Transformational Leadership and Performance

Abstract

This research seeks to examine the effect of transformational leadership on performance with self-efficacy and work engagement as the mediating variables. The sample is local government financial managers in Surakarta City, Central Java Province, Indonesia, with 438 usable questionnaires. The study predicts and finds that that transformation leadership positively affects performance. In particular, transformational leadership increased the ability to achieve higher performance. Further, the study also shows that self-efficacy and work engagement mediated the relationship between transformational leadership and performance. The findings highlight the importance of leadership style to achieve higher performance. Thus, leaders with transformational leadership are better able to motivate their employees to achieve better performance.