The Moderating Impact of Performance Appraisal Politics on Leadership Styles and Job Performance: Overview From Banking Sector in Pakistan

Abstract

Leadership has been considered as an important factor which has great influence on the performance of organizations, managers, and employees worldwide. The success of the organization depends on the efficiency of the leader to uplift individual performance. Among all other sectors banking sector is considered as backbone of the economy and contributes significantly in the growth of economic development worldwide. Therefore, the present study is called to examine the corresponding dimensions of transactional and transformational leadership styles in relation to 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.

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“…The appraiser should be independent, and employees perceived procedural and distributive justice of the PA process must be established in order to make the PA process effective in influencing employee outcomes (Birckcikli et al, 2016). Similarly, it was argued that PA moderated the relationship between leadership styles, such as transformation leadership behaviour and job performance (Hamid, Shah, Rahman, & Badlishah, 2020). According to Hamide et al ( 2020), the significance of the moderation depends on the degree of procedural justice and fairness of the PA process in moderating the leadership style and job performance.…”