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Advances in Social Sciences Research Journal – Vol. 12, No. 2
Publication Date: February 25, 2025
DOI:10.14738/assrj.122.18259.
Gankhuyag, G., Zanabazar, A., Baljinnyam, E., & Dondog, J. (2025). How Employees’ Engagement Mediates Relationship between
Transformational Leadership and Employee Performance: Case of Private Universities in Mongolia. Advances in Social Sciences
Research Journal, 12(2). 38-50.
Services for Science and Education – United Kingdom
How Employees’ Engagement Mediates Relationship between
Transformational Leadership and Employee Performance: Case of
Private Universities in Mongolia
Gantugs Gankhuyag
ORCID: 0009-0008-4706-5908
Department of Management Sciences, Shihihutug University and
PhD Candidate, Department of Management, Business School,
National University of Mongolia, UB, Mongolia
Altanchimeg Zanabazar
ORCID: 0000-0003-0467-4267
Department of Management, Business School,
National University of Mongolia, UB, Mongolia
Enkhtuya Baljinnyam
ORCID: 0009-0004-9976-0831
Department of Management, Business School,
National University of Mongolia, UB, Mongolia
Jagralmaa Dondog
ORCID: 0009-0004-6641-7383
Department of Management, Business School,
National University of Mongolia, UB, Mongolia
ABSTRACT
In today’s competitive environment, effective leadership requires quickly adapting
to situations, listening to and respecting others' opinions, incorporating them into
one’s actions, collaborating with others, and involving them in decision-making,
rather than simply managing and controlling. This study explores the connection
between transformational leadership, employee engagement, and employee
performance in the context of two private universities in Mongolia. Using a sample
of 114 employees, the research investigates how transformational leadership
influences employee performance, with employee engagement acting as a
mediator. Data were collected through surveys, and structural equation modelling
(PLS-SEM) was employed to analyze the relationships among the variables. The
results confirm that transformational leadership positively impacts employee
performance and engagement, with employee engagement mediating the
relationship between leadership style and performance. The study’s findings
indicate that fostering employee engagement through transformational leadership
enhances both individual and organizational performance. Practical implications
suggest that universities should prioritize leadership development programs
focusing on transformational leadership qualities to improve employee
performance. The research contributes to the growing literature on leadership and
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Gankhuyag, G., Zanabazar, A., Baljinnyam, E., & Dondog, J. (2025). How Employees’ Engagement Mediates Relationship between Transformational
Leadership and Employee Performance: Case of Private Universities in Mongolia. Advances in Social Sciences Research Journal, 12(2). 38-50.
URL: http://dx.doi.org/10.14738/assrj.122.18259
employee performance, highlighting the importance of leadership in creating a
work environment that promotes engagement and, ultimately, improved
productivity.
Keywords: Leadership Style, Transformational leadership, Employee performance,
Employee engagement.
INTRODUCTION
The uncertainty of the global marketplace is heightening organizational awareness, requiring
continuous adaptation and active engagement at all levels [1]. Consequently, organizations face
a growing demand for leaders who can navigate the complexities of the evolving global
environment while effectively managing human resources. In today's competitive
environment, organizations must maximize employee performance to achieve their strategic
objectives [2] and leadership plays a decisive role in shaping subordinate performance [3].
As the understanding and perspective of leadership evolve alongside societal changes,
researchers continue to explore pathways to effective leadership [4]. Leadership is a crucial
factor in determining organizational success, with research demonstrating that leadership
styles significantly influence every aspect of organizational functioning [5]. The style of leaders
managing their teams profoundly and significantly influences organizational culture, employee
satisfaction, and overall performance [6]. Therefore, comprehending the relationship between
leadership style and employee performance is vital for management professionals and scholars.
Many studies have consistently demonstrated a strong correlation between various leadership
styles and employee performance, emphasizing the significant impact of leadership style on key
outcomes such as creativity, motivation, satisfaction, productivity, and overall performance [7,
8]. Leadership style has a profound impact on employee performance and effective leadership
styles boost productivity and foster innovation [9, 8]. Therefore, this study aims to explore how
managers' transformational leadership styles impact employee performance and whether
employee engagement moderates this relationship.
LITERATURE REVIEW
Leadership Styles
A single, widely accepted definition or theory of leadership does not exist [10]. To date, we lack
a comprehensive understanding of the relationship between leadership styles and leadership
behaviors from a theoretical perspective. Specifically, there is no integrative framework that
highlights the similarities and differences between these two concepts [11].
Leadership styles are shaped by individual and group interests, dependability, and values,
which are 'managerial attitudes, behaviors, characteristics, and skills [12]. Leadership style
refers to a specific management strategy and behavioral pattern exhibited by leaders within an
organization, which in turn influences employee attitudes, behaviors, and performance [13]. In
his research, Zulch [14] identified eight primary leadership styles: directive, bureaucratic,
pacesetting, participative, visionary, coaching, laissez-faire, and affiliative. Transformational
and transactional leadership are widely regarded as the most effective management and
leadership strategies of the twenty-first century [15].
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These leadership styles have both positive and negative effects on employee performance,
productivity, engagement, and overall organizational effectiveness [16]. Although every
leadership style has distinct advantages and disadvantages and influences employee
relationships, attitudes, and performance in different ways, it is crucial to remember that the
style of leadership must be suitable for the given circumstance. Leadership is responsible for
innovating how a business operates, transforming existing processes and structures, and
shaping employee behavior and work culture [2].
Transformational Leadership Style
According to Bass and Riggio [17], transformational leaders genuinely inspire and motivate
their people to achieve unprecedented success while also fostering the development of their
leadership abilities. By focusing on the needs and strengths of their employees and reducing
the power gap between them, transformational leaders typically cultivate and maintain strong
relationships with their staff [18].
Transformational leadership fosters positive employee performance by encouraging personal
development and learning, including skill growth and career advancement. This approach can
enhance performance, and reduce employee dissatisfaction, burnout, absenteeism, and
turnover, while generating more creative, diverse, and effective ideas [19]. The ultimate goal
of transformational leadership is to empower staff members to reach their full potential and
work with integrity and enthusiasm toward a shared objective [20].
Transformational Leadership and Employee Performance
Extensive research has been conducted on the factors influencing employee performance.
Among these factors, leadership style is one that has been shown to significantly impact
employee performance [21].
Numerous theoretical and empirical studies have examined the effectiveness of
transformational leadership, with many previous researches demonstrating that
transformational leadership enhances employee performance [22, 23, 20, 24, 25, 26].
Employees under transformational leaders typically exhibit improved performance because
they feel valued and empowered to contribute to the organization's objectives [27].
Transformational leadership enhances organizational performance by overcoming obstacles,
promoting change, and fostering an environment that encourages team learning and
adaptability [28].
Transformational leadership enhances employee autonomy, motivation, creativity, and
organizational performance [22, 24]. Compared to other leadership styles, such as ethical
leadership, authentic leadership, servant leadership, and transactional leadership [29], TFL has
a stronger and more positive impact on employee performance due to its multifaceted nature,
which incorporates ethical values [23]. Employee performance improves when
transformational leaders support their staff in maintaining psychological well-being and job
satisfaction [25]. In light of the review, we put out the following first hypothesis:
• H1: Transformational leadership style positively influences employee performance.
Transformational Leadership and Employee Engagement
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Gankhuyag, G., Zanabazar, A., Baljinnyam, E., & Dondog, J. (2025). How Employees’ Engagement Mediates Relationship between Transformational
Leadership and Employee Performance: Case of Private Universities in Mongolia. Advances in Social Sciences Research Journal, 12(2). 38-50.
URL: http://dx.doi.org/10.14738/assrj.122.18259
Leadership styles that emphasize trust and communication enhance employee engagement
[30]. Innovative work practices introduced by transformational leaders further boost
productivity and employee engagement [20, 25, 31]. Transformational leadership has been
positively associated with employee performance, job satisfaction, and organizational
commitment. Transformational leaders cultivate strong relationships and a sense of belonging
within the organization by genuinely caring for each employee. This positive sentiment, in turn,
boosts employee engagement [32]. According to Nurtjahjani, Batilmurik, Puspita, and
Fanggidae [33], transformational leaders foster employee engagement, and highly engaged
employees are passionate, dedicated, motivated, and deeply immersed in their work.
Transformational leadership approaches have a strong, positive impact on employee loyalty
and engagement [34]. Based on the discussion, the following hypothesis is proposed:
• H2: Transformational leadership style positively influences employee engagement.
Employee Engagement and Employee Performance
The level of employee engagement directly impacts organizational performance. According to
Bakker and Demerouti [35], engaged employees are more likely to demonstrate higher levels
of innovation, take initiative, and contribute to the team's success. Furthermore, engaged
employees are less likely to leave, reducing turnover and associated [36]. Studies have shown
that employee engagement enhances both individual and team performance. Engaged
employees not only improve their performance but also foster a productive work environment
that boosts teamwork, creativity, and problem-solving skills [37]. This collective engagement
plays a crucial role in achieving organizational goals and ensuring long-term success.
As employee engagement rises, job satisfaction and initiative improve, leading to reduced
burnout, enhanced collaboration, and increased productivity among employees. Additionally,
engaged employees are better equipped to overcome challenges and adapt to change, leading
to improved long-term company performance. According to Jindain and Gilitwala [38],
employee engagement plays a significant role in improving employee performance. As a result,
the following hypothesis is proposed:
• H3: Employee engagement is significantly related to employee performance
The Role of Employee Engagement in Enhancing Performance
Employee engagement refers to the emotional commitment that employees have to their work,
which directly impacts their performance and behavior [39]. One important determinant of
how leadership styles transfer into real performance outcomes is employee engagement.
Higher levels of initiative, innovation, and a stronger sense of accountability for their work are
all characteristics of engaged employees. The organization's overall success is directly
impacted by this conduct.
Researchers Buil et al. [23] concluded that the relationship between transformational
leadership and job performance is mediated by employee engagement. Engaged employees are
more emotionally invested in their work and experience higher job satisfaction. This leads to
lower turnover rates, increased productivity, and improved teamwork. Furthermore, engaged
employees are more capable of managing difficulties and adjusting to changes, contributing to
the long-term sustainability of organizational performance. Lai et al. [25] found that the
relationship between transformational leadership and job performance was partially mediated
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by employee engagement. However, Ribeiro et al. [40] concluded that transformational
leadership does not have a direct impact on job performance. On the other hand,
transformational leadership enhances employee performance by fostering greater staff
engagement [41, 20]. From the discussion above, the following hypothesis is proposed:
• H4: Employee engagement mediates the relationship between transformational
leadership style and employee performance.
MATERIALS AND METHODS
Research Design, Population and Sample
The study investigates the connection between employee performance and transformational
leadership style, as well as how employee engagement functions as a mediator in this
relationship.
Employees of two private universities in Mongolia participated in the current study. The
sample size was 113 and the overall population was 158 employee of two private university.
The Krejcie and Morgan [42] table was used to calculate the sample size. A total of 114
complete surveys were obtained, indicating a 100.8% response rate. Participants were selected
randomly from each university using simple random sampling.
The Questionnaire and Variables Measurement
The questionnaire was initially developed in English and then translated into Mongolian. A 5-
point Likert scale was used to record all responses, with 1 indicating strongly disagree and 5
indicating strongly agree.
Transformational Leadership:
The Multifactor Leadership Questionnaire (MLQ), developed by Bass and Avolio in 1990, was
used to measure transformational leadership. The scale was adapted from Dai et al. [43] and
consists of eight items. The Cronbach's alpha for transformational leadership ranged from
0.951, indicating strong reliability.
Employee Performance:
A five-item scale adapted from Ozer's [44] study was used to measure employee performance.
The Cronbach's alpha for this scale ranged from 0.921, indicating strong reliability.
Employee Engagement:
An eight-item scale, modified from Croswell [45], was used to measure employee engagement.
The Cronbach's alpha for this measure ranged from 0.886, indicating strong reliability.
RESEARCH RESULTS AND DISCUSSION
Demographic Characteristics
Of the respondents, 75 (65.8%) were female and 39 (34.2%) were male. Regarding age,
23(20.2%) were between 21 and 30 years old, 51 (44.7)% were between 31 and 40, 28 (24.6%)
were between 41 and 50, and 12 (10.5%) were over 51.
In terms of education, 19 (16.7%) had completed high school, 21 (18.4%) held a specialized
degree, 28 (24.6%) had a bachelor's degree, 38 (33.3%) had a master's degree, and 8 (7%) held