Influence of leadership style on job satisfaction of NGO employee: The mediating role of psychological empowerment

The objective of this investigation is to analyze the impact of leadership styles on frontline employee psychological empowerment, and thereby, improving the job satisfaction level of employees. A questionnaire-based survey was conducted in nongovernmental organization (NGO) functioning in two major cities (Islamabad and Peshawar) of Pakistan, analyzing a total sample size of 319. Structural equation modeling results revealed that transformational leadership style has a significant association with job satisfaction, and the effect is partially mediated by the psychological empowerment. Conversely, findings showed that the relationship between transactional leadership and psychological empowerment was insignificant. Though, there existed a direct positive relationship between transactional leadership and job satisfaction. This research makes an important contribution in the area of leadership, which can be useful for NGOs to recognize the importance of leadership and encourage psychological empowerment of frontline employees. The findings also provide significant implications for organizations to understand better the importance of leadership, which will be helpful to enhance organizational success.