The Influence of Participative Leadership Style and Organizational Culture on Employee Performance through Motivation as an Intervening Variable
Keywords:
Participative Leadership , Organizational Culture , Work Motivation , Employee Performance , Structural Equation ModelingAbstract
Purpose: This study investigates the extent to which participative leadership style and organizational culture influence employee performance, both directly and indirectly, through the mediating role of work motivation. Amid the growing complexity of organizational environments—especially within the financial services sector—this research aims to explore how human-centric leadership and cultural alignment can enhance performance outcomes
Subjects and Methods: The study employed a quantitative approach involving 120 employees from financial service institutions in Indonesia. Data were collected using validated instruments and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The model tested both direct and indirect pathways to assess the mediation effects of work motivation on the relationships between leadership, culture, and performance.
Results: The findings revealed that participative leadership and organizational culture significantly influence employee performance. Moreover, both variables exert an additional indirect effect through work motivation, which serves as a partial mediator. The structural model explained 56.4% of the variance in employee performance and 47.2% in work motivation. All path coefficients were statistically significant (p < 0.05), indicating strong predictive relationships among the constructs.
Conclusions: The study underscores the strategic importance of participative leadership and cultural alignment in fostering motivational climates that drive high performance. Work motivation emerged as a critical psychological mechanism through which organizational structures translate into behavioral outcomes. These findings provide theoretical validation for Self-Determination Theory in organizational settings and offer practical insights for leaders seeking to develop adaptive, engaged, and high-performing teams in competitive service environments.
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