THE EFFECT OF TRANSFORMATIONAL LEADERSHIP ON INNOVATION AND EMPLOYEE PERFORMANCE MEDIATED BY LEADER MEMBER EXCHANGE AT PT. ACEH MANDIRI UTAMA
Published:
2026-09-23Downloads
Abstract
This study examines the direct and indirect effects of transformational leadership on employee performance and innovation through leader-member exchange at PT Aceh Mandiri Utama. The research applied an explanatory, cross-sectional design and used a census of 109 employees from four operational branches. The study collected primary data through a five-point Likert questionnaire and analyzed the model with Partial Least Squares Structural Equation Modeling using SmartPLS 4. Transformational leadership positively affected employee performance (β = 0.442; t = 3.485; p < 0.001), innovation (β = 0.442; t = 2.724; p = 0.006), and leader-member exchange (β = 0.704; t = 5.607; p < 0.001). Leader-member exchange also positively affected employee performance (β = 0.427; t = 3.842; p < 0.001) and innovation (β = 0.437; t = 2.712; p = 0.007). The indirect effects on performance (β = 0.300; p = 0.007) and innovation (β = 0.308; p = 0.036) were significant, indicating partial mediation. The findings show that transformational leadership improves employee outcomes both directly and by strengthening high-quality relationships between leaders and employees.
Keywords:
Employee innovation Employee performance Leader-member exchange PLS-SEM Transformational leadershipReferences
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