Why Positive Leader Behavior is Good for Job Performance: A Mediation Study

This paper develops a conceptual framework depicting the relationships between positive leader behavior (represented by transformational, authentic and servant leader behaviors), organizational virtuousness, psychological capital, thriving and performance. Based on the social embedded model of thriving, self-determination theory, social exchange theory and broaden and builds theory, our study used a survey methodology to collect data from staff and managers employed in the IT software and banking sectors within Pakistan. Using a sample of 349 followers and 61 leaders, data were analysed using the IBM Statistical Package for Social Science Version 25 and Mplus Version 8. Our results indicated that transformational, authentic and servant leadership predicted employee psychological capital, while transformational and authentic leadership styles predicted organizational virtuousness. Further, organizational virtuousness and employee psychological capital mediated the relationship between positive leader behavior (transformational and authentic) and thriving. These results confirmed that employee thriving mediated both the organizational virtuousness-performance relationship, and the employee psychological capital- performance relationship. Further, leader behavior along with virtuousness and psychological capital played an important role in promoting employee thriving at work which subsequently enhanced employee performance. We conclude our paper by offering managerial and practical implications, especially organizational change and development, within organizations.