Muhammad Junaid 

Impact of Transformational Leadership on 
Employee Productivity Through Mediation of 
Employee Motivation in Banking Industry of 

Pakistan 

 

 

 

 

 

 

 

 

  
VAASA 2024 

School of Management 
Master’s Thesis in 

Strategic Business Development 



2 

UNIVERSITY OF VAASA 
School of Management 

Author: Muhammad Junaid 

Title of the Thesis: 
Impact of transformational Leadership on Employee Productivity 
Through Mediation of Employee Motivation in Banking Industry of 
Pakistan 

Degree: Masters of Science in Economics and Business Administration 
Programme: Strategic Business Development 
Supervisor: Pekka Töytäri 
Year: 2024         Pages: 88 

ABSTRACT: 

This thesis examines how employees of the banking sector in Pakistan are influenced in terms of 
motivation and productivity level through transformational leadership. The objective of the 
study was to look at the relationships between these variables directly as well as mediated ones 
and how the motivational style selected by leaders affects how motivated and productive people 
become. The quantitative approach was applied whereby both primary and secondary data were 
collected through a structured Likert-scale questionnaire from 100 banking employees. SPSS was 
utilized to analyse the data and test the hypotheses made (H1, H2, H3, H4) regarding significant 
associations. 

According to the findings, it emerged that transformational leadership is effective in increasing 
employee motivation and productivity. The hypotheses tested show a direct relationship with 
productivity (H1) and motivation (H2), a productive relationship between the motivation of em-
ployees and their output (H3), and a mediated relationship of transformational leadership effects 
on productivity through motivation (H4). The employee motivation as a regulating factor has 
been confirmed by all hypotheses studied. 

The research report finishes with the assertion that if the motivation of the employees is im-
proved, then rather transformational leadership ought to be called a tool for enhancing em-
ployee productivity. Contributions of theoretical nature expand the scope of leadership theory 
by broadening the model of leadership to include the elements of motivation, while practice 
oriented contributions suggest that the banks would be concerned with transformational lead-
ership in order to enhance employee commitment and performance. 

Keywords: Transformational leadership, employee motivation, employee productivity, banking 
industry. 

 

 

 



3 

CONTENTS 
1 Introduction 7 

1.1 Introduction to the Study 7 

1.2 Problem Statement 12 

1.3 Research Objectives 13 

1.4 Research Questions 13 

1.5 Significance of the Study 13 

1.6 Scope and Limitations of the Study 14 

1.7 Structure of the Thesis 15 

2 Literature Review 17 

2.1 Theories of Leadership in the Banking Industry 17 

2.2 Transformational Leadership 19 

2.2.1 Transformational Leadership and Employee Productivity 19 

2.3 Employee Motivation 21 

2.3.1 Transformational Leadership and Employee Motivation 21 

2.3.2 Employee Motivation and Employee Productivity 23 

2.3.3 Employee Motivation as mediator 24 

2.4 Employee Productivity 25 

2.5 Theoretical Framework and Discussion on Hypotheses 26 

3 Research Methodology 28 

3.1 Contextual Description of Banking Industry in Pakistan 28 

3.2 Research Philosophy 30 

3.3 Research Approach 32 

3.4 Research Design 32 

3.5 Research Strategy 34 

3.6 Population and Sampling 34 

3.6.1 Target Population 34 

3.6.2 Sampling Technique 35 

3.6.3 Sample Size 35 

3.7 Data Collection Method 36 

3.7.1 Primary Data Collection 37 



4 

3.7.2 Instrument Design 37 

3.7.3 Pilot Testing 38 

3.7.4 Data Collection Procedure 39 

3.8 Data Analysis Techniques 39 

3.8.1 Descriptive Analysis 40 

3.8.2 Inferential Analysis 40 

3.8.3 Mediation Analysis 41 

3.9 Ethical Considerations 41 

4 Data Analysis and Results 43 

4.1 Introduction to Data Analysis 43 

4.2 Demographic Analysis 43 

4.3 Reliability Analysis 46 

4.4 Descriptive Statistics 48 

4.5 Correlation Analysis 49 

4.6 Hypothesis Testing (Regression Analysis) 51 

4.6.1 Direct Effect of Transformational Leadership on Employee Productivity 52 

4.6.2 Direct Effect of Transformational Leadership on Employee Motivation 53 

4.6.3 Direct Effect of Employee Motivation on Employee Productivity 55 

4.6.4 Mediation Analysis: The Role of Employee Motivation 57 

4.7 Summary of Findings 59 

5 Discussion and Conclusion 60 

5.1 Overview of the Model and Hypotheses 60 

5.2 Interpretation of Key Findings 61 

5.2.1 Hypothesis 1 61 

5.2.2 Hypothesis 2 62 

5.2.3 Hypothesis 3 64 

5.2.4 Hypothesis 4 65 

5.3 Theoretical Implications 66 

5.4 Implications for Practice in the Banking Industry 67 

5.5 Limitations of the Study 68 



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5.6 Recommendations for Future Research 69 

5.7 Conclusion 70 

References 72 

Appendices 83 

Appendix 1: Questionnaire 83 

Appendix 2: Data Analysis 86 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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Figures 

Figure 1. Theoretical Framework 26 

 

Tables 

Table 1. Demographic analysis of sample 41 

Table 2. Reliability analysis of scale 43 

Table 3. Descriptive Statistics 44 

Table 4. Correlation Analysis 46 

Table 5. Testing Hypothesis 1 48 

Table 6. Testing Hypothesis 2 49 

Table 7. Testing Hypothesis 3 51 

Table 8. Testing Hypothesis 4 52 

 

Abbreviations 

TL Transformational leadership. 

EM Employee motivation 

EP Employee Productivity 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 



7 

1 Introduction 
 

 

1.1   Introduction to the Study 
 

Transformational leadership plays a crucial role in boosting productivity among employ-

ees in various economic sector specifically in Pakistan (Garad et al., 2022; Younas, 2024). 

Before defining the transformational leaderships, let’s have a look at what leadership is? 

The act of directing and impacting people or groups inside or outside an organization to 

successfully achieve desired goals of an organization is termed as leadership (Goleman, 

2017). Furthermore, transformation leadership is a leadership style that seeks to moti-

vate employees by creating a shared vision, encouraging intellectual stimulation and per-

sonal needs (Shafi et al., 2020). In the banking sector, transformational leadership is es-

pecially pertinent given the industry’s need for change, flexibility and high employee 

participation. Employee productivity means the extent to which employees carry out 

their tasks and support organizational objectives (Ugoani, 2020). This means that moti-

vation as a mediator describes how and why transformational leadership affects produc-

tivity and this is the mechanism by which leadership influences employee behavior and 

outcomes (Khan et al., 2020; Chen & Cuervo, 2022). In highly pressurized regulatory en-

vironments with economic instability like Pakistan’s banking sector, motivated employ-

ees are vital for maintaining high levels of production and accomplishing organizational 

objectives (Khan & Iqbal, 2013). Leadership therefore assumes an important meaning as 

a factor shaping employee motivation amidst strong cultural emphasis on hierarchical 

structures and respect for authority (Areiqata et al., 2020). Transformational leadership 

promotes higher productivity through aligning organizational goals with both intrinsic 

and extrinsic motivations of their subordinates (Aljumah, 2023). 

 

The current trends of digitalization and sustainability are transforming the recent busi-

ness milieu and changing the nature of competition (Aagaard & Vanhaverbeke, 2024). 

Within such quick changes, companies do not only pursue the goal of achieving perfec-

tion, rather, they have to pursue the latest technologies and sustainable practices if they 



8 

wish to stay competitive (Aljumah, 2023). Such modern trends and adoption require or-

ganizational change and strategy revolution altogether. This is crucial as it enables the 

organization to respond properly and maintain in the competitive positions in the mar-

ketplace. It should be noted here that a lot of factors are responsible for and drivers of 

organizational performance, however, employees themselves are the most crucial asset 

of a company (Anwar et al., 2023). Therefore, it is required to trigger motivation and 

loyalty of employees with a company in order to ensure achievement of organizational 

goals resulted from the best efforts put by those employees (Goleman, 2017). However, 

not all employees exhibit this level of dedication, many focus solely on their tasks, often 

neglecting the importance of cohesion and collaboration (Younas, 2024). This is where 

leadership plays a vital role. It ensures that every employee performs efficiently and they 

are aligned with what the entire firm aims at accomplishing (Akdere & Egan, 2020). 

 

The current literature has provided detailed information on transformational leader-

ship’s affirmative influence on the performance of employees within different sectors 

and settings (Purwanto, 2020; Jaroliya & Gyanchandani, 2022). However, there is no re-

search that deals with particular problems that exist in Pakistani banking sector (Anwar 

et al., 2023). The economic conditions in Pakistan which are defined by fluctuating inter-

est rates, inflation, and regulatory changes (Ali, 2020) create a turbulent atmosphere 

that can impair worker morale and productivity. In addition, cultural context in which 

authority is respected as well as hierarchical structures prevail may shape perceptions 

about transformational leadership and the extent to which it can be practically applied 

(Areiqata et al., 2020). It is therefore important to investigate whether or not transfor-

mational leadership tenets tuned towards meeting specific requirements peculiar to the 

Pakistani banking industry can help boost employee motivation to enhance their produc-

tivity. 

 

A significant role is being played by leadership in identifying whether the organization 

will embrace success or not because leadership is directly involved in employee’s moti-

vation, decision making, and performance as a whole (Aljumah, 2023). Good leadership 



9 

encourages good working relationships, stimulates innovations as well as aligns organi-

zational objectives with employee efforts to boost productivity and achieve long-term 

goals (Northouse, 2021). There are different kinds of leaders with different characteris-

tics and effects. Transformational leadership, in particular, is characterized by the moti-

vation and inspiration of workers through vision building, creativity promotion, innova-

tion fostering and meeting individual needs (Shafi et al., 2020). This kind of a leader 

makes it possible to achieve high employee satisfaction as well as productivity since cre-

ates an environment where employees feel valued and empowered (Saira et al., 2021). 

Other styles such as transactional leadership use control and rewards based on perfor-

mance (Lee & Ding, 2020), whereas autocratic leaders take control over every decision 

made in their firms (Khan et al., 2021). 

 

The introduction of Fintech solutions and the advent of digital banking applications have 

changed the model of how financial services have traditionally been rendered prompting 

the need for traditional banking systems to come up with novel products and services in 

order to keep pace with consumers need for speedy provision of services (Rajapathirana, 

2023; Wu, 2023). Furthermore, adherence to strict regulations such as the anti-money 

laundering and the know the customer principles raises the degree of engagement and 

innovation for an organization, thereby complicating the banking processes manage-

ment Sokoli (2023). In such a fast-paced environment, effective leadership-strategic 

leadership in particular-is indispensable. It is the transformative leadership style that will 

help to bring changes within the employees by enhancing innovation, supporting flexi-

bility, and boosting employee morale, and hence guiding the teams through the changes 

(Mcisaac & Ly, 2019). This leadership style helps to enhance the performance of banking 

institutions not only in coping with the fast-changing environment but performing by 

ensuring customer satisfaction and regulatory compliance. By adopting transformational 

leadership practice, totality of banking operations and activities can be made active in 

an increasingly challenging marketplace. 

 



10 

The ability of leaders who use this style to clearly articulate the direction of an organiza-

tion, provide supportive and innovative environments, and question conventional wis-

dom is well recognized (Chitiga, 2018). This method encourages staff workers and en-

hances a culture of continuous improvement as well as a dedication for organizational 

objectives (Abdulfatai, 2021). Transformational leadership has had a deep effect on or-

ganizations. One study found that it leads to higher employee satisfaction by instilling in 

them purpose and belongingness hence improving morale and reducing turnover (Davis, 

2023). In addition, transformational leadership style promotes creativity and innovation 

that necessitate better problem-solving skills and adaptability in a rapidly changing en-

vironment. Furthermore, this leadership also improves productivity by linking the ac-

tions of employees to the organizational strategic objectives which gives them a sense 

of ownership and accountability (Patil et al., 2024). Additionally, transformational lead-

ers play an important role in changing the attitudes and behaviors of non-committed 

ones by motivating and inspiring their workers, thus fostering a strong commitment 

(Monje-Amor et al., 2020). For instance, research on transformational leadership within 

Spanish communities has shown that there is a positive link between job performance 

and OCB directed towards the organization (Buil et al., 2019). 

 

In banking, output is often captured in terms of metrics such as number of transactions 

processed, customer satisfaction levels and revenue earned per employee. Banks need 

high productivity because this directly affects the profitability, competitiveness and over-

all performance (Anwar et al., 2023). Employee production in the banking sector de-

pends on a few factors. Good leadership has a major role to play since good leaders in-

spire and direct workers towards improved performance. Additionally, motivation which 

stems from intrinsic factors such as job satisfaction and extrinsic rewards like bonus pay 

also has great effects on productivity (Hoque et al., 2021). Besides that, the work envi-

ronment and organizational culture are very important; an inclusive supporting atmos-

phere produces collaboration and creativity leading to improved productivity (Mukher-

jee, 2020). On the other hand, a toxic or unstructured environment can demotivate staff 

members hampering their work rate. 



11 

Employee motivation describes the internal and external aspects that push a worker to 

desire doing job-related activities and strive for organizational goals (Nwannebuife, 

2017). It is a key motivator of productivity because motivated employees are more likely 

to be loyal, efficient and go further than expectations in their roles. Furthermore, it im-

pacts not just the quantity and quality of work produced but also overall team morale 

and cohesion (Lozano-Jiménez et al., 2021). Transformational leadership has a significant 

impact on employee motivation by creating an enabling environment where followers 

feel supported and inspired (Shafi et al., 2020). On a deeper level, transformational lead-

ers engage with employees, inspiring them through shared visions as well as intellectu-

ally stimulating them according to Akdere & Egan (2020). This type of leadership style 

satisfies the higher-level needs such as self-actualization and esteem which are funda-

mental components of motivation as described Maslow’s hierarchy of needs Ngudieh 

Njuakoh (2012). Empirical studies have shown that transformational leadership has pos-

itive correlations with increased employee motivation, which leads to greater productiv-

ity and job satisfaction (Davis, 2014). 

 

Banks in Pakistan contend with economic instability and changing regulations, which 

makes it important for leaders to motivate their teams (Abdullah & Anwar, 2021). Trans-

formational leadership helps to steer banks through these challenges as they promote 

an innovation culture, empower their workforce and keep the organization competitive 

in a vibrant market (Minhaj et al., 2019). The unique challenges faced by employees in 

the banking industry of Pakistan affects productivity. Additional complication of routine 

operations is brought about by regulatory pressures such as adherence to stringent fi-

nancial legislations. Continuous learning and training are necessitated by incessant tech-

nological adjustments; this coupled with stress from economic instabilities resulting into 

low morale, lack of focus among employees (Ajayi & Udeh, 2024). In order to survive in 

this tough business environment, these barriers require strategic leadership and a sup-

portive culture that promotes productivity (Patil et al., 2024). 

 

 



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1.2   Problem Statement 
 

Leadership is a major factor affecting employee productivity. The leadership style em-

ployed within an organization can greatly influence employees’ task performance, their 

motivation, and their overall job satisfaction (Paais & Pattiruhu, 2020). Furthermore, 

transformational leadership leads to increased productivity in such areas (Shafi et al., 

2020). Although the evidence has strongly predicted that there is a direct relationship 

between transformational leadership and organizational performance (Fu et al., 2022) 

rather few studies have taken the initiative to investigate the direct effect of transforma-

tional leadership on employee performance in the banking sector ever since its inception 

in Pakistan. To a large extent most pre-existing literature will focus on general outcomes 

of leadership including innovation, motivation, and general success of the firm rather 

than how transformational leadership affects an average employee productivity in the 

area (Khan et al., 2020). In addition, considering the fact that this sector operates in Pa-

kistan where the culture and regulations are different compared to the Western coun-

tries that most of these studies have been centered on that is not clear if the same lead-

ership dynamics will result in the same productivity. This lacuna however indicates a 

need and justification for delving deeper into how leadership oriented on transforma-

tional leadership might be geared at enhancing the productivity of employees working 

in the banking sector of Pakistan, which is still sparsely addressed by adequate empirical 

literature. 

 

However, only a few studies have examined employee motivation as a mediator in this 

relationship and context (Ismael et al., 2022; Sujatha, 2023). Prominently, motivation is 

a key element that induces behavior and performance of an employee (Ratnaningtyas et 

al., 2021). It provides a connection between leadership practices and its resultant 

productivity levels. Therefore, when workers are motivated, they will be more likely to 

be involved in their assignments by showing increased commitment level and executing 

their duties efficiently (Lozano-Jiménez et al., 2021). Nevertheless, the need to maintain 

high motivational levels is explicitly difficult considering Pakistan’s banking sector which 

is regularly characterized by; high competition, rigid hierarchical structures and frequent 



13 

economic uncertainties (Khan et al., 2020). This brings about the question; How can 

transformational leadership effectively enhance employee productivity under such de-

manding circumstances and what role does motivation play in this process? 

 

1.3   Research Objectives 
 

The broader objective of this study is to identify the influence of transformational lead-

ership on employee productivity and employee motivation. In addition, the impact of 

employee motivation on employee productivity and the mediating role of employee mo-

tivation between transformational leadership and employee productivity in the banking 

industry in Pakistan are also objectives of the current study. 

 

1.4   Research Questions 
 

RQ1. What is the impact of transformational leadership on employee productivity and 

employee motivation, and employee motivation on employee productivity? 

RQ2. Does employee motivation mediate the relationship between transformational 

leadership and employee productivity? 

 

1.5   Significance of the Study 
 

Academically, it contributes to the literature on leadership and employee productivity 

with specific reference to the banking industry in Pakistan. Nonetheless, not much has 

been done regarding transformational leadership’s effect on employee productivity 

within Pakistan’s emerging markets’ banking sectors (Aleem & Bowra, 2020). This study 

seeks to fill this gap by exploring how transformational leadership may impact produc-

tivity through the mediating effect of employee motivation that provides a deep under-

standing of these phenomena in an environment characterized by economic instability 

and cultural uniqueness. 

 



14 

The practical implication of the research is that it will help those in charge of leading 

banks in Pakistan. The study identifies factors that can increase the motivation and 

productivity levels of employees (Ali & Anwar, 2021), which implies that managers and 

leaders will find useful data in this document to improve an organisation’s performance. 

In a highly competitive and challenging environment where regulatory pressures and 

economic instability are prevalent (Honig & Samuelsson, 2021), effective leadership is 

crucial for sustaining growth and competitiveness. This means that the management 

could use these findings to develop leadership training programs or come up with strat-

egies on how they can have a motivated workforce who works hard (Khan et al., 2019). 

 

Moreover, it is important to mention that the role of employee motivation in this rela-

tionship is very critical. However, it is still unclear how much this inspiration gets trans-

lated into increased productivity in Pakistan’s banking sector (Khan et al., 2020). It is 

therefore essential to understand this connection so as to develop leadership strategies 

that can not only enhance productivity but also be consistent with the sustainability per-

spective in the long run. The purpose of the study is to investigate the effects of trans-

formational leadership on employee productivity in Pakistan’s banking sector through a 

focus on the mediating effect of employee motivation (Jufrizen & Hutasuhut, 2022). The 

research will offer useful insights into how leadership styles can be adjusted to meet 

cultural and economic differences unique to Pakistan, while providing guidance for en-

hancing employee productivity within a challenging and dynamic industry. By investigat-

ing this relationship, the study will contribute to knowledge about leadership and 

productivity in emerging economies that have significant influence on organizational 

outcomes through economic volatility and cultural forces. 

 

1.6   Scope and Limitations of the Study 
 

The area under scrutiny in this research only covers the relationship between transfor-

mational leadership and employee productivity within the banking sector of Pakistan, 

emphasizing on how employee motivation mediates it. The study will be carried out in 

some selected banks in Pakistan, both public and private ones to ensure that there is a 



15 

wide range of leadership styles and organizational environments. Quantitative research 

methods such as surveys will be used to measure the impact of transformational leader-

ship on productivity while also assessing mediating influence of motivation. 

 

Nevertheless, this investigation has some limitations which are good to take into account. 

To begin with, the research is confined to the banking sector in Pakistan, which implies 

that there may be a limitation on the use of the findings elsewhere or regularity over 

different geographical regions. The unusual cultural and economic setting of Pakistan 

can make these findings not applicable to other contexts (Aleem & Bowra, 2020). Next, 

this study uses subjective responses by employees and managers that could be distorted 

by social desirability or self-deception (Quinio & Lam, 2021). Moreover, since it is a cross-

sectional study; it cannot establish any clear causal relationship between transforma-

tional leadership style and motivation as well as productivity. The insight into these re-

lationships over time can be enhanced through carrying out longitudinal studies. 

 

1.7   Structure of the Thesis 
 

The thesis was structured in such a way that it provides comprehensive exploration of 

the research topic, and progresses logically from introduction to conclusion. Introduc-

tion chapter highlights an overview of the study which includes background, problem 

statements, research objectives and questions as well as significance, scope and limita-

tions. Literature Review chapter examines the body of knowledge on transformational 

leadership, employee motivation and productivity in banks. This chapter outlines what 

gaps are to be filled by this study. Research Methodology chapter sheds light on research 

design, data collection techniques, sampling methods and analytical procedures used in 

this study. It also discusses issues relating to validity and reliability for the research in-

struments employed here. Findings and Analysis chapter presents the results of data 

analysis inclusive of statistical findings with their interpretation thereof. This chapter in-

vestigates how transformational leadership relates to motivation or productivity. Discus-

sion chapter compares findings from other studies with the current one while looking at 

their implications for theory or practice. This chapter further looks into the limitations 



16 

involved in this study while pointing out areas for future researches or improvements 

thereof. Conclusion and Recommendations chapter summarizes the key findings of the 

study and provides practical recommendations for bank managers and policymakers to 

enhance leadership practices and employee productivity. 

 

 

 



17 

2 Literature Review 
 

 

2.1   Theories of Leadership in the Banking Industry 
 

Throughout the banking sector, due to the presence of special threats emanating from 

regulatory shifts, advancement of technology, and fluid markets, different leadership 

theories have been used to deal with the challenges of the sector (Belias & Koustelios, 

2014; Murinde et al., 2022). One of those leadership styles that needs special attention 

is transformational leadership. This leadership promotes leaders who motivate their fol-

lowers to be supportive, intellectually stimulating, and challenging to their employees, 

which makes employees put organizational goals above their self-interests and promote 

cohesiveness in the organization (Vij, 2022). With respect to the aforementioned de-

mands in the sector, transformational leadership features advocate for creativity and in-

novativeness, which are important in addressing sectorial challenges (Bass & Riggio, 

2006). 

 

Transformational leaders are capable of establishing the strategy that captivates and en-

courages employees to complete the work successfully (Schiuma et al., 2022). This style 

has helped in increasing personal drive as well as cooperative productivity, which is vital 

for the business (Della Porta, 2023). In banks, where employees perform in confined, 

high-stress, high-demand, and high-compliance environments, this effect of motivation 

becomes more pronounced. Team transformational leaders increase the sense of pur-

pose while providing team members’ intellectual challenges in order to foster engage-

ment and resilience so that organizations are able to cope with rules and regulations 

(Mishra et al., 2019). 

 

Furthermore, it must be emphasized that this type of leadership style is beneficial in the 

banking sphere, as it promotes the ability to learn and adapt to circumstances at all times 

(Zeesahn et al., 2020). The leaders with such styles encourage their workers to innovate, 

adopt change, gain necessary competencies, and continue to develop with the industry. 



18 

Transformational leadership is said to help in the development of employees who are 

not just engaged but have high abilities to cope with changes in technology and pro-

cesses, which are always present in this industry (Avolio & Bass, 2004). This mode of 

leadership does not only assist in handling present shifts. It empowers the organization 

to be proactive and well prepared for future shifts that may occur. 

 

As well as encouraging flexibility, transformational leadership has also been associated 

with a higher level of employee satisfaction and performance, which is important in at-

taining the organization’s goals in the long run (Hoque et al., 2021). In the banking sector, 

which can experience high employee attrition, transformational leaders are instrumental 

in helping retain talent through creating a culture that appreciates individual develop-

ment and employee input (Nyakomitta, 2021). Such retention has direct benefits to the 

organization with respect to improvement in stability and consistency in the workforce, 

hence saving on recruitment and training expenses in the long run (Avolio & Bass, 2004). 

Transformational leadership also helps employees look inwards towards their work and 

personal growth, whereby such focus enriches employees’ sense of accomplishment as 

well as motivation, which in turn enhances productivity. 

 

Transformational leadership is effective; however, one can learn valuable lessons from 

other leadership theories that may complement the transformational leadership ap-

proach and its strengths. A situational approach to leadership where a transformative 

approach is blended with task-oriented strategies should be optimal in banking (Zeesahn 

et al., 2020). This combination of leadership styles makes it possible to focus both on the 

human aspects of the bank, such as motivation or involvement, as well as on operational 

priorities, such as meeting relevant regulations. Collectively, these approaches also cre-

ate a performance-oriented and dynamic culture so that for banks, the swift changing 

nature of the industry is not an impediment but rather a challenge that they can over-

come successfully (Nyakomitta, 2021). 

 

 



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2.2   Transformational Leadership  
 

Transformational leadership is a style of leadership in which you can inspire and motivate 

your employees to go beyond their self-interests for the good of company goals (Shafi et 

al., 2020). This approach to leadership is based on creating an appealing vision, an intel-

lectually stimulating environment, and responsiveness to individual needs (Bass & Riggio, 

2006). Transformational leaders are change agents who always produce innovations by 

allowing workers follow the same thing together in terms of a mission and performance. 

They do this through being charismatic, showing personal consideration and providing 

inspirational motivation (Northouse, 2021). Transformative leadership has been found 

to positively affect several organizational outcomes. For instance, researches have 

shown that transformational leaders improve employee satisfaction as well as perfor-

mance by fostering a motivating work climate that creates sense of belongingness and 

purpose (Davis, 2023). Through alignment of individual goals with organizational objec-

tives, transformational leaders can responsibly encourage employees towards higher 

productivity levels and involvement. 

 

2.2.1 Transformational Leadership and Employee Productivity  
 

Employee productivity is widely influenced by transformational leadership through its 

influence on employee motivation and engagement (DeSilva, 2021). They create a vision 

of what tomorrow looks like and promote an innovative working environment with per-

sonal growth opportunities, thereby motivating their subordinates to achieve more as 

well as enhancing their commitment and enthusiasm towards work (Purwanto, 2020). 

This is done by establishing high goals, offering customized assistance and acknowledg-

ing the successes of employees. Transformational leadership has been shown in research 

to have a positive impact on employee motivation which is a vital determinant of produc-

tivity. For example, in a research Della Porta (2023) conclude that job satisfaction and 

performance of employees is significantly increased by transformational leadership ex-

ercised in the organization that leads to improved productivity of employees. 



20 

Moreover, transformational leadership raises employee productivity by inculcating a cul-

ture of constant improvement and learning (Jaroliya & Gyanchandani, 2022). By encour-

aging intellectual stimulation, transformational leaders lead employees to think crea-

tively and look for fresh ideas to problems. This strategy of motivating employees helping 

them to develop strong problem-solving skills and develop them a proactive attitude 

towards work or role so that they will become more productive for the organization 

(Northouse, 2021). Transformative managers set the pace for high productivity and per-

formance through establishing an environment where workers can freely share their 

ideas and take steps. Intellectual stimulation is prioritized as well as personal growth 

which enables skills and competencies among workers so as to influence their output 

levels (Patil et al., 2024). 

 

In the banking industry, where pressures to reach targets and embrace advanced tech-

nology are high, this style is particularly applicable (Anwar et al., 2023). In conclusion, 

banks that practice transformational leadership have a higher ability of dealing with 

these challenges by creating a motivated workforce (Shafi et al., 2020). For instance, 

scholars in their study indicated that transformational leadership in bank institutions 

leads to improved employee performance and organizational outcomes through provi-

sion of support and dynamic work environment (Anwar et al., 2023). In such a competi-

tive and rapidly changing sector, having highly productive employees is very crucial for 

maintaining operational efficiency and achieving strategic goals. Therefore, it is im-

portant to have transformational leadership so as to not only improve employee moti-

vation but also enhance productivity within the banks as well as other sectors with sim-

ilar problems. Hence, it is hypothesized as: 

 

Hypothesis 1: There is a positive relationship between transformational leadership and 

employee productivity in banking sector (Anwar et al., 2023). 

 

 

 



21 

2.3   Employee Motivation  
 

Employee motivation is an internal and external factor that sparks a person’s passion to 

work on job tasks and follow organizational goals (Jufrizen & Hutasuhut, 2022). For high 

performance and productivity, motivation determines how involved and devoted em-

ployees are in their roles (Lozano-Jiménez et al., 2021). Some of the major theories of 

motivation include Maslow’s Hierarchy of Needs which claims that people are motivated 

by various needs ranging from basic physiological requirements to self-actualization 

(Ihensekien & Joel, 2023) and Herzberg’s Two-Factor Theory which differentiates be-

tween motivators such as achievement, recognition; and hygiene factors such as working 

conditions, salary. Motivation is key when it comes to transformational leadership since 

it acts as a mediator between leadership practices and employee performance. Trans-

formational leaders enhance motivation through setting a vision that resonates with the 

values and aspirations of employees, offering personal development opportunities, giv-

ing rewards for accomplishments (Dhiman & Kumar, 2020). In turn, these lead to in-

creased job satisfaction, commitment levels as well as enhanced performance (Bass & 

Riggio, 2006). 

 

2.3.1 Transformational Leadership and Employee Motivation 
 

Through encouraging and motivating employees to become more engaged in their work, 

transformational leadership would have a possible way of causing influence on em-

ployee motivation through the alignment of personal goals with organizational objec-

tives (Kimeto & K’Aol, 2018). They are charismatic leaders who develop a vision for the 

future, create an intellectually-stimulating environment and offer one-on-one support 

to each member of their team (Bass & Riggio, 2006). When transformational leaders 

create clear and meaningful visions for the organization, it makes it easier for workers to 

identify how their job is connected to and can help achieve overall company mission 

(Northouse, 2021) thus enhancing intrinsic motivation. In so doing this, they not only 

align employees’ commitment with their roles but also enriches their sense of purpose 

and involvement in their positions (Jufrizen & Hutasuhut, 2022). 



22 

The leader’s ability to provide individualized thought and help intensifies the influence 

of transformative leadership on employee motivation (Shafi et al., 2020). Transformative 

leaders understand each worker’s exceptional requirements and goals, and provide 

them with guidance, motivation, and opportunities for professional development (Bojo-

vic & Jovanovic, 2020). Employees are more likely to engage fully in their tasks and con-

tribute entire organizational objectives because they are highly motivated when given 

this kind of attention. Research has proved that an employee’s perception of his or her 

leader as a support system actively involved in his/her growth results into higher moti-

vation levels and job satisfaction (Paais & Pattiruhu, 2020). This increased motivation is 

associated with improved performance and commitment because employees partici-

pate actively, work harder thus leading to better organizational achievements. 

 

Transformational leadership plays a very critical role in the banking sector, where main-

taining customer relationships, achieving sales targets and operational efficiency require 

high levels of motivation. To stay motivated and focused in a demanding industry that is 

heavily regulated and faces tough competition, employees play an important role (Ali, 

2020). By creating a vision aligned with employee values and providing the required sup-

port for individual and professional development, this can be achieved by transforma-

tional leaders within this field (Jufrizen & Hutasuhut, 2022). Della Porta (2023) shows 

that in high-performance demanding industries like banking, transformational leader-

ship can enhance productivity and service quality through staff motivation. Therefore, 

maintaining a high level of performance in these challenging situations is only possible 

because transformative leaders may also be able to motivate their employees which is 

vital for an organization’s success. Therefore, it is proposed that: 

 

Hypothesis 2: Transformational leadership is positively supporting employee motivation 

in banking sector (Jufrizen & Hutasuhut, 2022; Della Porta, 2023). 

 

 

 



23 

2.3.2 Employee Motivation and Employee Productivity 
 

For an organization to increase its productivity, it is vital that the employees of the or-

ganization are motivated. This results in higher performance and output because being 

active, committed and going above and beyond what is required of them become char-

acteristics of a highly motivated workforce. There are two types of motivation recognized 

by self-determination theory that have a great influence on productivity as stated by 

Deci and Ryan (2012). In order for both intrinsic motivation, which is based on personal 

satisfaction or pleasure derived from performing a task and extrinsic motivation derived 

from rewards and recognition, lead to innovation (Hoque et al., 2021), they need to be 

supported by higher levels of productivity. Employees who work with enthusiasm are 

expected to apply themselves more assiduously, show inventive thinking and enhance 

their effectiveness in completing assignments when they possess high levels of desire 

for success. 

 

Studies show that motivation and productivity are related. One specific area examined 

in many studies is job satisfaction which was linked to job performance (Babalola, 2016). 

Moreover, commitment to one’s role as well as willingness to participate in organiza-

tional citizenship behaviors by employees are also influenced by motivation which may 

be viewed as discretionary efforts leading to the overall productivity of an organization 

(Akindipe & Fadun, 2023). Another reason why motivation is important relates to its in-

fluence on goal setting among workers such that they strive for higher levels of task ac-

complishment thus raising the overall organizational performance (Ali & Anwar, 2021). 

 

Employee motivation has a big impact on productivity especially in the case of the bank-

ing sector. Banks operate in an extremely competitive and customer-centered world 

where efficiency and quality of service matter most (Anwar et al., 2023). The banks re-

quire motivated workers to have high service standards, meet their operational goals 

and satisfy the customers. Studies carried out within the banking industry indicate that 

motivated employees are likely to be more effective in performing their duties, dealing 

positively with clients and adding value to the organization (Paais & Pattiruhu, 2020). 



24 

Consequently, through recognition, rewards, opportunities for growth among others; 

they can create a motivating work setting that will increase employee productivity which 

will lead to better performance and competitive advantage in this field. Based on review 

of literature, it is hypothesized that: 

 

Hypothesis 3: Employee motivation is positively affecting employee productivity in bank-

ing sector (Paais & Pattiruhu, 2020). 

 

2.3.3 Employee Motivation as mediator 
 

Employee motivation is very important to mediate between transformational leadership 

and employee productivity; it connects two things: effective leadership practices and 

better performance outcomes. Transformational leadership, which is aimed at inspiring 

and motivating employees, plays a key role in determining the level of motivation in or-

ganizations (Shafi et al., 2020). Through setting a compelling vision, providing individu-

alized support and creating an environment of intellectual stimulation, such leaders can 

increase workers’ intrinsic motivation levels. This increased motivation then results in 

increased effort, engagement, and thus higher productivity (Hoque et al., 2021). 

 

It is supported by research that employee motivation acts as a mediating variable in the 

relationship between transformational leadership and productivity. For example, re-

search has shown that transformational leaders who possess the ability to inspire and 

involve employees result into higher levels of motivation among their team members 

(Chua & Ayoko, 2021). This increased motivation then leads to better productivity since 

workers with intrinsic motivation are more likely to work hard, be persistent in the face 

of challenges and have high performance standards (Ali & Anwar, 2021). A dynamic and 

supportive workplace environment created by such leaders will encourage employees to 

make their personal goals align with organizational goals which will in turn boost their 

motivation and thus increase their productivity (Jaroliya & Gyanchandani, 2022). 

 



25 

In practice, motivation’s role as a mediator is especially apparent in industries where the 

success of an organization depends on the performance of its workforce (Astuti et al., 

2020) such as banking. In banks, transformational leaders can increase worker motiva-

tion by setting clear objectives, recognizing achievements and providing opportunities 

for development thus impacting productivity and customer satisfaction (Khan et al., 

2020). Hence, employees who are motivated tend to exhibit high levels of achievement 

because they contribute towards organizational goals. For instance, Anwar et al. (2023) 

found that transformational leadership positively influenced both motivation and 

productivity illustrating how it affects performance through motivating employees. Con-

sequently, organizations can enhance the benefits of transformational leadership 

through understanding and using employee motivation as a mechanism that leads to 

higher productivity rates. So, it is proposed that: 

 

Hypothesis 4: Employee motivation is positively mediating the relationship between 

transformational leadership and employee productivity (Ali & Anwar, 2021; Jaroliya & 

Gyanchandani, 2022). 

 

2.4   Employee Productivity 
 

Employee productivity is a measure of how effectively employees perform their tasks in 

relation to the company's objectives (Ugoani, 2020). The output per employee, the qual-

ity of work and its efficiency in completing tasks are some of its indicators. Employee 

productivity has an impact on the profitability, operational efficiency and competitive 

advantage of a business and organization (Ali & Anwar, 2021). There are multiple factors 

that affect employee productivity such as; leadership style, motivation, work environ-

ment and organizational culture. Transformational leadership improves such features 

like; motivation which determines how productive workers can be. Encouraging employ-

ees to be motivated and feel valued will make them have a better contribution to higher 

outcomes for organizations (Della Porta, 2023). In addition, it helps to develop collabo-

ration by creating a positive work environment that enables sharing of ideas and ade-

quate resources for high productivity. 



26 

2.5   Theoretical Framework and Discussion on Hypotheses 
 

 

 

 

 

 

 

 

 

 

 

Figure 1. Theoretical framework (self-made) 

 

The assumptions about this research are well grounded in the already existing leadership 

and motivation theories with recent practical evidence backing the claims. 

 

Hypothesis 1 assumes that transformational leadership has a positive impact on the 

productivity of the employees in the banking industry. This hypothesis builds on the 

transformational leadership theory, which places emphasis on the role of leaders as be-

ing those who inspire and encourage their employees to achieve more than what is ex-

pected of them. Iqbal (2022), and Della Porta (2023) have also pointed out that transfor-

mational leaders cultivate circumstances for the high performance by embracing individ-

ual aspirations into organizational ones. Jaroliya and Gyanchandani (2022) leave no 

doubt about the positive effects of transformational leadership on employee productiv-

ity, resigning to it the negative consequences of stress and time limitations typical for 

banking. Finally, Anwar et al. (2023), and Patil et al. (2024) adds further proof to these 

claims scanning the followers of such leaders regarding their performance and overall 

efficacy within organizations. 

 

 

Transformational 

Leadership 
Employee 

Productivity 

Employee 

Motivation 

H1 

H2 H3 H4 



27 

It proposes in the hypothesis 2 a positive correlation between transformational leader-

ship style and motivation among employees. In a way it found support by Self-Determi-

nation Theory which says that transformational leaders do satisfy employees instinctive 

psychological necessities of his Autonomy, Competence and Relatedness which in return 

heightens their motivation. According to Kimeto and K’Aol (2018), transformational lead-

ers ’inspire employees to engage in their duties and commit themselves toward the or-

ganization by creating an environment which is favourable. Paais et al. (2020), agree with 

earlier studies, asserting that motivation is further improved when leaders articulate a 

vision, motivate and allow for self-improvement. 

 

While hypothesis 3 explains how employee motivation bears a positive impact on em-

ployee productivity, this is reinforced by expectancy theory which states that active ef-

fort from employees would yield higher performance and productivity. Surveys done by 

Hoque et al. (2021) and Akindipe et al. (2023) state likewise that motivation improves 

productivity among employees’ performance due to much focus and dedication. Such 

arguments are also shared by Anwar et al. (2022), and Ali et al. (2021) who state that 

motivation is a vital factor in enhancing employee performance in most industries in-

cluding banking. 

 

Despite their differences, the leaders employed by various organizations share some 

common leadership characteristics that propelled them to the level of the leaders of the 

company. In this regard, hypothesis H4 suggests that motivation acts as a mediator in 

the relationship between transformational leadership and productivity. This hypothesis 

is consistent with the Full Range Leadership Model that puts an emphasis over motiva-

tors for productivity primary productivity increases later on. Shafi et al. (2020), and Ali 

and Anwar (2021) further contend that their leadership styles tend to become more ef-

fective in terms of productivity improvement there is a high motivation among employ-

ees. Khan et al. (2020) further notes the mediating role of motivation in linking leader-

ship to performance outcome. They advocated a great deal of intrinsic motivation to be 

developed in order to get the most out of transformational leadership. 



28 

3 Research Methodology 
 

 

Chapter 3, in a more detailed manner, explains the research methods used to assess how 

transformational leadership influences employee productivity, bound by the mediating 

factor of employee motivation, specifically within the Pakistan banking industry. This 

chapter presents a comprehensive narrative of the research design which includes re-

search philosophy, research approach and the techniques deployed for collecting as well 

as processing the data. Since leadership is complex and key in influencing employee out-

comes, this chapter acts as an anchor so as to ensure that the research process is thor-

ough, well-organized, and credible. 

 

The research purpose of this paper is confirmatory and, therefore, it adopts a quantita-

tive research design. It intends to seek empirical data that will capture the relationship 

that exists between transformational leadership and employee motivation and produc-

tivity. The data will be gathered by closed-ended questionnaires that will be given to the 

employees of the banking industry using non-probability convenience sampling with the 

assistance of personal contacts. A total of 100 respondents were recruited to ensure that 

the study has sufficient statistical sufficiency to draw valid conclusions. This quantitative 

approach was adopted because it has the ability to provide accurate assessment of the 

situation and make inferences from the sample to the whole population which is rele-

vant in recognizing the leadership frameworks within the banking institutions of Pakistan. 

The selection of this particular research design guarantees that the work will be able to 

advance the existing body of knowledge and more importantly be of practical use to the 

practitioners in the field. 

 

3.1   Contextual Description of Banking Industry in Pakistan  
 

The banking sector holds a lot of weight in Pakistan’s financial system and also plays an 

important role in the development and stability of the economy. For years, it has 



29 

changed significantly due to regulatory shifts, economic fluctuations and technology ad-

vancement (Prati et al., 2003). It is essential to understand the context within which the 

banking industry works for examination of leadership challenges and employee produc-

tivity among others (Bhattacharya et al., 2025). There are various phases through which 

Pakistani banking has evolved over history. After its independence in 1947, the banking 

sector was mainly controlled by government with 1974 bank nationalization being a de-

fining moment (Shahbaz et al., 2019; Haneef & Mirakhor, 2006). With limited competi-

tion and innovation during this period as state ownership led to inefficiencies and bu-

reaucratic inertia (SBP, 2016). However, these were just some of the steps that opened 

up liberalization into privatizations and deregulations efforts of the 1990s which leads to 

a new era of growth and modernization. These changes encouraged entry of private 

banks as well as foreign banks who contributed towards more competitive environments 

leading to enhanced service delivery (Tasheda & Mmmmm, 2019). The privatization of 

major banks, such as Habib Bank Limited (HBL) and United Bank Limited (UBL), was par-

ticularly instrumental in enhancing operational efficiency and financial performance 

(Awais, 2016). 

 

Presently, the country’s banking system is constituted by a mix of state-owned, private 

and foreign banks (Burki & Niazi, 2010). Major contenders are HBL, UBL, National Bank 

of Pakistan and Askari Bank. Meezan Bank, Allied bank, Bank Alfalah, Standard Chartered 

Bank, Bank AL Habib, MCB Bank, Sindh Bank and The Bank of Punjab and The Bank of 

Khyber control the market in terms of assets, deposits as well as branch networks. This 

industry is regulated by SBP which plays a key role in ensuring financial stability and in-

ternational compliance with banking standards as well as encouraging sound banking 

practices (SBP, 2021). Despite this progress made there are several challenges that affect 

its performance and sustainability. 

 

The first one is the problem of economic instability which is characterized by changing 

percentages of inflation, fluctuating currency exchange rates and unpredictable fiscal 

policies (Ali 2020). These factors create a volatile operating space that affects banks’ 



30 

profitability and growth. Moreover, this sector has strict legal requirements such as; risk 

management rules, capital adequacy norms and anti-money laundering laws (Mian 

2023). It is argued that although these measures are essential in maintaining financial 

system stability, they impose high costs on compliance as well as operational burdens 

for banks (Khan et al., 2020). The other important aspect that has shaped the banking 

industry in Pakistan is technology change (Aleem & Bowra, 2020). Digital banking ser-

vices, mobile banking and fintech innovations have revolutionized bank operations and 

customer relations. Nonetheless, this digital transition also comes with its own chal-

lenges like continuous investing in new technologies cyber threats and the pressure to 

up-skill employees to manage emerging digital platforms (Nawaz et al., 2024). Such prob-

lems highlight the need for capable leaders who would be able to navigate through com-

plicated situations of contemporary banking industry. 

 

For the reason that in this context, leadership is imperative in guiding banks through 

these difficulties, while still keeping employees productive and maintaining the perfor-

mance of an organization. What makes it especially appropriate is its focus on vision, 

motivation, and adaptability as necessary attributes for effective management of change 

and stimulating innovation in a very dynamic industry (Shafi et al., 2020). Better place to 

be would be among leaders who know how to inspire and engage their staffs to solve 

such problems within the industry with growth chances (Abdullah & Varatharajoo, 2017). 

Furthermore, leadership dynamics within the banking sector are influenced by Pakistan’s 

cultural context which includes hierarchical structures and reverence of authority. Tradi-

tional but dynamic demands required by a competitive modern banking environment 

have to be balanced by leaders. This way is important since improved employee motiva-

tion and productivity which are key success drivers for the sector (Patil et al., 2024). 

 

3.1   Research Philosophy 
 

This particular research is built around positivism as the prevailing research philosophy. 

Positivism maintains that all knowledge must come from what is observable, and that 

the investigator must be detached and unbiased. This philosophy is in consonance with 



31 

the study seeking to analyze measurable parameters (transformational leadership, em-

ployee attitude, and performance in productivity) within a bank management situation, 

where measurable data is manipulated to confirm interaction of the variables. Creswell 

(2014) argues that this research believes in and supports theories which in most cases 

depend on hypothesis testing and or any statistical science. 

 

A largely deductive approach is best served for this study as it supports the needs for the 

constructs that are to be determined objectively. Established scales used in the ques-

tionnaire can also be applied to measure the transformational leadership and its effects 

on employee motivation and productivity. There are particular reasons, however, for re-

lying on quantitative data collection methods in this study such as structural testing of 

the stated relationships among these variables as well as seeking clear insights (Bryman, 

2016). This study embraces the positivist philosophy so that its findings are based on 

data and not on cultural or personal views, which is one important aspect that can influ-

ence the understanding of leadership practices in the highly diversified banking sector. 

 

The relevance of positivism in this specific situation is found in the characteristics of the 

re-search question. This study is looking for cause and effect relationship between vari-

ables mostly of numerical values such as leadership styles, motivation and productivity 

outputs. Since the technique of data Collection is through a closed ended questionnaire, 

the positivist philosophy enables destruction of patterns and trends that are useful 

across the Pakistani banking industry (Saunders et al., 2019). Additionally, the adoption 

of such sampling methods poses some drawbacks in terms of representativeness, but it 

is also a necessary evil because of the reality and time-boundedness that this study has 

to operate in. Considering the nature of the data This study employed and the tech-

niques of analysis the positivist approach provided enough justification for the research 

design. 

 

 

 



32 

3.2   Research Approach 
 

This study employs a deductive research design. In deduction, researchers formulate hy-

potheses that are general and then proceed to subject them to empirical testing (Bryman, 

2016). This is given the research aim – To investigate the relationship between transfor-

mation leadership and employee productivity, while focusing on the employee motiva-

tion as a moderating variable - The deductive method seems valid. Such manner of pro-

ceeding enables the author to apply theoretical models of leadership, motivation, and 

productivity in the banking industry of Pakistan. 

 

As such, the reason for using the deductive approach in this work is determined by the 

problem of the research. Numerous studies have been undertaken across various coun-

tries in different parts of the world dealing with the influence of transformational lead-

ership on different employee outcomes and many theories have been developed ex-

plaining these relationships (Bass, 1985; Burns, 1978). However, there has been very few 

if any empirical studies conducted in the specific subsection of Pakistan’s banking indus-

try. Using the deductive approach, this research makes use of propositions that have 

already been developed in the study of leadership and motivation, and based on these, 

develops research hypotheses and provides measures to test the same in the sector. This 

is indeed appropriate in the development of new theories that apply to specific areas 

and industries that are new to the particular theory, like in this case. 

 

3.3   Research Design 
 

This research employs a quantitative research design, defined as the collection and anal-

ysis of numeric data in order to reveal themes, interconnections, or relationships be-

tween the variables under consideration. The main variables which are under the inves-

tigation are transformational leadership, employee motivation, and employee produc-

tivity, all of which can be adequately measured using set scales and closed-ended ques-

tions. This particular approach is favourable for the present study because it enables the 

objective measuring of these variables and leads to some degree of statistical robustness 



33 

which is necessary for testing hypotheses (Creswell, 2014). Similarly, it also makes it pos-

sible to apply the results to a wider context, here – the Pakistan banking industry. 

 

In terms of the temporal arrangement, the study employs cross-sectional design, which 

involves collection of data at one time. Cross sectional design is especially useful in re-

search that aims to provide a snap shot of some aspect of the phenomena of interest at 

a specific period, which in this case is leadership behavior and employee productivity 

(Sekaran & Bougie, 2016). In this research, the population under study shall be eye bank 

employees, who shall be sampled over time in order to assess the present existence of 

transformational leadership and its role in employee productivity through motivation. 

 

There are several reasons why a cross-sectional design is selected instead of a longitudi-

nal design. First, the scope and the objectives of the study do not allow for such a design 

in collecting data over time as it should be done in longitudinal studies. Second, the ob-

jective is to investigate the relationships among the variables at one point in time rather 

than observe variation or growth over time. In addition, the cross-sectional research de-

sign is effective in resolving the research questions and to test the proposed hypotheses 

without needing the long-term data collection, which is very characteristic of the con-

venience sampling method, which relies on social networks to gather data. 

 

Furthermore, there are practical considerations in the choice of a cross-sectional design 

whereby the aim of the study is to provide practical solutions to the problem in a rela-

tively short period. Given that data will be collected through a self-administrated instru-

ment with closed ended items and that the aim is to uncover relationships and report 

such relationships, statistically a cross-sectional design permits a rapid collection of data 

and analysis followed by a quick dissemination of the results (Bryman, 2016). The design 

chosen is therefore appropriate in meeting the objectives of the research and the nature 

of the study. 

 

 



34 

3.4   Research Strategy 
 

The chosen methodology for this study is survey. Survey strategy is effective where the 

intent is to collect structured quantitative data from a large population sample particu-

larly for the purpose of testing hypotheses and exploring relationships among constructs 

like transformational leadership, employee motivation, and employee productivity 

(Saunders et al., 2019). With this kind of questionnaire, there is a uniform way of collect-

ing information that makes it easier to manage the various responses that arise. This is 

consistent with the aforementioned self-explanatory approach where the formulated 

theory is verified through facts. 

 

The survey strategy chosen in Pakistan’s banking sector is based on the sector’s size and 

the easiness to access the respondents. Most of the employee productivity and leader-

ship studies have indicated that the survey strategy is convenient in collecting infor-

mation from a wide population and hence the results are representative and generaliza-

ble (Creswell, 2014). Moreover, it is common knowledge that survey’s experimental 

methodology is most applicable in the examination of people’s perceptions, their atti-

tudes, their emotions, and so forth. The reasons make it possible to find out how trans-

formational leadership affects the motivation and the productivity of the bank employ-

ees. The survey method is also highly controlled which allows for a certain degree of 

statistical analysis which is needed to find out the relationships between the variables in 

the study. 

 

3.5   Population and Sampling 
 

3.5.1 Target Population 
 

The target population of this study is comprised of employees from the banking sector 

of Pakistan. It consists of persons occupying a variety of positions: junior employees 

through to the senior management of different departments within the banks. The Pa-

kistan banking industry is inefficient, inflexible, and lacks motivated employees; thus, it 



35 

provides a unique opportunity to study transformational leadership (Avolio et al., 2009) 

in practice. Considering the specific focus on employees of the banks makes it possible 

to obtain the opinions of those members of personnel that are important for the perfor-

mance of the industry and are affected by the management style. 

 

3.5.2 Sampling Technique 
 

The study utilizes convenience sampling which is a non-probability sampling method in 

which subjects are selected because of their convenient accessibility and proximity to 

the researcher (Etikan et al., 2016). This method is quite helpful and reasonable in situ-

ations when there are time and resource constraints. Since primary data will be gained 

from the author’s contacts, with some of the author’s brothers and relatives working in 

the banks and serving as access gate to the respondents, convenience sampling is justi-

fied. It is recognized that convenience sampling cannot be regarded as generalisation 

and random sampling of the population but it is ideal for such studies which are explor-

atory in nature where the relationships between the variables are the key considerations 

as opposed to whether the estimates hold true for the entire population or not (Bryman, 

2016). 

 

3.5.3 Sample Size 
 

The target population in this study has been determined accordingly for practical reasons 

such as ease of getting the respondents and the nature of the study at hand. In scenario 

quantitative researches, it is worth noting that a sample size in the range of 100 is often 

necessary and acceptable in doing issues such as various correlations and regression 

analysis of multiple variables (Hair et al., 2010). Thus, in this case, the sample size is 

enough to provide sufficient statistical power in establishing meaningful links between 

transformational leadership, motivation of employees, and their productivity levels. 

 

Also, it is useful point to make that other studies seeking to establish the interlinkage 

between leadership and employees’ productivity in similar studies have also managed 



36 

to use approximately the same sample sizes hence establishing some basis for this study 

(Bass, 1985). The sample of 100 employees will also ensure that the scope of the study 

covers employees of different banks to allow for comprehensive understanding of the 

phenomena understudied. Even if the use of convenience sampling has certain limitation 

with regards to the overall external validity of the findings of this research, the sample 

size is still reasonably enough for the purpose of testing the proposed hypothesis in this 

particular study. 

 

3.6   Data Collection Method 
 

For the research, data was gathered through Google forms, thus making it easier and 

quick to target a larger population of bank employees in Pakistan. This tool included a 

well-oriented closed-ended questionnaire which was focused on obtaining numeric data 

with regards to transformational leadership, employee motivation and productivity. Flex-

ibility was the main reason for choosing Google Forms, supplemented by the conven-

ience it gave respondents as they could conduct the surveys from different devices at 

any appropriate time. 

 

The link of the survey was shared with the intended respondents via WhatsApp, emails, 

and professional sites such as LinkedIn in a bid to get a larger audience within the bank-

ing industry. The questionnaire was sent to slightly over 150 employees but only 100 

employees completed the questionnaire. To enhance the response rate, assurance was 

given that a follow-up would be done on those who had not responded after a certain 

timeframe elapsed. Completion of many forms or associated portions of them as well as 

the analytic features of Google Forms itself was useful for real-time monitoring of re-

sponses. 

 

To handle the missing information, the form was designed in such a way that it automat-

ically made some relevant questions mandatory so that the chances of not completing 

the data submission was minimum. Still some respondents left answers incompletely. 

Seeking to increase completeness of responses, they were accounted for, and in the end 



37 

of the process any response that did not include the basic answers was dropped from 

the dataset as a measure to maintain the quality of the data. This strategy made it prac-

ticable to use only completed surveys for analysis, which protected the integrity and 

quality of the outputs. 

 

3.6.1 Primary Data Collection 
 

For the primary data collection, a survey method was utilized. It is worth mentioning 

that surveys are most appropriate in this case, as they enable the collection of data that 

can be quantified, which serves the purpose of testing the hypotheses or establishing 

patterns (Saunders et al., 2019). In this particular research, as previously mentioned, an 

online survey was utilized with a close-ended questionnaire. Employing closed-ended 

questions is in line with the deductive approach of the research; as it allows one to quan-

tify variables—transformational leadership, employee motivation, and employee 

productivity—and perform statistical procedures (Bryman, 2016). The questionnaire was 

administered to employees of different banks with the collection of the data aided by 

author's relatives connected to the banking industry. Respondents were drawn using 

convenience sampling, with a total of 100 questionnaires returned from a large size of 

banking staff that was targeted in this study. 

 

3.6.2 Instrument Design 
 

The questionnaire developed addressed the main concepts examined: transformational 

leadership, employees’ motivation, and employee productivity. The individual compo-

nents of the questionnaire were developed to consist of multiple items measuring vari-

ous aspects of the constructs. For example, the transformational leadership approach 

used 20 items taken from the Multidimensional Leader Questionnaire (MLQ) designed 

by Podsakoff et al. (1996) which measures aspects such as charisma, intellectual stimu-

lation, and individualized consideration of followers. In the same vein, employee moti-

vation’s six item scale adopted from Shahzadi et al. (2014), and productivity was assessed 

using standard scale from Chen and Tjosvold (2008) that has been tested in previous 



38 

studies (detailed questionnaire is given in the appendix 1). Following table has summa-

rized the number of items used in each construct and sources from where they are 

adopted. 

 

Variable No of items Source 

Transformational Leadership 20 Podsakoff et al. (1996) 

Employee motivation 60 (Shahzadi et al., 2014) 

Employee productivity 5 (Chen & Tjosvold, 2008) 

Source. (Self-made) 

3.6.3 Pilot Testing 
 

The pilot study for the current study was conducted in a circumspect manner in order to 

assess the precision of the tool with a total of thirty bank workers from four major cities 

of Pakistan, namely, Islamabad, Rawalpindi, Peshawar, and Lahore. The wide-ranged 

sample also made it possible for the study to receive a broader perspective of different 

ways the questionnaire may be understood and interpreted, making it clear and relevant 

to various target audiences. The respondents not only filled in the questionnaire but also 

scored it and expressed their views on its construct, enabling the researchers to recog-

nize and rectify problems of clarity, cultural context, and the form of the questions. 

 

Subsequent to collecting this feedback, the questionnaire was evaluated for reliability 

using Cronbach’s alpha, which is a commonly used statistical technique to measure the 

internal consistency of a scale, and an alpha coefficient of 0.7 or 70% is the preferred 

target (Hair et al., 2019). It was useful to determine whether the constructs that were 

supposed to be measured were indeed measured and that the survey instrument was 

consistent in its intention of achieving the objectives of the study. The reliability tests 

also pointed out the areas where certain questions could be improved or deleted as they 

were repetitive. This made the overall quality of the survey better and its focus sharper. 



39 

As a result of qualitative and quantitative evidence, several revisions were made to en-

hance question construction, remove ambiguities, and simplify the order in which ques-

tions are asked. This approach made sure that the instrument is relevant to the banking 

sector in Pakistan, strengthening it for the main study. Such aimed at ensuring the in-

strument was properly tested, and so the study enhanced the precision and reliability of 

the questions and thus enabled informed data collection in the entire study. 

 

3.6.4 Data Collection Procedure 
 

To enhance consistency and reduce bias, this study employed a systematic data collec-

tion procedure. The surveys were handed out by the author’s brothers and relatives who 

are employed in different banks within Pakistan. This strategy was adopted because of 

the practical benefits of direct distribution like enhanced response rates or the clarifica-

tion of issues that the respondents may have (Dillman et al., 2014). This phase in the 

distribution of surveys lasted for two weeks. During this time, the participants were ad-

equately informed about the objectives of the research and how to fill in the question-

naire. 

 

I assured the respondents that the information with their names would be kept confi-

dential and that their privacy would be respected. Such attentiveness has proven effec-

tive in increasing the response rates and obtaining candid responses from the survey 

(Cre-swell, 2014). When surveys were finished, these intermediaries reunited the mate-

rial back to the author for further analysis. Utilising a convenience sampling strategy, 

conscious efforts were made towards including respondents of varying roles and depart-

ments within the banks so that the sample would be more representative. 

 

3.7   Data Analysis Techniques 
 

The data analysis techniques employed in this study are such that quantitative data col-

lected from the bank employees is made to follow a systematic approach in order to 

answer the objectives of the study. Considering the purpose of this study is to analyse 



40 

the effect of transformational leadership on employee’s productivity, where employee’s 

motivation is the mediating factor, it employs reliability, descriptive analysis, inferential 

analysis, and mediation analysis. 

 

3.7.1 Descriptive Analysis 
 

The first level of analysis of any data consists of descriptive analysis which helps to pre-

sent, retrieve and understand the basic aspects of the collected data. In this regard, sta-

tistical tools such as dispersion and distribution measures were employed to clarify the 

demographic profile of the respondents (age, gender, experience) and their different re-

sponses to transformational leadership, employee motivation, and workplace productiv-

ity (Field, 2013). This particular approach provides information concerning the skewness 

and the spread of the distribution and highlights important patterns and features so that 

further statistical analysis is concentrated on relevant parts of the data. The outcomes 

of this particular stage of analysis deserve consideration as they help to create the pri-

mary picture of the data and the general patterns of responses among the banking sec-

tor employees within Pakistan. 

 

3.7.2 Inferential Analysis 
 

After the descriptive analysis, an attempt of hypothesis testing was made as part of the 

inferential analysis which comprises this study. In general, inferential statistics allow con-

cluding about the population based on the results obtained. In the current study, rela-

tionship interplay between transformational leadership as an independent variable and 

employee productivity as an outcome variable was examined through the regression 

modelling; employee motivation was treated as the mediating variable (Hair et al., 2019). 

Regression analysis makes it easier to determine with regards to the research questions, 

the strength and the direction of the relationships between these variables as well. 

Moreover, correlation analysis was conducted to understand the relationship between 

transformational leadership, employee motivation and employee productivity. Those 



41 

tests are important for proving the theoretical concept of the study as they show 

whether there is a significant relationship among variables tested. 

 

3.7.3 Mediation Analysis 
 

The main objective of this study is to assess the role of employee motivation working as 

a mediator between transformational leadership and employee productivity. For this 

purpose, Baron and Kenny's (1986) mediation analysis, which is a series of regression 

analyses to look into the indirect effect of the mediator on the dependent variable, was 

utilized. In addition, Hayes' PROCESS macro performed bootstrapping that served as me-

diation in a more sophisticated way as it was able to evaluate the indirect effects by 

utilizing resampling procedures (Hayes, 2017). The findings of this mediation analysis are 

important as they provide evidence on the mediating role that employee motivation 

plays in the two variables of transformational leadership and employee productivity in 

the context of the banking sector. 

 

3.8   Ethical Considerations 
 

Regardless of the different forms that scientific investigation may take, and bearing in 

mind that it is human beings as subjects that are central to this study, ethical issues must 

be considered and addressed. In the course of this particular study, the author practiced 

adherence to ethical issues so that the data collection and analysis process did not or 

rather respect the rights and well-being of the participants. During the research itself, in 

order to guarantee the respect of the participants’ privacy, confidentiality and anonym-

ity were assured normally to the respondents, even before the participant and their in-

formation and answering had been utilized (Saunders et al., 2019). This was important 

in minimizing response biases from the respondents. 

 

Each participant’s active informed consent was obtained as well as subject information 

for the study. This form detailed their participation on a voluntary basis amongst others, 

their ability to withdraw at any time unless they wished, and the confidentiality of the 



42 

study. During data collection, the authors ensured that the basic principles of informed 

consent were observed. This implies that the participants were adequately informed 

about the study and were free from any form of pressure to participate (Bryman, 2016). 

Last but not least, the research complied with the ethical principles established by the 

advisory board such as the institutional review boards (IRBs) as well as any legal implica-

tions that address the rights of individuals in research. These ethical measures helped to 

safeguard the conduct of the research process as well as the outcomes of the research 

undertaken. 

 



43 

4 Data Analysis and Results 
 

 

4.1   Introduction to Data Analysis 
 

This chapter presents the data analysis and findings derived from the responses of bank 

employees in Pakistan regarding transformational leadership, employee motivation, and 

employee productivity. The objective is to analyse and interpret the data to address the 

research questions and hypotheses formulated in earlier chapters. A quantitative meth-

odological design was utilized, starting with demographics, reliability and descriptive sta-

tistics to present the demographic variables, reliability of instrument and the responses 

and then moving to inferential and mediation analysis of studied variables (Field, 2013). 

 

This analysis is fundamental to first understand relationships between the basic charac-

teristics of research participants and their responses to the research questions, through 

the application of descriptive analysis to demographic data and employee motivation 

statistics. The relationship between transformational leadership and productivity, trans-

formational leadership and employee motivation, employee motivation and employee 

productivity, with motivation as a mediator, is examined next, employing correlation and 

regression techniques (Hair et al., 2019). The analysis therefore tests the proposed and 

seeks to support the theoretical framework by showing statistical significance and 

strength of such relationships. Lastly, mediation analysis helps to consider the produc-

tivity of transformational leadership through motivation, which helps to show some 

pathways connecting these variables (Hayes, 2017). The author also present main con-

clusions of the chapter and thus provide grounds for a discourse in the next chapter. 

 

4.2   Demographic Analysis 
 

To better characterize certain characteristics of a population, it needs to be described by 

sociological and economic factors such as gender, age, education, the amount of earn-

ings, experience and job position. This kind of analysis is important as it places the data 



44 

in proper perspective by understanding the population sample and their diversification 

and distribution (Creswell & Creswell, 2017). In this regard, demographic information 

was gathered from employees in the banking sector in Pakistan with the objective of 

understanding their backgrounds, which is important in know-how these characteristics 

may influence the perception of transformational leadership, motivation and productiv-

ity. 

 

Table 1. Demographic analysis of sample. 
 

Respondents Gender 

  Frequency Percent 

Male 59 59.0 

Female 41 41.0 

Total 100 100.0 

Age Group 

18 - 25 Years 26 26.0 

26 – 34 Years 43 43.0 

35 – 42 Years 17 17.0 

43 – 50 Years 12 12.0 

Above 50 Years 2 2.0 

Total 100 100.0 

Highest Qualification 

Intermediate 2 2.0 

Bachelors 29 29.0 

Masters 56 56.0 

M.Phil. 10 10.0 

Ph.D. 3 3.0 

Total 100 100.0 

Income Per Month 

Below 60K 13 13.0 

60-75K 27 27.0 

76-90K 31 31.0 

91-105K 18 18.0 

Above 105K 11 11.0 

Total 100 100.0 

Highest Work Experience 

< 3 Years 21 21.0 

3 to 5 Years 34 34.0 

6 to 7 Years 27 27.0 

8 to 10 Years 12 12.0 



45 

> 10 Years 6 6.0 

Total 100 100.0 

Current Job Position 

Junior Level 17 17.0 

Mid-Level 48 48.0 

Senior Level 30 30.0 

Top Management 5 5.0 

Total 100 100.0 

 

Of the 100 respondents, 59 percent were male and 41 percent were female, exhibiting 

a strong male gender penetration dominance which is a stark contrast imbalance. It’s 

likely this distribution is also reflective of the gender ratio in Pakistan’s banking industry 

where men tend to outnumber women due to culture and trends within that sector 

(Javed et al., 2018). 

 

There was a pronounced concentration of respondents who belonged to an age group 

of 18 to 50 years. According to the findings, the largest share of respondents, 43%, were 

in the age band of 26-34 years and the next largest percentage was 26% who were in the 

18-25 age bracket. This indicates that the workforce in Pakistan’s banking industry is rel-

atively young probably because this industry tends to lure people in the early stages of 

their career. The low proportion of respondents exceeding the age of 50, comfortably 

sitting at just 2%, perhaps speaks towards an absence of a considerable number of senior 

employees in this industry as younger individuals dominate the industry due to policies 

regarding retirement or turnover ratios (Omar et al., 2012). 

 

Educational levels were also high with majority having a Master’s degree (56%) what is 

more important followed by Bachelor’s (29%). The education level is surely related to 

the nature of employment in the banking institutions, as such jobs require deep 

knowledge and proper analysis. All were a doctoral or a higher degree, M. Phil was 10% 

suggesting that advanced education may not be widespread among the work-force but 

exists in the upper or advanced levels, or research bases (Mahmood et al., 2014). 

 



46 

The majority (31%) of respondents earn a monthly salary range of PKR 76,000 to 90,000 

per month, while 27% earns a range of between 60,000 to 75,000 monthly. This provides 

knowledge on economic placement of workers working in the banking industry where 

salary is average or above average compared to national level in Pakistan due to the 

highly rated nature of banking jobs (Bhatti et al., 2023). 

 

Respondents had differing domains of work experience with the majority, 34% having 

about 3 to 5 years while 27% had some experience between 6 to 7 years. This portrays 

an average year of experience which is expected of a dynamic yet progressive sector in 

terms of employee positions. Only 6% were significantly higher than 10 years which was 

in tandem with the age graph which resulted in a low number of older participants taking 

part in this study (Rasheed et al., 2024). 

 

The majority of respondents, 48%, occupy middle level positions, with a senior share of 

30%. This composition highlights that middle management is the most popular source 

of occupation within banking, since only 5% of respondents occupied senior manage-

ment. Again, as noted above, this sort of stratification may be expected in sectors such 

as the banking industry, which possess strict vertical slugger, single pathway, career ad-

vancement with less direct lateral movement (Anwar et al., 2023). 

 

4.3   Reliability Analysis 
 

Reliability analysis deals with the constancy of results obtained from a measurement 

instrument on multiple occasions or its replicability (Tavakol & Dennick, 2011). One 

widely used measure of reliability for this purpose is Cronbach’s alpha (α), which ranges 

from 0 to 1. Advocates of this coefficient believe that, the threshold value for a satisfac-

tory Cronbach's alpha should approximately be around 0.70, stating that, the items in a 

scale category are egoistically connected (Nunnally & Bernstein, 1994). 

 

 



47 

Table 2. Reliability analysis of scale. 
 

Variable No of items Alpha Value 

Transformational Leadership 20 0.875 

Employee Motivation 6 .0.837 

Employee Productivity 5 0.873 

 

The scale that was used to measure transformational leadership has 20 items and a 

Cronbach’s alpha value of 0.875. This high alpha value corresponds with strong internal 

consistency in the items so that the questions have a good bearing on transformational 

leadership. This consistency is important since transformational leadership is a complex 

construct including idealized influence, intellectual stimulation and individualized con-

sideration (Bass & Avolio, 1995). A trustworthy measure guarantees that these dimen-

sions are not undermined in the responses given. 

 

A reliability score of 0.837 was given to the employee motivation scale which consists of 

six items. This result, in turn, shows that a fairly high level of the respondents' reliability 

is determined which testifies to the fact that the items capture different aspects of mo-

tivation of the employees' perspective. Motivational measures that are valid are highly 

needed since motivation is an antecedent of job satisfaction and performance (Ryan & 

Deci, 2000). An adequate measurement and its subsequent use in this study as a medi-

ating variable gives assurance in dealing with such issues. 

 

The same level of consistency was also recorded in the employee productivity scale 

where a Cronbach’s alpha of 0.873 was registered on five items. The significance level of 

this consistency lies in the fact that productivity is expected to be measured reliably. High 

reliability in this instance means that the items are capable of yielding a consistent meas-

ure of productivity which is important for the analysis which is likely to be set up in de-

termining the role of transformational leadership in employee performance (Hackman 

& Oldham, 1976). 

 



48 

4.4   Descriptive Statistics 
 

As Tabachnick et al. (2013) elaborate, the data is further understood with the help of 

descriptive statistics, providing a detailed summary including mean, standard deviation, 

skewness and kurtosis. These statistics are sufficient to get a brief idea about how the 

respondents view transformational leadership, motivation and productivity in the bank-

ing sector in Pakistan. More specifically, there is a focus on the mean which is viewed as 

the average level of a response and standard deviation as the amount of the change. The 

data distribution is also described these days by significant indicators which are skew-

ness and type which assist in understanding the role of employee perceptions through 

the concept of normalcy where the central tendencies are the focus (Field, 2013). 

 

Table 3. Descriptive Statistics 

 

Descriptive Statistics  
N Mean Std. Deviation Skewness Kurtosis 

Statistic Statistic Statistic Statistic Statistic 

TL 100 4.0325 .49835 -.324 -.487 

EM 100 4.1000 .67253 -.342 -.959 

EP 100 4.0120 .78821 -.512 -.825 

 

Transformational Leadership (TL) with the assistance of a mean score of 4.0325 shows 

that majority of employees in the organization are likely to score leadership practices, 

slightly below the maximum possible on the scale. From the sample analysed, the results 

showed a standard deviation of 0.49835 and so it is noted that the replies are relatively 

close to the mean representing a high agreement amongst employees. Thirdly, a skew-

ness of -0.324 and a kurtosis of -0.487 implies a minor degree of left skewness as well as 

a relatively low degree of steepness of the curve. This indicates that transformational 

leadership is generally liked, but there may be a few low scores due to low frequency, 

meaning that employees are indeed confident in the leadership effectiveness (Gravetter 

& Wallnau, 2016). 

 



49 

For Employee Motivation (EM), the mean score is 4.1000, the highest among the other 

recorded variables, showing that there are a lot of motivated employees. The moderate 

standard deviation of 0.67253 shows that although most of the respondents experience 

a high level of motivation, there is room for some quirk. The data distribution is ascer-

tained to have a negative skewness indicating that more responses tend towards the 

higher end of the motivation scale where the mean is - 0.342 (and kurtosis - 0.959). This 

positively skewed distribution suggests that there is a closer fit among employee moti-

vation as well as the leadership environment as far as the banking sector is concerned 

(Klein, 2023). 

 

In Employee Productivity (EP), a mean of 4.0120 is recorded portraying that transforma-

tional leadership under which the respondents view themselves as generally productive. 

A higher standard deviation of 0.78821 depicts more variance as compared to other var-

iables meaning employee productivity perception tends to be more widely dispersed. 

The negative skewness – 0.512 coupled with negative kurtosis -0.825 also implies that 

the data is higher concentration toward the left-tailed with flatter distributions. This ad-

heres to the facts that while high productivity perceptions are the norm, there is a wide 

variation in productivity perception between employees (George & Mallery, 2019). 

 

4.5   Correlation Analysis 
 

Correlation analysis is a technique in statistics that is used to assess the degree of close-

ness, as well as the strength of the linear relationship, between two variables (Cohen, 

2013). Provides a strong understanding of the relationships between the most important 

variables allowing to gain the picture of the relationships and whether they move to-

gether and in which manner. The results of the performed correlation analysis can be 

expressed in the correlation coefficient, which value is reported as “r” and normally 

ranges between -1 and +1. If the coefficients measure is positive, it suggests a direct 

relationship that when one of the variables increases the other one also increases while 

a negative coefficient implies a reverse relation (Field, 2013). This study looked at the 

relationships between Transformational Leadership (TL), Employee Motivation (EM) and 



50 

Employee Productivity (EP), in which the Pearson’s correlation coefficient is applied to 

this analysis as appropriate for the methods applicable to interval level data. 

 

Table 4. Correlation Analysis 

 

Correlations 

  

Pearson Correlation 

TL EM EP 

Transformational Leadership (TL) 1 .790** .766** 

Employee Motivation (EM) .790** 1 .799** 

Employee Productivity (EP) .766** .799** 1 

**. Correlation is significant at the 0.01 level (2-tailed). 

 

Cohen (2013) reports the correlation between Transformational Leadership (TL) and Em-

ployee Motivation (EM) as r = 0.790, which is a strong positive association. This finding 

(p < 0.01) means that when transformational leaders set the goals and link those goals 

to the vision of the company and other relevant channels, employees elevate their 

productivity. This relationship level underlines that leadership approach probably mat-

ters in stimulating productive engagement among employees, and such findings have 

related transformational leadership style with enhancement of positive aspects in em-

ployees including engagement and commitment (Bass & Riggio, 2006). 

 

Likewise, the correlation between Transformational Leadership (TL) and Employee 

Productivity (EP) is also significant with the correlation strength factor percentage at r = 

0.766 (p < 0.01). This significant finding correlates positively meaning that there exists a 

strong effect of transformational leadership on productivity on the premise that as trans-

formational deeds are improved greater probability exists that employees will be pro-

ductive. This finding confirms the findings of earlier studies where transformational lead-

ership was found to be positively related with employee performance and higher 

productivity since these leaders motivate and energize normal people to accomplish vi-

sion and set goals (Podsakoff et al., 1996). 

 



51 

A strong connection between the employee motivation (EM) and the employee produc-

tivity (EP) has been determined where the correlation coefficient r = 0.799 (p < 0.01). 

This high association implies that the more motivated the people are, the more produc-

tive they are. This fits with motivational theory which maintains that employees who are 

motivated are able to concentrate more and be productive since they are actively in-

volved in their work (Ryan & Deci, 2000). The essence of this relationship highlights the 

role of motivation as an intervening variable between the practices of the leaders and 

the productivity outcomes. 

 

In conclusion, all correlations are statistically significant and in the positive direction 

which indicates that transformational leadership, employee motivation and productivity 

are closely related. The results provide evidences in support of the need for transforma-

tional leadership as a vital factor aimed at raising motivation and productivity levels 

among employees, particularly amongst the Pakistani banking industry, where leader-

ship can enhance the performance of the work force. 

 

4.6   Hypothesis Testing (Regression Analysis) 
 

The goal of regression analysis which is defined as a statistical tool in predicting or ex-

plaining the variation on the dependent variable due to the variation on the independent 

variable (Field, 2013) is achievable in most cases. It examines how many independent 

variables explain or predict the outcome of a single dependent variable or how many 

dependent variables one or more independent variables can predict or explain the out-

come (Tabachnick & Fidell, 2007). Within TL, there exists an independent variable while 

EP subsists as a dependent variable in which the focus is on the impact of transforma-

tional leadership on employee productivity in the banking industry in Pakistan. 

 

 

 

 



52 

4.6.1 Direct Effect of Transformational Leadership on Employee Productivity 
 

Table 5. Testing Hypothesis 1 

 

Hypothesis IV DV R R2 F Sig Beta T Action 

H1 TL EP 0.766 0.587 139.22 0.000 0.766 11.78 Accepted 

 

The correlation between TL and EP is exhibited by regression analysis with an R value 

equal to 0.766. This R-value shows that there is correlation between transformational 

leadership practices and employee productivity. In addition, the R-squared (R²) value of 

0.587 explains that about 58.7% of variance in employee productivity can be predicted 

by transformational leadership thereby indicating clear cause and effect relationship. 

(Cohen, 2013). 

 

As the F-statistic is 139.22 and the significance is 0.000, we conclude that the overall 

regression model is statistically significant. For a significance level (p-value) of less than 

and equal to 0.05, the outcomes can be regarded as not simply random and therefore, 

the model can be confirmed as able to predict employee productivity given the transcen-

dental leadership practices. In addition, the beta coefficient (ß) is 0.766, which suggests 

that each unit increase in transformational leadership causes an increase in employee 

productivity of about 0.766 units. A T-value of 11.78 more substantiates that this associ-

ation has a statistical significance and hence H1 is accepted, establishing a positive asso-

ciation between TL and EP. 

 

Give