis shows that
transformational leadership is weakly connected with
employee performance but in regression analysis value
of t is greater than 2 (i.e. 2.039) )it is lump sum that
Transformational leadership is positively but
weakly associated with employee performance (H2Accepted)
H3a: Job satisfaction is mediating between transactional
leadership and employee performance.
The result shows that Job satisfaction is not
creating a role of mediating variable between
transactional leadership and employee performance
because by controlling job satisfaction value of t
become greater than 2 which indicates that job
satisfaction is not a cause of employee performance if
transformational leadership is adopted. (H3a-Rejected)
H3b: Job satisfaction is mediating between
transformational leadership and employee performance.
The result shows that Job satisfaction is playing
a role of mediating variable between transformational
leadership and employee performance because by
controlling job satisfaction value of t become less than 2
and
job
satisfaction
is
mediator
between
transformational leadership and employee performance.
(H4-Accepted)
This study was based to determine whether

which leader ship style i.e. Transactional or
Transformational leadership style can increase the
performance of Employees of private school (educators)
working in Pakistan. The results indicate that
hyphothesis1 (H1) has strongly positive relationship with
Employee performance with .27**
The level of
significance of transformational was positive but weak
i.e. .18* then transactional leadership with respects to
employee performance, in our Pakistani culture where
power distance and uncertainty is high, transactional
leadership is more suited in order to achieve targets, in
a bureaucratic nation where one man show rules and
autocratic leadership follows through out the whole
history, Ahmed (1996) also indicated that Pakistan is
bureaucratic state where command and control rules ,so
employees are also habitual of transactional leadership
style and they assume themselves that their leader will
be strict and follows rules and regulation so most of the
private organization prefers to motivate their employees
by using Transactional rewards such as promotion,
bonuses and punishments etc. Now with the passage of
time, the trend is slowing changing and moving towards
the transformational leadership style as above
mentioned that .18* correlation exits between
transformational leadership style and employees
performance, but the performance level is low as
compared to transactional leadership because
employees are feel relaxed when they come to know
that their leader will not be going to punish them.
However the third Hypothesis (H3a) is not
accepted because their was no mediating role of Job
satisfaction, this is due to organizations basic purpose
is to achieve their targets without caring about the
satisfaction of the employees. Results clearly indicating
that employees are not satisfied with their jobs yet their
productivity level is increased because of the fear that
they will be punished if their tasks will not b completed.
Or another reason is might be employees are hoping for
promotions or bonuses
The hypothesis (H3b) indicates that job
satisfaction is mediating between transformational
leadership and employees performance as 0.73** is
showing
relationship
between
transformational
leadership and job satisfaction. And if we excluded job
satisfaction between them, value of t becomes decline
to 2, that is the sign of importance of job satisfaction
between transformational and employee performance. If
we explained this results, it shows that employees are
satisfied with transformational leader but they did not
give high performance, this results showing that when
employees feels that their leader is supportive and
always encouraged them, employees take them light
and in result productivity level is low.
Another important observation deducted from
the result was the of R square value of transactional
leadership is showing 55%, which indicates that

education sector (educators) we have selected for our
research emphasize heavily on transactional leadership
while only 34% rely on transformational leadership and
just 12% are the other factors that create an impact on
employees performance. These results also informed
that employee performance is heavily relying on
leadership and it can play a vital role in determining the
performance of employees, so organization must
carefully analyze, what kind of leadership they should
adopt if they to want to increase employee performance
and the result suggests us organization must opt
Transactional leadership style so that employee
performance can be increased but some other practices
should be introduced so that Job satisfaction also can
be increased.
VI.
Implications
This research is extremely important for

mangers of private school owners or institutions while
monitoring or supervising the employees or
subordinates because it may help them to understand
and to implement a right leadership style to increase the
performance of the followers. It is suggested that
organization should implement the mix of both
transactional and transformational leadership style
according to the certain situation and nature of task
assigned to employees. After analyzing the data, it is
recommended that for routine task organization should
adopt transactional style of leadership and
transformational leadership style should be used when
there is complexity in job and interrelated tasks. But in
context of Pakistani culture, it is suggested for new
entrants or running educational sector to put their major
focus on transactional leadership in order to take high
level of performance level from their employees.
VII.
Limitation And Future Research
Beyond the distinctive condemnations of survey

measures, there are several important limitations to the
current study which illustrates that this research is not
fully conclusive. First, current research only covers and
focuses on private institutions or organizations although
there are many Government organizations currently
operating in Pakistan which may demonstrate different
results due to difference in their environment. The
dissimilarity between private and government owned
organization may effect differently on leadership style
and there may be some important variables missing
which have positive impact on employee performance.
So, while conducting a future research these aspects
should be kept in mind by doing so this can give more
valuable results. Secondly, since all samples included
were collected by employees of private organization
through questionnaires, there was no control over the
consistency in the method employed for survey
administration. There may be some reasons of
61
Discussion
V.
March 2012
March 2012
62
inconsistent data i.e. non-serious attitude of

respondents, busyness with work or fear of information
leakage leads to biasness, while filling the
questionnaires. The lack of consistency or biases in
sampling may have increased measurement error in
data analysis.
Nevertheless, considering these limitations, the
current study endow with some guidance to carry out
future research in different directions for assessing or
studying different leadership styles which will increase
employee performance in an organization.
Our
investigation covers only two types of leadership styles
i.e. transactional and transformational, researchers can
also study other leadership styles like laissez-faire style,
servant style and can find appropriate leadership style
which plays an essential role for enhancing employee
performance.
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Global Journal of Management and Business Research

Volume 12 Issue 4 Version 1.0 March 2012

Impact of Leadership Style (Transformational & Transactional

Keywords : Leadership style, Transformational Leadership, Transactional Leadership, Job satisfaction,

Abstract - The purpose of this research is to determine that

does leadership styles that is Transformational leadership style

Keywords : Leadership style, Transformational

n todays competitive environment, organizations

& Hamid Waqas

leaders are those who use their powers for betterment of

Volume XII Issue IV Version I

Global Journal of Management and Business Research

M. Umer Paracha , Adnan Qamar , Anam Mirza , Inam-ul-Hassan

Impact of Leadership Style (Transformational &

2012 Global Journals Inc. (US)

Global Journal of Management and Business Research

Volume XII Issue IV Version I

Ezeh (2008) did analysis and give evidence in the favor

To promise the success of organization it is

2012 Global Journals Inc. (US)

followers. Kuhnert & Lewis, (1987) Stated that

Leadership has two main dimensions i.e.

Volume XII Issue IV Version I

uncertainty avoidance high power distance and followed

Global Journal of Management and Business Research

investigated by (Rowold & Schlotz, 2009) in their study

Global Journal of Management and Business Research

Volume XII Issue IV Version I

performance and job satisfaction and argued that

H2: transformational leadership is associated with

From decades, researchers take considerable

From the initiation of globalization, the foremost

Measures : Data was collected For leadership

Sample: Respondents included employees

Volume XII Issue IV Version I

Global Journal of Management and Business Research

turn enlarged performance (Kahai, Sosik & Avolio,

Global Journal of Management and Business Research

Volume XII Issue IV Version I

*. Correlation is significant at the 0.05 level (2-tailed).

The correlation matrix indicates that employee

Table 2 : Regression analysis

Dependent Variable: Employee performance

Table 1: Correlation coefficient matrix

which means that 88% creates an impact on dependent

H1: transactional leadership is associated with

This study was based to determine whether

leadership is showing 55%, which indicates that

This research is extremely important for

Limitation And Future Research

Beyond the distinctive condemnations of survey

Volume XII Issue IV Version I

Global Journal of Management and Business Research

Global Journal of Management and Business Research

Volume XII Issue IV Version I

inconsistent data i.e. non-serious attitude of

References Rfrences Referencias

2012 Global Journals Inc. (US)

10. Bass, B. (1999). Two Decades of Research and