The relationship between leadership styles and job performance : the moderating role of performance appraisal politics

Drawing upon the leader-member exchange theory and equity, fairness and justice theory, the present study examined the role of performance appraisal politics in moderating both relationships between transactional and transformational leadership styles with job performance. This study also examined the corresponding dimensions of transactional and transformational leadership styles in relation to job performance. Using the quantitative inquiry, the survey method employed had collected a total of 266 responses from bank managers of six large banks in Sindh, Pakistan. They were selected using the stratified random sampling technique. The PLS-SEM analyses revealed that the study supported both the hypothesized relationships between transactional leadership, transformational leadership styles and job performance. Specifically, positive relationships were found between two dimensions of transactional leadership (contingent reward and management by exception [active]) with job performance. Conversely, the significance of relationship between management by exception (passive) and job performance was not supported. However, except intellectual stimulation, remaining four dimensions of transformational leadership styles, namely, idealized influence (attributed), idealized influence (behavior), inspirational motivation, and individualized consideration, were found positively related to job performance. Additionally, while performance appraisal politics moderated the relationship between transformational leadership style and job performance, the reverse was found for the relationship between transactional leadership style and job performance. In general, the results suggested that transformational leadership indeed plays an integral role in facilitating job performance; this relationship is strengthened in the presence of the moderating variable, performance appraisal politics. Finally, the theoretical, methodological, and practical implications were also included