Understanding Employee Performance Through Transformational Leadership and Organizational Culture: The Role of Job Satisfaction

Abstract

This study aims to examine the effects of transformational leadership and organizational culture on employee performance, with job satisfaction as a mediating variable. Employee performance is a major concern in the banking sector, where operational effectiveness and service quality rely on employees' ability to meet organizational expectations. Leadership and organizational culture are considered important in improving employee performance, although the extent to which job satisfaction explains these relationships requires further examination. A quantitative approach was employed using data collected from 65 employees of PT BPR Aruna Nirmaladuta Gianyar through saturated sampling. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The findings indicate that transformational leadership positively and significantly influences job satisfaction and employee performance. Organizational culture has a significant positive effect on employee performance but does not significantly affect job satisfaction. Job satisfaction positively influences employee performance and significantly mediates the effects of transformational leadership and organizational culture on employee performance. These findings suggest that employee performance is shaped by both organizational factors and individual job satisfaction. This study contributes to the human resource management literature by providing empirical evidence on the role of job satisfaction in linking leadership and organizational culture to employee performance in the Indonesian rural banking sector.