The effect of transformational leadership on employees’ motivation and job satisfaction with the mediation impact of motivation in improving job satisfaction : implication for businesses after Covid-19 pandemic

Abstract

This master's thesis provides a comprehensive analysis of the complex interplay between transformational leadership, motivation, and job satisfaction while addressing a gap in the current research landscape, specifically focusing on the mediating role of intrinsic and extrinsic motivation between transformational leadership and job satisfaction. The data analysis, collected through a questionnaire and processed using IBM SPSS and IBM AMOS software, reveals key insights into the factors that influence employee motivation and, indirectly, job satisfaction. Notably, "Vision," "Innovative thinking," "Empowerment," "Supportive leadership," "Staff development," and "Lead by example" emerge as pivotal drivers of motivation and, subsequently, job satisfaction. Importantly, the findings indicate that there is no direct effect of transformational leadership on employees' job satisfaction.

This observation leads to the conclusion that remote leadership during the Covid-19 pandemic did not significantly alter employees' perceptions and judgments regarding their motivation. However, it may have influenced the primary leadership drivers that directly impact job satisfaction. The study also identifies specific intrinsic and extrinsic motivation factors that strongly influence job satisfaction. The most influential intrinsic motivation factors include "Working overtime without pay," "Job worth the effort," "Work satisfaction," and "Very satisfied with job." On the other hand, the most relevant extrinsic motivation factors are "Compensation motivation system," "Promotion possibilities stimulate to work hard," "Enthusiastic salary level," and "Existing promotion possibilities."

Furthermore, the research reveals that intrinsic motivation mediates the relationship between transformational leadership and the first job satisfaction scale (27-31), while extrinsic motivation mediates the relationship between transformational leadership and the second job satisfaction scale (32-37). Additionally, the study finds no substantial gender-based differences in how subordinates evaluate their leaders or rate intrinsic and extrinsic motivation factors and job satisfaction factors. As expected, the results show that flexible and creative workplaces are more successful in implementing transformational leadership compared to highly hierarchical and bureaucratic organizations.

Despite its valuable insights, the master's thesis acknowledges several limitations. It is cross-sectional in nature, relying solely on quantitative data collection. Multicollinearity issues exist among the variables of the intrinsic and extrinsic motivation scales with the first (27-31) and second (32-37) job satisfaction scales respectively, which were addressed through multiple linear regression analysis by separating highly correlated items. Moreover, contextual factors may influence the results, introducing a level of complexity. Future researchers have to keep in mind these limitations.