The conditional Indirect Effect of Leadership Styles on Employee Performance: The Moderator Role of Employees’ Educational Level

Abstract

The purpose of this study is to test a moderated mediation model in which transformational, transactional, and laissez-faire leadership styles independently predict employee performance through the mediating role of public service motivation. Furthermore, this study examines whether educational level moderates the indirect relationship between leadership styles and employee performance via public service motivation. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) and data from a survey of employees working in public institutions in Ethiopia's Oromia region, the results show that transformational leadership has a strong positive impact on public service motivation and a significant direct effect on employee performance, whereas transactional leadership exhibits smaller positive effects and laissez-faire leadership shows negligible influence. While transformational and transactional leadership enhance performance through public service motivation across the workforce, this process is not uniform among employees. The findings show that employees with bachelor's degrees have a stronger motivational relationship than their postgraduate counterparts. The study contributes to leadership and public administration literature by demonstrating that leadership effectiveness functions through a conditional motivational process. Consequently, these results suggest that organizations must move beyond "one-size-fits-all" development programs.