The Impact of Transformational Leadership on Employee Retention: Mediation and Moderation Through Organizational Citizenship Behavior and Communication

• Published in: Frontiers in psychology Vol. 11; p. 314
• Main Authors: Tian, Hongyun, Iqbal, Shuja, Akhtar, Shamim, Qalati, Sikandar Ali, Anwar, Farooq, Khan, Muhammad Aamir Shafique
• Format: Journal Article
• Language: English
• Published: Switzerland Frontiers Media S.A 17-03-2020
• Subjects: communication; employee retention; organizational citizenship behavior; Psychology; small- and medium-sized enterprises; transformational leadership; small- and medium-sized enterprises; communication; transformational leadership; organizational citizenship behavior; employee retention
• ISSN: 1664-1078; 1664-1078
• DOI: 10.3389/fpsyg.2020.00314

This study investigates the impact of transformational leadership on employee retention in small- and medium-sized enterprises (SMEs) and probes the mediating role of organizational citizenship behavior (OCB) and the moderating role of communication. Data were collected using convenience sampling from 505 employees of SMEs. A Smart PLS structural equation modeling (PLS-SEM) was used to estimate the various relationships. The findings of the study reveal a positive and significant relationship between transformational leadership and OCB. Similarly, this study finds a positive and significant relationship in OCB and employee retention. In addition, OCB had a positive mediating effect on the relationship between transformational leadership and employee retention. Furthermore, communication positively moderates the transformational leadership- OCB and OCB-employee retention relationships. Leaders at SMEs should implement the traits of transformational leadership such as developing a compelling vision for employees, focusing on goal achievement, having problem-solving techniques, having a sense of purpose, and spending time on the training and development of the team to enhance OCB and employee retention.