The Role of Work Engagement in Mediating the Relationship Between Transformational Leadership and Employee Performance: Evidence from PT Bank Sinar Lestari Utama Tbk

Rianto Manurung; Riza Afni; Rosenta Febri Mutiara Sinaga; Fitri Aisyah Ritonga

Authors

Rianto Manurung Akademi Pariwisata Medan Hotel School
Riza Afni Universitas Pembinaan Masyarakat Indonesia
Rosenta Febri Mutiara Sinaga Akademi Pariwisata Nusantara Medan
Fitri Aisyah Ritonga Universitas Budi Darma Medan

Keywords:

transformational leadership; work engagement; employee performance; mediation; financial services

Abstract

This study examines the effect of transformational leadership on employee performance with work engagement as a mediating variable. The theoretical framework used is social exchange theory and the Job Demands–Resources model. Primary data were collected through a survey of 185 permanent employees at a banking company (case study) using a five-point Likert scale questionnaire. Analysis was conducted using stepwise multiple linear regression with tenure and gender as control variables, and the significance of the indirect effect was tested using bootstrapping with 5,000 resamples. The results indicate that transformational leadership has a positive effect on work engagement (b = 0.622; p < 0.001) and on employee performance (total effect b = 0.476; p < 0.001). Job engagement positively influences performance (b = 0.478; p < 0.001) and partially mediates the leadership–performance relationship (indirect effect = 0.297; 95% CI [0.202; 0.396]), with a mediation proportion of approximately 62.4%. These findings indicate that transformational leadership improves performance primarily by enhancing employees' energy, dedication, and engagement in their work. Managerial implications and directions for further research are discussed in the final section.

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