THE EFFECT OF TRANSACTIONAL LEADERSHIP ON EMPLOYEE PERFORMANCE: THE MEDIATING ROLE OF ORGANIZATIONAL TRUST AND THE MODERATING ROLE OF PERCEIVED ORGANIZATIONAL SUPPORT

Abstract

This study aims to analyze the effect of transactional leadership on employee performance, with organizational trust acting as a mediating variable. This study employs a quantitative approach using the Partial Least Squares - Structural Equation Modelling (PLS-SEM) method. Data were collected from 56 respondents via a questionnaire. The results indicate that transactional leadership does not have a significant direct effect on employee performance. However, transactional leadership has a positive and significant effect on organizational trust, and organizational trust also has a significant effect on employee performance. Furthermore, the mediation test results show that organizational trust mediates the relationship between transactional leadership and employee performance. These findings suggest that the influence of leadership on employee performance occurs indirectly through organizational trust. This study contributes to the development of human resource management by emphasizing the importance of trust as a mediating variable.