Transformational Leadership, Job Satisfaction on Employee Performance and the Mediating Role of Organizational Learning Culture in PT. NOVA Plantation

Abstract

This study sets out to examine the bearing of transformational leadership and job satisfaction on employee performance, and in the instance of PT. NOVA Plantation, to evaluate the mediating role of an organizational learning culture. A quantitative cross-sectional survey was the method of choice for this end. Data from the employees were collected with a five-point Likert scale questionnaire and subjected to partial least squares structural equation modeling (PLS-SEM) in SmartPLS 3.0. The measurement model that emerged had the requisite internal consistency reliability and was valid in both convergent and discriminant terms. The structural model explains 50.6% of the variance in employee performance and 32.5% in the organizational learning culture. Transformational leadership has a decidedly positive effect on the latter (β = 0.296, p < 0.001), not unlike job satisfaction (β = 0.405, p < 0.001). These two variables are positively reflected in employee performance as well; the values for transformational leadership and job satisfaction being β = 0.273 (p < 0.001) and β = 0.156 (p = 0.006) respectively. Yet the strongest direct predictor of performance is the organizational learning culture (β = 0.454, p < 0.001), serving in part as a mediator between performance and be it job satisfaction (β = 0.184, p < 0.001) or transformational leadership (β = 0.134, p < 0.001). In short, the findings indicate that through the creation of a conducive workplace, leadership and job satisfaction will improve performance, one way or another.