The mediating effect of employee engagement in the relationship between transformational leadership and organisational innovation

Abstract

Organisational innovation is essential for prioritising alternative methods to remain competitive, sustainable and for economic growth for South African businesses. Engaged employees are instrumental in implementing innovative organisational strategies. Managers and supervisors that adopt transformational leadership characteristics can increase employee engagement and motivate organisational innovation. The study’s purpose was to investigate the mediating effect of employee engagement on the relationship between transformational leadership and organisational innovation. A quantitative study was performed, in the form of a questionnaire to evaluate 209 employees reporting to a manager or supervisor in various South African industries. The study found a significant positive and strong relationship between transformational leadership, organisational innovation and employee engagement constructs through Pearson’s correlation analysis. Additionally, the study used partial least square structural equation modelling (PLS-SEM), and the findings indicated the mediating role employee engagement plays in the relationship between transformational leadership and organisational innovation. The results gave insights for managers, supervisors and organisations to adopt leadership behaviours, in particular transformational leadership characteristics, by applying the social exchange theory to increase employee engagement to drive organisational innovation.